BUYING
SV H.O.M.E.S.
With
With
BITCOIN
Buying a boat with Bitcoin!?! Have you ever wondered what it takes to buy a boat to live on, let alone with Bitcoin? It’s much more intensive than we originally thought. There is definitely no written path for buying a liveaboard boat. We had quite a few curveballs thrown our way. This article will shed some light on the tools we created to find the right boat, how we bought our boat with Bitcoin, while also securing a loan. As well as the insurance and documentation steps.
Table of Contents
Our life plan always included buying a sailboat to live on full time. But having a plan and actually acting on it are completely different things. After occasionally searching online through for sale ads, we decided to get serious about boat buying. But buying a sailboat to live on full time can be VERY intimidating for anyone, let alone a novice boat buyer. Any large purchase is very scary and comes with multiple important decisions to be made. How to finance? Should we get insurance? Should we buy new or used? Should we use a boat broker? What KIND of boat should we buy? The list goes on and on. We haven’t even gotten into how well the boat is outfitted, makes, and maintenance history.
One of the major pros AND cons of boats is how customizable they are. The first decision to make is monohull, catamaran, or trimaran? Once that decision is made, you can narrow your focus to makes, specifications, and what kind of liveaboard are you going to be? Will you be primarily at dock or anchored? Where will your boat be and what kind of weather does that region experience? OUR goal is to have the capability to live on anchor/off the grid for long periods of time, with minimal docking planned.
The ONE piece of advice you should follow when buying a boat to liveaboard is TO DO YOUR RESEARCH. Watch all the videos, read all the blogs possible detailing the process of purchasing and registering your liveaboard vessel.
THE SEARCH AND OUR TOOLS
Monhull Specs
These are overall specs for monohull make/manufacture to compare with each other.
For example: If you’re looking for a center cockpit, skeg hung rudder, sloop, aft master suite, fin keel, 40 comfort ratio, ect, ect. It will show you those make/models.
Market Tracking
This is tracking and logging the boats on the market that we were interested in. It helped us keep it all straight.
Multihull Specs
Like the first tool but for catamarns. These are overall specs for make/manufacture to compare with each other.
For example: If you’re looking for a single helm, galley up, sprit pole, dagger boards, KSP #, ect, ect. It will show you those make/models.
Personal Rankings
As we all know there is no such thing as the “perfect” boat. So this is our subjective personal ranking for catamarans.
For example: Yea, you want dagger boards; but how much do you value it? Is it a deal breaker?
It very hard to keep all the make and models straight in terms of what they offer. So Jon built these tools which helped us narrow down our search. If you're interested in any of the tools he built let us know down below and if enough people are interested, we can publish them for you to use.
If you know anything about us, you’ll know we LOVE our research. We tend to get stuck in what we call “analysis paralysis”. You can prepare everyday until the cows come home but unless a decision is made it will always remain A DREAM. Be it the right or wrong choice, we made our decision. With the eventual plan to have children and raise them on the boat, we decided instead of buying a monohull and eventually “upgrading” to a catamaran, we wanted to start our liveaboard journey with a catamaran.
We seriously started looking in March of 2020. Perfect timing right? Personally, we were all over the map when it came to buying our liveaboard. Bouncing between monohull and catamaran multiple times. Originally, we looked for monohulls located in the Great Lakes, as our experience with sailing was primarily racing monohulls there. With the ultimate goal of sailing worldwide, it became increasingly apparent that “bluewater” boats are found, you guessed it, on the ocean. On a trip to Florida, we specifically set an appointment with Just Catamarans to look at some catamarans in person. It was quite the eye opener. The amount of space and the liveability in comparison to monohulls was enviable.
After our visit with Just Catamarans we decided that we wanted to buy with a broker because the ins and outs of buying a vessel possibly overseas is very complicated. Plus, we loved our broker Terry Grimbeek who is very knowledgeable, had all the contacts we needed, and overall made the process easier.
