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From: Rich, Michael (no email)
Date: Mon Jan 08 2001 - 10:29:16 EST
On the other hand, don't rule out owner financing. While there are risks
associated with this, there is also a good opportunity if investigated
thoroughly.
The prospective applicant should supply you with a credit report, financial
statement including a budget, employment records and personal references so
you know who your dealing with. There could be actual savings to the owners
associated with owner financing. For example: Calculate the cost involved
for the owners of a nearly 20 year old 40' sailboat sitting 'For Sale' in
Annapolis for a couple years racking up yard storage costs, insurance
premiums and succumbing to the elements and then the benefit of getting a
premium price. Some people with a boat for sale have just bought another
larger boat and don't want the problems of two boats in two different
places.
Then bring in a reliable person(s) with a steady, more or less perm income
i.e. Gov't, Military or retired (not a dot.com). That person's situation
might be post divorce and low on cash, but high in monthly income. Then you
as the owner would have a steady stream of income over multiple years with
interest. I have owner financed two sailboats including my current 37'
ketch. Each time I wrote up the contract which was reviewed by legal
counsel including an admiralty lawyer (my brother). The vessel has to be
CG doc'd, insured to certain minimums and name the owner financing as the
lien holder of record.
>From this experience, I have also made good friends with the previous
owners. They are fully supportive and available for questions and really
like to see the 'old girl' as she is refit, remodeled and brought up to
date. mike
-----Original Message-----
From: Larry DeMers [mailto:]
Sent: Monday, January 08, 2001 9:45 AM
To: Jim Lynch
Cc:
Subject: Re: lv-ab: owner financing?
Jim Lynch wrote:
That's assuming you can find it. 8) Boats have more hiding places than
homes or cars.
wrote:
>
> "I don't think so. Some owners may be desparate to sell a boat this way,
> but as a seller I'd be concerned that the new owner would find some reason
> to withold payment when his "dream boat" is viewed in the light of day and
> doesn't look so great. EVERY boat has problems. "
>
> But if you already have 80 to 90% of the price, and you DON'T GIVE IT BACK
if they default - just repossess the boat when they miss a payment, I'd
think that would be win-win situation for the seller.
> grandma Rosalie, CSY 44
....There is also something that happens to a persons mind when they
are in the clutches of a default on a loan. They frequently are strapped for
cash, they could care less about maintenance items, as they know they are in
trouble so the boat starts a spiral path downwards. One thing fails, another
fails, never getting fixed, causing a cascading failure scenario. You may
get that boat back after all normal legal channels are used up, but the
condition may be less than desireable (!).
We have had to face this situation with a little restaurant that we own,
and have for sale now. Lots of buyers if the owner is financing the
purchase..few buyers if the bank or perspective owner is to fund the
purchase. Be very careful, as the boats condition that you get back may be
so bad that the boat cannot be resold without the missed maintenance,
resulting in more work than you bargained for.
Larry DeMers
s/v DeLaMer
Cape Dory 30
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