Help! Need advice on Piper Lance...

[kath]

Hi everyone,

This is a long story but I'll give you the quick version. My boyfriend and I are considering buying a Piper Lance. Here're the spec's:

1976 model PA-32R-300
19000 TT
1200 SMOH, TBO 2000
Prop due Aug. 2007 (400 hours left on 2000 hours)
36000 lb max gross (2139 lb empty, 1460 lb useful)
Annual fresh Feb 2007
IFR avionics:
DME
KME20 audio panel
ADF
King navcom 170 B (two of them... one with GS and one with LOC)
Intercom
Transponder
Autopilot
Previosly used as part 135 cargo hauler. Seats removed except for pilot & co-pilot, wall barrier between pilots and cargo area.

Asking: $40,000

Informally appriased at $51,610 with most of the price reduction coming from the high time on the airframe. Located at Oshkosh, WI.

So here are my questions:

Question #1) Good plane? Good price? Gotchas?

Question #2) This plane would be used by my boyfriend (Mr. part 135 guy), not me, for hauling cargo. But at the moment he has no cash, and I have cash. As an alternative to taking out a bank loan, we're talking about possibly my buying/owning it and him leasing it from me. He would take care of all day-to-day maintainence on the plane.
2a) Is it totally crazy to enter (or even consider) a deal like this with one's Significant Other?
2b) What are the "gotchas" for the owner if participating in such a deal?

Question #3) What are the hopes of a 350-hour Cessna pilot learning to fly a 300HP Lance?

Question #4) Is anyone near Oshkosh willing or interested in having a look at this bird?

Thanks in advance,

--Kath

 

[tonycondon]

lance is pretty easy to fly, not too fast or slippery. Ken will be able to tell more, he owned one.

Ill ferry it up to Alaska for you.

 

[gprellwitz]

Typo on the gross; it's actually 3600 gross, not 36000 . I presume you didn't make the same typo on the TT, since you mention the high time. That 19000 jumped out at me right away, I have to admit. It's been in the air more than two years of its 30 year life span.

I'm not TOO far from OSH, but know nothing about buying planes, so would be worse than useless to you there. As to whether it's crazy to do this with ones SO, I'd say not necessarily, but it certainly carries risk, as you obviously recognize. Definitely form a corporation to do it rather than putting it in your name. Make sure that all monies go through that corporation. Makes it a lot easier at tax time, too. Also, allows some distance should things go, shall we say, South.

Up there, it's a good thing that it has an ADF, but I'd feel a LOT better with a GPS too, personally. Don't know how many VORs you have up there.

 

[kath]

Typo on the gross; it's actually 3600 gross, not 36000 .

Ooops, you're right I meant 3600 gross.

--Kath

 

[Capt Kirk]

Condition of the plane aside (note that if a part 135 operator thought they could cost effectively squeeze more out of a plane they would - purchase price is kinda like the tip of the iceberg) you need to honestly evaluate the revenue that could be generated with the aircraft. Of course, that revenue can only be generated by getting the part 135 cert and getting this aircraft on that cert. If you do go the loan to boyfriend route do yourself a favor and get a lawyer to write it up and be prepared to have to resort to legal action in the event things don't pan out.

Len

P.S. for the purchase price of that Lance there are lots of really nice aircraft available for your own use.

 

[Henning]

Hi everyone,

This is a long story but I'll give you the quick version. My boyfriend and I are considering buying a Piper Lance. Here're the spec's:

So here are my questions:

Question #1) Good plane? Good price? Gotchas?

Question #2) This plane would be used by my boyfriend (Mr. part 135 guy), not me, for hauling cargo. But at the moment he has no cash, and I have cash. As an alternative to taking out a bank loan, we're talking about possibly my buying/owning it and him leasing it from me. He would take care of all day-to-day maintainence on the plane.
2a) Is it totally crazy to enter (or even consider) a deal like this with one's Significant Other?
2b) What are the "gotchas" for the owner if participating in such a deal?

Question #3) What are the hopes of a 350-hour Cessna pilot learning to fly a 300HP Lance?

Question #4) Is anyone near Oshkosh willing or interested in having a look at this bird?

Thanks in advance,

--Kath

I won't address the quality of the plane or the deal other than to say the Feb Annual is worthless, have one done by the shop of your choice (preferably the one that is going to do the continued maint/inspection program) on the prebuy, and the price is not out of line. IOW, there's nothing that I read there that particularly scares me away from that airplane yet. I would go look at the plane, if you like it (your Mr 135 boyfriend ought to be able to make some determinations about the quality) make a deal to rent the plane from the owner and you and your boyfriend fly it to AK and have the insp done. If it doesn't pass or you can't come to a deal with him, you fly it back. If it passes, you put the rental deposit towards purchase, and the plane is already there. It's an expensive way of doing it, but it's a high time airframe and has been in 135 service. (If $40,000 is not a large sum to you, it's a different story, my thoughts come from the perspective that $40,000 is a significant sum for you that you need to really protect.)This will give you a chance to really check out the plane, all the equipment and find the little bugs.

