At A Cross Roads

[RyanB]

As a buyer, if presented with two identical aircraft, one with a field OH and one with an FREM, I would pay more for the FREM but probably not 15K more. However, if presented with the same two aircraft 3-5 years later, I would probably not be willing to pay more for the FREM.

Concur, but for me, it depends where the OH was done. I’d put the bigger name shops like Western Skyways or Penn Yann up a little higher in quality than some smaller, lesser known shop in the middle of BFI, but still it’s a crapshoot. 15k more for a factory reman? Not worth it to me.

 

[Dave Theisen]

Concur, but for me, it depends where the OH was done. I’d put the bigger name shops like Western Skyways or Penn Yann up a little higher in quality than some smaller, lesser known shop in the middle of BFI, but still it’s a crapshoot. 15k more for a factory reman? Not worth it to me.

To the OP. Choose the wrong shop and your airplane might not be worth crap to me as a buyer.

 

[Clip4]

Hello, fellow airplane owners, soon-to-be owners, owners with buyer's remorse, or folks on the fence about buying...

We've found ourselves at a fork in the road with our Mooney M20. After a long battle with engine problems, our Lyco O-360-A1D has finally bit the dust and we're presented with a couple of routes to take.

Route 1: Complete overhaul on our original 1961 narrow deck O-360-A1D, reset the TBO, new cylinders, and accessories. Out the door $25,000 USD.
Route 2: Factory Reman, zero time, new logbooks, modern spec, warrantied engine. Out the door $40,000 USD after core return.

Here's the question: Lead times aside, when comparing apples to apples, in the eyes of a buyer, is the factory reman worth the extra 15 grand compared to an overhaul from a reputable engine shop? Please only answer the question as presented. Is the factory reman worth the cost compared to an overhaul from a value perspective? Do not consider lead times or shop quality. Just assume the overhaul shop is a reputable and high-quality shop.

I would not pay $15k more for a zero time engine vs a factory overhaul, but I like Lycoming cylinders v brand X and would not accept brand X cylinders unless there was no other choice.

 

[Pinecone]

0-time engine, whether it be reman or overhaul, says to me things:

1. Beware of infant mortality.
2. Seller probably cheaped out knowing the plane is getting dumped on the market. Ever watch a home flipping show on HGTV?

My preference would be for either mid time or a runout. With a runout, there‘s less question where my money is going.

I’m probably not the only one to think that way, but I also wouldn’t doubt that there are probably even more that go Gaga when they see zero time.

I agree with this thinking.

 

[ArrowFlyer86]

To me, a 0-time engine from the factory is worth $15k extra if I'm buying a plane to keep it. I say that as a current owner and someone currently in the market for buying. It's the closest thing to a guarantee that I can get that the engine work was done right.

I agree with Dave. The risk you run with path1: unless your definition of superb, high-quality, reputable shop aligns with mine -- I'm probably going to treat your "0 SMOH!!" listing with serious suspicion. As I should. B/c what's the mindset of someone doing an OH who plans to flip it when it's done?

And FWIW... I can tell you that Tims Aircraft + Engine Co in SoCal is not on that list of Tier 1 OH shops. They might do terrific work, IDK. But that's the risk you run - that your definition of high quality/reputable doesn't overlap w/mine and thus I treat it as a cheap field overhaul and price accordingly. In that case your $25k is going to be money ****ed down the drain, whereas your $40k 0 SNEW engine might come closer to paying itself off.

I might be in the minority - but it's how I'd treat it.

 

[farmrjohn]

And FWIW... I can tell you that Tims Aircraft + Engine Co in SoCal is not on that list of Tier 1 OH shops.

Where does one find this list of Tier 1 OH shops?

 

[ArrowFlyer86]

Where does one find this list of Tier 1 OH shops?

Everyone's got their own list, and there-in lies the danger of picking the wrong one

 

[Ed Haywood]

Concur, but for me, it depends where the OH was done. I’d put the bigger name shops like Western Skyways or Penn Yann up a little higher in quality than some smaller, lesser known shop in the middle of BFI, but still it’s a crapshoot. 15k more for a factory reman? Not worth it to me.

I used to agree. When I was planning for my overhaul 2 years ago, I visited Zephyr and was not impressed. Felt like they were coasting on their brand name.

In contrast, Jimmy Bronn at JB Engines in Sebring, FL (just up the road from BFE) really impressed me. Super clean, meticulous shop; nice guy; stand up business practices. When the engine came off 19 months ago, he got my business.

I just test flew my restored Decathlon for the first time 2 hours ago. What a feeling! Sorry, still a bit euphoric. It's not every day that you completely disassemble your plane, rebuild it, then fly it.

Anyhow, engine is flawless so far. Ask me again in 100 hours, which should be January.

So my advice is find a small business with a solid track record and an owner who stands behind his product. That will not be the cheapest, option, but it should be very competitive with the big names.

 

[DJTorrente]

If you are going to sell it, then just sell it - leave the engine choice to the buyer.

