Challenge: Buy Yacht Overseas on House Equity and Come Out Better Off Financially

[SimonV]

You do not need to worry about CGT it just won’t get there. You may get a portion of your loan using the equity in your house but banks are not happy with folks taking the money they borrow offshore to spend in another country especially on a second hand boat that has not been surveyed by an Australian surveyor. It’s hard enough getting a loan for a boat here in Oz. You need cash and lots of it. This loan for 200k lets say at 8% if you are lucky, and they give it to you; more likely it will be closer to 11% but we will look at 8%. 200K at 8% is $16000 pa and you are unlikely to sell at your asking price so you may off load the boat after 2 years from the date you bought it at less than you expect, so that’s 36K in interest and you have to pay of the balance of the loan which is still 190K Oh and the broker will want their cut so to off load the boat you have to give them min 21K. If you bought the boat for 200k you will spend about 15/25K making it worthy of the crossing. When you get it here you are looking at 7k marina fees for 12 months waiting to sell. The first decent offer you get, you will knock back; and in 12 months you will except less than that first offer, import fees and charges (there are some you don’t find out about until you get the bill and this can change depending on what AQIS think they have found and what they require you to do.) so there is 30k import duty plus the other stuff from AQIS. Add in you 1 years off shore insurance and 1 years Oz local and we have 10k. 1 years lost wages and thing can get out of hand add in 2 lifts and anti fouls 5k. If you are lucky you will have the adventure of a life time and may break even if you don’t break anything major ( you will break something). I HAVE DONE IT, with a cheaper and well set up boat to start with. You may fall in love with the boat and not want to sell her. The other option is to buy local have your adventure take a small lose and sell on your return the broker may give you a deal if he sells the boat again and no doubt will have other buyers on the books that missed out when you snapped up the boat. Good luck and I might see you out there, I am off to Hawaii in 6months or the Philippines or somewhere else with the love of my life and the misses.

[Chickenlips]

Dennisail,

I'm selling my house and going to the Carib with cash in hand , and plan in mind to sail it back to Oz. I currently live in Cairns, house market not that good but what the heck you only live once....and I'm going to make the most of it YEH!
Anyone wanna buy a house?

Jase

[dennisail]

You have the balls mate. Good onya.

[dennisail]

Hmm I just re read this thread as I am very seriously considering trying this again. Some very negative but realistic comments in this thread. This time I have a girlfriend with who has money available too.

Mark said it took 3 months before he could leave due to licensing issues etc. What takes so long and how can this time be reduced?

[MarkJ]

There are 4 Aussie boats in this anchorage. EVERYONR (except me) is heading back home in their boast to sell them. So make sure you have your market right and you facts right and your outlook at the right level of optimism.




As for paperwork, you won't be able to do it faster. And that 3 months included 6 weeks on shore and there's very little accomodation, we were paying $60 per night so its got to be factored in

[dennisail]

Thanks Mark. What did you do for insurance and what were their major requirements? Are they AU based? Where are you at the moment? Why couldn't you sleep on the boat as soon as you purchased it? You are probably sick of repeating this to people, but can you please give me a quick rundown on what paperwork needs to be done and why it takes so long?

Sorry for so many questions but I really need to get my facts straight before I can seriously consider this.

[MarkJ]

Originally Posted by dennisail

You are probably sick of repeating this to people, but can you please give me a quick rundown on what paperwork needs to be done and why it takes so long?

.

I do get a bit jaded because its been asked so many times before and some of it is commercial in confidence. i.e. people want to make money out of that information by on selling it. I had a guy just last week email me and ask for all the information so he could publish it! He sure as hell wasn't gunna give me a dollar for it.

Look, it takes 3 months. If you get away a week earlier good on you. But it wont be 6 weeks early. All the how too information is on websites in Australia: Customs and AMSA. Any info thats not understandable a lawyer and accountant will help with. And the rest is the broker, transfer, paperwork, deflagging etc.

I spent about US$500 on Fedexing documents to and from Australia and Florida etc.

But its all more or less linear. You start at the beginning and slowly resolve problems and when new problems arise you solve them.

And that all takes about 3 months.

Give or take a week or 2

Sorry my answer isn't better

Good luck with it.




Mark
PS Remember: EVERY boat with an Aussie flag here and in most of the Caribbean (except mine) is trying to do the same thing as you.

[boatman61]

You've also got to allow for which country its 'Flagged' under.. if its a Brit boat.. simple as they're usually SSR an informal process thats done by the owner.. 2-3 days maximum...
If its a French boat the papers have to be sent back to the home port in France and this takes time... took 7 weeks for mine and it was costing me $40 a night for a room above a local bar in Phillipsburg... no way I could afford the $100+ that was being asked for down Simpson Bay...
BVI's was $100/night for 6 weeks... I was a bit 'Flush'..
You can't sleep on board because although the deposits down... the final transfer is not made until all documents have been processed... would you let a complete stranger sleep/live on your boat just holding a refundable deposit on the chance he'll complete on the deal...
Now if you want a free holiday and can find a mug....