As to question 3, no worries girl, you'll fly it like a champ in 10 hrs or less. There's nothing about a Lance that will jump out and bite you.

Since I'm not within 12,000 nm of Oshkosh, that leaves us with question 2 as the really major issue. Let's just call me a bit jaded at the moment having made major sacrafices and relocated myself to Australia for my girlfriend who just left me after 3 years together and now I have to pick up and get out of the country in 16 more days and have a bunch of crap to deal with. We won't get into "But this is Mr. Right" because I thought "This is Ms. Right" myself, I saw us growing old together. The reality is you are not in total control so keep that clearly in view (why aren't you married is a question to be answered in this evaluation as well). So, the first question you have to ask is "Is this a plane I want regardless the boyfriend" or "If everything goes south, can I get my investment back out of the plane?" Then you also have to ask "Will this investment leave me critically low on reserves?" which is a situation I'm currently in and it's not pleasant. If you can answer Yes, Yes, No, you can proceede with reasonable security to the next issue. When it comes to wrighting the lease contract, and be sure you have a written one, this guy is no longer your boyfriend. This is a BUSINESS DEAL, C.Y.A.!!! Whether during the course of the relationship you choose not to enforce some parts of the contract to help him out is an option always open to you, but if the terms and conditions aren't set to protect you and your investment in the written contract, then you won't be able to enforce them when/if the relationship goes away. Get some good legal advice from someone intimate (not just familiar) with these kind of contracts.

Sorry if I sound a bit bitter and jaded, it's just that I am. This deal has cost me over $50,000 now (not including lost income, just savings, we won't even start on the emotional level) and it's not over yet. I'd hate to see a similar thing happen to you.

Good luck and best wishes.

 

[kath]

Henning,

I've been following other threads around here, and let me say how much I appreciate your reply and how much you've shared your (albeit horrible) experience... I do hope your advice can help me stay out of similar trouble!

It's maybe worth mentioning that Paul also owns a C-150. He's thought about selling it in order to buy the Lance. Another possibility we've talked about is for me to buy the 150 (or half of it) to finance the Lance. A C-150 is a much more "Kath-ish" kind of plane, one that I would actually fly, and, if I ever get off my butt and get that CFI thing, maybe even have students in, etc... So I've been thinking about that possibility too. Maybe I should give y'all the specs on that one too?

--Kath

 

[Henning]

Henning,

I've been following other threads around here, and let me say how much I appreciate your reply and how much you've shared your (albeit horrible) experience... I do hope your advice can help me stay out of similar trouble!

It's maybe worth mentioning that Paul also owns a C-150. He's thought about selling it in order to buy the Lance. Another possibility we've talked about is for me to buy the 150 (or half of it) to finance the Lance. A C-150 is a much more "Kath-ish" kind of plane, one that I would actually fly, and, if I ever get off my butt and get that CFI thing, maybe even have students in, etc... So I've been thinking about that possibility too. Maybe I should give y'all the specs on that one too?

--Kath

Feel free, my brain is yours to pick. It beats the heck out of what I'm using it for right now which is being miserable. You can post here, PM or e-mail me as you please. If you've got a cheap way to call you can even call 011 61 429 017 246. (I don't come off as bored, lonely and abandond do I )

 

[AdamZ]

Kath Henning gave some good advice. I'd just add that I learned to fly a straight tail Lance with less than 200 hours. Its agreat plane to fly and you will have no problem doing so.

 

[gismo]

Henning,

I've been following other threads around here, and let me say how much I appreciate your reply and how much you've shared your (albeit horrible) experience... I do hope your advice can help me stay out of similar trouble!

It's maybe worth mentioning that Paul also owns a C-150. He's thought about selling it in order to buy the Lance. Another possibility we've talked about is for me to buy the 150 (or half of it) to finance the Lance. A C-150 is a much more "Kath-ish" kind of plane, one that I would actually fly, and, if I ever get off my butt and get that CFI thing, maybe even have students in, etc... So I've been thinking about that possibility too. Maybe I should give y'all the specs on that one too?

--Kath

I like that idea better than you investing in the Lance, assuming the price of your share (or the whole plane if you go that route) is reasonable. That way your "deal" isn't as likely to come between the two of you and the consequences to you would be less if the relationship goes sour for any reason. I know I'd be pretty frustrated owning all or part of a plane I didn't fly even if my relationship to the actual pilot was on solid ground.

As to the Lance itself, I'm certain you could learn to fly it well (you did pretty good on your first try with my Baron) but it would be a lot more expensive means of buzzing around for fun (like 2-3 times the cost). Also if it's configured for cargo it may not be convenient to switch to a "people mode" for a short time.

Also the avionics in that particular Lance don't look too good to me. If the plane's been a cargo hauler, chances are the autopilot (and who knows what else) is inop and/or in need of costly repairs.

 

[flyingcheesehead]

2a) Is it totally crazy to enter (or even consider) a deal like this with one's Significant Other?

Depends how significant... Just be sure you can live with whatever deal, no matter what happens.

Question #3) What are the hopes of a 350-hour Cessna pilot learning to fly a 300HP Lance?

