Boat Values

[BUIZILLA]

Jim,
I agree about trying to negotiate the cost of the procedure and I hope him all the best. However you can’t rely on or expect a certain amount of money for something because you need to pay for something that’s at a higher cost than what that something your selling is worth. What if the procedure was say…$100,000? Is that what the asking price would have been?

I would love to sell my home and move out to PA but the way the real estate market is I would lose almost 100K on my home. But if I truly want to move I will need to take that hit. But if I need to make that 100K up and price my home where that’s factored in…well…I’m going to be here for a very,very long time. And the market that I would be attracting at the lower cost has now shrunk to a very small audience because now my home is priced way to high .

It’s all relative.

exactly my point................

[gcarter]

I agree it's a good way to think about it. (One thing I wonder: in the car world, how hard is it to know what's really wrong, to grade condition? In the boat world, it feels to me like it's harder, and that there's almost always a good bit that would require destructive testing to really assess.).

Mike, I read this again another six or more times, and the short answer is as far as cars go, there're specialists just like marine surveyors that'll inspect a car for you and give you as much info as you can use. As we all know, we should get a marine surveyor and not make poor choices unless we're just looking for a parts boat. A good surveyor should be able to give you a good estimate of the structural condition. I wander why we don't use them more often?

[roadtrip se]

I grew up in the car business. Still in it. Comparing boat valuation techniques to cars doesn't really work, because of the sample size. They just build more cars of similar style and options than Donzis, so the statistical data sample is more relevant.

I admire the efforts to apply various evaluation techniques to the Donzi world, but again, if someone came up to me and tried to use this sort of thing to drive their offer on the Flowerpot for example, I would just ask if they were going to make an offer or not, and then move on.

Restoration dollars are dollars lost. It is like putting in a swimming pool at the house. You do it, because you want to enjoy it. I have re-rigged my boat twice in the past fourteen years, and I did it because I enjoyed the results. Is it worth more than the typical 2001, probably. How much? Who knows. I would have to test the market to find out.

I have talked to Parnell a bunch about his experiences selling the GT. It is all about the cash. No one is going to loan money on these old things. You don't have it in the account, you are not buying today. This is probably the number one reason, old restored, and very nice boats aren't moving today. The price has nothing to do with it.

[woobs]

You don't have it in the account, you are not buying today. This is probably the number one reason, old restored, and very nice boats aren't moving today. The price has nothing to do with it.

Sorry tripse, I disagree. I've spent more than a few decades in the car business too. While there may not be an established "system" to evaluate boats, most everyone uses some sort of criteria or personal system. You must do this to take the emotion out of the purchase.

Emotion on the part of the buyer (gotta have it because it's cool) clouds the issue and affects the decision process. Emotion on the part of the seller (sentimentality) clouds the issue just as much from the other side. You can't script the negotiations other than to say it will be different with each buyer & seller over each different boat.

There are some real facts. Boats deteriorate, fuel systems (amongst others) included. At 46 years old, or any age thereabouts, not replacing a fuel tank is imho, irresponsible. If you want to remove it and have it professionally checked that's one thing but, with the effort and cost to do this... replacement is the right decision. likewise, old wiring is equally important. A complete and proper inspection of structural systems (especially if the boat has not been used in some time) should be mandatory. Once you are into the type of Re & Re it takes to do these things, the repair/replacement issue is much more clear.

In this day of litigation, and as this is a very real concern, I would hope that anyone that represents a particular boat to be sound or, uses such an old boat personally would truly ensure all is really up to scratch. The consequences of not doing this could be immense. Especially if you ever plan on taking passengers (not that there couldn't be an incident at a dock somewhere).

Given this, (old boats require work no matter how clean) the restoration/repair costs are the real driver of the old boat market. The purchase price is merely the down payment and may be insignificant to the overall investment. If that down payment is too high, the potential buyer will be way upside down before even starting (and finding all the other "surprises"). It's easier to buy a newer boat that does not need all this work or wait for one that has had all this work done (and documented) or find one priced more reasonably.

