high time engine/partnership

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newbienw

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newbienw
Folks, I just joined the board and pretty happy about it!

I am a student pilot with about 20 hours of dual instructions. I was training with the local club. My CFI has left the club, so I have no one I like to train with currently.
My CFI is a member of 4 way partnership on Piper Warrior 140(IFR). One of the partners has left for the medical reason.... so the spot became available.

This is a really well maintained aircraft ... the only showstopper is that the engine is at 2100 hours (2000 TBO).
The compression is 76 out of 80, the oil analysis is performed at each change with really good results.
The plane flew 50 hours last year, with the average of 200 hours annually.

In theory if I join this partnership and the engine dies within 2-3-8-etc. month, I will be on the hook for 25% of the expenses. I do not think that it's fair, since other people flew the engine to the 2100 hour mark and I (potentially) have to pick the bill up.

Do any of you know a mechanism in a partnership that makes the whole thing lil more palatable for people joining a partnership in the "late stages" so to speak?

Thanks in advance!
 
newbienw said:
Folks, I just joined the board and pretty happy about it!

I am a student pilot with about 20 hours of dual instructions. I was training with the local club. My CFI has left the club, so I have no one I like to train with currently.
My CFI is a member of 4 way partnership on Piper Warrior 140(IFR). One of the partners has left for the medical reason.... so the spot became available.

This is a really well maintained aircraft ... the only showstopper is that the engine is at 2100 hours (2000 TBO).
The compression is 76 out of 80, the oil analysis is performed at each change with really good results.
The plane flew 50 hours last year, with the average of 200 hours annually.

In theory if I join this partnership and the engine dies within 2-3-8-etc. month, I will be on the hook for 25% of the expenses. I do not think that it's fair, since other people flew the engine to the 2100 hour mark and I (potentially) have to pick the bill up.

Do any of you know a mechanism in a partnership that makes the whole thing lil more palatable for people joining a partnership in the "late stages" so to speak?

Thanks in advance!
Click to expand...


I was in kind of a similar situation a few months ago. I bought in on a 4 way partnership (C-182Q) and while the engine isn't at TBO it has been over 15 years SMOH. However, the partnership I bought into requires the members to pay into a overhaul reserve for each hour flown and a monthly fee, so in theory no one should have to pay anything out of pocket when we are due for an overhaul. Seems like a fair way to do it.

Also you should be paying a much lower buy in than the other members did when they got it, as it was x amount of years newer, with much less hours on the engine.

Get the aircraft appraised (or do your own comps on controller.com) at it's current condition and engine time and offer to pay 1/4 of that price as the buy in. If they have an overhaul reserve like my partnership does and they can show you the proof of how much is in the fund, your comps should be based on a 0 time engine.

Oh, and welcome to POA!!!
 
If everyone has been paying into an engine fund, then not only will you be buying the airplane, but you'll also be buying a large bank account.
 
Unfortunately, there is no engine reserve fund. Their dues cover the hangar, annuals, insurance, etc.
If they did, my choice would be way easier
 
First off it's not a very desirable plane, I'd probably pass.

That said.

Figure what's it's currently worth by looking at comps and asking around outside of the club, offer 1/4 of that amount. Take it or leave it.



Without knowing much about the plane times, damage history and repairs, who's owned it, the panel, cosmetics etc, I'd say it's MAYBE about a $15- $18,000 plane

So I'd offer $3,750 - $4,500 on the high end, and fly all the hours you can, while you can
 
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Talk it over with the partners, tell them your concerns, ask if they have plans to overhaul the engine soon. I would negotiate a lower buy in rate, as suggested previously. If the other 3 partners don't want to deal, I would walk away.
 
You needed to think about that before your purchase and had them either split the overhaul or work your portion into the sales price.
 
newbienw said:
Unfortunately, there is no engine reserve fund. Their dues cover the hangar, annuals, insurance, etc.
If they did, my choice would be way easier
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Scotty78 said:
Talk it over with the partners, tell them your concerns, ask if they have plans to overhaul the engine soon. I would negotiate a lower buy in rate, as suggested previously. If the other 3 partners don't want to deal, I would walk away.
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If this is a "4-way" split style arrangement, then you'll need to speak to them about what the correct/current value is of the aircraft and work from that number.

