Is there any profit in refurbishing aircraft?

Tom-D said:
Only because buyers will not pay. the smart buyer who wants a certain type, and thinks they will own it for a long time should buy a fully restored aircraft. Most buyers don't realize it is simply a matter of pay me now or pay me later.
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Asset value is determined by the market. The problem for aviation is in general terms supply exceeds demand. Sure there are exceptions, like Aviat and Cubcrafters. They've found a pretty nice niche for $300K Cubs. If I rebuild a 1960 Cub to the exact same standard as CC I'd have a hard time getting $150K for it. And to that standard I'd likely have more than $150K into it. I understand the concept because I've built and sold a similar Cub. And I'm building another one. I question my own intelligence every day!
 
Should be noted that outside of a very few select aircraft that they are all depreciable assets. It's similar to the non-collector car/motorcycle market and that rarely are you going to dump money into a project and have it worth more than the cost of the parts hanging from the chassis. If you intend to make money it's on the buy and with sweat equity that you put in. Your best chance to making money on a plane is buying it on the cheap, cleaning it up and fixing minor squawks, redo the interior on your own. Maybe get it painted and buy some 2nd, 3rd hand instruments and radios.

You want to make money with some airplane stuff then buy some tools and build Vans RV gas tanks for people.
 
azblackbird said:
Same could be said for that '34 Ford sitting out back at Uncle Joes Farm. Buy it for a couple grand. Get your team together and and do your magic and sell it at Barrett-Jackson for $200k. I would think there would be a similar market for older, fresh, clean, airplanes that have been refurbished to factory new condition.

Maybe I'm wrong... which is why you don't ever hear or see about it all that much. I think it would make for a cool reality TV show. Tons of shows about taking crap cars and turning them into diamonds. Somebody needs to do that with airplanes. :ihih:
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You might want to go look at Hemmings as to what a nice mid 30's Ford goes for. It's not anywhere near $200K

azblackbird said:
Bingo... you nailed right on the money Tom! :thumbsup:

Now bring that $20k paint job in-house and do it for $3k. Same goes for that $30k engine overhaul. Bring it in-house and do it for $10k in actual parts and machining. Same goes for the $20k upholstery job. Bring it in-house for $5k. Same goes for the avionics. Bring that $30k stack in-house and do it for $10k or less. Do you think there might be some money to be made if everything is all brought in-house?
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You're valuing everyone's labor at zero. I suppose if times were slow for this group of people that it might be worth their while to renovate an airplane, but then they're taking a risk on being able to sell the end product. If there are customer jobs to be had, they'd be better off doing them, less risk and you get paid faster

azblackbird said:
I think we're on the same page here, thus the reasoning of bringing all the experts in refurbishing aircraft in-house and let them do their magic.

I think it would cool to be the Chip Foose, Boyd Coddington (RIP), or even the Gas Monkey Garage of old airplanes.
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People buy customized cars from people like Chip Foose that for their art value, there's not really an aviation equivalent.

SoonerAviator said:
The thing is, even with the GTO that sells for $100K+ on the auction block, it's not generally a run-of-the-mill vehicle. They restore specific VIN#s in order to command those prices, the ones with #'s matching and original paint colors/interior or rare options (A/C, FI, Ram-Air, etc.). You'd have to be specific about the aircraft you chose, and a run-of-the-mill 172 or M20 isn't it. You'd have to look at more specific aircraft (like Staggerwings, WACO, Beavers, etc) that could be a niche market for buyers. You might even be able to do it with certain Amphibs.
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+1. There are only a tiny number of cars that will bring big money. There are a very few shops that can make money doing a restomod on certain cars. Typically it's a car from the muscle car era that didn't have the high performance options. They put in a new crate motor, upgraded brakes and suspension, and bring it up to cosmetic spec. I wouldn't recommend trying it unless you have a strong reputation in the industry.

The number of private pilots is shrinking. As long as this continues, and it probably will for the foreseeable future, flipping airplanes is going to be a tough nut to crack.
 
So many post to quote but not that much interest. Simple fact is, most people aren't willing to pay a premium to have the nicest Mooney of it's era. They will see your plane with low time engine and outdated avionics but a nice paint job and instantly think "for that kind of money I could have a newer mid time airplane with better avionics" or "I could upgrade to a Debonair for that kind of money". I saw one of your post earlier thinking you could buy all the painting supplies for 3k to paint a 4 seat airplane, fat chance of that bud. Avionics need to be overhauled by an avionics shop, engine accessories should be overhauled by a reputable repair shop. Anything less will spook most buyers and detract value from the airplane. An engine overhaul and paint job will exceed the value of most any airplane that is old enough to need those things.
 
Tom-D said:
Only because buyers will not pay. the smart buyer who wants a certain type, and thinks they will own it for a long time should buy a fully restored aircraft. Most buyers don't realize it is simply a matter of pay me now or pay me later.
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Bingo!... we have today's winner of the internets. Personally I think there's a market there for those type people that do realize the "pay me now, or pay me later" mantra. With the proper financing available, I think there's a market for nice refurbed 4 place family aircraft with modern paint/graphics, luxury interiors, and modernized panels.