The easiest way to get acquainted with brands or makes, and all the modifications possible is to consistently search websites with boats for sale. We started with a top down approach, make, model, layout, year, build rationale (charter/liveaboard/etc.), modifications, and maintenance. We familiarized ourselves by searching justcatamarans.net, yachtworld.com, boattrader.com, boatlistings.com, catamaransite.com, amongst many others. Another way to learn about the possibilities for your liveaboard vessel is to go to boat shows, specifically the Annapolis Sailboat Show. Here, you’ll find everything from financiers, vendors, and actual boats both new and used to step foot on! The boat show occurs annually every October, but because of its popularity they also have a smaller scale boat show in the spring! We know liveaboards that found and bought their vessel in a few weeks. That being said, the combination of wanting to be prepared and the pandemic hitting; we spent at least an hour EVERY SINGLE DAY, for a year and a half searching and learning what it is we wanted in our boat.
*DISCLAIMER We found this was time well spent, as we plan to do all the maintenance on our boat ourselves if possible and live primarily on anchor. If your cruising plans allow for crew, primarily professionally completed work, and living at the dock; you may find your time is better spent elsewhere.*
WE FOUND HER!
On December 12th 2021, I stumbled upon a listing on catamaransite.com for a 2004 Voyage 440. She had everything we were looking for; great performance/design, turn-key ready to go, owner’s layout, protected helm/cockpit that could was enclosed (since we wanted to do high-latitude), no headliners (to help against mold, again high-latitude)! The listing really revealed just how well loved she was. It also had some wonderful perks; newer antifouling, almost brand new engines/fuel lines (420 hours!!!). The previous owners really went above and beyond with the listing and we LOVED IT!!
For full up-to-date specs, check out our SV H.O.M.E.S. page.
We sent the listing to our broker, and after hearing his input, we reached out to the owners and started the conversation. We talked via email and on the phone to gather more information on the boat. After much thought, we put together a verbal offer (e-mail) and sent it over. After a bit of back and forth with the previous owners, we settled on the fair price of $352k. It was definitely on the higher end of our budget (if not over
) and it was definitely a seller’s market. Nonetheless she was everything we wanted after SO much time searching. So we moved forward with scheduling a survey!
SURVEY AND RIG INSPECTION
The boat was located in the USVI and we planned to complete the survey in Marina Puerto Del Rey, Puerto Rico. Research will tell you to find a surveyor yourself or through your broker as long as the broker doesn’t also represent the seller. The surveyor is working for YOU as the buyer and should be meticulous in finding issues or potential issues with your purchase. Finding an accredited surveyor was important to us as this was going to be our home. On our brokers recommendation, we ended up going with Joseph Barlia (americanmarinesurveyor.com). With his extensive experience, SAMS accreditation, and affiliation with ABYC and SNAME, we couldn’t have been happier. The survey took approximately 9 hours and included afloat inspection, dry dock inspection, sea trial (Sails, Winches), standing rigging at deck level only, engines performance at wide open, USCG mandatory safety inspection, ABYC safety standards, and electric and electronic test. Keep in mind, as the surveyor works for the buyer, we are expected to pay for the survey as well as any haul out fees.
As our surveyor would not go up the mast to inspect the rigging, we hired Joaquin Sanchez of Puerto Rico Ocean Enterprises Corporation to inspect the rigging up the mast. We found him again on our broker’s recommendation.
Traveling to another country for the survey definitely presented a hurdle in purchasing. We didn’t want to spend the money on securing a survey, rigging inspection, and travel costs on a boat we were only lukewarm about. You better believe we asked plenty of questions prior to scheduling the survey. The previous owners also completed a survey on the vessel in 2020 which they provided to us. The sellers were very transparent with us and are wonderful people. We 100% struck gold with them!
The total cost of survey, haulout, and rigging inspection was a little over $2000. While not cheap, it cemented in our minds not only how well the boat was cared for but how appropriate our offer was. We even made a friend during our short time there!
BITCOINS & BOAT LOANS
Securing funds to buy your boat can be done in many different ways. Know that however you buy your boat it may stipulate if and what kind of insurance you get. Our options were frustratingly very very limited.
