New boat and interesting quandary

[suke]

Picked up my new 212x today! Bittersweet as I've put a lot of work into my old boat.

Hopefully taking it out tomorrow.

So here's my problem..... Sorta long and not something I've personally run into before.

So I bought this boat a little over 1.5 years ago. I got a pretty dang good deal on it when I bought it. Buddy of mine I've known for a long time called me up and asked if I'd help get a mutual acquiantance's boat ready to sell. We'd split the payment as I've done paint correction work for nearly 20 years on the side. During the process he's like man you should buy this or we should split it and flip it. I said nah I'm not into the flipping business. After we finished and I chatted with the wife we decided we'd buy it. I knew the owner but he(my friend) insisted on being the middleman for the negotiation. Anywho, I buy it and put a ton of work into it. Trailer needed to be completely overhauled, I put new mats in it, brand new Bimini, new lighting, cables, cobrajet steering, etc. My neighbor went out a lot with us last year and had been trying to convince me to sell it to him. I finally said aight lemme look at new boats. Whenever I personally sell to friends I just stick to purely book value. Doesn't matter mods, or money I've put into it. That way it's fair for all.

My buddy finds out I'm selling it and says I owe him 10% of the profits since I'm selling it. Now mind you I never purchased it for the intent to sell it, but knew if I ever sold it I'd sell it for what it's worth. Now I found that quite a weird request. I paid for the boat, I've taken care of the boat, I fixed up the boat, stored the boat, and found the seller. He literally did nothing other than say hey you should buy this. He said I owe him money cause he wanted to buy it and flip it. I. E. Buy it as low as possible do nothing to it and sell it. We've enjoyed the heck outta this boat and put 50 hours on it last year. He now won't talk to me, which is sort of heartbreaking as he's what I'd consider my best friend. We're not young kids either. Am I in the wrong, do I owe him money? He's sort of a hustler and he's bought several things from this mutual acquiantace and flipped it.

Pics of new boat, cause in sure that's all you really care about.

 

[Mike Cardillo]

Boat looks sweet. I would say no, you don't owe him anything. If you are really worried about the friendship give him an estimate of all your time and costs (including interest on your money). That will probably demonstrate that their is no real profit. If there is profit offer him a percent of that IT YOU want.

 

[Scarab 215]

Congratulations on the new boat!

Agree with Mike, you don't owe your buddy anything.

 

[marcham]

Again, great looking boat! I love the black and yellow.

Go with your gut. If you don't feel you owe him anything (and certainly don't on paper), then that's the way it is .... I think the advise in post #2 is sound.

Seems like you guys need to sit down over a beer. What you made or didn't make in profit isn't really any of his business if he wasn't part owner and didn't fund any of the boat or repairs. How many hours did you put on the boat? 50 ? 150? At $100/hr I think you'll be well ahead in terms of sweat equity but fundamentally, he did not buy it, you did!

Seems like a strange request coming from a friend. Is there anything else going on his side? job loss?

 

[Noko]

If he hasn't put any money into the purchase or you don't have any written agreement, then he get's nothing. Where would he come up with 10%? Some people don't have a problem trying to use friends, most of us are a little nicer.

 

[suke]

Again, great looking boat! I love the black and yellow.

Go with your gut. If you don't feel you owe him anything (and certainly don't on paper), then that's the way it is .... I think the advise in post #2 is sound.

Seems like you guys need to sit down over a beer. What you made or didn't make in profit isn't really any of his business if he wasn't part owner and didn't fund any of the boat or repairs. How many hours did you put on the boat? 50 ? 150? At $100/hr I think you'll be well ahead in terms of sweat equity but fundamentally, he did not buy it, you did!

Seems like a strange request coming from a friend. Is there anything else going on his side? job loss?

I do know his company was doing pay cuts. Initially he said he was spared, but yeah I was thinking something was going on. It wouldn't matter though he lives in his parents $1.8mill house. I'm 39 and he's 37,so we're not kids.

I put about anywhere from 300-500 hours in, and about $4500 on top of the purchase price, again of my own money. He didn't even so much as help with any of the work post sale. At $100 an hour I'm in the negative...... A lot. LOL!

Purchase price:13500
Money spent: 4500
Labor : 30,000-50,000
Sale price :23,500
Loss of: holy crap!

