With the U.S. economy sputtering, discretionary spending on boats has been off for several seasons. This is not news to folks like you who scour boat listings because it has resulted in a fleet of used boats for sale, and a group of anxious sellers who’ve had to drop their prices. However, for folks like me who enjoy buying old boats to fix, then sell or flip them on the open market, patience and profit is hard to come by. If you have a less than pristine product it may be very hard to sell in this environment or recoup any investment.
Take my current project for instance, a 30-foot sailboat. Over several seasons, I have slowly bought or salvaged used parts I needed to repair the boat: a new tiller, some rudder bearings, a small outboard kicker, cushions, plenty of G-10, a used bow pulpit, basic used Raymarine electronics, a compass, some stanchions, etc… I started work by gutting the interior and removing the frozen Atomic-4 gas engine, fuel tank, nasty plumbing, and a rotted bulkhead. Next I rewired the mast, repaired some fiberglass damage on the hull, awl-gripped the hull, and painted the bottom.
This year, invigorated by spring weather and my mantra not to sell until it floats, I determined to get this boat back in the water. In the process of installing much of my menagerie of used equipment and making the boat water tight again, I found plenty of rotted core in the deck. A friend was helping me install the bow pulpit, one of those awkward jobs requiring two people, someone inside and someone outside, to install. The friend, seeing the condition of the boat and realizing how much more work was required just to get it floating, never mind prepped to sell, encouraged me to scrap it. While I bought this wreck for a measly dollar, I have spent about 5k and several seasons doing the afore mentioned work putting it back together. My hopes were to sell it for 8 to-10k, far below the 15k these boats, in excellent condition, fetch on the open market.
My friend calculates that the spot price of lead at $1.23 per pound multiplied by the 3,560 pounds of ballast in the keel would more than pay for any more investment or sweat equity, especially if I sold off the mast, rigging, and inventory of parts I had acquired. This boat was never meant to be a keeper for me, but while I can understand his logic, I’m invested in more ways than one.
Knowing when to let go of a flipper, even one acquired for next to nothing, goes against my philosophy to see all old boats restored and floating once again. Sure, it may be time to buy more flipper inventory at bargain prices, but the exit strategy is very cloudy, both emotionally and financially, in this down economy. Stay tuned to see how I let go.