Liveaboard Financing Quandary

[Tropic Cat]

oops line 3 of expenses is the insurance premium estimate. If you have a loan, you need complete coverage.

[GDFL]

80k financed 15 years at 7.5% is only $741/mo. The expensive marina, which I found out today no longer accepts new liveaboards would have been $480/mo including electricity and liveaboard fee. Insurance at a max of 3k/yr is $250/mo and maintenance at $300 plus sailing twice a month (realistic because I work 6 days most weeks) $100 totals at $1871 using numbers on the high end of the scale. This replaces $3100 is real expenses so I would see at least $1229 per month that would go directly into savings and paying off other debts.

I'm not worried about the mast. IF the boat I choose has a mast too tall for the bridges, I'll simply pay a rigger to shorten the mast and shorten or replace the rigging and then I'll have the sails cut. About half of the Schuckers on the market now have masts short enough to clear the bridges so it's only a 50/50 shot that I'll even have to worry about it.

Children won't be a problem. As of this coming Friday at 4:30, I won't have the ability to make children any more. I've never wanted them a single day in my life and neither has my wife so we're taking care of that now as part of our planning for the future.

Back to the original subject. I know that I can make it easily work financially after I get the boat. Are there any private finace companies that look beyond the black and white rules?

[TaoJones]

GDFL, have you considered selling the house yourselves - thus saving the (typically) 6% siphoned off at closing? It really isn't that difficult a task to manage, though many are intimidated by it.

I agree with those who advise selling the house before you assume any other large expenses, and agree also with those who suggest that should you start a family, the picture will change considerably. If you're certain that your spouse is on the same page as you are, then definitely pursue the liveaboard dream.

I don't know if you've already listed your home with a real estate agent, but even if you still have the option of selling it yourself, I think you may be disheartened at how soft the market has gotten, especially in places like Florida. You probably already know this, but you make your profit in real estate when you buy, and realize it when you sell. That just means that you must grind the seller down as much as possible going in, otherwise you are in the position of asking too much when you try to get out (just to "break even") if you have to sell soon after buying.

I would be surprised if you were able to get a good deal if you bought a couple of years ago, as it was still a seller's market then. Now that it has become a buyer's market, they hold the position of power. Unfortunately, it sounds as if you got in at the top and now are trying to get out before the market collapses further.

I hope your situation works out to your benefit, GDFL, and that you are living on the water sooner, rather than later.

TaoJones

I'm going to add to my post, GDFL, since we were both apparently composing our posts at the same time. First of all, congratulations on your decision not to have children. My wife and I agreed on that course many years ago, and got thoroughly tired of feeling we had to defend ourselves for being "selfish."

To your original question: I was advised by two very knowledgable people in the marine industry to not admit that I intended to liveaboard when I was applying for financing, because I'd never get financed. After the boat was mine, I was free to "change my mind," they said, and that no one involved in providing financing ever checked (or even cared, for that matter) once the deal was in place - as long as I made the payments.

TaoJones

[GDFL]

Tao, thanks for the reply. I have no intention of owning a house and a boat at the same time because I realize the tremendous financial exposure that would result. I think we've decided upon selling the house, moving into a travel trailer in the camp ground down the road on the St. Johns river, and then finding a boat. The only problem is that I don't know if I can call the trailer a "permanent" residence when filling out an application.
How do I get past this problem? I can't quite make the debt to income ratio while owning my house so I can't pre-qualify. After I sell the house I'd be able to easily qualify except I'd be in one form of temporary housing or another.

Can I use a relative's address as my permanent residence? That would solve a ton of problems as I do have a relative in Sanford. I can live in a travel trailer for up to 6 months and really pile up some cash to close on a boat. Any problems with this plan?

[dana-tenacity]

Lie, i sell mortgages, it's easy.

[TaoJones]

Two years ago, I sold the house I'd owned in Los Angeles since 1987, bought a travel trailer (I already had a 3/4 ton Chevy p/u with a 454), moved myself, my two dogs and my parrot aboard, and hit the road. I haven't had a "permanent address" since June of '05.

In May 'o6, my California plates, on both the truck and trailer, expired. I happened to be in North Carolina at the time, so I went to the local DMV branch office, used my RV park address to re-register in NC, put on the new plates and hit the road again. When those plates expired a few days ago, I did it again, only this time in Colorado.

