I work for a client that designs and builds these 100MM+ yachts. They just can't build them fast enough to keep up with demand. Some of their clients buy a yacht, and sell it within a year for a hefty profit, then buy a new one, repeat. There is quite a business in selling 'used' yachts simply because it takes 2-4 years to build a new one.
Indeed. Some people have a talent for taking a risk on the front end of buying something they know they can flip for a profit, and that something may even be just a place in line. Years ago I helped start a corporate jet manufacturer (that went bankrupt after investment dried up after 9/11). One of our first deposit holders (a "mere" $10K as I recall) flipped his early position in line after about 18 months for a cool million dollars. He tied up for a relatively short time a relatively trivial amount of money for something someone else did most of the work in developing and promoting. His bet was our effort would be successful enough to simply sell his early spot in line. I recall thinking at the time that was why he was rich and I wasn't - I could have bet the same small amount and made the same money, and I had the insider knowledge to guess we'd do a good job early on. Yet I didn't have the idea to do that.
I've heard of this type of thing happening in Boston Real Estate in hot markets, where someone gets in early on the new condo going in the Seaport, and by the time it's done, they flip it a few months later for a profit. Seems pretty risky, but some have the stomach for it.
Do you have any estimate of how many buyers actually want to sail around / host parties, and for how many it's some kind of tax evasion / money laundering scheme?
I don't know any details but always wonder about this... an easy-to-move super-expensive asset, physically in Cannes but legally in the Bahamas... there must be many schemes.
That kind of information is not something I'm privy to, but I'd say it's about 50/50. It's definitely a laundering scheme for many. They deal with brokers obviously, and those just want a cut, never mind where it came from. But they deliver to a lot of Russian oligarchs. I bet there are tons of schemes.
I’ve heard of similar VAT avoidance schemes where the vehicle/vessel gets returned or « returned » back to the tax-free base and another lease gets drawn up before VAT would be owed.
Well, if it's anything like exotic cars, then I guess it works like this: if you walk into a Lamborghini dealership right now and buy an Aventador off their stock, then yes, that car will lose 20-30% of its value the second you put the keys in the ignition. That's just how it is.
But....if you keep buying loads of cars from Lamborghini, eventually you will end up on a list of people who get to put a deposit for brand new cars that haven't even been announced yet. And if you get an opportunity to do that, then you do that. Because then you get to buy cars like the Centenario, like the Reventon, like the Veneno - and you can be 100% certain that those will go only up in price regardless of what their sticker price is.
