Topic: Has anyone ever split ownership of a race car with 2 or 3 people

Has anyone ever split ownership of a race car with 2 or 3 people, can you show me the contract you used? When you sold the car or get divorced did you still talk to the other car owners?

Re: Has anyone ever split ownership of a race car with 2 or 3 people

We do but it did not start that way and no contract was signed.  It is only the easy-going nature and financial stability that keeps it viable for us.  If we had to split now, there would likely be some challenges dividing up one race car but the other two would be easy.

In the end you have created a money pit that all "investors" should know will return $.10 on the dollar.  If that is not clear in the beginning, there will be hard feelings.

A good, competative B-class car with lots of spares and a history of finishing races is worth about the value of the safety gear...so about $2-2500 in my area IF you can sell it.  We could not sell ours for $1500 (Instead it burned to the ground and saved us the heartache).  So agree on a number of what it is WORTH and not what you have in it.  Then figure out how to buy the other person out based on a percentage of how much you each contributed to it to include money and time/expertise/tools/storage/work space/etc.

Some teams are friends that decide this is a good idea to try and all invest as equally as they can but I personally am not a fan.  I gained friends as part owners as I went along but I would rather own the car outright and treat a lifelong friend as a modified arrive and drive verses later have an argument over money.

Re: Has anyone ever split ownership of a race car with 2 or 3 people

I'm building mine my self and will be the sole owner so I don't have to worry about the inevitable team skisim.

Re: Has anyone ever split ownership of a race car with 2 or 3 people

If you have any hints of a worry now, just sort the subject now. Sharing a car, meaning having multiple people who all think that they "own" a part of it at the end of the day can lead to problems. Even with people you start out friends with. Large sums of money cause problems. Best practice usually is to have one person who owns the car, and then an agreement on how the money works, if it's everyone puts in a certain amount each race, and any extra is sorted back, or someone pays all up front and then sends the total out to be reimbursed, or whatever you want to do. But you should have some plan for the day that someone gets mad and walks away and what do you do with the car.


My last car/team I owned the car, I did most of the work, I asked my friends to pay a certain amount each race to cover what I'd spent. It worked mostly, but I ended up paying more than them usually. But when the team kind of dissolved there was no argument. I said the car was dead, I drove it to the crusher.

now, my team is all family, so if something goes wrong, we're just forced to sort it out. It's a weird setup, but it's working. Dad owns the car, since it was his daily driver first, I still do most of the prep work, but they chip in an enormous amount. It's working well.

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Re: Has anyone ever split ownership of a race car with 2 or 3 people

TheEngineer wrote:

Sharing a car, meaning having multiple people who all think that they "own" a part of it at the end of the day can lead to problems. Even with people you start out friends with. Large sums of money cause problems. Best practice usually is to have one person who owns the car, and then an agreement on how the money works

I respectfully disagree.  We have four owners and we split EVERYTHING evenly.  We're all adults and have an agreement that we are friends first, and car owners second.  If owning this car together will keep us from being friends, the car will have to go.

We have a gentlemen's agreement that if something happens to the car and it was 100% your fault (ex.: you miss a shift and engine goes boom) you pay for the parts, and the whole team will provide labor to fix it.  If it's not your fault (ex.: you get t-boned) we'll all pay for the damage and labor to fix it.

We've been doing this over 10 years now and have never had any arguments about money or anything else, so it can be done.

Captain
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Re: Has anyone ever split ownership of a race car with 2 or 3 people

Our team runs the same.  4 owners.  All split mostly evenly.  Never an argument in 10 years of car ownership (a couple of cars in fact).   

It definitely can be done with a handshake agreement.

Our non-Lemons car is owned amongst 5 other guys in an LLC with Lawyer-derived paperwork.  That was a requirement of one of the owners who is wealthy and wanted some financial protection for his estate.

I would say how the team is formed is largely based upon the personalities in the group and their concerns over legal stuff.  When guys start talking about whether team owners should be held liable if negligence in car preparation leads to an “event”, I would opt for a formal written agreement or just run away.