[dennisail]

Originally Posted by MarkJ

I do get a bit jaded because its been asked so many times before and some of it is commercial in confidence. i.e. people want to make money out of that information by on selling it. I had a guy just last week email me and ask for all the information so he could publish it! He sure as hell wasn't gunna give me a dollar for it.

Look, it takes 3 months. If you get away a week earlier good on you. But it wont be 6 weeks early. All the how too information is on websites in Australia: Customs and AMSA. Any info thats not understandable a lawyer and accountant will help with. And the rest is the broker, transfer, paperwork, deflagging etc.

I spent about US$500 on Fedexing documents to and from Australia and Florida etc.

But its all more or less linear. You start at the beginning and slowly resolve problems and when new problems arise you solve them.

And that all takes about 3 months.

Give or take a week or 2

Sorry my answer isn't better

Good luck with it.




Mark
PS Remember: EVERY boat with an Aussie flag here and in most of the Caribbean (except mine) is trying to do the same thing as you.

I am currently trying to make a document and spreadsheet outlining all the costs and red tape I can find. This will be posted free of charge right here on cruisers forums for newbies to learn from, and for those with the experience to add corrections so the facts can be updated for the best accuracy possible.

[dennisail]

Originally Posted by boatman61

You've also got to allow for which country its 'Flagged' under.. if its a Brit boat.. simple as they're usually SSR an informal process thats done by the owner.. 2-3 days maximum...
If its a French boat the papers have to be sent back to the home port in France and this takes time... took 7 weeks for mine and it was costing me $40 a night for a room above a local bar in Phillipsburg... no way I could afford the $100+ that was being asked for down Simpson Bay...
BVI's was $100/night for 6 weeks... I was a bit 'Flush'..
You can't sleep on board because although the deposits down... the final transfer is not made until all documents have been processed... would you let a complete stranger sleep/live on your boat just holding a refundable deposit on the chance he'll complete on the deal...
Now if you want a free holiday and can find a mug....

I would not want anyone who has not paid for my boat staying on it either. But don't funds take a few days to clear even it the paperwork takes longer? Or is buying internationally a lot different in that you really need to make sure you don't pay, then end up with someone taking all the cash and leaving you with no boat? IE it takes 7 weeks to be sure you won't be ripped off before paying?

[boatman61]

Originally Posted by dennisail

I would not want anyone who has not paid for my boat staying on it either. But don't funds take a few days to clear even it the paperwork takes longer? Or is buying internationally a lot different in that you really need to make sure you don't pay, then end up with someone taking all the cash and leaving you with no boat? IE it takes 7 weeks to be sure you won't be ripped off before paying?

All monies are held in escrow by the broker until the final t and i has been dealt with... would not advise doing a private deal... find a good broker... at best the seller will pay the fee for handling the transaction usaully a low %age... at worst you split it...
But you won't have any nasties coming back to bite you...

[dennisail]

Makes sense. Cheers. I wonder if you could negotiate staying on the boat as part of the contract, eg the non refundable deposit would equal the same amount of money as it would cost to charter the boat for that period of time and you can move on once the broker has the funds. ??? Just a thought.

[VirtualVagabond]

Originally Posted by dennisail

Makes sense. Cheers. I wonder if you could negotiate staying on the boat as part of the contract, eg the non refundable deposit would equal the same amount of money as it would cost to charter the boat for that period of time and you can move on once the broker has the funds. ??? Just a thought.

In business everything is negotiable. With a house sale you can arrange early occupation (before final settlement) on payment of occupational interest for the period.
I would think that occupation could be negotiated as a part of the sale agreement, possible with the payment of an additional security bond, refundable on settlement.
Agents, brokers etc hate having to deal with something a bit different to standard... makes them have to think and that's unfamiliar territory for most of them.

[dana-tenacity]

Consider renting the house, then buying a much smaller/cheaper boat and going cruising for a year or two. I'm thinking spend under 50k. If you cock it up the consequences aren't as dire. If you like it you can sell the boat and move up the ladder a little.


BTW - I flew to California, bought a boat in 2 days and was in Mexico 3 days later, it can be done.

[dennisail]

Originally Posted by dana-tenacity

Consider renting the house, then buying a much smaller/cheaper boat and going cruising for a year or two. I'm thinking spend under 50k. If you cock it up the consequences aren't as dire. If you like it you can sell the boat and move up the ladder a little.


BTW - I flew to California, bought a boat in 2 days and was in Mexico 3 days later, it can be done.

Legend. Reading here has stories of needing to wait 3 months before leaving. How did you manage to get out so fast registration wise?