Please see the catamaran questions and answers from clients below. Contact Us for more information and to buy your own catamaran.
Q. I see a 2016 Lagoon 450F Owner's Version listed for sale around $560,000 in the Caribbean. Will this 450F OV hold its value well? What will it be worth in 2026 and in 2030?
A. The price is a bit high for this time of year and the location and this or similar ones should sell for $500-525k this summer in that area. The value of this 2016 L450F Owner's Version will hold its value well and will continue to be worth $475k in low demand areas/"low buying season for that region" and $500k in high demand areas/high demand season (not counting inflation) for another ten years BUT
as all catamarans age, they require major refits every 5 years. The Ten Year Refit usually costs double the Five Year Refit (because everything that broke down at "age 5" does so again at "age 10" in additional to the components that fail by "year ten". YOU WILL NOT RECOVER MOST OF THE REFIT MONEY YOU SPEND. IT IS "MONEY GOING DOWN THE DRAIN". This is why it does NOT pay to refit/remodel older catamarans (unlike real estate).
We should see more listings between now and late June as the Caribbean high season comes to an end. Europeans will also start listing boats soon for Sep-Oct turnover and there will be "deals" there if you can take the yacht in October and allow the Seller to get one last "high season " of fun out of the boat...
Q. A lot of these older catamarans like Prout and the South African designs seem overloaded with a low bridgedeck-clearance and hull-slamming. Is that so and why?
A. Yes, all catamarans have this issue in certain wave-conditions but the older, narrow-hulled designs see more bridgedeck-slamming. The reason the Prout bridgedeck clearance is so low is that they used relatively narrow hulls in the old ones and when Prout went under and the Chinese guy bought it in 2001, he re-used the molds from the old 45 because totally re-tooling that model would cost $1,000,000 and only the big production-builders can afford that expense...so to save money he just re-tooled the decks and interior-modules which weighted the boat way down. These narrow hulls do not have much "load carrying capacity" because as you add heavy equipment like generators, larger tenders with heavy 4-stroke engines, extra fuel tanks, extra water tanks, large solar panel arrays aft, larger salons, etc., it sinks the bridgedeck and increases hull-slamming. Nowadays buyers want more options and "off grid" equipment which weighs more, so "max load-carrying capacity" becomes important. The "speed demons" like Catana, Outremer, Gunboat and Dolphins cannot easily handle heavy loads without increasing hull/bridgedeck-slamming.
The big production builders discovered that if you widened the aft sections of the hulls you don't slow down the sailing speed much AND you gain significant "load carrying capacity" which allows for larger dinghies with heavy 4-stroke engines, large solar arrays, dive tank racks and doesn't cause the yacht to "squat" and drag down the sailing speed. This is what 95% of the mainstream buyers want in a cat.
I helped redesign the Prout 50's, 63's and 72's and we changed the tooling to give them better load-carrying capacity, larger flybridges, larger salons and other improvements that modern buyers prefer.
Q. What are the prices of all the 38' and larger sailing catamarans sold for in the world in January 2022?
A. Click the Catamarans Sold Link to see the PDF of selling price histories of all SAILING catamarans over 37' that sold in the worldwide recently courtesy of Yachtworld.com and SoldBoats.com. Interested in seeing selling price histories of a particular model? Let me know model, years, make, etc and I can send details.
Q. What are the prices of all the 38' and larger sailing catamarans sold for in the world in December 2021?
A. Click the Catamarans Sold Link to see the PDF of selling price histories of all SAILING catamarans over 37' that sold in the worldwide recently courtesy of Yachtworld.com and SoldBoats.com.
Q. What are the "hottest of the hot" model catamarans around the 40' size range and please explain the difference between the Lagoon 400 and the current Lagoon 40.?
A. The Lagoon 400's were built from 2009-2019. They used to be "the hottest of the hot" in the 40' range, meaning that more "secondhand market buyers" wanted these than any other model because they used to have the most usable interior space of any 40' cat at an affordable price. Now the Leopard 40 (2016+ version) has supplanted the L400 because it has the most usable interior space, the interior "fit and finish" is a bit better and that front door solves the problem of under-ventilation (when in tropical areas) that most cats have. But these are rare on the market.
SIDE NOTE: Something to keep in mind: in general, 85% of all cats go into charter for the first 5 years of their "lives". The charter managers greatly prefer 4 (with 4 heads which charterers prefer) stateroom boats because they can do 35 weeks of charter per year in the BVI which is the most popular charter destination in the world. "Owner Versions" might only do 18-22 weeks which greatly reduces income. So, the "first-hand" market demands mostly 4 stateroom versions. The "second hand market" for cats prefers "Owner Versions" because most of these buyers are "live-aboard cruisers" and there is a shortage of these.
The Lagoon 40 (introduced in 2018) is a brand new model and not the same as the 400. They moved the mast aft to accommodate a self tacking jib (and to make the mainsail easier to handle for newbies) and are under-powered in winds of less than 15 knots especially when sailing to windward in a chop. It has a smaller salon than the 400. Because of these two changes most Buyers didnt like them as much as the 400. Concerning future pricing for your $300k budget: If we are talking about the 400 then we should see some 4 stateroom 2 head versions (aka "European Owner Versions") and 4/4 "charter versions for $300k-375k coming out this Spring (2022) as the Caribbean high season winds down.
If you are referring to the new version (2018+) Lagoon 40 , we should see them becoming available in larger quantities at $425k-475k in the late Spring of '22.
Q. Who handles and approximate cost for boat insurance, who changes the registration and closing paper work, boat survey, AC and genset installation?
A. I could discuss all the different permutations and it would take an hour... (which I dont have today)... so let me give you some short answers... also see my video on Cost Considerations When Buying Catamarans:
If you are my client and we get to the stage where you should seriously shop for insurance I will send you an insurance checklist with names, contact numbers, tips, what to say, etc...So, I will refer you to the insurers who have been writing the lowest premiums for A+ Rated policies. You should get insurance for 1.5% of the value of the yacht (on an annual basis)....therefore a $300k yacht will require $4500/year. Some of this depends on where the yacht is currently and where it is going over the next year. It could be less for US coverage only. I will refer you to a title agent who will make sure the title is clean and I never release 1 cent to the Seller until the Title Agent says "The Seller has transferred a clean title and I am in possession (or have copies) of all the documents that show title has been passed. It's OK to release funds". The Title people have insurance for Errors and Omissions so they take the liability for getting it right. IN 32 years and thousands of yacht sales I have never seen a title issue we could not overcome and I know how to do the extra difficult, Spanish, Greek and Italian flag yachts.
I will refer you to an Accredited Surveyor...the only kind you want. Prices are running $20-28/foot depending on location, competition, demand, etc.
Depending on the location we can connect you with reliable, honest aircon and genset contractors to get those installations.
Q. Why do so many listing sheets fail to list something as important as engine-hours?
A. Let me give you more info about the engine hour issues.
Yanmar, the most reliable and popular engine used in the charter yacht industry, have digital hour meters that almost always fail around 1500 hours or so. Some charter companies (like my old company) replace them with analog counters and make note of the reading at time of failure.
Some of the larger hp engines have a port that Certified Mechanics can plug into and get the hours. The experienced surveyors can usually look at the engine and determine a rough hour-count... This explains why many listings do not show hours.
Q. Have you heard if Starlink Satellite Internet is coming to the cruising yacht community anytime soon?
A. I understand they have 1,443 satelites launched (19,600 to go) as of May 2021 and are testing the system now. The U.S. military should be able to use the emergency broadcast system (thru starlink) now and retail customers in New England are in beta-testing now. We should have "retail coverage" near the U.S. east coast/Bahamas this year (dunno when exactly). Starlink Internet is an absolute game-changer.
Q. I live in the Rocky Mountains and don't have much experience but am committed to buying a catamaran and cruising. I understand insurance can be hard to get for newbies. What's the easiest/quickest way to get over this hurdle?
A. SAILING-TRAINING AND THINKING AHEAD ABOUT INSURANCE:
When you buy a catamaran the insurance agency will want to see a "sailing resume" and they look for "comparable experience" and prior yacht ownership. They like to see at least two years' experience of owning a yacht. In some Insurance underwriters' eyes a sailing monohull of similar size constitutes "comparable experience" to a catamaran. Powerboat experience helps but doesn't guarantee you will get coverage. So, if you do not have this, we should talk about your situation "sooner than later".
If you do not have enough experience they will probably say either "Sorry, we cannot insure you" or "We can insure you but you must have a licensed captain in command whenever you move the yacht" or "you must have a licensed Captain for the first 100 hours and when he/she signs a statement that you are qualified to operate the vessel then that restriction is lifted.
Having to have a Captain is impractical and expensive. So, it's good to get some training and/or "comparable experience" sooner rather than later. It doesn't look good to the insurance company if you get Certified and then 2 weeks later you buy a yacht. The best approach for newbies is to get Certified at an accredited sailing school . Another way is to charter the same size catamaran as you want to buy (and you may need a captain) for a week. I own America's oldest sailing school (Castle Harbor of Miami) and after hurricane Irma destroyed all of our docks we are only doing powerboat training. Bluewater Sailing School of Ft Lauderdale has week-long live-aboard ASA "Combination" (ASA 101, 103,104, 114) courses in Ft Lauderdale, USVI and Bahamas and I recommend them... Or you may have an ASA (American Sailing Association), RYA (Royal Yachting Association in Canada or Commonwealth countries) or US Sailing accredited schools closer to your home. It's better to do this as soon as possible and not wait. Some buyers think they will wait and get trained on their boat but this can cause big insurance complications... Instructors do not like doing classes on boats they are not familiar with and it is harder to find those that will. I do have three ASA-Certified Catamaran Cruising Instructors who will sometimes do this BUT USUALLY ONLY AFTER YOU HAVE COMPLETED AT LEAST ASA 101 AND 103.
