Market research.

Skip Miller said:
Would he carry one of those Spot tracking devices? That might ease your Mother's mind.... -Skip
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Sigh... that will take more effort as it will require my mother not running screaming away from a computer refusing to so much as touch it....:( If I could get her on Facebook it would help with her feelings of isolation as we have a bunch of relatives on it.
 
Henning, while I certainly do feel for you (I have my fair share of confused elder relatives) I also know for a fact that these things are doable sans seaplane. I hope you can work it out.
 
steingar said:
Henning, while I certainly do feel for you (I have my fair share of confused elder relatives) I also know for a fact that these things are doable sans seaplane. I hope you can work it out.
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Of course it can and I do, it just makes it so I can do it more often as it's a 4.5 hr drive vs a 45 minute flight and the seaplane would also be able to produce revenue.

What happens happens, one can only provide opportunity and see what happens.
 
It makes a lot of difference if you ever hope to have anything different than what you have now. Sitting with an airplane that won't sell due to unrealistic expectations is the classic folly of many sellers. Nothing happens other than the airplane continues to devalue, the fixed costs of ownership continue and the capital to do something else is unavailable if/when the opportunity arises.

Classic case of the monkey and the banana in the box that is repeated many times over.



Henning said:
What's the difference? If it doesn't meet the requirements now or then is completely irrelevant. It'll either happen or it won't.
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wabower said:
It makes a lot of difference if you ever hope to have anything different than what you have now. Sitting with an airplane that won't sell due to unrealistic expectations is the classic folly of many sellers. Nothing happens other than the airplane continues to devalue, the fixed costs of ownership continue and the capital to do something else is unavailable if/when the opportunity arises.

Classic case of the monkey and the banana in the box that is repeated many times over.
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So I take $40k for the 310, that doesn't buy a plane I need, how am I better off?
 
$40K will buy you a seaplane to accomplish your mission. Might not be the one that makes you revenue, but it will do what you need for your family. If it was that important to you, that's what you'd do. You could probably get an ultralight for very little money that would accomplish your mission.
 
steingar said:
$40K will buy you a seaplane to accomplish your mission. Might not be the one that makes you revenue, but it will do what you need for your family. If it was that important to you, that's what you'd do. You could probably get an ultralight for very little money that would accomplish your mission.
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Ultralight is the other option I'm looking at but that will not involve selling the 310, just need to pick up a job. Getting rid of a top quality plane that I'd never be able to replace for a piece of junk that will cost more to keep running than flying the 310 isn't going to happen. I have an excellent airframe, low time engines, new props and panel.

I'm not selling the plane for cheap, that's all there is to it. I can liquidate $80k in a couple weeks selling the engines, props and panel and still have the airframe for when they bring in Owner Maint Experimental, and then I'll turn it into the travelling machine I really want. If someone isn't going to buy it, it's not what was gonna happen. I cannot control what others do, only what I do. If I don't agree with others, I don't play.
 
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You're better off because you have gotten ride of a plane you don't need now and have a liquid asset with which to make your next move. Whatever value you may have gained or lost due to changes in the market or other factors has already occurred, but is unrecgonized because you haven't converted the asset to cash.
Henning said:
So I take $40k for the 310, that doesn't buy a plane I need, how am I better off?
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$40-45K would make a nice down payment on the seaplane you want. If it can be used to generate significant revenue, and if you have a business plan that would support it, the loan may be feasible. If not, a partner may be feasible. But you've probably already thought of all that.

Here's the flip side of your question. If you're not flying it, and it's still costing you to hangar and maintain and keep in annual and insure... how are you better off keeping it? You could grow old and die waiting for it to double in value. Every year you keep it, it's a financial drain that you may never recover. I can see the value in keeping an airplane you're flying, even if it doesn't necessarily make financial sense. But if you're not flying it? :dunno: Seems like it's an anchor cleverly disguised as a very pretty airplane.
 
Henning, if you sell that plane for 45K, call me first, I'll come get it today.
 
wabower said:
You're better off because you have gotten ride of a plane you don't need now and have a liquid asset with which to make your next move. Whatever value you may have gained or lost due to changes in the market or other factors has already occurred, but is unrecgonized because you haven't converted the asset to cash.
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Have you not been listening? That's the whole point, if I can't liquidate it into my next move then I have lost, until then I have lost nothing because as you say, the result is unrecognized. The only way that liquidation at this point makes any since is ONLY IF I can liquidate it into enough capital to advance. Because I don't need it now does not mean I will have no future use it. Replacing the airframe with one of this condition will cost a minimum of $200k because that's what it costs to get them back into this condition when you're done replacing all the metal in the augmentor sections.

