Helia 44: Buy as a business?

[toddsinoz]

Have talked with BayYatch about getting a Helia. The cost was about $670,000 and I have to put about 15% down. If it rents 7 weeks a year out of the Cheasepeak area, that income plus the income from saved personal federal taxes is supposed to cover the cost (mortgage, insurance, docking, maintenance) each year. Is this a good way to get a boat? Maybe just look into a 5 year used boat? Any Thoughts?

[Lajos]

If those number are right I think Fontaine Pajot would have a hard time meeting the demand....

[Lajos]

What's the buy-out after 5 years?

[Johnathon123]

If these schemes worked out the charter industry would own the boats themselves

[Tony B]

Originally Posted by Johnathon123

If these schemes worked out the charter industry would own the boats themselves

Exactly !!!

[DotDun]

Even if the claimed charter income was realized you would owe ~$483,000 on that boat at the end of 5 years. This is assuming $670,000 - 15% borrowed at 6% on a 20yr mortgage.

I'm not sure the boat will be worth that after 5 years in the charter business, plus the fact you'll be slammed with a $4000/month mortgage payment when it comes out of charter.

You might get more charter income down in the islands, you may actually see positive cash flow during the time it's in charter, but I would guess never enough to come out with a free/cheap boat.

FWIW, the only Helia TMM has is going for $11,000/week in high season.

[Cotemar]

A few of the current Helia 44 owners are doing the Bay Yacht Agency - Boat As A Business plan

Bay Yacht Agency Page Bay Yacht Agency Group. We offer new and brokerage boats. Power and sail. Monohulls and catamarans. We also offer a unique Boat-As-A-Business plan.

Just like the Moorings / SunSail / TMM plans, that in the end, leave the owners stilled holding the bag.

No one seems to be able to say if its a bag of Sheet or a bag of Cash

[toddsinoz]

I have to agree with what I am reading from you all. I get 5 years of not dealing with the real cost of having a boat, but I have to put up about $120,000 and still owe $450,000 on a boat maybe worth about $500,000? No free lunches I guess. But that is a beautiful looking boat!

[Cotemar]

Originally Posted by toddsinoz

I have to agree with what I am reading from you all. I get 5 years of not dealing with the real cost of having a boat, but I have to put up about $120,000 and still owe $450,000 on a boat maybe worth about $500,000? No free lunches I guess. But that is a beautiful looking boat!

I am with you. I was on a Helia 44 for two days taking photo's and talking to the new owners.
They put it in the "Boat as a Bussiness" plan and where taking it straight to CYOA docks in BVI after the boat show.

They where happy as a clam.

Will be getting together with them this summer in Long Island Sound.
They will keep it in Newport, RI. for the summers.
It is a very SWEET RIDE.

[vida nueva]

I looked into this with Bay Yacht before but found they didn't come through when I asked for detailed information like references to other owners, previous years business, etc. it gave me a feeling of suspicion. The business they said I could expect was not what my research supported - further suspicion. My tax advisor had me talk to a tax lawyer who said the IRS is going after these operations and you better really be spending more time in the business than anyone else, among other things. Though I like the boats I came to not like the feeling I had about the company.

[Wideranger]

We are the new Helia mentioned in the previous thread. We bought our boat thru Bay Yachts and put it into a Boat as a Business program in the Virgin Islands. We are very likely going to be able to cover all of our annual costs and costs of running the business as well as capitalize on a tax benefit available to write off the depreciation (first year bonus depreciation - 50% of the purchase price if we wish to take it all).

Our VI Management Co (CYOA) is doing an outstanding job of assisting us with the boat and they are very diligent about screening the charterers. We have also spoken to several former boat clients of CYOA who have spoken highly of how well their boats were maintained during the charter time frame. Our experience with them so far indicates this to be on point.

We believe that after 4-5 years of chartering our boat, we will still have a very nice boat to spend a lot of time on. In the mean time, we have spent several weeks aboard our boat in the VIs for vacation and to check on it. We have done a lot of work on the boat to help maintain and get in the time we need to work on our boat as a business and we will have it for a large part of the summer as well.

Signed off.....Happy as clams!

[Seadame]

Originally Posted by toddsinoz

Have talked with BayYatch about getting a Helia. The cost was about $670,000 and I have to put about 15% down. If it rents 7 weeks a year out of the Cheasepeak area, that income plus the income from saved personal federal taxes is supposed to cover the cost (mortgage, insurance, docking, maintenance) each year. Is this a good way to get a boat? Maybe just look into a 5 year used boat? Any Thoughts?

I had the misfortune of purchasing my Helia (owners version) through Eric Smith of Bay Yacht Agency (BYA).

It was a murky and opaque experience layered with misinformation and a heavy dose of inflated commissioning costs. There were attempts to completely ignore purchase agreement terms that gave me the option to remove commissioning from BYA- which I did with great resistance from BYA.

I was never given a customer reference list as promised multiple times and was told I would meet some owners at the 2012 Annapolis show. I did meet 3 owners- all very nice and informative on their sail boat experiences, but their references for BYA were not particularly supportive.

I finally was able to locate and speak with six recent /former BYA and Let's Go Cruising (LGC) clients. After hearing about their negative dealings with BYA/ LGC after the sale, I did not proceed with having my Helia managed by LGC. Instead, Dream Yacht Charter will manage our Helia in Annapolis and beyond.

Luckily I live close to Annapolis so I could show up in person at BYA's office when my phone calls went unanswered and emails ignored after my deposit was taken. The initial charm turned arrogant. I'll never deal with Mr. Smith or BYA again.

The Boat as a Business that BYA pitches is not rocket science. If you have the income to support the tax deductions; the time to participate in the charter business and can keep good records- then it can be a good way to offset the coat of owning your dream boat. Finding a CPA with "Marine" experience to assist with the depreciation calculations, K1 and 1065 forms is a good idea.

[toddsinoz]

Thanks, nice info! So to the two with Helias...first, how is the boat, are you loving it? Second, how are the rentals going? Any difficulties in finding renters or covering cost? Any thoughts of going with a 40ft cat? Still very nice and a substantial savings.

[JayCall]

As a tax attorney who has dealt with this and similar programs, fid a very good tax lawyer and explore the tax claims very carefully. Your ownership is a "Passive Activity" within the Tax Code and, as such, the ability to deduct losses is quite limited. In general, in the best of circumstances and depending on your personal tax situation, the maximum amount deductible as a loss is limited to $25,000 annually. If you have a substantial Adjusted Gross Income, this amount will decrease, if your AGI is $250K or more, the deduction disappears. Take any tax claims with a very large chunk of salt and have a good tax advisor examine them carefully in light of your personal tax situation.

[MNLandLoc]

I am reading some good common sense advice in this thread. I suspect that I have a goal that is common on this board: I would like to reduce my overall ownership costs of owning a decent boat. I don't mind owning a slightly used boat (i.e. depreciated) in good condition and I don't mind sharing some of the time since I don't plan to live aboard (yet). The market for slightly used boats is tight. The charter and boat as a business options seem to make some pretty strong claims that seem ideal - but require strong skepticism.

So where can one get some unbiased information on these programs. How does one find a competent and honest tax lawyer with marine experience?