ROUGHLY-SPEAKING, COSTS AND TIME-REQUIREMENTS:
We think the best way to learn sailing is to take it in graduated steps with time to practice between each step . The steps are best done in progressive sizes of sailboats. So, Learn To Sail (ASA 101 costs around $700 and takes 3-4 days) should be in a 20'-25 daysailer (monohull) because these help you get the feeling of balance when sailing. Then Basic Coastal Cruising (ASA 103- costs around $700 and takes 2 days) should be done in a larger size like 28'-36' monohulls to see how these handle. Then ASA 104 (Intermediate Coastal Cruising or sometimes called Bareboat Chartering costs $1600 and takes 4 days) and should be done in 38'-44' monohulls or catamarans. Other schools offer "Combination" week-long 101-103-104-114 combination courses (costs $3,300-4,200/person) where you live aboard a catamaran for a week and cruise around with an Instructor. This is a LOT of material to absorb and test for and many students forget 70% within a couple of months. This combination-accelerated course is best for those with some prior experience who need to get it done fast or need Certification to charter in one of the 9 countries that require the 104 level Certification. Learning To Sail in a large cruising catamaran is like learning how to drive in a big city bus! Not the best way to start out.
If you get certified to the ASA 104 level and do at least one charter for a week in the size/type of catamaran you want to buy, I should be able to get you covered for 1.5% of the value of the boat or less (i.e., $300k boat, annual premium = $4500). I have some special insurance programs available to my newbie clients that most of my competition doesn't even know about.
"Doing it sooner" is better than later. They don’t like to see that you got "certified" one week and the next week you want to buy a yacht and sail around the world. ;)
Q. Why should I come to Florida to see catamarans with you? I don't see any attractive prices there.
A. The purpose in coming to Florida is not to buy but to educate yourself and to narrow down your choices. We usually have a pretty good selection to see in one day. Most buyers are "all over the place" and don't really know what they want because what you see on the Internet is not the same as walking on the boats and seeing the bad parts and the good parts which I will show you..... After you spend a day with me, you usually then have only one choice of model(s) in your budget. Then I send you the selling price histories so you can spot a good deal when you see one. This makes everything very easy and I advise you where in the world and when to find the best deal for that model. There are almost never any "deals" in Florida because we have way too many Buyers here compared to the number of boats. For example, if I have a "hot listing" here we usually have 60-75 buyers each month looking at that boat who are willing to pay higher prices. So Florida is a great place to sell but not to buy. That same "hot listing" if located in Belize, Curacao or some other remote Caribbean island would not have one buyer look at it in 3 months! This is also where the boats have lower engine hours. This is where you want to buy because prices are significantly lower!
Q. I see this really cheap new Lagoon 46 catamaran offered for sale by a European dealer. Why shouldn't I buy this?
A. This is a yacht (not yet in existence) that you must order and here is the reality:
- this is a "clickbait base price"; that is, it includes no options and the price will likely be over $1,000,000 once you add all the normal options and lose dollars buying Euros. This tantalizing price is there to get you to click on this "clickbait ad" and contact this dealer who may also try the "Switcheroo" tactic (to switch you to a used boat). The European dealers have different (higher) pricing than the Western Hemisphere dealers and they are the masters of "clickbait".
- you may have to wait 9-15 months for it. If lockdowns come back for "COVID-21", or whatever the next pandemic is called, there will be even more delays that you will not be compensated for. Some of the factories in Europe were closed for months for "Covid-reasons" last year.
- This yacht WILL have between 50-150 defects if you survey it and you will have to wait another 2-5 months to take possession after it is commissioned and before repairs can be finished. They are hoping you will not survey it (like most buyers) and many defects won't be found until after the 12 month warranty on everything expires. Then YOU pay for all these repairs!
- they are NOT supposed to sell to you as you do not reside in their territory, so you could have major problems getting warranty work done unless you leave it in Spain for many months.
Q. Why use a Buyer's Agent? Doesn't it add to my Budget?
A. Buying or selling a yacht successfully requires skill, knowledge and an understanding of the process. While it is possible for an individual to do this on their own, most “DIY's” don’t have the time, knowledge or access to what or who is needed to complete the transaction successfully. If your objective is to save money by not having to pay commissions, think again. Statistically speaking, Brokers help their clients sell their yacht for more and buy their yacht for less because a Broker knows the market better than the average consumer and appropriately advises their client. They pay for private selling price historical data provided by the largest MLS and others.
Why would you want to make one of the largest investments of your lifetime without the knowledge that you have accurate data and an advocate on your side that knows where to get this information and who provides it to you at no charge. That’s a no brainer.
To answer your question about "Why use a Buyer's Broker?" let me first ask you a question. Would you go to court without an Attorney when the opposing counsel is represented by an Attorney? Well…..maybe. If your neighbor said your kid hit a baseball through his window and he wants you to pay for it, and you don’t have a kid, you might go to court and tell the Judge, “I am not responsible because I don’t have a kid”. Pretty cut and dried example and perhaps a safe bet to not be represented by someone that knows more about the law than you. On the other hand, let’s say your neighbor accuses you of breaking into their house and stealing their million dollar Picasso painting and they want it back and you in jail. In this case, you will probably want to be represented by a competent Attorney that can defend you against this false claim.
Statistically speaking, for most folks, their yacht is their second-largest investment during their lifetime. Why would you want to make this investment without knowing you have an experienced advocate (a Buyers Agent) representing you and making sure you get the best deal and helps you successfully navigate through the sea of paperwork that is to follow, especially since most Buyers Agents are paid by the Seller and cost you nothing?
If you are not represented by a Buyers Agent, do you think the Seller's Agent is going to tell you about all the defects with the yacht? No, they are not, because they represent the Seller and not you the Buyer. They are going to do just what is required by law and nothing more to help you. A Licensed and Bonded Florida-based Buyers Agent on the other hand will make sure you are treated fairly because they have a legal fiduciary-responsibility to their Buyer. Agents in most countries owe you nothing and often operate under a different rule of Law (like Old Roman Law or Napoleonic Law). Under those laws the Buyer is on his/her own with "Caveat Emptor" (Let The Buyer Beware!) and there is another precept that states "...if a Seller takes advantage of the Buyer, then the Buyer permitted it to happen...." So, what legal recourse do you think you have?
A Buyers Agent has a contractual obligation to have your best interest in mind. They can help you navigate through a sea of paperwork, connect you with the right service people like an Accredited Marine Surveyor knowledgeable in the type of yacht you are interested in. This surveyor inspects your yacht to make sure there are no latent defects, no undisclosed damage and is a good fit for your intended use. A Buyer's Agent refers you to an experienced yacht titling agent who makes sure the title is clean and transferred properly. A good Buyer's Agent can also make sure you get a list of the lowest cost insurance underwriters, most versatile lenders, referrals to reputable mechanics, riggers, air-conditioning contractors, canvas fabricators, solar panel installers, etc etc.. A good Buyer's Agent has relationships with all these people and can help you find the right ones to make your move into the new yacht a pleasant one.
As you can see, a yacht broker does a lot more than just buy and sell yachts. They can help save your marriage and the cost of counseling by handling all the logistics necessary for a successful transaction. Having a great Buyer's Agent on your side helps you keep your sanity and puts you in contact with the right folks to get the job done right and in most cases, at no cost to you.
Gary Fretz has been Licensed and Bonded as a Yacht and Ship Broker since 1989 and has never had anyone file a lawsuit in connection to any deal handled by Gary or one the brokers working under him. He will navigate you through the hazards of yacht buying with ease and grace.
Q. What is happening in 2021 to the Leopard 48, 45 and Lagoon 46 markets?
A. There were no Leopard 45's or Lagoon 46's sold in the first two months... these models are so new that we aren't seeing much entering the second-hand market. The Leopard 48 market is a much different story.
Leopard 48 market will see at least 20 phasing out of charter fleets this summer as the Caribbean (June) and European (September) "high seasons" end. This is in addition to the (26) L48's already listed. I talk about this "flooding the market factor" in my report Insider Secrets To Buying Catamarans that I believe I sent you. There isn't enough buying demand for these to absorb this supply so prices WILL trend lower especially in May-June-July in the Western Hemisphere and August-Sept-Oct in the Med.
There are no Leopard 45's available for sale in the world right now. There is one deal-pending that can fall apart for certain reasons. It's just too new of a model to see many of these listed. We will see a few 2016-2017's phasing out of charter this year, most likely starting in May 2021. It will not be a flood but a "drip-drip-drip" and prices will stay high. This design is a game-changer and will stay in high-demand for 5 years.
There are a few second-hand Lagoon 46's on the worldwide market which was introduced in late 2020 and replaced the popular 450 that had a production run that approached 1,000 units ...I see a lot of fake listings of 46's that are really new boats that have not come off the production lines. The new boat dealers list these fakes to try and capture buyers for new boats. Prices will stay high because demand exceeds supply. The new walnut interior option is way better than the old Alpi (Ikea-like) interiors.