[gcarter]

If anyone cares to go back and read my original post, while value is mentioned, it's all about determining condition.
We've all seen ads for 25-30 year old Donzi's claiming it to be "rare", and therefore valuable. Of course all Donzi's are rare compared to all cars and bikes w/very few exceptions. I just picked up my "Sports Car Market Pocket Price Guide" and flipped over to Lotus Europa 47 built during the '68-'70 model year, and the production number is fifty five (55) and by car standards, that's almost non-existent production. That's really rare, but for performance boats, in a little over three years, Donzi built and sold 165 Minxs which was all they could produce and sell. The same rules DON'T apply as to value, but the same rules CAN apply for determining condition.
So, what I'm trying to do is raise awareness of misleading ads claiming a 1985 Minx is worth $25K based only on low production numbers. Interested would be first time Donzi purchasers need to have some ground rules to start their search, and that's what i was trying to provide.

[Ghost]

Maybe I misread something, but I thought Todd and Sean were talking about two different things. Sounded like Todd was talking about old boats that are already restored/nice, versus Sean talking about boats that need a lot done. Where a big limitation on the former is that loans are VERY hard to come by, regardless of how good the boat's condition, and thus the pool of buyers is further shriveled by the need to have a pile of cash, no?

[mattyboy]

Hahahahahah....Almost choked on my sandwich!!

hope you have obamacare

[duckhunter]

Maybe I misread something, but I thought Todd and Sean were talking about two different things. Sounded like Todd was talking about old boats that are already restored/nice, versus Sean talking about boats that need a lot done. Where a big limitation on the former is that loans are VERY hard to come by, regardless of how good the boat's condition, and thus the pool of buyers is further shriveled by the need to have a pile of cash, no?

That's how I understood it, as well.

[BUIZILLA]

Maybe I misread something, but I thought Todd and Sean were talking about two different things. Sounded like Todd was talking about old boats that are already restored/nice, versus Sean talking about boats that need a lot done. Where a big limitation on the former is that loans are VERY hard to come by, regardless of how good the boat's condition, and thus the pool of buyers is further shriveled by the need to have a pile of cash, no?

that's how I understood it

[gcarter]

Restoration dollars are dollars lost.

Upon re-reading Todd's quote, I agree and the heart of it is in the above sentence.
It's a good thing there's room for all of us.

[woobs]

that's how I understood it

Maybe I need to work on my communication skills.

My post In response to old "restored" and "very nice" original boats are not selling because there is no financing available.... and price is irrelevant.

"This is probably the number one reason, old restored, and very nice boats aren't moving today. The price has nothing to do with it."

My point is that price is very relevant. We overvalue old boats because they are cool and rare without consideration to the costs of reconditioning. Those costs are so significant that the true value of even a cool "nice survivor" is far less than most fans would like to think.

Old restored and very nice boats aren't moving because they are overvalued in comparison with what else is available in the market. A purchaser takes the path of least resistance and that is...

A) a newer boat that does not require all the work (or restored & documented)
B) a complete project.

This because in case A) newer boat that does not require the work utility is derived without more investment. And in B) project acquisition price is low, surprises few(as the worst is assumed) and a value for the complete restoration is considered before purchase.

The older a boat is the more it needs (whether it looks like it or not) at near 50 years old this is a certainty. Tougher to judge at 20 years.

With old boats there is no free lunch. Do the work and document it or sell it for what it's worth. Not list it for what it could be worth IF the work was done....

[roadtrip se]

Sean...

Several folks here have looked at what I stated and agree with it. There is nothing at all similar to valuing a production run of cars and attempting to compare the same process to a restored, one of a kind, old boat. Night and day. I stand by what I said.

As for the liability factor, an old restored boat with a leaky gas tank, something that would likely be taken care of in a deck-off restoration, presents no more liability than my selling a 22 Classic with 700 prop shaft horsepower to a person stepping up from a Bayliner Capri. Both transactions represent significant liability, as does every boat sale in its own way. However, this liability has nothing to do with the asking price.

Older or newer, people just don't have the cash in pocket to buy these things. Period. And every transaction is going to stand on it's own.

[roadtrip se]

Upon re-reading Todd's quote, I agree and the heart of it is in the above sentence.
It's a good thing there's room for all of us.

Amen, George. Now, when are we going to see the red head at a run?