I'll continue to read the comments... :popcorn:
 
azblackbird said:
Bingo!... we have today's winner of the internets. Personally I think there's a market there for those type people that do realize the "pay me now, or pay me later" mantra. With the proper financing available, I think there's a market for nice refurbed 4 place family aircraft with modern paint/graphics, luxury interiors, and modernized panels.

I'll continue to read the comments... :popcorn:
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Yep. I'm in the higher-end legacy 182 market right now, and it's ridiculous how difficult it is to find one.
 
From knowing a few people that have gone through companies that do refurbishing. They will by a solid plane. In the case I know they paid like 100k for a PA32. They stripped the plane to bare metal, and did total new paint, new interior, and upgraded the avionics. My best guess is with labor they put about 75k into the plane, and then they sold it just north of 200k, making about a 35k profit.

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ktup-flyer said:
Yep. I'm in the higher-end legacy 182 market right now, and it's ridiculous how difficult it is to find one.
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That's probably the market to go after. Any plane that is above the trainer level wether fixed or retract. I know exactly what your talking about in finding a plane of that level. Most have clapped out panels, interiors, paint jobs, etc. There are some pristine planes of that caliber available out there that have been hangered all their lives and are very well maintained, but it's like looking for a needle in a haystack to find them.
 
drotto said:
From knowing a few people that have gone through companies that do refurbishing. They will by a solid plane. In the case I know they paid like 100k for a PA32. They stripped the plane to bare metal, and did total new paint, new interior, and upgraded the avionics. My best guess is with labor they put about 75k into the plane, and then they sold it just north of 200k, making about a 35k profit.
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The key to the entire business model is finding planes with solid airframes for pennies on the dollar. The rest (engine, paint, interior) is all superficial. If you have to pay $50k for a clapped out plane, then your potential profits become smaller. It would take a lot of bird dogging to find the right planes, but I think it could be done.
 
SoonerAviator said:
Lol, while I'm sure that's true, I don't know that I'd use eBay as an indicator of the health of a particular aircraft market. I wouldn't use it for estimating the used car market, either. I just think there's a market for certain aircraft (whether WACO falls into that niche is a different discussion). I'm sure where good examples of a certain aircraft are hard to come by, especially if there are limited number of those aircraft available for sale, someone might be able to make some money on it as long as they weren't taking in a really poor aircraft to begin with. Probably something more akin to flipping houses than doing an outright restoration.
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e-bay seems to be the last resort for aircraft that won't sell.
 
Tom-D said:
e-bay seems to be the last resort for aircraft that won't sell.
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Amen... I've bought countless vehicles and motorcycles off of E-bay for pennies on the dollar just because there was no interest in the sellers immediate market, and they were being squeezed to sell. It would be nice to be able to do the same with aircraft. :yesnod:
 
azblackbird said:
The key to the entire business model is finding planes with solid airframes for pennies on the dollar
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With that in mind, you best have a savvy buyer that has the money in hand, and knows what you are looking for and knows what they are looking at. then be ready to buy. because those aircraft will not stay on the sales pages for very long.
what you are looking for is a low timed, clean airframe. Every thing else is going to be rebuilt/replaced.
 
Probably been said already in so many words, I ain't readin the whole thread. There is profit in everything. All ya gotta do is find customers. Was it Barnum or Bailey who said "there's one born every minute"
 
azblackbird said:
Amen... I've bought countless vehicles and motorcycles off of E-bay for pennies on the dollar just because there was no interest in the sellers immediate market, and they were being squeezed to sell. It would be nice to be able to do the same with aircraft. :yesnod:
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Problem is, most won't have a resale value that will support the restoration.
 
Tom-D said:
Problem is, most won't have a resale value that will support the restoration.
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It will definitely take some serious number crunching and finding the right aircraft. There's a few shops that have been brought to my attention that do exactly what I would propose. There must be some profit in it, or else I don't think they'd still be in business. :dunno:
 
Tom-D said:
With that in mind, you best have a savvy buyer that has the money in hand, and knows what you are looking for and knows what they are looking at. then be ready to buy. because those aircraft will not stay on the sales pages for very long.
what you are looking for is a low timed, clean airframe. Every thing else is going to be rebuilt/replaced.
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That's the idea. Beat the crowd.
 
I also go to an airport where the owner of the shop buys place es at auction, then will do minimal repair, and basically clean up the plane, and do an annual on it. About 1 year ago he picked up two high time Barrons for 25k each. He basically cleaned them, made sure everything worked, and flipped them for about 40k each within a few weeks.

He had also did something similar with a Malibu that he bought at salvage for about 100k. He put about 75k into repairing the damage and getting it recertified as airworthy, and flipped the plane back to the original owner for somewhere around 200k.

But he is really not refurbishing. He is getting bargains at auction, doing what must be done on the plane, and flipping them as quick as he can.

He seems to be very good at it.

