How to buy an Airplane?

[Stegoo_86]

Hey All,

I want your stories.
-What did you do right/wrong?
-Did you by single or partnership?
-Any great advice on Pre-buys or Insurance agents?
-Broker or owner?
- How about financing (specifically looking for info regarding financing in partnerships)?
- Upgrading avionics/interior/paint? (Would you buy low and refurbish)?

*A few things I should note as I know pilots tend to be a bit snarky.

1) Let's assume that I'm financially stable enough to be considering a purchase. I understand the difference between fixed/variable costs and I'm quite savvy with numbers. (I'm a fin analyst)
2) I'm likely going to be doing this in a partnership, so the cost will not be my burden alone. (I also have a good understanding of LLCs/S Corps etc...)
3) I know my mission. I've narrowed my options down to a few single-engine piston aircraft.
4) I'm not purchasing anything in the short term. I'm getting information and doing my research now, and plan to possibly buy within 2 years.
5) I have over 300 hours / hold a PPL and I am working towards my instrument. Though I'm still green, I'm not fresh out of flight school.

Appreciate your suggestions.

 

[schmookeeg]

My own stories are either tedious or reckless and not too useful for you.

Treat "plane ownership" as a separate skill, completely unrelated to the pilot license, and with similar learning curve and lesson expense. Actually higher lesson expense if you cut corners.

If you haven't done it before, don't go it alone. Find a type-specific broker, buyer agent, or friend 3 hangars over to help you out. Find the type-club forum, magazine, whatever, and start drinking knowledge. fast.

It's a sellers market. That means to get a quality plane, you need to start throwing karen-level elbows when a plane lists. Convince the seller you have the cash ready and can transact FAST because others can and will also.

"Don't forget to have fun!"

$0.02. Good luck.

 

[GeorgeC]

Just because it has passed annuals and flies regularly doesn't mean much when the deferred maintenance bills come due. Look beyond the usual dimensions of paint/interior/avionics/tsmoh. Be able to point to every component of every system on the plane and have a ballpark estimate of when it last saw daylight.

 

[SixPapaCharlie]

-What did you do right/wrong?
Don't fall in love with a plane before you own it. I flew commercial to a few airports to pick up "The One" only to find out it was a POS.

-Did you by single or partnership?
Sole Owner

-Any great advice on Pre-buys or Insurance agents?
This is kind of a crap shoot. You're going to be throwing more money at your plane than you will ever understand until you own it. Even if it has an amazing pre buy.
Make sure the spar and engine and other staying alive components are not corroded.

-Broker or owner?
Bought directly from a guy

- How about financing (specifically looking for info regarding financing in partnerships)?
Paid cash for a chunk, used HELOC for the other half so I would still have some liquid available for when the engine started throwing metal
Super low interest and so far no metal.

- Upgrading avionics/interior/paint? (Would you buy low and refurbish)?
Too many variables to answer. My paint is good and it is a VFR plane and I am a VFR guy for now so no new avionics.
I have upgraded portions of the interior just because some of it was looking rough.

*A few things I should note as I know pilots tend to be a bit snarky.
*You spelled @$$holes wrong.


You should also ask the question "How do I avoid paying tax on my purchase?" I think about 1/2 of the folks here did and the other didn't and I am not sure we know why that is.
Something about an occasional sale form or something.

 

[TCABM]

I want your stories.
-What did you do right/wrong?

Right: All cash/zero ‘financing’ transaction into a partnership with significant engine reserve. Like factory new engine reserve.
Wrong: Aircraft is based an an airport that isn’t as convenient as I thought it would be.

-Did you by single or partnership?

Partnership.

-Any great advice on Pre-buys or Insurance agents?

It’s a 172, no pre-buy. Partnership was already insured, but spoke to my plane insurance guy to get his opinion on whether the policy was appropriate or not. We were somewhat underinsured and have since increased the hull value to reflect replacement cost of a similarly equipped aircraft in today’s market.

-Broker or owner?
- How about financing (specifically looking for info regarding financing in partnerships)?

See the part about what I did right. CapEx is cheap, OpEx is the long tail.

- Upgrading avionics/interior/paint? (Would you buy low and refurbish)?

Tough question. Buying into this partnership, I knew a dual G5 upgrade was on the books, so eyes wide open for me. That’s half the equation; the other half is that cheap airplanes are cheap for a reason and the ROI generally isn’t there, but depending on the airframe and upgrade path it could be.

 

[Mtns2Skies]

I want your stories.
You sure?
-What did you do right/wrong?
Bought my plane before the market exploded. I should have bought a newer plane and financed it.
-Did you by single or partnership?
Single
-Any great advice on Pre-buys or Insurance agents?
Don't use Savvy or you'll **** off the seller. Use a trusted mechanic from your local airport, but it also depends on the plane you're buying. Some planes will be gone in a heartbeat, so if you're mechanically inclined it may be worthwhile just going yourself and seeing what you can see. For me my only priority was on ensuring there was no corrosion. I was going into it as a restoration so I knew everything else would be replaced, but the airframe was the most important for me. I did not get a pre-buy done and it largely worked out well for me.

