Shared Ownership in Asia

Posted on October 16, 2012

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SHARED OWNERSHIP IN ASIA

The time is now to get your piece of paradise

Fractional Q&A with Michael Aumock, Founder and CEO of The Delfineo Group. The Delfineo Group is a luxury consulting company, specializing in shared ownership, who just opened an office in Asia.

1) Tell us a little bit about who you are, and your background in shared ownership?
Well, my name is Michael Aumock…my friends call my Mickey. I come from the US where I have been running a consulting company for most of the last 15 years. I specialize in high-value or luxury assets…acquisition, disposition, managing and maintaining. Although I’ve located and purchased many interesting and exotic toys along the way, including mini-subs, helicopters, jets, etc…I specialize in luxury real estate and yachts.

2) Where did you get your start in shared ownership?

Shared ownership started to take off in Colorado, where I’m from, about 15 years ago; and 13 years ago, I started managing some of the multi-million dollar ski homes that I listed and sold as a broker…eventually I got tired of listening to the owners complain about paying the bills in a house that they only used for 4-8 weeks per year, so I designed a fractional program for one of them…essentially to help defray the cost. The first one was a challenge, because I let the original owner call the shots. He had me design it so it would benefit him much more than any other owner. After that, I learned my lesson. Being a non-partial 3rd party is one of the keys to success in the fractional space. After cutting my teeth in real estate, I was hired to set up a fractional program for a yacht club in California.

3) What’s the difference between a club and fractional/shared ownership?

Shared ownership definitely gives you title to something… you own it. Usually, (if it’s being done right, and without giving too many of my secrets away) you create a separate company that buys the asset in question, and then your purchase buys you a relative percentage of that company. This accomplishes two things: A) it protects the investors by having a company between them and any liability, and B) it simplifies the paperwork of transferring ownership when shares are bought and sold.

A club is usually designed to be a bigger entity at the start…hundreds of members instead of a dozen owners or less. There typically is no equity, so if you want to leave, you just send a letter and stop paying your dues.

SHARED OWNERSHIP IN ASIA

4) Why now? What’s going to make this work?

The timing is right for Asia in general, and especially Phuket. The tourism numbers easily support fractional yacht programs in several markets at multiple price points. At the right price-point the risk is minimal because the charter prices are high enough in Phuket to offset unused fractional time, and the Asian market has a growing interest in boats and yachting.

5) What are the advantages?

The biggest advantage is cash outlay for services/goods received. Consider the fact that most people use their yacht less than 6 weeks/year, then anyone who can use “all” of their 6 weeks for what amounts to 1/8th of the cost of a whole boat, is WAY ahead of the game…. and I always hear the same argument. “I want to use it WHEN I WANT TO USE IT!” Fine. Just convince Mother Nature to stay on your good side and never rain or get choppy seas on the days when you want to get the yacht out, and I’ll let you use that argument on me. Until then, just like we learned when we were kids…
it’s nice to share your toys.

6) Who is your ideal client?

My ideal client is the guy who was always interested in yachts, but didn’t grow up around water, or his dad was into something else and he ended up learning

about violins, farming, or tennis. Now, he’s successful and embarrassed to ask the basic questions about yacht ownership. When that guy calls, we put him to ease, answer some of his questions, and invite him to discover the answer to the rest of his questions on his own, in his own time.

SHARED OWNERSHIP IN ASIA

7) What should people watch out for when they are looking at a fractional investment?

Unrealistic returns. Unrealistic access. You can’t pay for a 30-day fraction and expect to get Christmas or Easter every year. It’s not going to happen. But most importantly I think they should look out for a good solid program operator, who’s seen a few fractions before. Someone who can design a program for the people who will use it, NOT design it so it’s easy for him to operate (there
are a few shortcuts that can simplify operation, but limit access). Someone who you like, who stays in touch and is familiar with your lifestyle. Someone that you can live with hearing an occasional “no” from, because sometimes there will be a “no”. “Sorry, the boat is booked and Mr. XYZ is planning to use it this weekend.”

But likewise, if you’re dealing with someone good, he knows whose weekend plans are easily changed if you suddenly have to entertain Scarlet Johannsen on the boat.

8 ) What are the benefits of shared ownership?
For owners? Local community? Any downside?

It’s a safe way for owners to dip their toe into yacht ownership without any prior knowledge about yachting. You can make a small investment and in a few years have a solid understanding of boating and yachts and what you like and don’t like, so that you can move to buy your own vessel, or just buy a few more fractions around the world. A yacht that’s being used generates
jobs and incomes for the local community.

Local communities benefit because when the yacht is being used, there are provisions that must be purchased, a crew that must be employed, caterers that bring food to the yacht, a marina that must be paid, a manager that runs the “business end” of the boat, and the maintenance people who are required to repair engines or clean the hulls. There is an entire industry of yacht support personnel that benefit each time that boat goes out that the non-boating community never sees. Plus, I’ve never seen anyone stomping around in a bad mood on their boat.

SHARED OWNERSHIP IN ASIA

9) What are your goals? Individually and as a company?

Interesting question. Our goal as a company is to sell fractions and create a small fleet of yachts that is used by happy owners throughout Asia and beyond. Personally? I just want to share my love of the sea (which came late in life for me), and give the opportunity to as many people as possible to discover the magic of yachting. To help people conquer their fear of water and the unknown, and give the average businessman a legal and highly enjoyable way to hold his family hostage and out of cell phone range for a few days so they can be reminded of what’s REALLY important in this world.

MICHAEL_AUMOCK

Michael can be reached at mjaumock@gmail.com
follow him on Twitter@mjaumock.

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Posted in: Thailand