Q. Can't We Find Out What That 5 Year Old Yacht Sold for When New?
A. I used to own Florida's largest sailing yacht dealership (Eastern Yachts with 5 different yacht brands) which had offices all over the east coast.
A lot of people ask these questions and what they don't understand is that NEW BOATS RARELY SELL FOR THE SAME PRICE, OR EVEN CLOSE. PRICES CAN VARY BY 35%. BASE PRICES ON THE YACHT-MODEL CHANGE DRAMATICALLY IN YEARS 1-2 AS THEY DISCOVER THEIR TRUE COSTS. PRICES ARE CONSTANTLY ADJUSTED AT LEAST EVERY 6 MONTHS.
Why ? There are a lot of reasons, but among them:
- DEALERS HAVE WIDELY DIFFERENT DISCOUNTS BASED ON LAST YEAR'S VOLUME
- DEALERS ARE MOTIVATED VERY DIFFERENTLY DUE TO SUPPLY-DEMAND, LOCAL COST VARIANCES/DELIVERY COSTS, FLOORPLANNING PENALTIES, LOCAL ECONOMY, BOAT SHOW PRESSURES.
- SOME BUYERS ARE BETTER AT NEGOTIATING THAN OTHERS.
- A LOT OF NEW YACHTS HAVE MAJOR AFTER-MARKET INSTALLATIONS BECAUSE THE MANUFACTURERS OVER-CHARGE YACHT-BUYERS WHEN THEY BUY COMPONENTS NOT MADE BY THE BUILDER, SO IF, IN THEORY, WE COULD GET OUR HANDS ON THE ORIGINAL STANDARD PRICE SHEETS, WELL, THEY'D BE WAY OFF OF WHAT THE BUYER ACTUALLY PAID FOR EVERYTHING.
Instead of spinning your wheels in this quagmire, I can give you the actual selling prices for THE SECONDHAND SALES for different years and this is the best way we have to determine selling prices in the market.
If you are thinking of buying a new yacht, DON'T! I WILL EXPLAIN WHY ON THE PHONE
Q. What are the different taxes that can apply? Does Buyer or Seller pay them?
A. Taxes in a nutshell:
It generally depends on the following.
- Sales Tax only applies when a yacht is physically in a US State and that state has a Sales Tax on yachts....there are several US states that have no sales tax on yachts (Delaware, New Hampshire, Rhode Island are some)....Sales Tax is always for Buyers account because that has to do with where the Buyer keeps it and how it's registered.....we can usually avoid Sales Tax by leaving that state promptly or doing an "Offshore Closing"...Offshore Closings may add a little to the Buyer's costs.
- Use Taxes are always for the Buyer (if applicable in that U.S. state). Use Tax is usually triggered if you stay too long in one state that has this law. For example, yachts are allowed to visit Florida for 90 days in a 12-month period without paying Use Tax. Use Tax rates mirror Sales Tax (6-7.5% in Florida depending on the county)
- Duties and Excise Taxes are for the Seller's account.
- VAT only applies to Buyers with European Passports, unless a non-European owner overstays the time they stay in EU waters. VAT is a huge tax (16-24%). I know some ways to be legally exempt but it's too long to describe here.
- there are some other smaller taxes and fees, mostly imposed upon vessels in European waters but we can usually get around those taxes with some logistical maneuvers (like "offshore closings"). When you enter any foreign country NEVER EVER say to the Immigration officer "We just bought a boat here and are coming to take it away". They may get some ideas about taxing you.
Q. If the USCG Documentation is taking 3-4 months to process how do I clear out of the current country if it is in transit to another country?
A. To answer the question about "operating the vessel while waiting for the USCG ('Documentation') Registration to be finished".
If the boat is sitting at the dock then no need to do anything. If you will sail it to another country then we have a couple of solutions:
1. Just clear out and into the next country with a copy of the old registration, a copy of the Bill or Sale...you can also ask the Doc Agent for a "running letter" which just states that your application for USCG Documentation has been submitted and due to the usual delays, it won't be received for 3-4 months and please allow this vessel to transit swiftly.
2. Get a temporary Registration in Delaware, for example...this state registration is quicker-easier to get, especially if you have a Delaware LLC already, like many yacht buyers use. If you are going to Martinique or Guadeloupe they sometimes hassle you about this so I'd just avoid those two islands.
Q. We looked into Bluewater Sailing School ASA training courses and it looks like they do not have any classes scheduled with availability in the near future. So the question is, if we rush down there and look at boats, would we need to have completed that training course prior to closing in order to get insurance on the boat? We don't want to get in a position where we make an offer, complete a survey and then can't close because we can't get appropriate insurance lined up due to the inability to get the certification. Can you shed some light on this?
A. Normally it is best to complete the courses as soon as you can. Underwriters do not like seeing you complete the course and buy a yacht the next week. But let's consider the worst-case scenario: if you are not qualified we will find a policy that will cover you IF a licensed captain is in command of the vessel whenever it is moved. Some underwriters say "We will lift the restriction when the captain signs a statement that he feels you are capable of operating the vessel safely in that particular area." This doesn't mean you can sail around the world. It means you could be approved for, say, Caribbean use between Grenada and Puerto Rico which is a good start.
Q. Why don't we see more "galley up" catamarans for sale?
A. "Galley down" has fallen out of favor in a massive way since around 2003 because (and I exaggerate a bit to make the points clear):
- it uses up valuable space in areas that are already narrow (the hulls) that could be used for larger heads/showers and larger staterooms with more storage space which is increasingly more important to 95% of all live-aboard cruisers
- the 'bartender" or "cook" in the group cannot remain "part of the party" and must slave away in the galley alone and not be able to socialize and have fun. When the "cook" is in a galley-up they have more fun and it stays cooler when propane stoves are heating up the cook's space. My experienced cruiser girlfriend would NEVER EVER go for a galley-down.
- it causes the bridgedeck to have more redundant dining areas (larger dining tables in the salon and in the cockpit...a waste of space in most cruisers minds...why do you need two "dining areas"?) So, it is very difficult to find good catamarans with galleys-down because 95% of them are old, high-mileage "Money Pits" that usually require $50,000-150,000 in refit money. If we do find a good one they are not in demand on the resale market and you could wait 1-2 years to get a decent price. This type of yacht is known as a "cult boat" which means that only a few buyers really like them and "mainstream buyers" reject them for this reason (and for the salon window over-heating issue). The "carrying costs" (dockage, insurance, maintenance, interest) you endure while waiting for that "special buyer".
If you still want to acquire one of these I will support you 100% to find a good one. I'm just trying to warn you about some issues you may not be fully aware of. I've owner 48 boats and yachts and nowadays the first question I ask myself before buying another one is "How easy will it be to resell if I don't like it?". I'll never buy a cult boat again. I only buy "hot" boats because I want buyers chasing me and not the other way around. I've done too much chasing in my life!
Q. With all the Covid-19 lockdowns affecting the economy why haven't catamaran prices fallen?
A. The market is steady to firmer for certain models: Owner Version, low hours, 38-50' late-model name brands. We have seen some people selling off real estate and buying yachts to live on. Prices have not eased except for some of the "junk" cats. I define "junk" as 10 years old+, 6000 engine hours+, semi custom or kit boats.
Although government actions that resulted in shutting down businesses could result in millions of bankruptcies and business failures, remember that most catamaran owners will only allocate 10-15% of their net worth to their "toys" (like yachts), so they are not being forced to sell in order to survive. We may see some price discounting but, like in the 2007-8 recession, it could take 6-12 months to see this.
Q. Why would you buy a yacht right now when you can’t even hardly leave shore?
A. As best as I can explain it:
- buyers tell me they love the fact that they can isolate themselves from civilization on a yacht (like an island unto itself) and they want the ability to escape crowded urban, crime-ridden areas. Some sold their real estate to escape high taxes.
- investors are moving into hard assets like gold, silver, Bitcoin, Monero, real estate, yachts because when the 10 trillion dollars in crony-money gets absorbed into the economy prices will eventually hyperinflate and hard assets will soar in value, so better to buy now than later.
- I just returned from a 2 week cruise in the Bahamas and returned to the US. I can tell you that even though Bahamians were partially locked down with curfews, we were allowed 100% free rein to go anywhere we wanted to. Returning to the US was very easy. We had a Customs sticker and only had to call a toll free number to check in. Cruising on a yacht is the last bastion of freedom on earth in these times.
Q. Do I foresee activity after re-opening?
A. Yes, we saw no activity for 6 weeks. There is pent up demand for cats priced $150-400k. All the "deals" in this price range will get snapped up fairly quickly.
Q. Is Yachts International still open for busines during the Coronavirus COVID-19 outbreak?
A. Yes, by using safe practices and vessel walkthroughs, Yachts International continues to show boats and transact business on a remote basis. Agents and staff are working from home to continue brokerage services. Yachts International is showing boats via Facetime, etc. from a boat to prospective buyers. Contact Us to follow your dreams.
Q. I'm wavering between buying "New vs Used". I like the fact that warranty ensures everything will be working correctly but I don't like the "depreciation hit" I will take.
A. I have sold several new yachts that had over 50 defects found at survey. Nobody, including me, saw this coming at the time.. One of those new yachts took 4 months to fix everything and the buyer was mad because he couldn't use the boat during that time and he had planned on taking the family on a Christmas cruise. I heard when the factories were running "24/7" (to replace the cats destroyed by hurricanes) and "quality control" was not good, there was one Lagoon 450 that had over 150 defects noted at survey!