They aren't building these anymore so when I want another twin I'll either have to spend a couple million buying a new Baron (if they are still made then) or a couple hundred grand rebuilding an old one like the previous owners of this one did.

If I can't progress at this point, there's no reason to liquidate.
 
bartmc said:
Henning, if you sell that plane for 45K, call me first, I'll come get it today.
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Ha. I'll take it for $50K :) (which at least is more than those eBay buyers offered). Then I'll get an instructor to fly it back here with me so I can get the necessary multi training (and complex endorsement) en-route and get the multi checkride on it when we are back here so I can fly the thing solo.

But no, it isn't worth $80K.
 
I think you're the one with the listening problem . . . among others insofar as that airplane is concerned.

Henning said:
Have you not been listening? That's the whole point, if I can't liquidate it into my next move then I have lost, until then I have lost nothing because as you say, the result is unrecognized. The only way that liquidation at this point makes any since is ONLY IF I can liquidate it into enough capital to advance. Because I don't need it now does not mean I will have no future use it. Replacing the airframe with one of this condition will cost a minimum of $200k because that's what it costs to get them back into this condition when you're done replacing all the metal in the augmentor sections.

They aren't building these anymore so when I want another twin I'll either have to spend a couple million buying a new Baron (if they are still made then) or a couple hundred grand rebuilding an old one like the previous owners of this one did.

If I can't progress at this point, there's no reason to liquidate.
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No, I'm not having a listening problem, your solution is one that does not work for me so it's not an option. As I said, if I just need money I can part the plane out at a profit and still have the airframe.

I'm offering up a prime plane at a fair price, if you want a plane in equal condition it will cost someone a minimum of $200k to get unless they do all the labor then it will still cost them $150k. I am offering a deal whether it's recognized or not. I'm not asking you for an education in this, I already know the deal from every angle. There are only a few ways that making a deal makes sense since I need an airplane, not a cash value insufficient to get the airplane I want.
 
onwards said:
Ha. I'll take it for $50K :) (which at least is more than those eBay buyers offered). Then I'll get an instructor to fly it back here with me so I can get the necessary multi training (and complex endorsement) en-route and get the multi checkride on it when we are back here so I can fly the thing solo.

But no, it isn't worth $80K.
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$50 won't quite take it, but you never did try to deal....
 
The problem with airplanes is most aren't worth the price of their parts, and most can't financially support any sort of restoration. I recall seeing a Cherokee 140, like mine, on Ebay (I look every so often). He wanted $50K for it. He had an itemized list of stuff he put in during it's restoration, and the list added up to a lot more than $50K. Problem is, a Cherokee just isn't worth $50K.

That's the boat you're in Henning. I doubt strongly things are going to get any better. The price of fuel and maintenance keeps going up, and that's where twins suffer. So long as these factors remain constant, twin prices will remain soft. Maybe you'll find a sucker for 310's who has more money than sense and has to have it. Stranger things have happened. But don't count on it in time to help your parents.
 
wabower said:
It makes a lot of difference if you ever hope to have anything different than what you have now. Sitting with an airplane that won't sell due to unrealistic expectations is the classic folly of many sellers. Nothing happens other than the airplane continues to devalue, the fixed costs of ownership continue and the capital to do something else is unavailable if/when the opportunity arises.

Classic case of the monkey and the banana in the box that is repeated many times over.
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Wayne,

In your opinion, is this the state of today's market -- the bids for piston twins at or below parting-out value? Is there no value at all in all the parts being assembled correctly and flyable?
 
steingar said:
Problem is, a Cherokee just isn't worth $50K.
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I paid $17,000 for my Cherokee and six months later spent $19,000 overhauling the engine. There were only 250 hours on the engine when I sold it for $20,000.

To paraphrase General Patton: "You don't get a good deal on a plane by updating it. You get a good deal on a plane by making the other poor, dumb SOB upgrade it before you buy."
 
I think the idea is if you're going to spend that kind of money on an aircraft, best plan on keeping it.