In their mind, they could be thinking this is worth something around $30-35k, which it might have been when they all got involved. But with a runout engine, it's not unheard of to devalue that by the cost of the engine.

That there is no engine reserve going on, is a bit of a concern on my view. An honest question to ask of them is how they are going to deal with big ticket repairs when they occur. If they respond, "we will each just write a check for our 25%", then get very clear on what happens if one member is not able to pay their part.

One would hope that they are not looking at your "fresh meat" money as the cash they need to replace the engine.

Keep in mind that properly taken care of, and properly maintained, there is a good chance that engine could take on many more hundreds of hours before it starts telling the group it's time for a change. But you need to be thinking about the "what if's" of (1) the engine dies next month and (2) how difficult will it be for you to sell your share once the engine gets to 2300 and 2500 hours.

Finally, read over or ask for a well written and properly executed co-owner agreement. This document can (and should) cover all of the potential good, normal, bad, weird, and more stuff. The major benefit is that it documents how things are handled before any emotional toes are stepped on.

That's my dos centavos.
 
I would think, if there is no reserve fund, then the market value of the "1/4" share should be current market value of the aircraft with a run out engine divided by 4.
 
At 100 hours past the TBO, I'd count the engine as done. The only thing you can expect from it now is to fail. Any hours you get from it are a gift. Just on that basis alone, I'm not sure it's a good airplane for a fresh pilot to fly...I'm not sure it's a good airplane for ANY pilot to fly.

You didn't say what kind of 140 it was - but the above estimate of the entire plane being worth something in the 15k range is basically in the right ballpark, assuming no unusual equipment, OK paint and interior (rare on an old Piper!) and no corrosion issues. Also, Piper specific issues, such as the wing walk are in good shape.

So, you're essentially splitting a 15k airplane up 4 ways. That should be your buy in with the expectation that you'll be putting in 1/4 of 20-30k for a new engine very shortly.
 
newbienw said:
Unfortunately, there is no engine reserve fund. Their dues cover the hangar, annuals, insurance, etc.
If they did, my choice would be way easier
Click to expand...

What is the buy in price? Is it representative of the engine being 'core value'? If you are buying in <$5k, the deal is representative of the correct value given old avionics.
 
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bflynn said:
At 100 hours past the TBO, I'd count the engine as done. The only thing you can expect from it now is to fail. Any hours you get from it are a gift. Just on that basis alone, I'm not sure it's a good airplane for a fresh pilot to fly...I'm not sure it's a good airplane for ANY pilot to fly..
Click to expand...

Nah, with good compression and being flown regularly, I've seen em go THOUSANDS past overhaul, I highly doubt a failure is imminent.


For pt91 ops it's more of a value issue then a safety issue.
 
bflynn said:
....I'm not sure it's a good airplane for a fresh pilot to fly...
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That was my other thought too!
Hypothetically, if we fly equal amount of hours my chance to be in the cockpit when the engine fails is 25%. Out of 4 partners, I am the one least likely to survive if it happens.
According to Murphy's law, my chance of being in the cockpit is 98% :mad2:
 
newbienw said:
That was my other thought too!
Hypothetically, if we fly equal amount of hours my chance to be in the cockpit when the engine fails is 25%. Out of 4 partners, I am the one least likely to survive if it happens.
According to Murphy's law, my chance of being in the cockpit is 98% :mad2:
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The chances of the engine failing in the next 1000 hours is lower than if you were flying it the first 100 hours after overhaul. The engine in that plane is known to go 4000 hrs in frequent operation.
 
James331 said:
Nah, with good compression and being flown regularly, I've seen em go THOUSANDS past overhaul, I highly doubt a failure is imminent.


For pt91 ops it's more of a value issue then a safety issue.
Click to expand...

And you've seen them not go thousands of hours past overhaul. The fact is, it's just never been studied with any kind of discipline that allows anyone to draw any conclusion other than that you're doing something not recommended by the engine manufacturer.
 
newbienw said:
I will be on the hook for 25% of the expenses. I do not think that it's fair
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That would be perfectly fair provided you paid today for 1/4 of the current market value of this Warrior with the engine gone.
 