I put virtually everything that involves a paper statement (brokerage account, bank account, credit cards, etc.) on e-delivery only, and check my statements online from wherever I am to verify that things are still on track. I have the storage of a four-bedroom house collection of furniture and other personal items, as well as my cell phone, on an auto-pay set-up so that I'm never late making a payment. My American Express account is paid electronically after the monthly close (always the 22nd) once I've checked every new charge on it. I check my bank account and brokerage account once a week to confirm that everything is copacetic.

I've applied for financing on a boat purchase and a house purchase over the last two years, and the absence of a permanent address came up, but was not a deal-killer. I don't know if that's because I have a bunch of money, no debt, and a 750+ FICO score, or because they don't consider the fact that I "live in a trailer," and no longer work, relevent. Either way, it hasn't been a problem.

I use my brother's address as mine for anything that needs to be mailed and I can't wait for it in whatever RV park I'm in at the time. I have them throw everything into a box for me, and pick it up once or twice a year when I pass through there. I would never overburden anyone with receiving my mail, sorting it out, and forwarding the "important" stuff to me. If that were absolutely necessary, I'd rent a box at a mail forwarding company - they're everywhere.

When I tire of life on the road, I'll buy a place in Colorado to live in during the summer and fall, and live aboard a boat I'll keep in the Caribbean (probably the DR) during the winter and spring. I'd like to spend about six months in each place, give or take, and still use my RV for occasional road trips.

Oh yeah, I'm not married anymore, though my ex-wife and I are better friends now than the last few years of our marriage. I'm not kidding - now she wants to join my "excellent adventure!"

TaoJones

[hellosailor]

Well, I see one problem in that Schuckers are mainly motor trawlers--not sailboats. See Schucker 40''s - SailNet Community where WHOOSH, a Pearson 424 with extensive experience, comments on them.

If the Shucker holds its value, that's great. But I would call it a comfortable live-aboard trawler--not a sailboat. And "shortening the mast" is not the simple job you make it out to be, if you just chop a yard off and chop a yard off the bottom of all the sails, the boat will no longer balance properly--assuming it was balanced in the first place. Shortening a rig is a major change on a real sailboat, to be done properly you typically bring in a designer to recalculate centers of effort, etc. and make adjustments accordingly.

GDFL, I'd most strongly suggest "make haste slowly". Find someone who has one of the boats, and offer to cater the picnic lunch if they'll take you out for an afternoon, to see how well it SAILS. Considering that we will see $4 and $5 per gallon for diesel in the near future...A motor trawler may wind up being about as economical a way to travel as full size RV.

There are boats that have plenty of room for living aboard, and boats that are built for sailing. And many fewer than meet both purposes--usually, by compromising the sailing performance, or adding ten feet to the OAL. Which really can change the budget.

Figure also if that boat is from the 80's or even early 90's, it needs rerigging ($10,000) and sooner or later new sails ($5000) and those are just ballpark numbers. If you plan to cruise coastal, it might be very good since the ICW pretty much demands motoring. But if you plan to go offshore...those huge windows are the first sign this isn't a blue-water cruiser.

[Ex-Calif]

I sorta lost the plot on this thread -

You have an expensive house with $0 equity
You have two dogs you can't part with
You want to live on a boat to save money (?)
You want it all now

I am not sure how anyone here can help with this or what the question is.

Are you looking for zero down boat financing?
Someone to bridge a house loan to a boat loan so you don't pay dual mortgages at the same time?

My advice? Your situation is complicated. Get rid of the house first. Move into a cheap motel to get used to living in confined spaces. Find one that takes dogs so you get used to living with two beagles in confined spaces. Save 2-3000 per month and then buy a boat after a year of living in a motel.

Maybe with some diligent searching you could find a boat to rent and live on instead of the motel?

PS - Other Debt? I assume cars and credit cards? The American dream! You don't have to move to a boat to become debt free. Just lower (drastically) your lifestyle for a year or so and then voila - everything you want can be yours. The lesson you should be learning right now is pay in cash not credit...