In a twisted way it makes economic sense. Let's say you spend $100,000 lovingly restoring your Cherokee to new. You can't buy a new Cherokee for $100,000, or any other new four seater. So you have a bargain new airplane that isn't worth what you put into it. Heck, if you buy a new airplane what's the depreciation? Probably not too dissimilar.
 
steingar said:
The problem with airplanes is most aren't worth the price of their parts, and most can't financially support any sort of restoration. I recall seeing a Cherokee 140, like mine, on Ebay (I look every so often). He wanted $50K for it. He had an itemized list of stuff he put in during it's restoration, and the list added up to a lot more than $50K. Problem is, a Cherokee just isn't worth $50K.

That's the boat you're in Henning. I doubt strongly things are going to get any better. The price of fuel and maintenance keeps going up, and that's where twins suffer. So long as these factors remain constant, twin prices will remain soft. Maybe you'll find a sucker for 310's who has more money than sense and has to have it. Stranger things have happened. But don't count on it in time to help your parents.
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I know the plane you're talking about, it's been made fun of on eBay many times. If I had the gumption to update my Cherokee to the specs that one was touting, I'd buy his instead. Piper still seems to think the Archer is worth 300K. I think it's a small market, but someone who wants a nice cheap to maintain and fly plane it'd be right up their ally. I know these people exist, I park beside a Cessna 152 that I know the owner has put over 40K into in the last year.
 
steingar said:
I think the idea is if you're going to spend that kind of money on an aircraft, best plan on keeping it.
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I was when I bought it and still intend to if no deal can be made that gets me what I need. Life is a long process and I have a plane that will take me to the end of it. Just because I'm not using it this year doesn't mean I won't next. The nice thing about being a fatalist is you don't worry about what's going to happen.
 
Assets depreciate. When you're looking at an aircraft that's 50 years old, even if it's in excellent condition, it's depreciated. 310s aren't rare enough to command the value of a P-51. Even if they were as rare as P-51s, they wouldn't command the value.

An item isn't worth the sum of what it would cost to take a less desirable variant of that item plus the parts and labor to make it equivalent. It's worth significantly less than that, and, always, worth whatever people are willing to pay for it.
 
An asset doesn't show depreciation until liquidation, as Wayne says, until the deal is done, everything is just unrealized. The cash value may depraciate, but the physical value does not. My 310 does the same job as a brand new Baron does for over $1.7MM more and in order to get an airframe in this condition I'd be buying an $800k G-58 a few years old. In physical value, they are equal as they do the same thing with the same equipment.

I'm not an investment banker, to me money doesn't have value as a product, money is only a tool. The job the equipment does determines determines the value of equipment to me. In the scale of comparable condition and time aircraft, my 310 is listed cheap.

I realize most people don't think this way and that's fine, fly what you want. You want a 310 to keep for 10 years, go ahead and buy that $40,000 one, go for it. At the end of 10 years you'll more than have made up the difference in maintenance and repair costs.

I don't play in the world of economic idiocy where money is the final product of everything because that is exactly why the country and world is in the financial mess it's in. Mankind is just too shortsighted in his thought process in nearly everything he does. If the line of thinking that Wayne uses is so correct, why do we go from financial crisis to financial crisis? What do you think is gonna happen with the gold market that they screwed up like the real estate market? All that TARP money is now in gold. What value does gold have? Gold is pretty as jewelry and is a great corrosion proof conductor for plating, that's it, you can't eat it, you can't drive it. The only reason it's worth $1700 and oz is because people assigned an imaginary value to it.

This mode of thinking is wrong and is what needs to change. The only way change happens is for every individual to change their thinking. Change always bring hardship before it brings improvement, were just all to soft to do it so we just keep whinging about how bad things are getting while contributing to the problem.

Personally I live by my convictions, that's why I don't have many. When I know something is wrong, I just don't play, I refuse to be part of the problem, if I go Wayne's way and dump it like bad stock, I lose, if I have the plane for life, I don't. See, again, it's a matter of value, I value my ethics more than I value money.
 
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In some cases they aren't worth more than parts prices, but the most common mistake in this equation is to over-estimate the actual proceeds from such sales by disregarding (or ignoring) the costs associated with salvaging, carrying the inventory, storage, advertising, handling and all of the other costs of converting a hulk into cash.