- Martin

Agree with this perspective. Price it as runout, and leave the decision to your buyer. You discourage the buyers who aren't willing to buy a runout. But among those who are, whether they want the reman or are satisfied with an overhaul -- they make their own choice and deal with the value implications.

The downside in your circumstance is that its not merely runout, but AOG. That itself can independently depress your value, all other factors being equal.

 

[Salty]

I used to agree. When I was planning for my overhaul 2 years ago, I visited Zephyr and was not impressed. Felt like they were coasting on their brand name.

In contrast, Jimmy Bronn at JB Engines in Sebring, FL (just up the road from BFE) really impressed me. Super clean, meticulous shop; nice guy; stand up business practices. When the engine came off 19 months ago, he got my business.

I just test flew my restored Decathlon for the first time 2 hours ago. What a feeling! Sorry, still a bit euphoric. It's not every day that you completely disassemble your plane, rebuild it, then fly it.

Anyhow, engine is flawless so far. Ask me again in 100 hours, which should be January.

So my advice is find a small business with a solid track record and an owner who stands behind his product. That will not be the cheapest, option, but it should be very competitive with the big names.

I spent an afternoon at zephyr watching them work before my overhaul. I did not use zephyr for my overhaul.

I don’t get why people think they are so great.

 

[Ed Haywood]

I spent an afternoon at zephyr watching them work before my overhaul. I did not use zephyr for my overhaul.

I don’t get why people think they are so great.

If you ever need another one, go see Jimmy.

The first time I visited JB, a guy was laying on the floor, scrubbing a tiny stain with the tip of a shop towel. I always wondered if that was an act they rehearsed when a customer parked outside. But the shop looks like that is how they do business every day.

Contrast that with Zephyr, which looked like a homeless encampment.

From my experience in business, quality and performance are driven mostly by the HMFIC. If your name isn't on the building, at the end of the day it's just a job.

Zephyr was top notch when Charlie Melot owned and operated it. When he sold and retired, you gotta figure it would not stay that way forever.

Now JB is top notch, because Jimmy Bronn has his name on the building and he is there every day making sure things are done right. Can't overstate the importance of that.

Good news is there are plenty of Jimmy's out there. Just gotta do the due diligence.

 

[PaulS]

Really not enough information. What do you mean by value? At the end of the day a buyer is not going to really care who did the engine, with the possible exception of immediately after the rebuild. Also, is anything on an airplane really a value proposition? It's like when buying a car and the sales guy tells you what your "investment" will be. In the end it's just another money suck.

I went with 2, I'm with Martin on this. Also the factory will undoubtedly have better tooling than a repair shop.

 

[mr_happyland]

I voted route 1 but every situation is different. Keeping or selling? If selling, a large pool of buyers will value route 1, others route 2. Despite your question, to me, lead time certainly plays into it as well.

I recently put down a deposit for an overhaul exchange from Lycon. I'd certainly consider them reputable. My engine should be ready to swap out in (hopefully) 7 months. In the meantime...I keep flying. They are quoting factory remans at 18 months. I'm betting it takes longer than that.

 

[Bill]

If I saw similar planes in TT, price, and engine hours, I'd probably give the nod towards the plane with the factory overhaul/reman. I might even give a little more money for it, but $15k? Not just no, but hell no. Afterall, after breakin, they're all used engines. That said, if you're intersted I can tell you what we chose when we came to the fork in the road to re-engine our 201.

Best of luck!

 

[asicer]

I recently put down a deposit for an overhaul exchange from Lycon. I'd certainly consider them reputable. My engine should be ready to swap out in (hopefully) 7 months. In the meantime...I keep flying. They are quoting factory remans at 18 months. I'm betting it takes longer than that.

I've heard stories about people in the 70s that would put down a deposit on a new house just as the foundation was being laid and then selling it for a nice profit right before construction is completed because home prices were rising that fast. Considering the demand these days, you should put a deposit on both engines.

 

[mr_happyland]

I've heard stories about people in the 70s that would put down a deposit on a new house just as the foundation was being laid and then selling it for a nice profit right before construction is completed because home prices were rising that fast. Considering the demand these days, you should put a deposit on both engines.

I def think there could be a market for 0 time engines ready to go for people that don't want to wait. Problem is there's such a wide variety PLUS all the xtra options to choose when ordering an engine, that you'd want to have a large inventory. That said...i have no interest to be in that business LOL

 

[Ed Haywood]

Going long on the engine market?

 

[SoCal 182 Driver]

I recently put down a deposit for an overhaul exchange from Lycon. I'd certainly consider them reputable. My engine should be ready to swap out in (hopefully) 7 months. In the meantime...I keep flying. They are quoting factory remans at 18 months. I'm betting it takes longer than that.

I put a deposit down on my XP470 with Ly-Con in March. They recently said it will be delivered in the next couple of weeks, which is only about 2-3 weeks longer than their original estimate.