This is where things get interesting. We were lucky enough to have gotten into crypto many many years ago (before it was cool). 😊 So we had a few options, do we cash part of it in and buy the boat out right (paying capital gains tax
?) Or maybe some of it? Again, capital gains tax! Well, we are strong believers in Bitcoin (BTC) and truly believe it will be around for a long time, so selling it was avoided at all costs. We know it will crash (as it always does), therefore we played it very safe. We used bitcoin as collateral with a very large Loan to Value (LTV) ratio with a 1% interest rate. So WHEN Bitcoin drops, we would have a nice cushion. If it drops more than we planned; a margin call will be issued. We can then either add more Bitcoin or pay down some of the loan to bring the LTV back to “good standing”. Now because it’s only a margin call so they would liquidate the collateral we already gave them. In other words, we would never be in a position of being forced to owe them something we didn’t have.
So that’s what we did! As well as securing a standard boat loan. This way we can maintain our credit score as we wouldn’t be using our credit cards as often. But, as with every type of loan, securing a boat loan comes with certain stipulations you’ll need to fulfill. Generally, boat loans require a credit score of 700 or greater, a lower debt-to-income (DTI) ratio, verifiable income, insurance for the vessel, and proof of deposit. Something else important to note, is that the vessel must be no older than 20 years. Finally, not EVERY bank will fund liveaboards.
Through our broker, we were introduced to Zack at Azul Marine Lending who we used to secure our boat loan because most (if not all) lenders will only deal with a financing specialist, not the buyer. This was another major frustration!!
Outside of financial paperwork, the requirements for the loan included the survey, sea trial, and haul out (supporting price of boat and in average condition or better), name of boat, hailing port, boating experience, and Insurance- 3% Max deductible 6% for Hurricane/Windstorm.
As we were getting closer in finalizing the loan, we were broadsided with an ask to put 30% down, rather than the anticipated 20%. We were understandably taken aback, as nothing had changed. But, the lender decided that due to the age of the vessel, they wanted a larger down payment. Did they forget it was a 2004?!?! Talk about a kick in ass. So we provided the 30% down payment, and received our green light for closing.
INSURANCE
Onto the bane of every liveaboards world, insurance. It is becoming harder and harder to get insurance as time goes on, most likely due to the increasing frequency of hurricanes and named storms. So much so, that many people go without. Our boat loan requires us to carry insurance but even if we didn’t have a loan we would still get it, just given the fact that H.O.M.E.S. is our home. Pun intended
Our broker introduced us to Hugo at Hanham Insurance to secure insurance. Boat insurance is different from other types of insurance in that they TYPICALLY have navigational limits of coverage. So one of the first questions we were asked was our cruising plans for the year. For the first year we wanted coverage for the Eastern Caribbean and East Coast of the US. We were initially told to be expecting around $2-3k for insurance, and our past sailing/racing experience was more than enough. Then, during the final hour as we are beginning to solidify things, our first insurance quote came back with a premium of almost 3x what we were estimated!!! At this point, we thought maybe the universe was trying to tell us something. Nevertheless, we trudged forward.
We learned that the increased price was mostly due to the lender’s requirement of a 3% deductible. Sadly, the combination of low deductible and age of the vessel (again, did they not already know this information?) created a situation where little to no negotiation on our end was possible. The ONE thing we did to decrease the premium was change the location of our boat from North of Florida to North of Cape Hatteras for hurricane season. We were able to bind insurance with a decreased premium of just over $8k.
CAPTAIN SIGN OFF
Are you keeping track of the curveballs? Well, here’s #3! Remember, we were initially told we should be “more than fine” with all of our past boating experience. Now, with our flight to Puerto Rico quickly approaching, the insurance company wanted a sign-off from a captain!! The final stipulation to operate the vessel and maintain insurance was “20 hours of operational training required by a licensed USCG Captain with knowledge of this vessel. A proficiency exam shall be administered at the end of the training period with a sign-off letter by the Captain sent to this company.”