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drotto said:
But he is really not refurbishing. He is getting bargains at auction, doing what must be done on the plane, and flipping them as quick as he can.
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That's good for some quick money. Doing something like that definitely might be in the business plan. There are many aircraft out there that would fit the bill that maybe all they need is a fresh coat of paint, a quick engine overhaul, or a new interior and are ready to go back up for sale in a relatively short time period.
 
azblackbird said:
Everybody pitches in and buys a nice clapped out 1976 Cessna 182 that's been sitting at tie-down for 20 years for $10k The tires are all flat. The windows are glazed over, the interior is sunburnt and ratted out. The paint is all faded. The engine is timed out. However, the airframe is meticulous with no corrosion or damage history whatsoever.
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Right there is the problem. 20 years on the tiedown and no corrosion? You are looking for a unicorn. And the avionics are likely 20+ years old as well. Updating the avionics to be able to call the panel "modern" is muy dinero.

I wish it weren't true but the odds of finding a good candidate are remarkably low.

I do wish you luck, however! -Skip
 
Two aircraft that fit your plan, PA-18-150, the data tag logs with paper work sell for 2500-10k total rebuilds are about 120K for all new parts to build a new cub, and they sell for 250k

Cessna 150, when you can keep the selling price below $25k, just fix and flip.
 
azblackbird said:
I don't know. I just can't help but think there's a market for simple clean well refurbished 4 place aircraft somewhere in the 100k range. If everything could be done in-house (including the manufacture of new parts) and not have to be farmed out to anybody, I think there could be some potential there. :ihih:
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To answer your question there are some companies already doing this. But they are a little more than $100K

Yingling Aviation is doing the 172 but they are prices at about $250K with a modern glass panel. I am sure it could be done cheaper if "old skul" steam gauges were used. Aviat is doing it for the 150 and 152 fpr about $95 to $120K There is a guy in Floor-ie-duh redoing the Piper brand.. I don't know much about his operation.

The trick would be being able to buy the plane at the right price and like you noted trying to do as much work in house... I ran some numbers on this predicated on a very low hour 1975 Piper Cherokee ramp queen that was eventually sold for salvage..... it needed new engine regardless, paint and interior, windows, etc..... the cost was staggering and this was me doing as much of the work as possible.. and this was before I go into the air frame, the AD's, etc....

I am sure that if took this on as a living and I started to move some units I could negotiate some discounts with some suppliers and sub contractors... But, I am not quitting the day job yet. :D
 
azblackbird said:
That's the idea. Beat the crowd.
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What really happens the seller usually has a friend that wants the aircraft, and they never get advertised. NEVER ever buy a derelict off the ramp. I don't care if the airport is paying you to remove it.
I know a salvage yard that bought a twin beech for 1 dollar, and lost money scrapping it. He pulled both engines chopped the airframe and hauled it to salvage yard, they paid him for dirty aluminum and it was no enough to cover his fuel to do it, both engines were rusted up too bad to salvage any parts. He told me it cost him 2500 bucks in lost time and fuel.
 
Tom-D said:
The two most excuses heard. It ain't worth it to me, and who wants that junk.
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True... the key is sliding in between those type of buyers who know value when they see it, and know they can basically have a brand new plane for 1/4 or 1/3 the cost of a new one.
 
The aircraft owner can do a restoration by them selves, buy a clean low time aircraft that they can fly, then each year up grade the project each year.
build it slowly build what you want.

or borrow the money and buy now, and fly now. Comes out even in the end.
 
azblackbird said:
AZ is full of those types of planes. There's a reason the military and many of the airlines store their planes in this climate.
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Or they were full of corrosion so they took them out of service and parked them there...
 
azblackbird said:
True... the key is sliding in between those type of buyers who know value when they see it, and know they can basically have a brand new plane for 1/4 or 1/3 the cost of a new one.
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you are looking for a rare breed.
 
Tom-D said:
or borrow the money and buy now, and fly now. Comes out even in the end.
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That's kinda the idea. Finding what everybody wants in a used plane and giving it to them immediately along with the financing, rather than they spend years and years piece mealing the upgrades.
 
If it was a sound business plan you wouldn't be talking about it on the internet, you'd be out making your fortune buying crapped out airplanes. Let us know how it goes.
 
Stewartb said:
If it was a sound business plan you wouldn't be talking about it on the internet, you'd be out making your fortune buying crapped out airplanes. Let us know how it goes.
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Ever think?

this is a good place to get opinions?
 
bnt83 said:
Or they were full of corrosion so they took them out of service and parked them there...
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Nope, many of the aircraft stored here in AZ are corrosion free and are in flyable condition (relatively speaking) at a moments notice. If there was ever a major war, half of the Davis Monathan boneyard would/could be put into service.
 
Tom-D said:
you are looking for a rare breed.
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Most definitely, but I would think a guy with a good in-house team could turn 20 planes a year and find buyers for them. Are you going to get super rich doing it? Probably not, but it would be giving guys a decent living and returning some good aircraft back into the GA population.
 
azblackbird said:
Nope, many of the aircraft stored here in AZ are corrosion free and are in flyable condition (relatively speaking) at a moments notice. If there was ever a major war, half of the Davis Monathan boneyard would/could be put into service.
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Lol corrosion-free is relative term. Looked at several aircraft advertised as "corrosion-free" and ended up telling the guy not interested at any price.
 
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