Insurance will be expensive and it won't do as much for you as you want it to when you need it, BTDT after a hangar collapse.
-Broker or owner?
Owner. Found the plane on facebook.
- How about financing (specifically looking for info regarding financing in partnerships)?
No experience there, I bought my plane in cash.
- Upgrading avionics/interior/paint? (Would you buy low and refurbish)?
I would not do this again if you have the means to do so. Leadtimes are agonozingly long. People are incompetent *******s and this will cost you many dozens of times more than just buying a nice plane to begin with. I'm on year 4 of my flying restoration and just now the end is in sight 6 figures later.

*A few things I should note as I know pilots tend to be a bit snarky.
*You spelled @$$holes wrong.

1) Let's assume that I'm financially stable enough to be considering a purchase. I understand the difference between fixed/variable costs and I'm quite savvy with numbers. (I'm a fin analyst)
2) I'm likely going to be doing this in a partnership, so the cost will not be my burden alone. (I also have a good understanding of LLCs/S Corps etc...)
3) I know my mission. I've narrowed my options down to a few single-engine piston aircraft.
4) I'm not purchasing anything in the short term. I'm getting information and doing my research now, and plan to possibly buy within 2 years.
5) I have over 300 hours / hold a PPL and I am working towards my instrument. Though I'm still green, I'm not fresh out of flight school.

Sounds like a reasonable place to be to buy a plane.

I'm happy I own a plane. It's been a long painful road with it but it's given me adventures that I never would have had renting or in a partnership. She is my baby and a member of the family at this point. The only way you'd be able to get it away from me is prying the yoke out of my cold dead hands.

 

[Jumpmaster]

I am a solo owner and paid cash for my plane. Also used a signed contract and there are lots of samples on the internet. I bought when the market was in something of a lull but I still moved as fast as possible with the contract and deposit. The plane I bought was in the process of being annualed so it was easy to do a pre-buy. Similar to what @schookmeeg said, get your financing in order before looking. You will really pi$$ of Sellers if you don’t, and time is of the essence. In this market, you have to move fast. If you need your spouse’s permission get it in advance. And if you have an anal lender that requires something from the Seller like reps and certs or a title search, make it easy on the Seller to get it done. Second, study the log books if they are available. Don’t just give them to your A&P. You should know the contents as well as she/he does. I made an outline of of them when I was looking and it did 2 things - focused my questions to the owner and second to the A&P. It also made me pass on a number of planes. When you see the same 5 line entry for 7 consecutive annuals in a row by the same A&P, you really begin to wonder what’s going on. I bought from an uninformed owner - he had no idea why certain work was done so it became readily apparent that I was wasting my time with questions. His A&P however was a fount of knowledge and with the owners permission gave me copies of work orders which were very informative. It also focused what I wanted looked at in the pre-buy although many on this board have bought without a pre-buy and have done very well (or been lucky) and some have claimed they had an extensive pre-buy and ended up with a POS. Just keep in mind a pre-buy is no guarantee of anything. If you have time, there were lots of threads on this Board on pre-buys and some very savvy and I would say senior A&Ps weighed in on the relative value of them, and the problems encountered and you can find them with the search function. Third, fly the plane. I did with an instructor and it was the best money spent. Found a few problems with the plane that were corrected as part of the sale. Beyond that, even if you have 100 hrs in the same make and model, each plane flies just a little differently. Fourth, figure out if you will buy a plane with damage history if it has been properly repaired. Some lenders won’t lend on planes with disclosed damage history I am told. Fifth, get your insurance lined up. Get an estimate and figure out if you can afford it. Insurance seems to be a major issue these days for certain pilots and certain makes and models. Finally, don’t get emotional. It’s just a plane. Be prepared to walk away when the owner won’t let you do a pre-buy using anyone but her A&P, can’t produce all of the logs or won’t let you fly it even with a signed contract.

 

[Erik Muldrow]

I've been looking for a Cessna 205 recently. The market is insane right now and anything is selling quickly and at or above asking price. I'd go with a broker if you've never purchased a plane before.

 

[Sac Arrow]

DEA auction sales are a great way to get a stellar deal.

 

[Daleandee]

Bought mine in parts and put it together. Took about two and a half years.

I got to add the instruments I wanted, the engine it needed, and now I do the condition inspections (although a good set of AP eyes are welcome).

Was it cheaper? Don't know but building (if you enjoy it) can be a blast and when it's done you have a brand new airplane. If you build it correctly you'll also have a safe one.