Here is the solution:
- Forget new yachts! They can we worse than used yachts and the depreciation hot is a real concern unless you have "money to burn".
- look for a 3-4 year old yacht that looks like new because it was properly cared for... this way, you capture depreciation
- look for meticulous maintenance logs to prove it was well-cared-for and you want to see that they took care of all the warranty issues. All yachts have them. Some brands are worse than others. We can discuss this on the phone.
- look for low engine hours
- buy "the right boat" (Owner Version, popular model) it at the "right time of year" and "in the right locations" in the world so you "buy it right"
If you follow these rules you will be a happy owner and if, for any reason you are not, it is very easy to resell a yacht like this. I have sold many in a matter of hours, especially in the winter when we run out of the rare Owner Versions with low hours.
Q. If I buy a catamaran in Europe, how smooth is it to register the cat in Delaware, US? Does VAT apply to me (a US Resident)? Any other glitches??
A. If you buy a cat there it's usually not too complicated to re-register in Delaware. VAT only applies to EU Residents and even then I have a legal way for EU Residents to become VAT free. If a Buyer is a Non-EU Resident (like from the US) and you want to cruise around Europe then we just apply for a one year Cruising Permit and there are no taxes.
The main glitches I have seen are when a Buyer does not make the offer using our western contracts (based on English Common Law) and they get hog-tied by the European contractual terms and conditions (based on their legal system and old Roman Law) that make it difficult to get your deposit back when they find out that the Seller did not disclose all the various issues. The European Sellers tempt you with low prices, pressure you to sign their contracts and submit a deposit and then they later reveal certain issues and extra expenses for you after you have signed your rights away and given them the deposit. I have two Buyers who came to me in the past month (one is literally "in tears") after they made offers through a European agency and are discovering that the Seller did not disclose a number of issues, they have no leverage to get their deposits back and there isn't much I can do to help them because they did not get me to represent them from the beginning and they consented to use their European terms and conditions which offer little Buyer Protection compared to the contracts I use. So, they will lose their deposits if they do not buy the yachts and they are greatly regretting their actions right now...
LESSON TO BE LEARNED: Get me engaged as your Buyers Agent early in the process and never send a deposit to the European agencies.
Q. What are "Pre-Inspection Surveys" and how do they differ from a "Pre-Purchase Survey"?
A. There are many different types of surveys and we are normally concerned with "PrePurchase Surveys" and "PreInspection Surveys". The PreInspection version is less common and the goal is to determine general condition and answer the question "Is the yacht accurately described in the Listing Sheet?"... We see these done 15-20% of the time mainly in remote areas (like Grenada) to have an independent third party expert spend 1-2 hours to determine general condition and to see if there are any glaring defects. This report may include 80-100 photos and a 1-2 page Summary of Condition or the surveyor will brief the prospective buyer on the phone or on a Skype call. This can be a good way to avoid wasting money on travel expenses to see a yacht that may be mis-represented or "fluffed up" by the Sellers Agent. A lot of buyers waste a lot of money traveling around to inspect different yachts that look great in the photos but are not really described accurately.
A PrePurchase Survey, on the other hand, has been described as a "Cecil B. DeMille Production". These can last 1-2 days and generally follow this protocol:
The usual survey format goes something like this (with my comments and some "Tips"):
- meet on board at 0900 hoursHere are some general survey tips:
- the surveyor goes through all the systems and we want to ask him to notify us if he finds any significant defects so that we can discuss them
- surveyor does a cold start of the machinery
- we leave the dock around 1000-1030 to get to the yard for 1100-1130. These shipyards aren't as punctual as you think so it could be hauled anytime between 1100-1300.
- after it is hauled the surveyor performs the out of the water inspection including sounding the hull, inspecting the underwater running gear and surfaces, checking the rudder bearings and bushings, etc.
- Buyer settles up with the yard at least 30 minutes before "anticipated departure time" unless it was pre-paid.
- Relaunch at 1300 and proceed to the engine evaluation. The surveyor runs them at full throttle for a while and then checks the transmissions. He observes the engine running under load with special temperature sensors.
- Proceed to the ocean or bay and raise sails. The surveyor only needs to see how the sails get deployed, we do a couple of tacks and that's all he needs as he has a lot of other systems to check. If you would like to sail longer, please let me know in advance. We usually sail for less than 15-20 minutes unless you need more time.
- There is usually no time for lunch so eat a large breakfast and bring a snack and bottled water.
- We then return to "home base" and tie up by around 1500-1530. The surveyor takes oil samples sometimes especially if the engines are older or "high-time".
- the surveyor finishes up his inspections and gives a final briefing before departing (usually by 1600)
- Ask the surveyor (early in the day or in advance) to give you a briefing of findings before he leaves for the day which includes any defects found. You need to know what the issues are. Take complete notes of what he says. That way we can discuss these. Many surveyors get delayed with the typing of the reports and you may not see a survey for a week.I usually know exactly "what we have" at the end of survey day when we get the list of defects from the surveyor. Most US and British Caribbean surveyors know to give you the briefing-summary at the end but European surveyors are not as professional in this regard so you have to push them for this. I hope this helps.
- Check to see that all scheduled engine maintenance was performed especially each 1,000 hour service. These are often skipped.
- check raw water intake valves (many are frozen)
- Many original trampolines were sub-standard and should be double-checked
- CHECK FOR WINDOW AND HATCH LEAKS: I've surveyed several of this model and found leaks in main salon windows and deck hatches. Look for wood discoloration down low on wood trim and on sills in the salon near the windows. Trace the leaks. Leaks can be very bad if they get in between the hull and the liner.
- look for gaps in interior joinery work especially over the door frames. Hull flexing can cause cracking and bulkhead separation in some cases
- ask the Owner "What aftermarket items were installed?". Then ask the surveyor to pay close attention to these as many aftermarket installations (as opposed to factory installations) are done hurriedly and not well, especially if the contractor knew he'd never see the owner again.
- If there are any defects found and valued at more than 2,000 Euros immediately find the boat yard estimator or foreman and ask to get a quote to fix it. This way we know what it will take to get the yacht in proper working order. Most contractors must see the issue first-hand before sticking their neck out with a quote so it's best to get this done in the yard and not dilly-dally.
- Take photos of the Ship's Papers (especially Registration, Radio License, dinghy registration if applicable, insurance policy face page, etc) with your phone. This will save a lot of time later when the Documentation Agent needs these and the Owner doesn't have them with him.
Q. If the catamaran comes from Europe we are willing to pay to bring it over however this would depend on the price of the boat.
A. I have sold 5 year old Lagoon 400 owner versions in Greece and Croatia for around $226k-234k and they cruised for 9-18 months and came back here and sold them or could have sold them for $275k which essentially pays for the cruise, but you have to have the time and skill-set to do this method.
Q. It appears that generally the best deals in the world for catamarans are always found outside of the U.S. How do I protect myself from the vagaries of dealing with non-U.S. brokers and sellers of catamarans? I've read some horror stories on the forums.
A. If you would like to avail yourself of the benefits of the buyer protections under the US legal system and have me represent you, just let me take over the communication with the Owner's or his Agent and make any offers through me. I am licensed and bonded under the Florida Yacht and Ship Broker's law (since 1989) and it is the most-stringent in the world. Some offshore brokers operate like "The Wild, Wild West" and by making the deal subject to US law and the Florida escrow rules you are well-protected from "deposit seizures", mis-representations, and dispute resolutions under a foreign law that you may not be familiar with. Under our rules if you gain a proper "first option" the way I have described, you can reject the vessel for any reason during the "due-diligence period" and in fact, if you simply do nothing, it is construed as "rejection of vessel" with a refund of deposit.
Q. (I often get this question) I want to know what this yacht sold for new?
A. It is very difficult to know what a given boat sells for new because every new yacht sells for a completely different price. The only way to know is to get a copy of the new invoice which many Sellers are reluctant to give out. It's like "proprietary information". You may wonder why yachts sell for greatly differing amounts . I used to own Florida's largest sailing yacht dealership (Eastern Yachts) and I had $5.5 million of new yachts in inventory and a boat yard in Port of Palm Beach (until the Recession of 2008 killed that business) so I know all about this. Here is my attempt to explain this:
- Every yacht is sold with different equipment so this causes price variations. Equipment add-ons cost different amounts in different parts of the country.
- Every yacht costs the dealer different amounts due to "floor planning" costs. What is flooring planning? This is the cost to borrow money to buy new inventory. It usually costs the dealer 1.5-2% over the Prime Rate to borrow money short term. TIP: many floor planning programs impose huge penalties if the loan "ages" over 12 months. So, the interest rate can go to 12-14% (!) which is a huge expense for the dealer. This penalty by the lender really incentivizes dealers to get rid of "stale" inventory. This is why they will often sell it at cost if it is still in inventory after a year. But the popular model catamarans usually never stay in inventory this long.
- Every dealer has different "carrying costs". This refers to their cost of insurance, cost to store yachts and the cost to maintain the inventory which vary widely.
