Is your mouth watering for the opportunity to buy that post-hurricane Mega-Yacht for pennies on the dollar? Can you envision yourself on the bridge right now? Just look a that ad:

*********** 45 foot Monster Yacht lightly damaged by hurricane XXX water only covered the boat to the radome for less than 2 months. Small 10 foot hole in side. Engines pickled. *********

Well, you get the picture.

Buying and restoring a salvage boat is not for everyone. It requires good general skills, good knowledge of DC electricity, AC on bigger boats (shore power and generators), Fiberglass repair, Sometimes structural, Plumbing, Engines, and the ability to ask for help, and lots and lots of time. Oh, and money.

I have just completed such a project . (well, 98% done) It took over 13 months, required almost every other evening and every weekend, with help from an outstanding marina and their mechanics. I ended up over budget by about 15% which was included in my fudge 25% factor.

I am not an expert boat builder. I have a lifetime of average skills and lots of elbow grease. Sometimes I don't learn from my mistakes and end up doing things over when I should know better. But, that is the fun of taking on a project like this.

Are there good deals on salvage boats out there?

Yes, there are.

What is a salvage boat and what it can be:

A boat or yacht that is damaged to an extent that the cost to repair exceeds the market value, or repairs would not put the boat back into the condition it was in prior to the loss. And a total loss. Where the agreed insurance value minus, salvage costs, leaves less money than the cost to repair the boat.

Example: Insurance value $20,000 - Salvage fees $10,000 - Repair estimates $12,000 = -$2,000 Good reason to have enough insurance.

Most of the time salvage is sold on an "As Is, Where Is" basis. This means there are no warranties, the condition is the condition you are buying or bidding on.

Remember, you will be told anything you want to hear. If you are told the engines are "Pickled or Stabilized" ask for a written guarantee that the engines will run. (Bet you won't get one)

They are sold on a competitive bid basis and where many boats are damaged at the same location often a mass auction is held. There may be particulars unique to each situation and you should be aware of these by contacting the selling party or their agent for a bid package or bid solicitation prior to bidding.

The restoration of a salvage boat can be the most challenging project you will ever take on.

Where to start.

First thing is to pick a boat, set a budget, and do some homework.

You probably know what you want in a boat. There are over 2,000 salvage boats on the market today and that number will be the same for many months, and perhaps years, due to the recent hurricanes.

If the vessel sank in salt water you can presume the engines and electronics need to be rebuilt or replaced. The electrical equipment will likely need to be replaced. The wiring will need some work, but will mostly be reusable. The beds, seats, and fabrics may be stained beyond cleaning. The mattresses will have to be replaced. If the submersion was in fresh water some of the equipment may be repairable. The interior furnishings, other than those broken or damaged, may be reusable. Rub rails, windshields, and other extrusions may no longer be available and you may need to change out all just to replace a damaged section. So it boils down to "how much needs to be replaced". These are the basic factors in a salvage boat.

What year boat are you looking for? What make? The newer the boat the easier it will be to get replacement parts for it. (not necessarily cheaper) E-bay has the best selection of replacement parts in the world - I know as many of the parts that I used came from there.

How large a boat? Very subjective, we will get back to this.

How handy are you? Do you have a life now? Can you put it on hold for the next year or so? Does your spouse hang out at marinas wanting to rebuild boats?

BIG ITEM - Where are you going to keep it while you restore it. You will need access to it on your schedule, the site will have to have power and water, and if the location is a marina make sure that you can work on your boat and hire who you want. Remember to add the marina fee to your budget. You will also need to insure your boat and have your investment covered you need liability coverage and need to provide a copy to the marina or facility.

There are some marina's that will only allow their mechanics to do work on their site. (insurance and liability issues)

Well, if you answered any of the previous questions positively lets continue.

Budget

Once you have established your "Ideal" boat next we need to establish what your budget should be and how to arrive at that amount.

Use NADA, BUC, Abos Blue Book to establish what the boat would be worth when restored. That establishes the "Value" of the boat. You should never be above 80% of that value. Determine if you have the skill or expertise needed to do the work, use a multiplier of at least 125% of total repair cost (parts/labor/sales tax), and finally answer the question: “will this boat fit your needs when it is completed”. Generally, if it is a good restoration you will be between 65% and 75% of the "Poor Value". You may argue that point but, when you are done that is what it will be.

It all cases you should inspect the boat prior to bidding to determine the extent of the damage and your repair costs. It use to be that you were bidding against hungry professional salvage companies. Now there are enough boats for everyone. However, the cream of the crop will still go to the pros. Remember these people know what to look for and the real salvage value. They have the expertise to repair this vessel at a cost competitive rate and the resources to resell the repaired vessel.

The first step to establishing a budget is: A survey. It will help you ascertain the extent of the damage, and the net salvage value (bid price) for the boat. It won't uncover all of the repair problems that need to be addressed, as some of these will only turn up after taking the boat apart to fix it. But much of this 'hidden' damage can be anticipated with a survey. Also, any costs incurred in storage may be yours to settle up when you pick the boat up and you must transport it from where it sits. This may require a crane and semi-tractor trailer. Get estimates on these items.

Most of your repair cost is going to be labor. You need to look over the survey and HONESTLY decide what you can do and what will need to be done for you. Almost all of the parts can be found on e-bay, use the "Search Options: Completed listings" to give you the parts prices for your budget estimate.

Things to Think About

There are some good salvage companies out there that do a good job in preserving things on the boat, and your survey will show you who they are. The cost of a survey is peanuts compared to the rest of the project.

Almost all salvage boats have "Pickled" or "Stabilized" engines. Well what does that mean? Unless you get to the boat as it is sinking and help pull it out of the water, plan on replacing gas engines and major overhaul on diesel engines, kiss the alternators, starters, and electronic engine modules and, If there is one, the generator good-by.

The official definition:

"Pickling - When an engine is submerged the oil inside is displaced by the water and it fills with water. When it is removed from the water rusting (oxidation) begins immediately. The best way to combat this oxidation is to de-water the engine, change the oil and filter (at least 2x) and run the engine to operating temperature to dry it out. Be sure you pull the spark plugs or injectors and turn it over to blow the water out of the cylinders before you start it. If you don't you will bend the connecting rods, because water doesn't compress. If there is no time available to do the foregoing then the engine is de-watered and filled with diesel fuel (pickled or stabilized) to reduce the formation of rust and prevent seizing. This pickling is better than leaving it full of water and it should last for a short while. It will allow for salvageable parts during an engine overhaul. As a rule of thumb if the pickling is one month old, forget the engine."

Always, always expect and plan for the worst when calculating your budget.

Fudge factor  +25% add parts labor and sales tax and add this cost  to your repair costs to cover additional expenses that may be required

Finally, be sure the seller will provide you with clean title or documentation on the vessel after the sale. It is also a good idea to contact your attorney to determine what (if any) your obligation(s) may be in the future to a potential buyer.

Add up your costs, including the fudge factor, and subtract them from average “Value” listed above.  Is it a big number or a little number? Does it appear to be worth the trouble of your time and monetary investment? If so get the wife’s permission and go for it.