FWIW, the requirements to rent the Lance at RYV are 250TT and 10 make/model (any PA32R counts). I'm sure you could get into it in a reasonable amount of time.

Question #4) Is anyone near Oshkosh willing or interested in having a look at this bird?

If you want, I'll fly up there and take lots of pictures. Heck, I'll even test-fly it to see what doesn't work, if you want to arrange something like that. Be forewarned, it may take a week or two before I'm off and in town. Let me know.

 

[bbchien]

Part 135 with 350 hours?

Ugh, Kath, if you're serious with the guy, have his 152 appraised and buy it. But don't be an owner in a commercial operation. It's a quantum risk for you.

My dad used to say, if it is bankable credit, take it to a bank....

 

[Dean]

I like that idea better than you investing in the Lance, assuming the price of your share (or the whole plane if you go that route) is reasonable. That way your "deal" isn't as likely to come between the two of you and the consequences to you would be less if the relationship goes sour for any reason. I know I'd be pretty frustrated owning all or part of a plane I didn't fly even if my relationship to the actual pilot was on solid ground.

Dido on this, if you want to help out, buy his plane and let him take the risk of the 135 operation on his own. That way if it goes south, you don't go with it.

 

[deafsound]

In regards to 2a) I wouldn't go there. Sounds like a recipe for trouble down the line. I'm a bit jaded tho'.

 

[Henning]

Part 135 with 350 hours?

Ugh, Kath, if you're serious with the guy, have his 152 appraised and buy it. But don't be an owner in a commercial operation. It's a quantum risk for you.

My dad used to say, if it is bankable credit, take it to a bank....

That'll only work though if he has the credit rating to be able to borrow the rest of the money to buy the plane (with the +/-$20k for the 150 down, that shouldn't be hard unless he scores below 520) and can establish a line of credit for operating with (considerably more difficult unless he has a friendly banker). The only way I see it possible to work and for her to be protected is to buy the plane and lease it to him. If she wants to fly the 150, she can rent it from him. That way if it sours, she takes the plane back if he doesn't meet the terms of the lease. If the plane "dissappears", she reports it stolen and claims against the insurance she carries (a liability & not in motion policy) in her (or the LLC she starts for the plane) name that he pays for as part of the lease contract. That policy is above and beyond the policy he carries for the 135 op which covers all operations and names her as the beneficiary of the hull value.

God I hate being a negative person. It really annoys me to think like this about a "couple" situation.

 

[gprellwitz]

Like others have said, the 152 seems like a reasonable way to go. Get it appraised as you suggested. Just don't go paying well over its value because you want to help him on the Lance. Keep the two separate.

Edit:
Just read Henning's advice. Hes's right that the proceeds of the 152 (obviously) wouldn't cover the Lance. Not sure why you couldn't do a separate loan for the difference secured by the Lance, however. But yeah, that would make it a little more difficult than if the title were clearly in (your LLC's) name.

 

[Henning]

Edit:
Not sure why you couldn't do a separate loan for the difference secured by the Lance, however. But yeah, that would make it a little more difficult than if the title were clearly in (your LLC's) name.

See what I mean, I didn't even consider that, I gotta get out of this negative funk...

 

[kath]

Update....

At this point, the frontrunner solution is: get a bank loan for the Lance, with the expectation of paying all or most of it off quickly upon the eventual sale (to me, or to someone else) of the C-150. I like this because it keeps me out of the whole 135 operation. It sucks to have to involve a bank, but oh well I guess that's how it goes.

A little about the C-150... It's not an ordinary 150 really, it's a super souped-up Alaska 150, with:
A 150-HP engine
Increased gross weight STC
Long-range wing fuel tanks (20gal each)
An extra fuel tank in the back
A phat panel (two radios, VFR-only GPS, DME, engine analyzer)
Some kind of nosewheel "beef-up" which I don't know much about yet

Paul's going to have it appraised, but estimates the price will land somewhere between $35K and $45K.

More news as it comes in... especially about the 150. Thank you to everyone for the advice; it's good to get second/third/fourth opinions on this kind of thing. Even my mom (who knows nothing about aviation) thought the whole 135 lease deal sounded like a bad idea when I tried to describe it to her... But Paul definately understands the philosophy of "keeping business as business" and knows the worth of having things solidly in writing, even when dealing with someone that you're... well, very VERY fond of.

We've already started daydreaming about the trips to the lower 48 that we could make in the Lance... the cargo space in the back will be big enough for a couple of bikes and sleeping bags...

--Kath

 

[gprellwitz]

Update....

At this point, the frontrunner solution is: get a bank loan for the Lance, with the expectation of paying all or most of it off quickly upon the eventual sale (to me, or to someone else) of the C-150. I like this because it keeps me out of the whole 135 operation. It sucks to have to involve a bank, but oh well I guess that's how it goes.
...

We've already started daydreaming about the trips to the lower 48 that we could make in the Lance... the cargo space in the back will be big enough for a couple of bikes and sleeping bags...

--Kath

Sounds like you're on the track of a good solution here!