- Every dealer has different delivery costs. So, a dealer in Seattle Washington would have a huge cost of delivery from a factory in France whereas a dealer on the west coast of France has a negligible cost of delivery. If you are a U.S. buyer and intend to use the yacht in the US the factories have very strict rules with the dealers about "poaching other dealers' territories" so you cannot easily take delivery there and deliver it yourself without some warranty claim problems. The factories make the dealers absorb warranty claims and if you make a claim to a dealer who didn't sell you the yacht this causes a big problem. When the factories are running "24/7" (like after Hurricane Irma destroyed so many yachts) the number of warranty issues skyrocket because they are in a hurry to finish boats. One very popular model was delivered new and had 153 survey defects recently that the dealer had to repair.
- Many manufacturers have different dealer markups depending on volume. So, the dealer who is one of the top dealers gets a lower cost for their new units.
Q. I realize that catamarans are less expensive down in the Caribbean but I have a lot of personal gear to put on the yacht so would prefer to have the boat in Florida or some US East Coast area?
A. One way some catamaran buyers handle this is to not bring the boat back to the US and risk taxes, high delivery costs and the boat is already in paradise "ready-to-cruise". Because St. Thomas, US Virgin Islands is a US Territory, the US Postal Service subsidizes parcel post packages and because of the many nonstop flights there from US airline hubs, it is relatively inexpensive and free of bureaucratic hassles to just ship your personal gear, spare parts, equipment, etc., there via air freight Tax Free and free of bureaucratic delays like you can have in non-US islands. If it is shipped to a freight forwarder's warehouse at the airport you can literally anchor next to the airport, take your dinghy in to the beach/dock and the warehouses are 200 yards from your dinghy. Otherwise, you can ship to yourself in care of:
"General Delivery"This is what I some cruisers do and the P.O. usually holds the packages for 30 days.
Charlotte Amalie Post Office
9846 Estate Thomas, St Thomas, VI 00802"
You can also ship air freight packages to other islands (especially St Maarten) and mark the box in large letters "YACHT IN TRANSIT S/V ____" (and write the name of the yacht after "S/V ____" . S/V stands for "sailing vessel") which should get you Duty Free status unless the Customs guy is in a bad mood that day. That's just the way it works.
Q. I'm confused about how these deferred title transfers work on French tax shelter yachts? I understand that the French tax partnerships want to make a deal today at a good price, and will charter the yacht for four months but what happens if the yacht is damaged during that time? Who covers insurance and when does the buyer take that over? When does title transfer actually happen?
A. This "deferred title transfer" is a common situation with French "tax shelter boats". They cannot legally be sold until the 66 month anniversary of their commissioning. The timing of the sale is more important than selling price in many cases, so this can create buying opportunities and save you money.
Here is how we handle it:
We make a deal now. You are saving $20,000 on the boat so it's worth it to be flexible. We go to survey/sea trial in the normal time-frame (within 3 weeks of making the deal). You then "Accept" or "Reject" the vessel depending on whether you are satisfied with the survey report. If you "Accept" then the boat keeps doing its charters until phase-out in 4 months and then when it is finally done the surveyor re-inspects the vessel to verify that no damage was done since the last inspection. I have done hundreds of these types of deals and only once was a boat damaged after the initial survey and it was a minor $300 gel coat repair ... We write into the contract a "damage clause" which essentially states that:
"Buyer has the right to re-inspection after the last charter. If damage is found and is valued at over 5% of the selling price then Buyer has the right to cancel the deal OR re-negotiate price. If damage is found that is less than 5% then Seller must repair the damage at their expense to the satisfaction of the surveyor."
Then title transfer takes place after the re-inspection. All liabilities are for Sellers account prior to title transfer. Buyer assumes insurance , dockage, etc type liabilities after title transfer.
Q. As I inquire about basics on various boats, I find that the listing brokers don’t know the facts. They speak in generalities at best. I can see the potential issue... that is these boats are located all over the world and how can a broker financially expect to inspect the boat given the time and vast distances involved.
I would think that a broker would spend a good deal of time with the owner on the phone, gathering information to adequately represent the boat/buyer. Perhaps I live in a fairy world thinking like that. How do you deal with this problem?
A. Yes, this is a problem that has been around a long time in the yacht business. The listing agents cannot always be the ones to blame for the reasons you give because Sellers do not always give a "balanced presentation"" of the yacht. They sometimes "fluff it up" so we can have unpleasant "surprises" when viewing some of these listings. Also, everyone's definition of "well-maintained" is always different.
So, the solution I always advocate is that once we think we have found a good candidate I recommend hiring an independent certified marine surveyor to perform a "PreInspection Report" or "mini survey". They spend 1-2 hours, take 80-100 photos and will either write a 1-2 page summary of findings OR they will brief you on the phone. Then we know what we actually have. These surveys usually cost between $250-300 or 250-350 Euros depending on location and some surveyors do not like doing these so we can't always get it done promptly. This has always worked except in areas where a surveyor is not nearby and then his travel costs make it prohibitive. If this happens we can sometimes have a local person take more photos and try to glean something from that.
Q. There is a lot of confusion out there about sales and use taxes. You said there is a little known way to gain exemption from from Florida sales and use tax even if I'm a Florida resident. Please tell me!
A.Yes, it's all so convoluted (by design!).
There is a little known method of exemption in Florida and it works like this:
- You must purchase a yacht outside of Florida... you can be a Florida resident.
- You must keep the yacht in another U.S. Taxing jurisdiction for over 180 days (many buyers take them to the US Virgin Islands if they buy in the Caribbean). There are several "low tax"/"no tax" us states/territories you can take it to.
- You must not register the yacht in Florida. I recommend Delaware because it is tax free, hassle free, cheap and easy. 150,000 yachts are registered there.
- When you come to Florida with the yacht you must report in to an auto tag agency (where we register cars and boats) before 90 days has elapsed. You must have receipts to prove you kept the yacht for 6 months in that other us taxing jurisdiction (Bahamas does not count!). If you owed tax there you must bring the receipt. A dock receipt is the best way to prove you were there. US Virgin Islands are "tax free". Many yachts go to Rhode island or Delaware which are also tax free. Some states (like Connecticut allow you to store the yacht on the hard "tax free" and this qualifies).
- Once you produce all this state of Florida will want a "state registration fee" based on the length of the yacht (40' costs around $85). Once you pay the fee you gain tax exemption forever and they give you a credit card type registration card to carry with the ship's papers.
Ask me about other ways to gain exemption.
Q. What should I remember to do "Day of Survey"?
A. The most important things are:
- be sure to advise the surveyor beforehand, if possible, how you intend to use the catamaran (weekend cruising? coastal cruising? circumnavigation? ocean-crossing? live-aboard? charter?) and he will tailor-make a list of recommendations to help prep the yacht for that intended usage.
- make sure the yard has an appointment to haul the boat (in writing) and the surveyor has confirmed an arrival time.
- the bottom may need a pressure wash when it is hauled out so the surveyor can inspect it up close... this is usually for Buyers account.
- advise the surveyor (early that day) that before he leaves for the day that you would like to have a briefing of a "summary of findings"... then bring a legal pad and pen and take good notes. This is the "meat of the survey" and it is better to get it on the day of survey instead of waiting days for the written survey to be sent. Many of these surveyors are very slow typists and they tell you "It'll be ready ___" and it is delayed. So, be sure to ask him at the end of they when you can expect it.
- I would also ask the surveyor to show you any major defects he finds "as he finds them" and you should take pics with your phone so we can analyze them.
- bring plenty of water and some snacks for survey day. It can get super-busy and many surveyors skip lunch
- ask the Listing agent if he will be there. He should be there to keep things moving along and to get things done with the yard.
- if the surveyor finds any major defects that seem to cost over 3,000 Euros/dollars to fix, immediately go find a yard foreman or yard estimator and get a price to fix that issue
- take good notes when the Seller explains any idiosyncrasies... many yachts have systems that were installed after initial commissioning and they sometimes entail a complex procedure to operate them that you may not remember later... so use the Seller's knowledge to get all this straight.
- ask the Seller "Have there ever been any major groundings?". "Have there ever been any lightning strikes?", "Has there ever been any water intrusion or leaks?" and find out as much as you can about these.
Q. I'm new to boating and my thing is that I get hung up on having all the newest tech and aids. As someone new to boating, I'll need all the help I can get while I learn.
A. I have 55 years of experience and got most of that experience before meaningful electronics actually worked. So, I tend to do things the old fashioned way and not rely on electronics. I cannot live without a GPS Plotter nowadays but a lot of the other stuff is more of a bother to me than a help. Also remember that if you get hit by lightning, it knocks all the electronics out and you must go back to the old fashioned method of deduced reckoning. I've been hit by lightning three times and I had to pull out the paper charts and figure out how to get home because I was out in the middle of the Gulf of Mexico each time I was hit. Some of the new electronics are even annoying because they sometimes mysteriously get into another mode/don't work and you have your hands full and don't have time to figure out why it won't work so they become temporarily useless when you need them the most! They also have a useful "life" of 5 years or less so I wouldn't get too excited about this new technology yet... I have had a couple of GPS Plotters fail just after the one year warranty expired and the manufacturer (Raymarine) would not honor the warranty... Can you believe that!? I say just master the basics of "tried and true" navigation and boat handling and you will be less frustrated than what you will find with these newfangled gadgets that are not as reliable as the methods that worked for hundreds of years.