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Re: Has anyone ever split ownership of a race car with 2 or 3 people

I think this just shows the range of situations you can have. But my statement was started with the caveat of "If you have any hints of a worry now, just sort the subject now", meaning if  you're already worried about this because of the people you're going into it with, you probably have reason to be worried about what will happen, and you should figure something out at the start.

Some teams area great at keeping things civil and sorted. Others are not. My first group of team mates were friends, but not that great of friends. Things devolved at the end. Large sums of money in cost can ruin weaker friendships. Up to you to navigate if your team is that way or not.

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Re: Has anyone ever split ownership of a race car with 2 or 3 people

TheEngineer wrote:

I think this just shows the range of situations you can have. But my statement was started with the caveat of "If you have any hints of a worry now, just sort the subject now", meaning if  you're already worried about this because of the people you're going into it with, you probably have reason to be worried about what will happen, and you should figure something out at the start.

Some teams area great at keeping things civil and sorted. Others are not. My first group of team mates were friends, but not that great of friends. Things devolved at the end. Large sums of money in cost can ruin weaker friendships. Up to you to navigate if your team is that way or not.

I'd agree with the above.  I've run teams both ways - our first team, everybody owned the car, expenses were split evenly, etc etc.  Since I moved out west, I've owned the cars, team mates chip in on costs and wrenching.  Both worked perfectly fine, it really depends on the people involved.

So I'd agree with the 'hints of worry' comment above.  If you think you might need a contract, then personally I'd veer away from the equal share mode and lean towards the single ownership mode.

bs

Re: Has anyone ever split ownership of a race car with 2 or 3 people

My teammates are my closest friends, but I could not fathom some sort of shared, co-ownership, clusterfu*k. I own the car, I make the decisions, I shoulder the responsibility, what I say goes. The rest of my crew pays for consumables and wear & tear. That’s how shit get done and the costs are shared*


*shared does not equal balanced, but that’s the price I pay for having it my way, which I consider invaluable.

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Re: Has anyone ever split ownership of a race car with 2 or 3 people

We split our first car three ways, and all expenses and parts along the way, then split the winnings three ways when we sold it. I generally took ownership of searching, purchasing and organizing spares and replacement parts and we worked on it together.

My advice; If you feel that you need a contract in place, don't even bother splitting it. The cost of a second hand Lemons car is usually not that much anyway ($2k +/- $500), and will be dwarfed by your safety gear and first race entry.

Splitting worked for us because none of us particularly cared about how much it cost to keep the car running, and we all had the same idea of what was a reasonable amount to spend on the car.

Re: Has anyone ever split ownership of a race car with 2 or 3 people

gus wrote:

Splitting worked for us because none of us particularly cared about how much it cost to keep the car running, and we all had the same idea of what was a reasonable amount to spend on the car.

A version of this I think is the key to co-ownership.  If all agree up front to what appears to be an unrealisticaly high number to get built, to the race and then maintained for following race(s) coupled with a seeminglyunreasonably low "buy out" price if someone wants or needs to leave, it could work well.

Re: Has anyone ever split ownership of a race car with 2 or 3 people

gtopat wrote:

My teammates are my closest friends, but I could not fathom some sort of shared, co-ownership, clusterfu*k. I own the car, I make the decisions, I shoulder the responsibility, what I say goes.

I'm glad that works for you, but my team would never work that way. 

We decide as a collective what to do, how much to spend, etc.  Nobody is the "boss" because I get enough of that "what I say goes" sh*t from my boss at my work.  He gets to do that because he's paying me.  Nobody else beside my wife will be giving me any orders, certainly nobody on my team.  We make decisions together, and rarely even disagree on what that decision should be.

I guess the bottom line for an answer on this topic is each team is different, and there is no universal solution.  Do what works best for you and your team.

Captain
Team Super Westerfield Bros.
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Re: Has anyone ever split ownership of a race car with 2 or 3 people

VKZ24 wrote:
gtopat wrote:

My teammates are my closest friends, but I could not fathom some sort of shared, co-ownership, clusterfu*k. I own the car, I make the decisions, I shoulder the responsibility, what I say goes.

I'm glad that works for you, but my team would never work that way. 