[woobs]

It's okay to have a differing opinion.... I agree with some of what you have said. However, I just disagree with your main point.

Also, I was considering more the "very nice" comment rather than the "old restored" as long as that is a complete and documented restoration and not just a cosmetic one. Although, I believe there is a market for "old restored" boats that is not financing dependant (albeit a small market)

Sean...

Several folks here have looked at what I stated and agree with it. There is nothing at all similar to valuing a production run of cars and attempting to compare the same process to a restored, one of a kind, old boat. Night and day. I stand by what I said.
I never said it was like valuing a production vehicle... I said each person has his own system to come to a valuation.

As for the liability factor, an old restored boat with a leaky gas tank, something that would likely be taken care of in a deck-off restoration, presents no more liability than my selling a 22 Classic with 700 prop shaft horsepower to a person stepping up from a Bayliner Capri. Both transactions represent significant liability, as does every boat sale in its own way. However, this liability has nothing to do with the asking price.
I was speaking to Condition (the liability a possible consequence of mis-representation of condition). To list a 50 year old vessel in original condition and represent it as fit & safe is irresponsible as we know these things need to be changed. Therefore a clean original requires a "deck off" procedure and this must be considered in the asking price.

Older or newer, people just don't have the cash in pocket to buy these things. Period. And every transaction is going to stand on it's own. I think the $ are out there. People just will not spend large amounts on an acquisition where there is a good chance they'll have to spend a lot more to get some use out of it. They will spend the $ if there is documentation to tell them what they are buying is sound or they will wait for an alternative (obvious project) where they KNOW they will be spending the $ and it is already figured in.

It's a small market for boats like Parnell's GT but that boat is worth every penny as it all been done. The "right guy" will come by and score that beauty. More often, the market is for the lower initial cost of an obvious project boat. We spend more by the end... but we still do it and those boats sell frequently. It's just a different way of spending the $ but make no mistake... the $ are being spent.

[duckhunter]

Sean...

Several folks here have looked at what I stated and agree with it. There is nothing at all similar to valuing a production run of cars and attempting to compare the same process to a restored, one of a kind, old boat. Night and day. I stand by what I said.

Older or newer, people just don't have the cash in pocket to buy these things. Period. And every transaction is going to stand on it's own.

Agreed again, and for the same reasons I mentioned in the Hornet value discussion. Old boats represent too small a sample size and too great a variation in condition and configuration to be able to value quantitatively. You can try to find "comps"and give an educated guess when selling or buying a boat (a qualitative approach), but it's more of a shot in the dark vs. other stuff like bikes or cars. The number that counts is the one that closes the deal.

I think the point about cash is valid as well. There's even a number of boutique finance and insurance outfits that handle classic cars exclusively. No such animal for old boats.

It's been proven here any number of times that it is way more cost-effective to buy a completed project vs. doing it yourself, and that does cross over to the car & bike markets. It's interesting watching the big auctions (Mecum, BJ, etc) and seeing the $150k customs and hot rods cross the block for half that. On the other hand, and unlike boats, the factory original cars seem to consistently bring good money. Some of that can be chalked up to the garage and the street being more forgiving than the marine environment, and some to the fact that the markets are so vastly different. There really doesn't seem to be an equivalent "restomod" category for boats; a 500hp LS '69 Camaro (or whatever) with modern suspension and nice paint and bodywork does great at auction. You probably won't get all of your money out of it, but you'll come way closer than you will with a restomod boat.

One of the rigs that stands out in my mind as a good example of all of this is Parnell's GT. Love that boat; it is immaculate and rigged exactly how I would do it, which is rare from what I've seen cruising the interweb. It is offered at a price that is more than fair IMO, and clearly less than the cost of the parts alone. I'd take it every day of the week and twice on Sunday compared to a $75k plus ski boat or equivalent value new Bayliner or Sea Ray. Or a 40yo original Donzi, for that matter. That said, there's no way I could justify tying up that much cash in a toy, especially one that I can't write off as a condo.

At the end of the day, I think that there is a very limited market for these things in the first place, and it shrinks exponentially when it takes a good chunk of cash to close the deal. The "classic" small boat market is just too specialized and too different from the classic car market to be a valid comparison. JMHO.