Q. Why are catamarans less-expensive outside of the U.S.?
A. WHY CATAMARANS ARE SIGNIFICANTLY LESS-EXPENSIVE OFFSHORE THAN IN THE U.S.
In my 30 years of buying and selling yachts I've noticed that prices for yachts are usually significantly lower outside of the U.S.
The best way I can explain it is this:
When we have a "smoking hot" listing which nowadays would be a late-model Owner Version Catamaran in the 38'-50' range, we could see 20+ prospective buyers/month inspecting it IF it is located in South Florida (also known as "The Supermarket for Yachts"). If the same yacht were lying in an "out-of-the-way" place like Belize, some small Caribbean islands or the Seychelles we would be lucky if we show that same boat once in three months! This supply-demand imbalance creates opportunities for buyers in some offshore islands and on a $250,000 yacht they could easily save $15,000-40,000 by buying offshore. I can arrange delivery to the US for $2-3 per mile. So, it can pay excellent dividends to buy offshore and when you resell it you may want to take it to a high-demand area like Florida.
Why does this happen and why don't smart sellers take their yachts to a high-demand area to sell it? Most catamarans, for example, are used in the Caribbean so there are naturally more of them there than anywhere else in the world. Generally, 90% of them go into charter at some point in their "lives" and many of these are owned by French tax-shelter partnerships, travel agencies or charter companies. These companies are very aware of the high "carrying costs" (dockage/insurance/maintenance/debt service) of yachts and they realize that it is better to discount them heavily and get them sold as soon after they phase-out of their money-earning charter programs as possible. This is why you see the term "available ____" (sometime on the future). The French tax-shelter program, for example, requires the yacht to stay in charter until the 66 month anniversary of its commissioning. They will not pay for the boat to be delivered to a high-demand area because it may trigger import taxes and if they take the lowest price in the world for that model they just get a larger tax-deduction so these can be some of the best deals out there. One possible drawback for Americans is that these European-spec yachts are wired for 220V/50-cycle electrical systems. But this is not a problem if the yacht will be primarily used in the Caribbean or South Florida and other parts of the world where most marinas' have dual 110V/220V electrical systems.
SO, IF YOU WANT THE BEST DEAL AND NEED U.S. FINANCING YOU NEED TO PLAN ACCORDINGLY:
Remember, there are really only 4 serious yacht lenders in the US who will write loans on vessels located outside the U.S. and U.S. Territories (where the best deals usually are). You will waste many hours (jumping through hoops with dozens of "information demands") with these other lenders who are not really serious...these non-serious lenders really just want to find out what assets you have and when they find the "one in a hundred golden borrower" they WILL write a loan but it is not only secured by the yacht but they sometimes attach your other assets. FORGET THESE TIME-WASTERS! You only want to deal with the serious marine lenders. I will connect you with the best loan broker I know of.
Q. What is the typical spread between "asking price" and "selling price" for catamarans? Is it like real estate where you might expect the Seller to take 15%-25% off of his "asking price"?
A. No. The spread between "asking price" and "selling price" in the catamaran market is not like real estate, especially for "hot listings" (Owner Versions) OR if we are discussing a boat that is the lowest priced in the world for that model/age. Some Buyers think that the spread is 15-25% like in real estate and it is not. This is unrealistic because yachts are different than real estate in that they can be moved from an area of "low demand" (any hard to get to island) to an area of "high demand" (like Florida). The spread is different for each make/model/location and I can usually advise roughly where we can end up on the "last price". If we are discussing a (low demand) older monohull or a custom-build that has been on the market for a year this is different and we can and do see spreads of 20%-25%.
Q. Wow, I see this older, larger (44') Nautitech with 5 cabins that is in my $250k price range. It looks perfect for mat plans to do some charters and cruise around. What do you think of these Nautitechs?
A. I'm going to exaggerate a bit to make a point about Nautitechs. There are several generations of these and the generation in your budget is a very old design. They are known as "cheap charter boats" with a very basic fit and finish... some of them come with a lot of staterooms which are excellent for the charter business as charter parties usually want to minimize the "cost per person" ... most high end charterers do not want them so this is suitable for mid-range and the low end of charters. The big problem with low end boats is that they are unreliable. So, imagine what happens when you are out on a charter and an engine breaks down and you must wait 2 weeks for parts. But because in the charter business your bookings come all at one time of year, one after another, you have charter party #2 arriving one day after "charter #1" departs and you must cancel it because the boat is not safe/seaworthy to go out. And these charter guests booked non-refundable airfare. And because it's the high season there are no available substitute boats to switch the charter party to. So, now you and your charter business are in big trouble. You will have to refund their money and you will get "trashed" on the internet and your business is ruined. All that hard work building it up goes down the drain. This is why the major charter companies get rid of their boats at the end of year 5. Because they know there is only a few years of "life" left and so they can still get a decent price for the boat....
I'm telling you all this so there are no unpleasant surprises in your future. The solution is to go smaller/newer/less expensive catamaran.
Q. In your experience, what percentage of deals-pending on catamarans fall apart on the "financing" condition? If the boat is rejected after survey then should we avoid it too?
A. In my experience around 15-20% of the deals fall apart on the financing condition. If it is rejected after survey we have to discover the real reason. I had one deal recently whereby the wife decided she wanted a larger boat after doing all the inspections. Other times Buyers are being unrealistic and trying to re-negotiate price down after survey and that's why it falls apart. If there is a major defect found at survey that was previously undisclosed this can cause rejection. We try to discover these before going to the expense of a survey though. Some agents overseas who have an attitude of "caveat emptor" will fail to give us a balanced or truthful Listing Sheet and we need to be extra vigilant when dealing with these types. I can advise which countries that tend to have these types.
Many boats that are over the age of ten will have 35-50 defects noted at survey. This is just "par for the course" and buyers are unrealistic sometimes and panic when they see this many issues to deal with. I always pre-advise my clients to stay away from these old "high mileage" boats unless they enjoy working on them continuously. You may think "Well, if I get the boat at a low enough price, I'll deal with the issues." BUT, most of the money you dump into the boat will not be recovered when you resell the boat. You may only see a return of 10- 20% of the value of the work you put into it.
Q. I found this 2015 Fountaine Pajot Mahe 36 for only $69,000 on Craigslist. It doesn't appear like the hurricane damage is serious.
A. This is a financially-dangerous proposition. I used to buy and fix up hurricane damaged yachts when I operated a boat yard in Palm Beach. But I would not touch this boat now because of what I know about these. Notice the stanchions were all wiped out. This means water got into the deck where they were ripped out because of the heavy rains at that time. He also says: "The damaged cabin top has a temporary, fiberglass watertight repair, which needs TLC to return it to factory condition. She lost her Bimini, davit and helm seat; all of her damaged deck gear has been removed, much of which is stored in her forward sail lockers."
This means that water did get into the deck and/or hull before it was temporarily repaired and cleaned up to look good on the outside. Sometimes it is in areas covered by an interior liner so you dont smell mold now but the water infects the electrical system and the mold and mildew starts to grow. This become toxic and is impossible, as fas as I know, to remove because you cannot reach it. Most builders construct the boats so that you cannot remove the interior liners without ripping the boat up and this is expensive to rebuild. Probably as expensive a building a boat from "scratch".
You may be thinking "Well, I can hire an expert marine surveyor to check it", BUT surveyors want nothing to do with these and refuse to survey them because they know they are disasters and there WILL be surprises because of what you can't see and whoever buys this will eventually be very unhappy, feel deceived when they dig deeper into the problem and may sue everyone in sight.
Whenever you see yachts advertised on Craigslist, 99% of the time, there is a major problem with the yacht or the title (or it's an old pile of junk) and these sellers know that a licensed and bonded broker has a fiduciary responsibility to disclose all defects and this ruins their plan to find an inexperienced or gullible buyer who won't do the proper due diligence because that type of buyer is looking for the "Deal of the Year".
It is better to find an undamaged boat at a good price using seasonal price variations, locational discounts and "flooding the market factors" I talk about in my INSIDER SECRETS TO BUYING CATAMARANS report.
Q. Florida Sales and Use Tax on yachts seems to be overly complex. Can you simplify an explanation and advise how to be legally-exempt?
A. Yes, Florida Sales and Use Tax on yachts can get complicated and here is my attempt at simplifying it:
Florida Sales Tax has to do with yachts purchased in state by Florida Residents. Use Tax has to do with yachts purchased outside Florida and brought to Florida for more than 90 days. The Florida Sales and Use Tax tax is 6-7.5% of the purchase price depending on what County the yacht is in. Florida has now capped its Sales and Use Tax on yachts at $18,000. Florida does not have a personal property tax like many other states. If you already paid tax in another US state, Florida will accept that amount as a credit toward their Sales and Use Tax. Florida Residents usually cannot avoid Sales Tax. If your primary residence is in Florida (a vacation home doesn't count), have a Florida drivers license, register as a voter there, are an officer of a Florida Corporation or pay a utility bill in Florida they consider you a Resident. Yachts purchased outside Florida by Non-Florida Residents are allowed to stay in Florida for up to 90 consecutive days or 183 days within 12 consecutive months without paying the tax.
TIP: Here is one loophole: yachts purchased outside Florida and then kept in another US taxing jurisdiction (including St Thomas USVI or Delaware or Rhode Island which are all tax free) for 6 continuous months can then be brought to Florida tax-free indefinately! You must be able to prove it was in another US jurisdiction for 6 continuous months and dockage receipts from marinas qualify as evidence of this. Sorry, Bahamas does not count.