We decide as a collective what to do, how much to spend, etc.  Nobody is the "boss" because I get enough of that "what I say goes" sh*t from my boss at my work.  He gets to do that because he's paying me.  Nobody else beside my wife will be giving me any orders, certainly nobody on my team.  We make decisions together, and rarely even disagree on what that decision should be.

I guess the bottom line for an answer on this topic is each team is different, and there is no universal solution.  Do what works best for you and your team.

This was kinda my point from earlier posts.  A lot of people make this work but I would say 70% (guesstimate) of teams that start as good friends and are not it the "don't come in, we are eating ice cream" faction have issues if one or more member needs or wants to leave.  People understandably have expectations that "I put X into the car and I expect Y out when I leave".  The point is if you have a joint ownership situations, how do you manage the X/Y differential.

Re: Has anyone ever split ownership of a race car with 2 or 3 people

I've done the partner thing and it ended in an ugly divorce. Single owner best option IMO

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Re: Has anyone ever split ownership of a race car with 2 or 3 people

No true owner works better because remember: Never spend any money in racing you wouldn't be willing and happy to stick in your BBQ Grill and just burn.

If you can't trust your team mates not to burn you, don't race with them. But either way, every dime you put in the car is ash the second you hand it over to Summit, eBay, Rock Auto, or Craigslist guy. Any utility derived from the product of that money being able to drive around on a race track is strictly a fluke.

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Re: Has anyone ever split ownership of a race car with 2 or 3 people

Guildenstern wrote:

No true owner works better because remember: Never spend any money in racing you wouldn't be willing and happy to stick in your BBQ Grill and just burn.

If you can't trust your team mates not to burn you, don't race with them. But either way, every dime you put in the car is ash the second you hand it over to Summit, eBay, Rock Auto, or Craigslist guy. Any utility derived from the product of that money being able to drive around on a race track is strictly a fluke.

^ seems like a good start re: setting expectations with regard to "contributions", and, "getting something in return".

Re: Has anyone ever split ownership of a race car with 2 or 3 people

OnkelUdo wrote:
VKZ24 wrote:
gtopat wrote:

My teammates are my closest friends, but I could not fathom some sort of shared, co-ownership, clusterfu*k. I own the car, I make the decisions, I shoulder the responsibility, what I say goes.

I'm glad that works for you, but my team would never work that way. 

We decide as a collective what to do, how much to spend, etc.  Nobody is the "boss" because I get enough of that "what I say goes" sh*t from my boss at my work.  He gets to do that because he's paying me.  Nobody else beside my wife will be giving me any orders, certainly nobody on my team.  We make decisions together, and rarely even disagree on what that decision should be.

I guess the bottom line for an answer on this topic is each team is different, and there is no universal solution.  Do what works best for you and your team.

This was kinda my point from earlier posts.  A lot of people make this work but I would say 70% (guesstimate) of teams that start as good friends and are not it the "don't come in, we are eating ice cream" faction have issues if one or more member needs or wants to leave.  People understandably have expectations that "I put X into the car and I expect Y out when I leave".  The point is if you have a joint ownership situations, how do you manage the X/Y differential.

Like VK, I too have been doing the joint ownership thing on and off for over ten years.  My experiences have not been quite as smooth as his but overall it has worked out well enough.  First takeaway, you will quickly figure out who your friends are in a joint ownership situation.  Decisions by committee only work if everyone's opinions are considered equally and fairly.

As to the X/Y differential..... make sure it is understood at the beginning what the rules are for buyouts (if available), wreck repair & financial responsibility, car prep labor, towing expenses, team dissolution and the splitting of proceeds if any are gained.

Expect some team drama, my wife says we are worse than a pack of women, but how the team handles it will determine your successes and your failures.  A cohesive team will always finish a race with better results than a dysfunctional team over time.

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18 (edited by TrenchFoot 2019-04-05 10:37 AM)

Re: Has anyone ever split ownership of a race car with 2 or 3 people

My team now has 3 cars, all owned by individual teammates. The first car (mine) was a group effort to build, but I bought it. We pooled money to prep it, but I covered the difference when we came up short (and still do). Because of this, no one else really thought they owned a piece of it. Once money was spent to buy/fix something, everyone assumed it only bought them seat time in the next race. This was kind of clear upfront because I was the persistent, driving force keeping the dream alive to make the first race. I'm the team captain because I'm too stubborn to quit.

