Partner Opportunity

EppyGA

EppyGA

Touchdown! Greaser!
Joined
Jan 6, 2009
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10,665
Location
Hoschton, GA
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Let's Fly
I have a shot at a piece of a 68' 172I. The engine has approx. 150 hours on it. The basic deal (don't have all the details yet) is there are currently four partners in the plane. They want to add a fifth and are looking for someone that will use the plane. I know one current partner has an RV also and I believe one other had another plane. At least one partner is currently not flying due to cataract surgery. Plane was flown about 80 hours last year. The buy in would be the cost of a 430W and install, $8,000 was quoted to me by one partner. They pay $10 hour to fly and have approx. $600 a year in fixed costs. The plane is tied down outside and has a cover on it. I haven't been able to see the plane inside yet due to timing issues.

Looking for some advice. Should I approach this like I'm buying and pay to have someone do a pre-buy on it to protect my interest? I suspect I should ask if there is a written agreement currently. I would hope so since the original owner and current partner is a lawyer.

Any advice will be welcomes. Thanks!
 
The key thing in any partnership is a written agreement spelling out your rights and your obligations. Even with your best buddy - it's still a REALLY good idea.

If you are obligated to kick in for unscheduled maintenance, then I'd suggest a pre-buy inspection as due diligence so you'll know if there are any maintenance time bombs about to go off. You're still buying an airplane, just a smaller part of one.
 
Tim's advice seems good.

The other thing I'd look at would be what's the fair market value of the plane, and as such is your buy-in share 1/5 of what the plane is actually worth. You should be able to sell your 1/5 of the plane to a different partner at some point in time should you want to opt out, and so you want to make sure that what you're paying in is reasonable so when you sell it you don't lose any more money than you should (likely gain money, given current the current market state). This brings up a good point - what are the rules for who you can sell your partnership to and the process of that? Barriers to exit are a problem.

Definitely a good idea to at least look over logbooks, etc. If nothing else, a plane that is going to need a bunch of maintenance would be unavailable to you to fly, and more likely will end up costing you money. If you've got 3 people who aren't flying the plane now (and if two of them have other planes to fly, it seems unlikely that they will fly it much), that's a good situation to be in for you.
 
Ted has a good point of the current value of the 172. If you buy in at $8000.00 that means the plane is worth $40K, which is probably pretty close for a nice 172. Even taking in the fact that it will have a 430W in it, I don't think its much more than a $40K dollar airplane. The other thing that is a must is a good pre-buy inspection.
 
Also I would change the buy-in terms to put $8,000 towards installation of a 430W, that is near the low end we were quoted for a used unit, and you probably won't know the total cost until it's back on line. The plane and the bill should come back today.

Also $600/yr fixed costs seems a bit low. In my mind fixed costs would be insurance, tie-down, annual, garmin database updates, do you property taxes on airplanes in GA?

I assume the $10/hr is dry, good idea to ask them what that covers and what the average contribution above and beyond that for maintenance has been.

It sounds like a decent deal. Here's a VRef evaluation. It gives you some idea of the worth of the plane with a 430
Code: 
25-Sep-2009.        [CENTER]1968 - CESSNA SKYHAWK 172 I-M                 
$38,750.00 (as configured)     [/CENTER]
          [CENTER]       Trade-in value will be considerably less 
 due to dealer marketing costs, margins and inventory expenses. 
 Price assumes complete logs, no damage, and all inspections complied.     [/CENTER]
                      Model       Base Retail              Serial No.                         172I         $27,000.00                  56513-57161                            
     
       Airframe Total Time and Engine Time Since Major Overhaul:                    Note: Numbers in parenthesis are negative values.                        [B]AFTT:[/B]                 6150. Effect on valuation=$0.00 at $0.59/hour.                                                         [B]SMOH Engine #1:[/B]         250. Effect on valuation=$6,750.00 at $9.00/hour.                                            
                    [B]Basic Equipment: [/B]DUAL DIGITAL NAVCOMS, 1000 SMOH, 7 P&I, ADF.                       
            [B]Additions/Modifications/Conversions: [/B]                                                     Item                   Retail Value                                                       Garmin 430                 $5,000.00                                                                                        
                               [B]Other Typical Add-on Equipment (Installed):[/B]                           Category       Item       Retail Value                               Navcom                 KX155             $0.00                                                         Navcom                 KX155 w/GS             $0.00                                                  
                                       [B]Approximate value for non-listed addons: [/B]                 $0.00                                                              [B]Description of non-listed addons:[/B]                                                     [B] Buying or selling an aircraft?  Then you should have this! 
The complete Vref price guide
[/B] Comprehensive information on every general aviation airplane, from Gulfstream to Piper Cub. Buy direct from the source. To order, call 800-773-8733 or visit [URL="http://www.vrefpub.com/"]www.vrefpub.com[/URL]. Single-copy price is just $54.95 and includes expanded avionics information, retail and wholesale pricing, as well as pertinent Market Data and Recent ADs. 
               
                Engine Data:                       Item         Description                       Power / TBO          LYC 150HP  TBO 2000                       Engine Model          O-320-E2D                       Fac. Reman.                         $25,034.00                                 Overhaul                     $17,000.00
Sorry doesn't really format well here.

Joe
 
The deal sounds reasonable on most levels. $3K/year is not unreasonable for routine maintenance. They should probably have a reserve for paint; being outside it will need a paint job with greater frequency than a hangared aircraft. The only other thing I would add would be to meet the other partners and make certain they're OK. if one of them is a farging son of a bastich is could make life more miserable than need be. But if was me I'd go for it.
 
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