 

[Magman]

Short answer :

To me NO.


Long answer:

It should be noted that the manufacturer is allowed to do things

that no one else is allowed to do. That is NOT always good!

 

[Pinecone]

Really not enough information. What do you mean by value? At the end of the day a buyer is not going to really care who did the engine, with the possible exception of immediately after the rebuild. Also, is anything on an airplane really a value proposition? It's like when buying a car and the sales guy tells you what your "investment" will be. In the end it's just another money suck.

I went with 2, I'm with Martin on this. Also the factory will undoubtedly have better tooling than a repair shop.

A saavy buyer will care. There are a number of shops that if they had done the overhaul, I would not buy or price as runout. An overhaul is not defined. Some shops put out overhauled engines that are better than factory new. Others put out engines that they took apart and reassembled with all the same parts.

One plane I looked it had an engine overhauled in 2010 by a shop that was known to do the minimum. They did such a good job, they overhauled it again in 2011. And that was so good, the engine needed a top overhaul in 2017. And that was done so well, that a cylinder had to be replaced at annual in 2019 and another one in 2020. I offered a price based on a runout engine. It was declined. And it was still on the market a year later.

 

[Bacho]

Purely for resale value, I do not believe you can justify a factory reman.

As a mechanic/buyer after a few years or a couple hundred hours in the difference would be zero to me.

 

[RyanShort1]

I'm gonna throw a few more considerations.

1. What's the condition of the rest of the aircraft? Is it new paint? 8-10/10 interior?
2. What's the mechanical condition of everything else?

If it's a great paint job and a very pristine plane, go for the factory reman and try to snag the $$$ buyer. If not, go for the cheaper roll of the dice and expect a broader appeal due to the lower price.

I've flown behind at least two Penn Yann remans that I personally helped break-in, and for a plane that flies about 500 hours a year, with a proper break-in, I think I'd prefer that, if I could afford it.

If the plane is being sold with a 0 time engine, that's "interesting" and I know I have to break it in. It's "interesting" as a plane to buy, buy brand new engines are unproven and iffy. If it's at 5-10 hours, I hope you did the break-in right! Personally, I'd want to see 50 hours on the plane as a buyer, 0 time is actually perhaps would make me want to offer a lower asking price than the 50-200 SMOH hour plane from a risk perspective.

 

[Pinecone]

And there is the infant mortality issue with a freshly overhauled engine.

 

[Brad W]

generally/generically speaking to how you framed the response rules.... No, it's not worth it.

that said, the first big chunk of hours after said rebuild I would have much less faith in the engine.... maybe the 1st hundred hours (maybe two hundred?) or more....

I'm not basically turned off by a field re-build in concept.... but there is far more question and concern....who did it? what did they do? what parts did they use?, and on and on...

so to me, that's where the value comes into play....

 

[Ed Haywood]

I'm breaking in an engine right now. It's not that complicated. EGT/CHT probes on all cylinders makes it easy. It's really cool to watch CHT climb and then drop off sharply and stabilize.

IMO the risk of "infant mortality" is over stated. If you have it done by a competent shop, it will be more reliable than it was before the overhaul.

Installation mistakes are more likely, but frequent inspections during the break in process should catch that. I pull my cowl off after every flight and inspect closely for leaks, looseness, etc. Torque stripe is your friend. Installing my own engine has made me a much better pilot.

 

[Salty]

I'm breaking in an engine right now. It's not that complicated. EGT/CHT probes on all cylinders makes it easy. It's really cool to watch CHT climb and then drop off sharply and stabilize.

IMO the risk of "infant mortality" is over stated. If you have it done by a competent shop, it will be more reliable than it was before the overhaul.

Installation mistakes are more likely, but frequent inspections during the break in process should catch that. I pull my cowl off after every flight and inspect closely for leaks, looseness, etc. Torque stripe is your friend. Installing my own engine has made me a much better pilot.

The problem with infant mortality beyond mechanic error is the parts haven’t been proven yet. If any of the new parts are defective, it’ll take some time before you find out.

 

[Gary Ward]

I went route 2 back in 2020.
I value a factory rebuilt zero hour more than I would a overhaul by lycoming or a local engine shop.
It sounds like the OP is not able to keep flying so he going to be waiting either way?
I kept flying my old engine until the rebuilt engine came in after having it apart for inspection. Put it back together and kept flying it waiting for the new engine.
Then my plane was only down/apart for 7 days for the engine change which I did myself. I have been doing progressive maintenance on it since 2018 so most everything else like hoses, alt, starter, baffles,scat hoses, etc were already fresh enabling a 7 day turn around. That was worth thousands to me verse waiting 4-6 months for a overhaul by a local shop. The piece of mind of lycoming zero hour was worth thousands to me also.
And my old motor was gonna need a crank so It was gonna cost more than a zero hour factory rebuilt.
BTW a Lycoming 0-320 zero hour rebuilt was $27.3K Jan 2020. I now have over 650 trouble free hours on it.