Everyone knows I pay way more than anyone else in money and time scouring CL for parts. It sounds goofy, but I do it because I get to say "I own a racecar". After the first couple races, teammates wanted to scratch their creative itch and have that sense of car-owner-pride so they built their own.

We all scramble to fill the seats. Some of our teammates are solid friends that are great drivers, but don't sling wrenches and definitely don't worry about what to fix/upgrade the 359 days we aren't at the track. They are teammates through and through but pay up like any other A&D, no shame in that on our team.

So, should you share it? It depends on whether you have 4+ solid, "friends first" type of friends. If you are a collection of friends and friends-of-friends, consider a contract or a single owner arrangement.

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Re: Has anyone ever split ownership of a race car with 2 or 3 people

It all depends on the personalities of those involved.  It also depends on whether anyone is expecting "value" from the car when it or they leave.  Some people feel the need to formalize everything and others are like us where the agreement was made over beers.

Our first car was shared and it was an immediate disaster.  But we really didn't know the dude in charge that well.  Apparently the state did know him better than us when they disbarred him.  After that great success, we went with shared ownership on the 2nd car which we still have 10 years later.  I'm fairly sure none of my teammates expect much of anything in return when it goes as over the years we've pumped way more than our original investment into it in repairs/consumables/etc.  The whole concept of who owns what when a used LeMon is worth, what?  $2k? seems like arguing over what you may have no problem spending  to host a Super Bowl party.

Every car we've run since then has been owned by me as it's just easier and I really didn't want to involve lifelong friends in shitboxes of dubious quantity that were literally drug out of the desert.  I take it back, I did buy one with a partner and sold it for what we bought it for so we both got back our original investment (less the $$$$s spent running/repairing the damn thing).  I would say that if you go the partner route, the expectation from everyone should be that if they leave or the car leaves (one way or another), not to expect much of anything when that happens.  You are throwing money into a hole.  Anything that happens different than that is a bonus.  If there's a dispute over anything, agree upfront to use a secret ballot box to decide with the team leader breaking any ties.  We really haven't had any disputes, grumbling at times but we're mostly older and my teammates are wealthier than I.

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Re: Has anyone ever split ownership of a race car with 2 or 3 people

cheseroo wrote:

I would say that if you go the partner route, the expectation from everyone should be that if they leave or the car leaves (one way or another), not to expect much of anything when that happens.  You are throwing money into a hole.

That is a very good way to look at it IMO.  It's kind of like buying tires, brakes, and fuel for a race.  Hopefully you got to enjoy yourself while lighting that amount money on fire, but either way, it's gone. If you can't just walk away, you shouldn't be racing because it's not if, it's when.

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Re: Has anyone ever split ownership of a race car with 2 or 3 people

I can't imagine 4 guys building a car, and all four guys doing the same amount of work, and putting in the same amount of money in,  there's always going to be one guy that's broke, one guy does all the work, one guy that has all the money.

I have rented many race cars and there's Usually not a problem till until there's body work.

Our team has one guy with the deepest pockets owns the car, we pay a lot of money to keep the cars going, so far it works.

Everybody thinks of a race car it's condition on the first lap of the race, when actually the race cars spend 99% of their time in the condition it was on the last lap of the race, needing body work, brakes, a new transmission and a new motor.

22 (edited by Type44 2019-04-05 05:34 PM)

Re: Has anyone ever split ownership of a race car with 2 or 3 people

"We're mostly older and my teammates are wealthier than I"

Seems to be the secret of success with the most recent iteration of our crew. An earlier group dissolved when one guy was done and expected someone to give him a check or something. My reaction was more like
"You're telling me that I'M done racing, unilaterally, now sell the car and give me some money?"