[TaoJones]

I don't take issue with anything in your post, above, hellosailor. What you have stated, as well as what WHOOSH offered on the link you provided have merit, but I would like to make a small correction to what WHOOSH wrote.

Bruce Van Sant did indeed move from sailing to a motor trawler ten years ago, but it is not a 40' - rather it is 44'. And while the Schucker 40 might not be the ideal bluewater passagemaker, it would serve nicely for cruising the east coast, the Bahamas, down island, even clear down to Cape Horn if you want to, because as Bruce has written, you're never more than one day away from land.

The Schucker 44 trawler served Bruce well for these last ten years as he cruised the Caribbean and the east coast compiling the info that many other cruisers have come to rely upon. His physical limitations compelled him to give up sailing in favor of the less physically demanding power cruising, but a close reading of what he has written doesn't reveal any misgivings.

I imagine a fit 27 year-old with an equally able mate will have no problem handling a Schucker 40 - as long as they are in no hurry to get anywhere.

TaoJones

[David_Old_Jersey]

GDFL

Lots of good advice given already.........I would certainly echo the advice not to incur more debt (and expenses) before selling the house.......as you have said once in temporary accomadation this may affect your ability to borrow (I am not aufait with US lending).......but IMO time spent looking for the right boat in the right condition (for you) without any deadline from selling a property will save you time and lots of money later.

Appreciate that you want to exit the debt and expenses burden, but am not entirely convinced that your savings will be massive when aboard a boat.......what about also working on addressing the income side?

I dunno anything about the US property market, but is this a temporary blip? with the value / market likely to increase in the next 2 to 5 years? in which case I would personally consider staying put, especially if the "only" problem was the cost - at 27 the odds are your income will increase over time and at least some of the money you are putting into the loan payments will probably be recoverable in due course, unlike rent. or boat expenses..........want a boat? buy a small doer upper (ala DREXEL).

I was going to add something about reducing the cost of the dogs / increasing your choice of accomadation - but I am too polite and also don't want this to develop into another "Firearms - good or bad?" thread

[GDFL]

Originally Posted by hellosailor

Well, I see one problem in that Schuckers are mainly motor trawlers--not sailboats. See Schucker 40''s - SailNet Community where WHOOSH, a Pearson 424 with extensive experience, comments on them.

If the Shucker holds its value, that's great. But I would call it a comfortable live-aboard trawler--not a sailboat. And "shortening the mast" is not the simple job you make it out to be, if you just chop a yard off and chop a yard off the bottom of all the sails, the boat will no longer balance properly--assuming it was balanced in the first place. Shortening a rig is a major change on a real sailboat, to be done properly you typically bring in a designer to recalculate centers of effort, etc. and make adjustments accordingly.

GDFL, I'd most strongly suggest "make haste slowly". Find someone who has one of the boats, and offer to cater the picnic lunch if they'll take you out for an afternoon, to see how well it SAILS. Considering that we will see $4 and $5 per gallon for diesel in the near future...A motor trawler may wind up being about as economical a way to travel as full size RV.

There are boats that have plenty of room for living aboard, and boats that are built for sailing. And many fewer than meet both purposes--usually, by compromising the sailing performance, or adding ten feet to the OAL. Which really can change the budget.

Figure also if that boat is from the 80's or even early 90's, it needs rerigging ($10,000) and sooner or later new sails ($5000) and those are just ballpark numbers. If you plan to cruise coastal, it might be very good since the ICW pretty much demands motoring. But if you plan to go offshore...those huge windows are the first sign this isn't a blue-water cruiser.

I guess you're trying to help me here, but it sure doesn't feel that way. I KNOW THAT IT IS NOT A PERFORMANCE SAILBOAT. I am already aware of that and it doesn't bother me. I AM AWARE THAT OLD BOATS NEED RERIGGING/REFITTING. Many on the market have gone through recent major refits. It won't be possible for me to go offshore for several years anyway. I KNOW THAT CUTTING THE MAST AND SAILS ISN'T A 5 MINUTE JOB. This isn't a performance sailboat. Many people have shortened masts on Schuckers and I haven't read of anyone dying or sinking. They also had an option for a shorter mast from the factory. I picked the Schucker for several reasons, none of which were that it was an America's Cup competitor. It's a solid built boat with no wood coring anywhere. It's affordable. It's very roomy. It's built specifically for two people. I don't have and will not have children so I have no use for 3 staterooms anyway. I recently went aboard two of them and talked to the owners for hours. I know what I'm getting into. The boat is not the issue at all here. The issue is how best to get from my house to the boat.