TIP: Here is another loophole- you can avoid Sales and Use Tax and US Customs Duty (2% of the appraised value and only applies to foreign-built hulls) by flagging the yacht overseas. When you enter the US under a foreign flag you must apply for a Cruising Permit (usually good for one year) and be sure to renew it when required. You should not do any charters in the US on a foreign flag vessel. Foreign flag registration offers owners anonymity and limited liability. Foreign flagging is the least expensive in St Vincent and Gibraltar.
If you purchase a yacht in Florida and are a Non-Resident of Florida you may be exempt from the Sales and Use Tax if you:
1. Remove the vessel from Florida within 10 days of purchase
2. Put it into a Registered Repair Facility (approved by the State) to have repairs done and leave the state within 20 days of repair-completions. You must pay Sales Tax on any repair work done.
3. You can apply for a Florida Cruising Permit that is good for 90 days. You can buy another 90 days for $450.
To qualify for this you must sign an Affidavit and advise which one of the three options you will take.
See me about special rules about taxes in South Carolina and Puerto Rico. Taxes can be tricky and I can connect you with highly experienced tax-advisors. If you are setting up a charter company in Florida and will pay Sales Tax on charters you may be tax exempt when you purchase the yacht. You must then get registered with Department of Revenue and get a Sales Tax Number BEFORE the yacht purchase closes.
Q. I'm not sure I want a flybridge from what I've heard. I don't like the separation of the driver and the passengers with flybridges. It is also up in the weather and sun and is unlikely to be used except on passages. I suspect there is also a performance hit. You also loose space for solar panels which increases your need for fuel.
A. I cruised a 440 for 6 months with my girlfriend and we had other couples come for a week every now and then. My observations are:
The flybridge is an awesome feature. My girlfriend and I virtually "lived" up there and you would find us there for morning coffee, every meal, sunset cocktails and whenever we were underway. There was never this "communication issue" that people talk about...In the hot summer or tropics you catch the best breeze up there so it's much cooler than being in the cockpit. It is safer because when underway you can see further ahead which is really important for night sailing, fog, rain and other limited visibility situations. You can enclose the seating area if it's raining. I never got a drop of water on me and we went all over New England in cold rain and I stayed dry as toast. It also adds 25% more usable square footage and opens up the cockpit area. It's easier to dock because you can see all four corners of the boat from there whereas on an "offset raised helm station" (like on most cats) you can't see the opposite corners which makes docking difficult sometimes. The 450's are an awesome model and is the hottest in-demand model of catamaran in the world because of the flybridge.
I have 33,000 miles of sailing and I think this is the best design-advance we have had in many years. I was just in a 31 boat catamaran rendezvous in the Bahamas and we had a race in 15-18 knots and the 450's absolutely outsailed every other cat by a mile so I don't believe this talk about a "performance hit". I made the US Olympic Sailing Team in 1980 and just won a World Sailing Championship so I know a little about performance. Solar panels on the coach roof is not a good place for them because the mainsail and boom partially shade them. Even if 15% of a panel is shaded it will limit production of electricity by a lot. The best place is on a bracket off the aft edge of the roof where it rarely gets shade and it also provides a sun awning when the sun is behind you.
Q. The catamaran's listing says 'available April of 2019'. How can I purchase, as in 'receive free and clear title' to a yacht that is not yet for sale?
A. This is a French tax shelter program boat and they MUST stay in charter for 66 months after they were commissioned. So, title cannot change until Month 67 which is April 2019.
I've done hundreds of these deals and the way it usually works is that when we identify a suitable candidate we travel to inspect it (now, for example). We can do a survey and sea trial anytime during the "due diligence period"..... We then decide after survey whether to accept or reject the vessel. Or we could do a Conditional Acceptance that says something like "We will accept the vessel if Seller remedies the defects #1-15 by April 2019."
They sometimes fix everything but normally only pay for the biggest defects that affect "Safety issues" or "Navigation Issues". We then send the surveyor back after repairs are done for a re-inspection and he must be satisfied with the repair. He can tell them to do it over again. If any damage occurs that exceeds 5% of the value of the selling price of the yacht, the Buyer can cancel the deal with no further obligations. If damage is less than 5% then the charter company must fix all those damages to the satisfaction of our surveyor. There is a 10% deposit to hold the deal and the balance is not due until Seller can transfer a clean title.
If we are talking about a Leopard phasing out of the charter fleet in year 5 or 6 they come with a "full refit guarantee" which means they will fix ALL defects noted at survey except of minor cosmetic issues relating to "normal wear and tear". These phase-out repairs can cost them $15,000-30,000 so this is a great deal for a Buyer because you know when you sail it away, everything is in good working order.
Q. Isn't there some money to be made buying hurricane wrecked Lagoon 450's? What about rebuilding it as an "Owner Version"? Will that add a lot of resale value?
A. That wrecked 450 could need hundreds of thousands of dollars in repairs... it is very, very difficult to estimate and control costs nowadays. Surveyors refuse to survey them because it is just too difficult to get it right or they say "This could take a week and I'd have to charge you $800/day".
I used to buy and sell hurricane damaged boats but it's just too financially dangerous now. Under some circumstances it may be safer to buy a L450 charter version and convert it to an Owner Version but it must be done very carefully because if t doesn't look 100% factory-finished the value of the yacht will be negatively impacted in a big way.
The absolutely safest-best way to make money is to find an Owner Version in a remote island where you can make better deals and to move it too a high demand area to resell it... when we have a "hot" model like a 40-45' Owner Version catamaran in Florida it may have 20 prospective buyers/month looking at it...when the same boat is in a remote place like Belize, Seychelles, Grenada, Tahiti, etc there may be one buyer every 6 months looking at it. This creates supply-demand imbalances that favor the buyer in the remote areas. There are generally no "hot deals" in Florida because we have so many buyers coming here. You have to be willing to buy in the outlying areas to save money.
Q. I don't have much sailing experience but want to buy and cruise a catamaran. Can I get insurance?
A. When you buy a catamaran the insurance company wants to see some "comparable experience". One way to get some is to get Certified at an accredited sailing school. In North America we have ASA (American Sailing Association) and US Sailing schools coast to coast. I own America's oldest sailing school (Castle Harbor) in Miami and we run ASA classes all year round. But you may find a school closer to your home. You must do the courses in order. The first course is Basic Keelboat Sailing (ASA 101) which is usually a 3-4 day course over two weekends. There is a written and practical test on the last day. Then they have Basic Coastal Cruising (ASA 103) which is a two-day course. Next we have ASA 104 which is also known as Intermediate Coastal Cruising or "Bareboat Chartering" because some charter companies require this level of Certification to charter a yacht from them (especially in Europe). Catamaran Cruising (ASA 114) is a one to two day course. It is possible to do all of these in one week where you live on board a catamaran but you should study the textbooks beforehand because it is a lot to digest.
You can also charter catamarans to get some "comparable experience" for the "sailing resume" the insurance company will want to see. If you don't have enough experience they could say "We will insure you but you must have a licensed captain on board whenever you move the boat" which is impractical and expensive ...so it's good to start now with getting some experience.
Q. I don't need a catamaran until the Spring of next year. You say I can save money buy buying now. But won't the "carrying costs" offset the savings? A. No, not always. Let's say we found a great deal on your ideal model now.
This time of year (summer) you can usually save $15,000-30,000 because it is the "low buying season" compared to the winter months. I can sometimes find a boat already in a charter program that has bookings through, say, March of next year. Because it already has charter bookings, we know approximately what the cash flow will be and this will cover all "carrying costs" like dockage, insurance, maintenance, etc. and you should have some money left over. If you know you need the boat in, say, April of next year, we leave it in charter until then. You can use the boat when it's not out on charter. We survey it now and do a second follow-up survey with the same surveyor at the end of its charter program ...if there is any damage we have a contract-contingency for that. Typically, if there is damage equal to 5% of the purchase price or less, the charter company must fix it to the satisfaction of our surveyor and the deal stands. If damage-value exceeds 5% then you have the right to cancel the deal OR they must fix the damage to the satisfaction of our surveyor. This is a common strategy used by some buyers.
Q. Why is it better to buy in the summer and not the Fall, and save money on the costs of insurance, dockage, maintenance, interest, etc.?
A. The Caribbean market is larger than all the others and it primarily drives world prices. Their high season generally runs from December 1-May 15.
Most of the buyers are Canadians, Northern Europeans and Northern US sailors (we call them "Snowbirds") who want to escape the cold winters. They think they are better off buying at the last minute (Oct-Nov) so they can avoid those "carrying costs" (insurance, dockage, maintenance, etc) and save money. BUT they are wrong because the seasonal price differences greatly outweigh the "carrying cost effect"... I have seen seasonal price tendencies for almost 30 years now and we usually see the least buying competition in the summer months. The lowest prices of the year are usually seen in July and early August. If there are hurricanes churning up the Atlantic this makes under-insured Sellers nervous and some of them panic and drop prices further. Then as more Snowbirds begin calling and asking questions in late August/early Sept, Sellers see this increased interest and get "bulled up" on price. The best deals are usually gone by mid-Sept and prices climb from then until the winter. We often see the highest prices from Nov-Feb. Europe's market is smaller but when their season ends in October we can see good deals and low prices over there. It is usually more expensive to buy in Europe. We often run out of the hottest models (Owner Versions) by November and you cannot find them at any price. This is because generally only 10% of the production models are "Owner Versions" so they are relatively rare and cruisers seek them out because they usually have lower engine hours and more interior space to store your stuff away and "kill the clutter". I hope this helps you understand the market better.