Yeah, that didn't work so well. I didn't really want to be a team leader but I'm too stubborn not to be smile

This isn't always the greatest spot to be in when, say, your car blows up 1.5 hrs into the race and you have to explain to the newb A&D that all the money is spent, there really can't be a refund, and that he's welcome to the unused race gas in the jugs and tomorrow's lunch in the cooler. Cause that's all there is that hasn't been spent- the money really is GONE!

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Re: Has anyone ever split ownership of a race car with 2 or 3 people

Every team will be dependent on the personalities of those involved.  If you're sharing ownership make sure you value the friendship more than the car; or go into it with all parties knowing that you don't and a written agreement with buy-out/dissolution plans in place. Co-ownership should be a bit like marriage - make sure you have similar attitudes, interests, outlooks, and expectations before tying the knot.  Team cohesiveness makes the weekend fun.  Team strife would interfere with the fun.

I am a team captain/car owner.  My wife fully supported buying a car and setting it up for Lemons with the stipulation that she got to drive, too.  She does very little of the wrenching but takes charge of the "support camp operations" planning and prep.  The other three drivers are younger, faster drivers and better wrenches; and are all recent college grads/current students so don't have the money to invest (throw away) in the car anyway.  One lives nearby, and he and I do most of the between-race repairs and prep on the car.  The other two are my nephews who live too far away to work on the car between races, but bust their tails on race weekend unloading, final prep, pit crew, repairs during the race, loading everything up after the race, etc.  Since everyone pitches in as much as possible where they can nobody complains and everyone gets a pretty fair deal.  I listen to their recommendations on car setup, repairs, and improvements and almost always follow their advice.  If I decide otherwise, they don't complain since they know I considered their recommendations carefully before making a decision. They also don't complain about my wife's lap times because they know that her driving was a condition for agreeing to invest in a money pit. That and the fact that she keeps it on the track, doesn't get flagged or break the car, and makes sure everyone is well-fed and watered.   If any of the three wanted to "buy-in" to the team I'd be happy to split ownership because the personalities and expectations of the team are pretty well established and all are happy with what we do and how we work. We have a slow car, but we've improved each race, managed a couple of impressive (to us) fixes during races, and had a lot of fun so far.

24 (edited by robert.mcdaniels 2019-04-23 08:39 AM)

Re: Has anyone ever split ownership of a race car with 2 or 3 people

First everyone has to accept this is a giant, worthless money pit and any money contributed is a total waste and bad idea. Once that expectation is set then there are few arguments over "ownership", "profit", etc.

Our team shares expenses. We do co-own one car, a BMW project car, but most of our builds have a single owner. It works like this. Someone sees a bad idea on Craigslists and buys it. They ask the team if we want to race their really crappy car. The team cringes and says, "I guess". We then run the numbers on getting it on track; cage, brakes, tires, assorted repairs. I then make a spreadsheet in Google with two kinds of expenses. There are race expenses that occur every time we go to the track like; brakes, tires, and fluids. Then there are durable costs, stuff that should last the life of the car, like; cage, transmission, etc. I usually pro-rate the durable costs over three races. After three races it is paid for and we just budget expenses. In the end team member X owns the car and can sell it whenever. We look at our investment in racing gear as pretty much a loss as a $500 car with a cage is still a $500 car. Anything of value that can be moved, like the seats, harnesses, and fire system, gets taken out for the next car.

Here's an example;

Car prep (cage and needed repairs) = $2500
Race expenses (tires, fluid changes, gas for the tow vehicle, etc) = $1000
Lemons Fee = $1400

*Cost per driver (4 drivers) for the first three races = (1/3 of car prep + Race expenses + Lemons Fee)/4 = $808
*Cost per driver after three races (no more car prep) = (Race expenses + Lemons Fee)/4 = $600

*Note: each driver buys their own jugs of gas for their stint

25

Re: Has anyone ever split ownership of a race car with 2 or 3 people

My team runs on the hippy commune system.  There are 3 of us we jointly own the car and are horrible about documenting costs so we all work on it when we can purchase and put money as we can and occasionally someone just gives me more money cause the car is at my house and I tend to order the bigger items.  Pretty sure this system wouldn't work for most people but luckily the team is all pretty laid back and all people who try to give more than their fair share into a project like this.

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