Henning said:
What is the buy in price? Is it representative of the engine being 'core value'? If you are buying in <$5k, the deal is representative of the correct value given old avionics.
Click to expand...

the buy in price is $3K.
the aircraft was repainted in '91 and has always been hangared(KPAE). The interior is probably 5-6 out of 10.
Steam gages with the yolk mounted tablet
 
newbienw said:
the buy in price is $3K.
the aircraft was repainted in '91 and has always been hangared(KPAE). The interior is probably 5-6 out of 10.
Steam gages with the yolk mounted tablet
Click to expand...

So the other partners are valuing the aircraft at $12k. I really wouldn't expect you (or any of you) to be in the left seat and in flight when the engine rolls snake eyes. More likely you'll OH on condition if something expensive breaks.

So look at it this way, are you prepared to write a ~$6k check for 25% of an engine overhaul on day 1 after you join? Are you confident all partners are ready and able to do so as well, so you're not grounded with a hull and $12-18k (meaning not enough) of OH fund? If the plane had a freshly OH'd engine do you think it would be worth $36k, and would you buy a 25% share for $9k? If all of those are yes, the current condition of the engine are not a reason not to do the deal. Also, since you're overhauling a 140, you'd probably want to consider the 160HP upgrade to the engine while you're at it, so odds are after the OH you'll have a livelier plane than it is now. And/or you can continue to fly it in current condition for a fairly low buy-in until the OH is needed.
 
newbienw said:
the buy in price is $3K.
the aircraft was repainted in '91 and has always been hangared(KPAE). The interior is probably 5-6 out of 10.
Steam gages with the yolk mounted tablet
Click to expand...

When was its last annual, and who did it?

I'm in and out of PAE all week, if you'd like me to have a look I'd be glad to do it free.

PM me
 
newbienw said:
the buy in price is $3K.
the aircraft was repainted in '91 and has always been hangared(KPAE). The interior is probably 5-6 out of 10.
Steam gages with the yolk mounted tablet
Click to expand...

The buy in price accounts for the current, core, engine value.
 
Here's the other thing to remember -- everything is negotiable. I'm not saying you have to squeeze your prospective partners dry, but you have a legitimate concern about the engine possibly needing an expensive OH very soon after you join (and frankly, I think their ask does reflect that). All the same, perhaps it makes sense for you to agree with your partners in advance to cap your exposure for maintenance for the first year or two -- maybe a sliding scale that increases until by the third or fifth year by which time you share a full 25%.
 
Tom-D said:
When was its last annual, and who did it?

I'm in and out of PAE all week, if you'd like me to have a look I'd be glad to do it free.

PM me
Click to expand...

the plane is current, due in Feb.
I believe that the aircraft had the "owner assisted" annual.

PMing you.
 
$10k for an overhaul at a non-name brand shop, $2500 each partner. $3k buy in. So, assuming you dive in and it drops a valve tomorrow, you are looking at $5500 and the next ten years to fly the pint off it! Assuming you are just wanting to fly, I'd say that's a pretty awesome deal.

Or, for $3k you can fly it for a very long time as that engine will go double TBO sometimes if you are slightly lucky.
 
newbienw said:
the buy in price is $3K.
the aircraft was repainted in '91 and has always been hangared(KPAE). The interior is probably 5-6 out of 10.
Steam gages with the yolk mounted tablet
Click to expand...

You're talking to guys in this thread with a lot more experience than me, but it sounds about right to me. That would be 12k if you were buying it yourself. I don't think you're going to find an airworthy plane for less than that. Someone mentioned the financial status of your potential partners. Make 110% sure that they can write a check tomorrow if the engine or prop fails. You'd hate for the plane to be grounded because any of the partners wasn't prepared. I'd prefer an arrangement with a maintenance fund, but that's just me. As others have mentioned, a 2100 hr engine that's been run and maintained properly can go much longer. A low time engine is no guarantee of problem free flying.
 