Airplanes with transportation value are still marketable, albeit at much lower prices than at any time in the past. Bluebook's Multi Piston Index fell continuously from $397.4k in 2000 to $260k in 2009, with no flattening or recovery during the period from 2004 through 2007 (when other segments of the market so responded) and has remained relatively flat for the past three years.

It is improbable to think that prices for any of the airplanes in this category will improve, for the reasons mentioned other posts. It is even more improbable to think that a 50+ year-old twin with no deice or autopilot will do so. If you asked 500 knowledgeable aircraft people if spending a big chunk of dough on the panel of such an airplane was a smart move, at least 499 of them would have said "only if you're damn sure that's what you want and you plan to keep it forever. Otherwise be prepared to lose yourass"



rpadula said:
Wayne,

In your opinion, is this the state of today's market -- the bids for piston twins at or below parting-out value? Is there no value at all in all the parts being assembled correctly and flyable?
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And when you don't have either the facts or the law, just pound the table.

Henning said:
Personally I live by my convictions, that's why I don't have many. When I know something is wrong, I just don't play, I refuse to be part of the problem, if I go Wayne's way and dump it like bad stock, I lose, if I have the plane for life, I don't. See, again, it's a matter of value, I value my ethics more than I value money.
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wabower said:
In some cases they aren't worth more than parts prices, but the most common mistake in this equation is to over-estimate the actual proceeds from such sales by disregarding (or ignoring) the costs associated with salvaging, carrying the inventory, storage, advertising, handling and all of the other costs of converting a hulk into cash.
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We'd considered parting out the Aztec, since we could probably make more money on parting it out than we could selling it. All the above reasons stated are why we chose not to.

It primarily makes sense if for some reason you purchased the aircraft for scrap (i.e. you needed some large piece of unobtainium from it, and were then left with a useless shell), or if you effectively have free storage. The large salvage yards do well at it since that's what they do. It would also make sense if you had an airplane that was deemed unairworthy for some reason (like bad corrosion issues) and the cost of the repairs would exceed what the owner is willing to spend, with a plane that has a low hull value.

If I get going with one of my engine conversions that I'm thinking of, it would end up requiring a spare aircraft. The hull of it would be scrapped once the project was completed. But even if I came away with $0 from the scrapping of the hull, I'd come ahead because of the unobtainium that I procured from the aircraft.
 
wabower said:
And when you don't have either the facts or the law, just pound the table.
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I'm not pounding, just responding, you all think I'm nuts so I'm just letting you understand my insanity to quell the confusion so many people write about. I really don't care what people think, I live by my convictions and what happens happens.

BTW, I can pull my engines, props and panel in a few days and store them in the same space as my airframe. Pulling engines is simple.
 
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Henning said:
I'm not pounding, just responding, you all think I'm nuts so I'm just letting you understand my insanity to quell the confusion so many people write about. I really don't care what people think, I live by my convictions and what happens happens.

BTW, I can pull my engines, props and panel in a few days and store them in the same space as my airframe. Pulling engines is simple.
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You're not nuts. You place a different value on the asset than the market apparently does. Twins aren't worth anything these days. That's just the way it is.

But, if yours is as nice as you indicate, and you have a use for it in the future, why dump it? Keep it, enjoy it, and if the market value ever exceeds the value you place on it, let it go.

In the meantime, buy a $1,000 airport car to keep at the field closest to your parents. Then commute back and forth with the 310 and a car at each end.
 
Dude, get a grip. It's not "just a response" when you launch into one of those savant-idiot-like economic diatribes that make absolutely no sense and then try to impute some equally wacko ethics argument into something that's dog-simple. You got carried away with the purchase and refurb of an old airplane, spent way too much money, don't like what the market is telling you, and simply can't admit you screwed the pooch.

As long as you're playing solitaire, you can make up any rules you like and nobody else will know or care if you play the red eight on the red nine. When you try to impose your silly-ass home-brew theories on other players at the table, you need to be aware that at least some of them are going to call BS.
Henning said:
I'm not pounding, just responding, you all think I'm nuts so I'm just letting you understand my insanity to quell the confusion so many people write about. I really don't care what people think, I live by my convictions and what happens happens.

BTW, I can pull my engines, props and panel in a few days and store them in the same space as my airframe. Pulling engines is simple.
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