"W1TEF" wrote in message
...
On Wed, 14 Apr 2010 12:25:53 -0700, "nom=de=plume"
wrote:

Right now, there's another couple that would be putting in sweat and time
equity (but limited cash), so that would give us a crew of four for
Mexico.

Allow me to give you the benefit of my experience with this.

Back when I was chartering, I took on a partner who was the son of a
friend of mine. He didn't have a lot of "cash" to buy in with me, but
he had been laid off, had a little money to spare and wanted to get
into chartering. He offered to put "sweat equity" into the boat -
essentially operating for free with his "pay" going back into the
boat.

The way it worked was pretty simple. He bought in with 1/10th the
value of the boat and "owned" 25% of the operation. I owned 50% of
the operation and the boat owned the other 25%. We wrote the contract
up so that the boat always voted with me when it came to company
issues.

In the contract, his "sweat equity" stake was clearly defined - he had
a set of responsibilities, a fixed amount for every charter with the
rest going to me and the boat and some other details that he was
directly responsible for. For instance, he was responsible for
checking and maintaining the slip, cleaning the boat every trip, he
was paid his regular amount if he worked as my mate. He was paid 25%
of the net profits out of which 10% was deducted towards his 25%
ownership stake. There were some other minor things he had to do, but
that was the gist of the contract - gives you some ideas like the boat
paying back any costs on maintenance or other issues like that.

His Dad was a lawyer and drew up the contract so that didn't cost him
anything. Eventually he did well enough to full fund his 25% stake
and eventually bought me and the boat out when I quit chartering on a
regular basis.

It's a good idea to get the responsibilities of the "sweat equity"
down pat and give your equity partners a firm stake in the boat -
gives them a sense of ownership which counts a lot towards solving any
issues that come up. Just make sure that you have the cash to buy
them out should they decide not to continue in the relationship and
have that process defined in the contract. For instance, the buy out
should be defined at a certain depreciation rate off the initial stake
- things like that. I can give you some ideas along those lines
should you decide to take the plunge.

With respect to the boats, I concur with your friend - Island Packet
makes some terrific boats. I have some experience with a friend who
has an Island Packet PacketCat. Perhaps not the best "cruiser" in the
sense of "privacy" and the sleeping arrangements are fairly open, but
as a cruiser? That is one sweet boat.

http://www.ipy.com/ShowBoat.asp?Inte...at=Packe tCat

Good luck on your hunt.


Definitely whatever arrangement we come up with will be a legal contract,
with specific responsibilities spelled out... I would do this for any large
dollar commitment (the lawyer in me). I'm not really too worried about it
though with these people. Mostly, by sweat equity (and time equity) I meant
that they would pay for the upgrades (which we're assuming would be
necessary), even if the boat is fairly new. As for time, they would likely
be the ones (actually the guy) to do whatever work is required to put in the
upgrades. They've both got plenty of cash, but we (my friend and I) want to
actually own the boat. They need to work still, so more than a couple of
months off would hurt them financially, where we could probably go 12 to 18
months without getting too stressed. I can always get work if I need it in
my former profession and my business should be self-sustaining (mostly) by
then.

I'm really hoping to benefit the most... the two guys are pretty decent
sailors, the other woman mostly wants to hang out, and I like to cook. So,
I'd get some good hands on sailing experience (even locally).

Nice looking boat... we're mostly looking at single hulls, although we've
discussed getting a big cat. Part of the problem is that it's hard to find a
good berth, since they're double-wide, so double the cost.

--
Nom=de=Plume