[Tropic Cat]

If you must, just buy a trawler

Rick in Florida

[GDFL]

Originally Posted by Ex-Calif

I sorta lost the plot on this thread -

You have an expensive house with $0 equity
You have two dogs you can't part with
You want to live on a boat to save money (?)
You want it all now

I am not sure how anyone here can help with this or what the question is.

Are you looking for zero down boat financing?
Someone to bridge a house loan to a boat loan so you don't pay dual mortgages at the same time?

My advice? Your situation is complicated. Get rid of the house first. Move into a cheap motel to get used to living in confined spaces. Find one that takes dogs so you get used to living with two beagles in confined spaces. Save 2-3000 per month and then buy a boat after a year of living in a motel.

Maybe with some diligent searching you could find a boat to rent and live on instead of the motel?

PS - Other Debt? I assume cars and credit cards? The American dream! You don't have to move to a boat to become debt free. Just lower (drastically) your lifestyle for a year or so and then voila - everything you want can be yours. The lesson you should be learning right now is pay in cash not credit...

I'm not looking for the "quick fix". I'm not trying to do something unreasonable. I'm trying to not waste years of paying for a house when I could live on a boat and save money and be happy. I probably should have never posted because I have gotten almost no actual help on the questions I asked. I HAVE NO INTENTION OF OWNING A HOUSE AND A BOAT AT THE SAME TIME. Please look at things differently. I own a 300k house. I want to downsize to an 80k "house" (the boat) plus pay slip fee. If this was just dealing with downsizing a house it would be beyond easy. I was trying to get advice and get pointed towards a finance company that isn't quite so limited by their black and white rules. 20% down on a 1990+ boat won't work for me and that's the requirements I've run into several times.

I believe I have a plan figured out:
1. Put house on market and begin selling "stuff" that I don't want on a boat or in storage
2. Sell house and buy travel trailer to put in campground on the river near my house
3. Live in campground until we have a 10% down payment plus money to cover essential repairs and upgrades.
4. Get boat loan based on using either the campground or a relative's house as my permanent address and the boat as a toy
5. Buy boat and do any essential repairs prior to moving aboard
6. Sell travel trailer and move aboard
7. Report back to those of you who have been nothing but negative that I actually did what I wanted without your help
8. Save more money than would have been possible while living in a house.
9. Retire or partially retire in my late 30's and go cruising in a paid for boat that I already know everything about.

I would actually have more money had I not moved to Florida. I had a very successful career established, but I moved here to work in a family business. All of my time and money invested into this should come to fruition sometime in the next 3-7 years when it can and probably will be sold. There's no way to plan for such an unknown, but I want the ability to evaluate my life at that point and possibly try a work 6 months/ cruise 6 months lifestyle.

Thank you to those that have actually tried to help. I'm going to do this sooner or later and with or without the support of any of you. I'm going to do it on a boat that I chose based on it fitting MY needs and desires.

This has been a real eye opener to the liveaboard boating community. I didn't realize that liveaboards were all members of a white collar society that only those in the absolute best of financial situations could enter. It's quite a contrast to everything else I read about simplified and layed back lifestyles.

[Ex-Calif]

"It's a solid built boat with no wood coring anywhere. It's affordable."

I can sense your frustration and this is not intended to antgonize you any further but can one even get financing on a 25+ year old boat?

What about comprehensive insurance? We are unable to get comprehensive insurance in Singapore at any cost for a pleasure boat older than 25 years.

[GDFL]

Originally Posted by Ex-Calif

"It's a solid built boat with no wood coring anywhere. It's affordable."

I can sense your frustration and this is not intended to antgonize you any further but can one even get financing on a 25+ year old boat?

What about comprehensive insurance? We are unable to get comprehensive insurance in Singapore at any cost for a pleasure boat older than 25 years.

From talking to other owners and reading posts, it is possible to get comprehensive insurance even living on the coast of Florida full time. It's not as easy as a new boat, but it is possible.