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rbridges said:
You're talking to guys in this thread with a lot more experience than me, but it sounds about right to me. That would be 12k if you were buying it yourself. I don't think you're going to find an airworthy plane for less than that. Someone mentioned the financial status of your potential partners. Make 110% sure that they can write a check tomorrow if the engine or prop fails. You'd hate for the plane to be grounded because any of the partners wasn't prepared. I'd prefer an arrangement with a maintenance fund, but that's just me. As others have mentioned, a 2100 hr engine that's been run and maintained properly can go much longer. A low time engine is no guarantee of problem free flying.
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This. The deal on the plane is ok, and even owner assist annual can be an indicator of either a bad partnership or good. If you have partners who do maintenance themselves, and are qualified and committed at keeping the plane in good condition at the lowest cost is exactly what you want. What you don't want is cheapskates. Looking the plane over usually makes it evident quickly what the 'group philosophy' to the care of the plane is. This is part of due diligence in any deal, and Tom should be able to give you a good idea of how to proceed.
 
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bflynn said:
And you've seen them not go thousands of hours past overhaul. The fact is, it's just never been studied with any kind of discipline that allows anyone to draw any conclusion other than that you're doing something not recommended by the engine manufacturer.
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So true. I think they are looking for a sucker. Air cooled, small aircraft engines are notorious for going south before the recommended overhaul. With the few hours you have, why would you involve yourself in this very high time airplane before you get some quality time,like over 2-300 hours. You'll know better then what you might want to fly. I also do not agree than new aircraft engines are not safer. I never heard of a new mooney or a new commanche quitting, or any other newer aircraft when I was younger. I did know of low time instrument pilots killing themselves by flying beyond their capabilitys. I would not touch that airplane.
 
Jimmy cooper said:
So true. I think they are looking for a sucker. Air cooled, small aircraft engines are notorious for going south before the recommended overhaul. With the few hours you have, why would you involve yourself in this very high time airplane before you get some quality time,like over 2-300 hours. You'll know better then what you might want to fly. I also do not agree than new aircraft engines are not safer. I never heard of a new mooney or a new commanche quitting, or any other newer aircraft when I was younger. I did know of low time instrument pilots killing themselves by flying beyond their capabilitys. I would not touch that airplane.
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The O-320 is notorious for eating cams and rusting internally when left to sit extended periods, particularly in damp coastal climates. However, for planes that operate > 100 hrs a year minimum every 2 weeks, they tend to go far beyond TBO. Flight schools operating them 300+ hrs a year often run them well into the 3rd millennium of hours and it's not rare for them to take them to 4000hrs.
 
Henning said:
The O-320 is notorious for eating cams and rusting internally when left to sit extended periods, particularly in damp coastal climates. However, for planes that operate > 100 hrs a year minimum every 2 weeks, they tend to go far beyond TBO. Flight schools operating them 300+ hrs a year often run them well into the 3rd millennium of hours and it's not rare for them to take them to 4000hrs.
Click to expand...

I've never known anyone....anyone ....to fly a small engine aircraft anywhere near those hours! The two FBOs I've known who flew some charter never did either. Most of the time the engine settled the matter by blowing a jug , burning a lot of oil, on and on. I wouldn't go near that airplane. Put a fork in it, it's done!
 
Jimmy cooper said:
I've never known anyone....anyone ....to fly a small engine aircraft anywhere near those hours! The two FBOs I've known who flew some charter never did either. Most of the time the engine settled the matter by blowing a jug , burning a lot of oil, on and on. I wouldn't go near that airplane. Put a fork in it, it's done!
Click to expand...

Cylinders are engine accessories. If you don't know anybody who has run an O-320 significantly past TBO, you simply don't know many operators of O-320s. I used to fly several of them in 172s and a PA-12 that were well into their 3000 hour clocks. Some patrol planes will do this every 2-3 years, schools 3-4 years.
 
Jimmy cooper said:
So true. I think they are looking for a sucker. Air cooled, small aircraft engines are notorious for going south before the recommended overhaul. With the few hours you have, why would you involve yourself in this very high time airplane before you get some quality time,like over 2-300 hours. You'll know better then what you might want to fly. I also do not agree than new aircraft engines are not safer. I never heard of a new mooney or a new commanche quitting, or any other newer aircraft when I was younger. I did know of low time instrument pilots killing themselves by flying beyond their capabilitys. I would not touch that airplane.
Click to expand...
There was a brand new mooney whose engine failed just days ago in Florida.
 
frcabot said:
There was a brand new mooney whose engine failed just days ago in Florida.
Click to expand...