ON FSBO'S (YACHTS FOR SALE BY OWNER)
Q. Can you help me with a FSBO catamaran? The seller is in Panama, the flag is Dutch and he has offered to deliver it to the US for me. What will all this cost ?
A. Yes, I can help with a FSBO and do this all the time.
Remember, there are 10,000 stolen yachts in the world today and the way the bad guys liquidate them and get paid is through FSBO sales. So, we must be extra-vigilant when dealing with these types. I have discovered two stolen yachts and turned them in to Interpol and FBI. One reason the bad guys will not list them with a broker is that most brokers have a fiduciary responsibility to Buyers to check out the title and brokers know the ways to research the title and spot bad titles and stolen vessels. I can't tell you all the secrets here because if the bad guys know about this they can take counter-measures, but there are some other things I do to identify stolen yachts.
I just need a consulting fee to oversee the sale and we must use my IYBA Purchase Agreement and follow the attached protocol so I can protect you. I attached a copy of the Agreement and of the usual procedure. WHEN A SELLER OFFERS TO DELIVER THE YACHT BEWARE! You may pay them and transfer title and they disappear so they can sell it again under a new name, new Hull I.D. number and different paint job.
We need to have a Certified Marine Surveyor (preferably well-experienced in catamaran inspections) to do the survey... another reason some Sellers use FSBO websites is because they know there is a big hidden defect in their boat and they go to "out of the way" places where surveyors are scarce, hoping to find someone who will waive a proper survey and then after they are paid they disappear, never to be seen again. Certified surveyors charge $20-24/foot. So, a 40' boat would cost $800-880 plus haul out fee. Panamanian surveyors may be cheaper. I haven't done one there in a few years.
I can advise the "due diligence" and closing costs if you send me full details on the yacht.
Q.1990's-VINTAGE DESIGNED CATS?
A.I can talk for 20-40 minutes about this issue and since I'm a slow typist I can't easily convey everything. If you need further clarification let's talk on the phone.
This 1997 is a very old design and we have made many advances since this came out so that a current generation 40' Lagoon or Leopard has more usable interior space than this 44' does... So, for around the same price, we can find a newer, albeit smaller LOA catamaran that is less-likely to be an old "Money Pit" like this probably is.
This website you found is likely a host of "phantom listings" which really do not exist. It did exist at one time, but was sold and some agents leave their old "good deal" listings up to attract your call and then tell you "It was sold but the closest thing to it is ____" ... so, it may not be available because I don't see this listing on Yachtworld. The only reliable website that somewhat polices listings for this practice is Yachtworld.com and my website LargeCatamaransForSale.com which is powered by Yachtworld.
This South African brand is a fairly fast sailing hull because they have relatively narrow hulls but this also creates a fast "sink rate"; that is, as you load equipment, people, luggage, fuel, water, provisions, etc., the boat sits lower in the water and this aggravates the "hull slamming" of the bridgedeck. All cats experience this but some are worse than others. I know an experienced catamaran sailor who bought one of these (without my advice), tried to take it to the Bahamas on a rough day in the Gulf Stream and the hull-slamming was so bad that he (and mostly his wife) got scared to death because they thought the boat would break up. They turned around after a couple hours of this, came back to Ft Lauderdale and immediately put the boat up for sale. - the exposed windows in the salon creates a "hothouse effect" in the tropics and semi-tropics during the hottest times of the day which is very hard to control. This means that the interior heats up to 10-15 degrees hotter than the outside temperature.This is precisely why the major manufacturers dumped this impractical old design-concept in the early 2000's and went to vertical windows with an "eyebrow" (Lagoon) OR louvered/shaded windows (Leopard).
This age of a boat is also highly-likely to cause this to be a "Money Pit" I don't recommend something of this age unless you are prepared to be working on it all the time.
Q. I found some Privileges for sale in my budget and I'd like to see some of these or similar models when I come to west Florida. What do you think of these?
A. Privileges have always been known as one of the best-built production cats out there; however, they are slow sailing boats, they don't have a lot of opening hatches so are "under-ventilated", the salons are tiny and the salon windows create a "hothouse effect" in the tropics and semi-tropics so they are not good for "live-aboard" purposes. This means it is like an oven in there even when it's 75 degrees out and even air conditioning cannot keep it cool. Most charter companies in the Caribbean stopped using them because of these reasons....Most everyone in the tropics put covers over the Privilege salon windows which defeats the purpose of having large panoramic views from the salon. These are great boats for northern Europe and high latitude climates but not the tropics.
Most of the cats "live" on Florida's East Coast but I may find some suitable candidates near Tampa. We usually never find "great deals" in Florida. The deals are normally in the Caribbean and I can have them delivered back to the US or wherever for $2-3/mile. But we usually have a pretty good selection here to see what model(s) appeal to you the most.
I usually recommend setting a budget and trying to get the newest boat that fits the budget even if you have to go to a smaller LOA.
Q. We will be cruising full time and attempt a circumnavigation. For the first year probably more local cruising to gather experience. (Med Sea or Caribbean)
A. YES, AS THE OWNER OF AMERICA'S OLDEST SAILING SCHOOL I RECOMMEND YOU TAKE IT SLOW AND EASY AT FIRST.
Q. We will get certified by RYA this summer. (Coastal Skipper, and eventually on the boat the yachtmaster.)
A. EXCELLENT ! YOUR INSURANCE COMPANY WILL WANT TO SEE SOME CERTIFICATION AND "COMPARABLE EXPERIENCE"
Q. TAX exempt?
A. I CAN SHOW YOU HOW TO GET EXEMPTION.
Q. You say all Cats turn into Money Pits eventually. How is it economical to buy one in the first place? Sell it after a few years?
A. THIS IS BEST DISCUSSED BY PHONE. I HAVE DISCOVERED THE KEY TO "MAKING MONEY WHEN YOU BUY A BOAT" OR AT LEAST NOT LOSING MUCH, WHEN YOU GO TO RESELL IT.
THE SHORT ANSWER IS: FIND A VERY POPULAR MODEL, BUY IT IN THE "LOW BUYING SEASON" IN A "LOW DEMAND LOCATION" (LIKE A REMOTE ISLAND AND I'LL MOVE IT FOR YOU) OR FIND A "FRENCH TAX SHELTER BOAT" WHICH CAN BE GREAT DEALS ....KEEP THE ENGINE HOURS AS LOW AS POSSIBLE, KEEP THE BOAT WELL-MAINTAINED, SELL IT IN A "HIGH DEMAND AREA" AND DURING THE TIME OF YEAR WHERE WE SEE MAXIMUM BUYERS.
Q. Can we get a better deal if we pay "cash"?
A. MAYBE, BUT UNLIKE REAL ESTATE, IN THE SELLER'S MIND ALL YACHT DEALS MUST BE SETTLED WITH CASH (A WIRE TRANSFER) SO IT MIGHT NOT MAKE A DIFFERENCE. LENDERS MAKE THE CLOSING MORE COMPLICATED AND CAUSE DELAYS OF ABOUT 1-2 WEEKS WHICH DOESN'T ALWAYS MATTER TO THE SELLER.
Q. How does altering the interior of a cat affect the reselling price?
A. IT CAN HELP AND YOU CAN MAKE MONEY BY DOING THIS, BUT THIS IS A "SLIPPERY SLOPE" TO CLIMB! YOU ABSOLUTELY MUST DO IT IN A FIRST-CLASS WAY. IF THE "REMODELING" IS NOT PERFECT IT WILL NEGATIVELY AFFECT VALUE.
Q. Great talking to you today. Huge help as always. I am thinking the Lagoon 410 is the type of boat you are encouraging me to buy because of my limited budget and desire to have a longer waterline cat so I can carry more stuff and not pitch as much while sailing upwind in a chop?
A. Thanks for this. The 410 in CT could be a "rare possible-gem". But we do not know the actual condition because the local agent probably "fluffed up" the listing sheet and didn't want to know about the defects when he took the listing so then he doesn't have to disclose them. This is just the way it usually works. If I am the listing agent, I want to always want to know and disclose the defects up-front so there are minimal "surprises". But many listing agents do not. I owned one of these 410's and they were extraordinary breakthroughs in their day. One of them averaged 21 knots between Ft Lauderdale sea buoy and Palm Beach sea buoy on their GPS (2 knots was Gulf Stream "push" so they were actually averaging 19K through the water. This was on a broad reach in winds of 25-30 knots and they had a Code Zero downwind sail up). This will have 35-50 defects noted at survey like all cats of this vintage so be prepared for that. Some Sellers will make additional price-concessions after survey to cover major "previously undisclosed defects' repairs" and some of them have the attitude that "this is a used-boat at a much-lower used-boat price and this is 'normal wear and tear' so I'm not reducing price to cover any defects. If you want a perfect boat then go buy a new one with a warranty" The solution to this issue issue is not always something we can predict so when you pursue these older boats this is a risk that you will assume. Many sellers are coy about this and will NOT give us a truthful indication before survey about whether they will give further price reductions for defective "surprises" we find at survey. A "mini-survey" is our best tool to get to the truth before we spend money and time to see the boat.
Ft Lauderdale, FL 33316, USA