 

[Matt Phillips]

I agree with the above...if he didn't put any risk into this in the form of money, then he doesn't get any of the reward. The idea was to buy it and flip it, not but it and enjoy it for a couple of years and sell it.

 

[suke]

If he hasn't put any money into the purchase or you don't have any written agreement, then he get's nothing. Where would he come up with 10%? Some people don't have a problem trying to use friends, most of us are a little nicer.

Dunno. Even a legit boat broker only gets 2-3%. Shit if I could get 10% on selling anything I'd be on sales. Haha

 

[marcham]

So ask him for 10% back of your net loss after time and expenses are considered....Add-in the opportunity cost of the capital you had tied up. He might not be aware of the time and money invested.

 

[Mjones]

I would find a new friend and enjoy the boat.

 

[I_squared_r]

If he really wanted to flip it then he should've flipped it from the beginning and not involve you. Doesn't sound like he brokered the deal out of the goodness of his heart, and that is alarming to me. Never expect something in return when helping someone. That's not helping - that's an exchange of services.

Once I found a really cheap car that needed minimal work. I thought of someone that needed a car and I called him right away. I said "look, I can flip this car right now for a few thousand dollars, but I know you need a car. You can take this car and I trust that you will take this as a blessing and use it for a long time" He used it for a few years and said to me "I want to sell the car" and I said "Go sell for a good price to a young kid that needs it." And thats what he did and he made $1000. I didn't stand there with my hand out because that's not why I gave him the car. I did it because I genuinely wanted to help and I know that $1000 went into his next car.

 

[Dave burke]

Sounds like a fair weather friend. I would never do this if I were him.

I think you need to do what YOU think is fair, considering all the factors you pointed out. As you said, at $100 per hour, you’re in the red. What about $50 or $25/hour, are you still in the red?

if you care about the relationship, I’d suggest you come up with a defensible formula and go with that.

good luck

 

[Dave burke]

Love the new boat btw! Very cool colors.

 

[suke]

If he really wanted to flip it then he should've flipped it from the beginning and not involve you. Doesn't sound like he brokered the deal out of the goodness of his heart, and that is alarming to me. Never expect something in return when helping someone. That's not helping - that's an exchange of services.

Once I found a really cheap car that needed minimal work. I thought of someone that needed a car and I called him right away. I said "look, I can flip this car right now for a few thousand dollars, but I know you need a car. You can take this car and I trust that you will take this as a blessing and use it for a long time" He used it for a few years and said to me "I want to sell the car" and I said "Go sell for a good price to a young kid that needs it." And thats what he did and he made $1000. I didn't stand there with my hand out because that's not why I gave him the car. I did it because I genuinely wanted to help and I know that $1000 went into his next car.

Even at $50 an hour I'm still in the red pretty bad if I counted labor. Even at $20 an hour I'm still in the red or CLOSE to breaking even.

 

[captras]

You owe him nothing.....matter of fact....show him your numbers and tell him he owes YOU money! Tell him to pound sand!

 

[Bluewater272]

I think he's absolutely right. You should send him an invoice to settle out the transaction. 50% of costs incurred since purchase including maintenance and insurance, interest if financed, cost of upgrades, etc. Then you can add a credit to the invoice with 10% of the profit. Seems a fair solution.

 

[jdkaeser]

Screw him! My best bud just stopped talking to me because I won’t let him take my brand new boat on vacation for a week with some of his family. I have literally had the boat out once!!! We’re in our mid 40’s and been best friends since high school. It really pissed me off when he got mad! I just said fuck it and don’t think about it. I suggest you do the same. Your buddy and mine should buy a boat together and let them aggravate each other! They will both figure out they are in the wrong at some point, but nice guys like us don’t need to let it bother us. Just move on and let him catch up, that’s what I’m going to do! Good luck!

 

[Dave burke]

Even at $50 an hour I'm still in the red pretty bad if I counted labor. Even at $20 an hour I'm still in the red or CLOSE to breaking even.

Sounds to like you owe him nothing. Show him the math and ask him to refute it.

 

[F.M.]

I love the colors. But don't care for your "friend".

You owe him nothing. You don't get paid when you have no skin in the game.

I flip cars occasionally with a friend of mine. I do the buying and selling, he does the repairs. Everything is split down the middle no matter what, profit or loss, spilt down the middle.

 

[portlandbucfan]

Sounds like you need a new friend. If my best friend ever did that, I would never speak to him again. Snake