Great pic of him Standing on the street watching it burn too.... sun N Fun, right?
 
Statistically speaking most engine failures occur after maintenance. Usually a result of the mechanic screwing something up or the engine not being assembled properly. You know the saying, "don't fix what's not broke." TBO is just a recommendation, made up by the lawyers considering mean time before failure. I'd be more interested in the compressions and the result of a borescope. With good compressions and rigorous oil analysis, it sounds like the engine has a ways to go.

Also remember most engine failures are only partial failures (eg if you have a cylinder fail, 3 are still working, you can still get down on the ground and just replace the bad cylinder). Catastrophic failures, for example relating to the crankshaft, are more rare.
 
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Jimmy cooper said:
I've never known anyone....anyone ....to fly a small engine aircraft anywhere near those hours! The two FBOs I've known who flew some charter never did either. Most of the time the engine settled the matter by blowing a jug , burning a lot of oil, on and on. I wouldn't go near that airplane. Put a fork in it, it's done!
Click to expand...

Spend some more time in aviation, it's more common than you think, also the guys flying charter (al la pt 135) are flying under very diffrent a TBO regulations, so that's not really a example.

As was said before, the first couple hundred hours after overhaul you are far more prone to failure than flying a well maintained past TBO engine.


The owner assisted annuals are a good sign, presuming the AP is a good guy, having partners that are of the owner mindset, not the renter mindset, makes the plane more valuable.

3k ain't that bad, though I'd like to see a pic of the panel.

As for APs to recommend there are a few in WA, I'd ask around this board, also get on this group and ask around, there are also a few you may want to avoid.

https://www.facebook.com/groups/FLightsAboveThePNW/
 
Jimmy cooper said:
So true. I think they are looking for a sucker. Air cooled, small aircraft engines are notorious for going south before the recommended overhaul. With the few hours you have, why would you involve yourself in this very high time airplane before you get some quality time,like over 2-300 hours. You'll know better then what you might want to fly. I also do not agree than new aircraft engines are not safer. I never heard of a new mooney or a new commanche quitting, or any other newer aircraft when I was younger. I did know of low time instrument pilots killing themselves by flying beyond their capabilitys. I would not touch that airplane.
Click to expand...

Yeah, that's with people who don't know how to manage a engine, or don't care.

I've known plenty of drop zone and tow planes which go beyond TBO, and that's on an engine working far harder than this little piper.

Plenty of new engines, or overhauled engines go T/U, that's a wildly known fact in the industry.
 
newbienw said:
Folks, I just joined the board and pretty happy about it!

I am a student pilot with about 20 hours of dual instructions. I was training with the local club. My CFI has left the club, so I have no one I like to train with currently.
My CFI is a member of 4 way partnership on Piper Warrior 140(IFR). One of the partners has left for the medical reason.... so the spot became available.

This is a really well maintained aircraft ... the only showstopper is that the engine is at 2100 hours (2000 TBO).
The compression is 76 out of 80, the oil analysis is performed at each change with really good results.
The plane flew 50 hours last year, with the average of 200 hours annually.

In theory if I join this partnership and the engine dies within 2-3-8-etc. month, I will be on the hook for 25% of the expenses. I do not think that it's fair, since other people flew the engine to the 2100 hour mark and I (potentially) have to pick the bill up.

Do any of you know a mechanism in a partnership that makes the whole thing lil more palatable for people joining a partnership in the "late stages" so to speak?

Thanks in advance!
Click to expand...
Why bother with any of this? there are two flight schools on PAE, plus a CFI teaching with a 170, two more schools at AWO.

Or simply buy your, own and finish in it.

screw some one else problem aircraft.
 
Tom-D said:
Why bother with any of this? there are two flight schools on PAE, plus a CFI teaching with a 170, two more schools at AWO.

Or simply buy your, own and finish in it.

screw some one else problem aircraft.
Click to expand...

Joining the partnership is one of the options I have.
Had no idea if I wanted to go any farther with the co-ownership offer.
 
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