We informed the current owners of the situation and as expected, they went above and beyond. They found a local captain who would be able to help us out. We reached out and through a few back and forth e-mails he was available for the dates we needed but was a little unwilling to give us a quote. He wanted the exact insurance document which we didn’t have. So we reached out to the insurance company for the exact verbiage/requirement and forwarded that along to the captain. We (finally) received a rough quote from him at around $300, which was on par from our research. Wonderful!!! Two days before flying out I sent the captain the final insurance info and can you guess what happened? That’s right! He is NO longer available for those days (but several weeks later) and to top it off is now asking $3k… (Again, what changed?!?!)
We frantically, informed our broker Terry and the current owners of the situation. Again, the previous owners knocked it out of the park! (Can you tell we really love them?!) They were able to find another captain at the marina who just happened to be passing through, named Captain Jay!
And just like that, we packed up our entire lives into 6 suitcases and flew to our new soon-to-be home!
We got Captain Jay’s info approved by our insurance company and got the sign off shortly after we arrived. The best part? We still keep in contact with Jay, his wife Terry, and their dog Captain Jack! They are fantastic people and we are so happy to now call them our friends. We even met back up with them in the USVI and on our way north in North Carolina, which you’ll hear about soon enough.
DOCUMENTATION
What exactly is documentation? Well, if you plan to register your boat in a US state or with the USCG, certain things need to be verified for legal transfer of ownership. Documentation companies procure an abstract of the title from the USCG, ensure there’s no outstanding liens or other obstacles, and complete vessel documentation with the USCG. (Maybe like a titling company? I don’t know, we never bought a house!)
As we were buying with a boat loan, the use of a documentation company was required. But if you plan to self fund you can choose to do the documentation yourself. Our financing specialist chose International Vessel Documentation LLC for our closing.
The closing date was scheduled for February 1, 2022 with the stipulation of importing the vessel prior to closing. Importation tax is required when a non-US built pleasure vessel is imported to the US. Our boat was built in South Africa and the previous owners registered the vessel in Canada. As we’re both US citizens and registered the boat with the USCG, the importation tax of 1.5% was required. Even though the first owners had it registered in the US and paid the tax, as it left US registration, it had to be paid again.
Can you guess whats about to happen? Curveball #4! Unfortunately, we ran into some difficulties importing from Puerto Rico. So, the closing date was delayed. Reason being, that removing it from Canada’s registration usually takes several weeks!!! As if this was new information!?! SO FRUSTRATING! So after several delays and by a miracle, the previous owners were able to do it in just a couple days. Importation was completed with a local customs broker by the previous owners which we paid for. The importation cost was approximately $5k.
After importation was completed, for us to be able to register the boat with the USCG, the documentation company needed proof of Canadian deletion, which also took a couple days. After sending over the deletion of the registry, we received the loan documents and proceeded to sign our life away! A few pages required notarization which we were thankfully able to arrange that evening. Fun fact, notaries in Puerto Rico are all attorneys but not all attorneys are notaries. After scanning and emailing the signed loan documents, it was too late to send the documents via FedEx. So, the next morning we shipped the original paperwork to the bank address, the funds were released and SV H.O.M.E.S. was ours! FINALLY!!
NOW WHAT?
Whew! Talk about a stressful and emotional rollercoaster! We definitely needed a drink after this exhaustive process! Now all we had to do was unpack and start the never ending process of learning and understanding all of her processes. The fun never ends! LOL
So what’s next? Well explore of course! We started slow; with short day sails to become more comfortable sailing not only a catamaran but our new home!
5 Responses
Wow! I thought we really got F’d over by the real estate agent and the previous owner when we bought our house, but that pales by comparison to this. Hoping everything goes much more smoothly from this point forward.
Yeah! It was quite the hassle, but in the end very happy that it all worked out!!! Would love to take you guys out sometime!!!
Totally fascinating to me, man what a journey just to start your journey! Here’s too many more adventures, looking forward to the next update.
Thanks yea! It’s been awesome! We are learning a lot along the way!