No Money Down Sailboats…For Investors
Just about everyone has heard the expression that it “takes money to make money.” But time and again, the assertion proves to be highly misleading.
Actually it’s very often the opposite – those who do have money are the ones least likely to use it.
As investors, we strive to have our capital working as efficiently as possible, each dollar working to produce more dollars.
Anytime we use something other than our own money to invest in a sailboat, we’re leveraging the purchase and multiplying the profit potential exponentially. That ‘something’ can be just about anything, so long as it doesn’t come out of our own pockets.
"We only had $10,000 to invest into our new sailboat business. We could’ve put it into one boat and that would’ve been okay, I guess. Double your money, right?
With a bit of digging around, we came up with 3 boats that seemed to fit the profile, then we made ‘split-offers’ like you suggested.
Two out of the three sellers went for the No Money Down option. The third one didn’t work out, but that’s okay. We still have our $10,000 plus 2 boats we’re planning to sell at $14,000 and $17,000.
Whichever one sells first will pay for the other. It’s almost like getting a free boat, except we’re going to flip that one too! Our net profit should come in around $18,000, which is quite a bit more than if we’d used the standard formula and spent our own money.
My wife says a big ‘thank you’. She’s really getting into this, which is a huge bonus for me. Now if I can just get her to pick up a scrub brush and some teak cleaner. Ha!"
Keep in mind that the return percentage (ROI) on a no money down flip is potentially INFINITE.
To illustrate, compare these two similar transactions:
Standard Formula / Cash: A 38′ Cabo Rico is purchased for $58,000 cash. Repairs and ownership costs came to $5,000. Fourteen weeks later, she is resold for $130,000. The net profit is $77,000. What is the ROI?
$77,000 / $63,000 x 100 = 122% ROI
No Money Down: A 38′ Cabo Rico is purchased for $58,000 with no money down. Repairs, ownership costs, plus three months worth of payments, comes to $6,500. Fourteen weeks later, she is resold for $130,000. The net profit is $75,500 (plus whatever equity was accumulated from the three payments). What was the ROI?
$75,500 / $6,500 x 100 = 1161% ROI
1161% ROI is certainly impressive, but in both examples the net profit was about the same. So then what difference does it make? If someone has the ability to pay all cash for a boat, why would they leverage the transaction?
There are many possible reasons, but probably the most compelling one is that we can cover more distance with the same amount of capital. Given the choice between investing $63,000 into one boat for 122% ROI, or $6,500 each into nine similar transactions producing 1000% ROI or better, the distinction becomes much clearer.
Let’s put it another way:
In the first example, we can make an investment of $63,000 to earn $77,000 net profit.
In the second example, we can make an investment of $58,500 but divide it into 9 different boats for a net profit of $75,500 each, or $679,5000 total.
Regardless of whether we’re flipping many boats or just one, the fact remains that by leveraging the transaction, our money is working harder. In this case, nine times harder!
Whether you’re interested in no money down purchasing because you need the flexibility or simply because you understand the value of leverage, the net effect is the same. Combining our standard 100% ROI formula with any one of our advanced techniques is a powerful way to cover more ground in less time.
That’s why the Start a Sailboat Flipping Business course contains a variety of sources and no money down techniques that are simple, safe, and that really work in today’s world – regardless of your financial position. Pick one method and use it "as-is" or mix and match to suit your preferences.
Clicking on the link above will earn you a $10 discount off the course, courtesy of iBuySailboats.com.