Partnership vs. Own outright.

[Mafoo]

Ok,

So this is not a philosophical question, but a question about two options in front of me.

The max out of pocket expense I want to spend to get into flying, is 30K.

Option A. find a nice Piper 180 or older Cessna 172 for 25K or so, with a strong high miles engine, and hanger it over at a small airport about 30 min away. The cost to hanger it is $90 if I want to use a shared hanger. There are T-Hangers to rent, but they are about $350 a month. The nice thing is they have the cheapest gas in the area. The airport is Parlin Field (K2B3). I would need to get insurance, and calculate my cost to know what to save for each hour flown.

Option B. One person of a 5 person partnership has a very nice and well maintained Cessna 172 Hawk XP II with a Garmin 430 WAAS, and completely redone interior back in 2002. The plane is VERY nice. It also comes with 38K in the maintenance fund, and they own a Hanger at the airport I want, KLEB, about 15 minutes away. To rent a hanger at that airport is $450 a month. The owner I would be purchasing from uses the plane more then the other 4 combined (two of them don't even live in the state). The cost to buy his share, is 24K along with $155 a month for the Hanger codo fees, GPS subscriptions, and insurance.

Option B sounds like the obvious choice. The only thing that makes me worry, is the cost to fly it is $22 an hour dry, and he says on average it's costing him about $95 an hour to fly. That's 10-12 gph @ about 130 KIAS.

The reason they have 38K in the maintenance pool, is because they overcharge for the hours. That's cool and all, if everyone flew. However if I am the only one flying, I am filling up the kitty all by myself, yet my share of that kitting is only 1/5. On the other hand, I get to own a plane and a hanger for 1/5 the cost.

What would you all do? I am 95% sure what I want to do, I just want to hear your opinions.

P.S. This is not the 182RG partnership I was talking about earlier. The reason this individual wants out of this partnership, is to get into that one. He needs more plane.

 

[Morne]

Your plane is your plane. Maintained how you want, kitty funded how you want, flown how you want. YOUR PLANE. Nothing like it.

 

[wabower]

Your plane is your plane. Maintained how you want, kitty funded how you want, flown how you want. YOUR PLANE. Nothing like it.

And paid for with all your money, all your risk for future big-ticket repairs and you're the worst pilot in the group. Nobody can utilize an airplane sufficiently to warrant total ownership.

 

[jhausch]

Says the dude with the cherry 180

 

[wabower]

Circumstances here might be a tad or maybe a tad-and-a-half different than most.:wink2:

Says the dude with the cherry 180

 

[EppyGA]

I'd say "B" but the buy in sounds high to me. You didn't say what year the plane is but your saying it is worth $120,000.

I was in a two partner deal on a '76 Warrior valued at 34,000. My partner has stopped flying for a while and wanted to expand. We've added two partners. This forced me to put some number to everything as previously we did not pay per hour, filled the tanks when done flying and just split whatever costs were incurred. My partner owns the hangar so that made things cheaper. Now with a more structured environment we will pay $146 a month and $47 hour dry to fly. There was no reserve when I got in so we've used a large percentage of the new members buy in to establish a reserve. The Warrior burns about 8gph when leaned properly so we're around $95 hour to fly.

 

[weilke]

What do you need the plane for ?

If you want to go places overnights on weekends on a regular basis, a 5-way partnership may not be the optimal solution (unless most of the partners are pretty much inactive).

$22/dry and $155/month will come out a lot cheaper than anything else with 4 seats you are thinking about.

 

[Mafoo]

What do you need the plane for ?

If you want to go places overnights on weekends on a regular basis, a 5-way partnership may not be the optimal solution (unless most of the partners are pretty much inactive).

This is from the seller. He has been in the partnership a year and a half:

"I have only seen the plane out overnight twice by other members since joining and I've NEVER had a scheduling conflict. I routinely fly the plane out of the area for several days at a time."

yea, one of the partners lives in FL, and the other is out of the country most of the time.

 

[EppyGA]

How was the 24k established?

 

[Mafoo]

I'd say "B" but the buy in sounds high to me. You didn't say what year the plane is but your saying it is worth $120,000.

the plane is a 1977, but most of it is newer then that.

The hanger that comes with it, is valued at $45,000, and they have $38,000 in the bank.

That right there, is $16,600 of it. The rest would go to the plane, putting it's value at $37,000, and it's much more then a $37,000 plane.

The cost to get into it seems very fair to me. It's the cost of flying it. But if you say the Warrior share is costing you the same per hour, that makes me feel a little better.

 

[weilke]

The hanger that comes with it, is valued at $45,000, and they have $38,000 in the bank.

Does the 'partnership' actually own the hangar ? Is it an LLC or something of that nature ?

The cost to get into it seems very fair to me. It's the cost of flying it. But if you say the Warrior share is costing you the same per hour, that makes me feel a little better.

The cost of flying it sounds quite reasonable, you can also throttle back, fly at Warrior speeds and Warrior fuel burns if you are not in a hurry.

The best aspect of this is the established mainteance reserve. The engine could croak tomorrow and there won't be an assessment against the members. If your sole ownership Cherokee needs a new exhaust tomorrow, well that's a $1200 bill right out of your pocket.

 

[Mafoo]

Plus, that 24K is really ~22K to me, because if I bought it tomorrow, I would stop renting at the school @150 an hour.

 

[Mafoo]

The cost of flying it sounds quite reasonable, you can also throttle back, fly at Warrior speeds and Warrior fuel burns if you are not in a hurry.

Outstanding point. So durring training, where the time is what I am after, and not distance, it will cost even less.

 

[Mafoo]

Does the 'partnership' actually own the hangar ? Is it an LLC or something of that nature ?

I need to get more details, but I am pretty sure they do. The partnership was started in 1988.

 

[Mafoo]

In looking up the tail number, the plane is owned by a corporation. I would be 1/5 owner of that corporation.

 

[PilotAlan]

Sole ownership is great, if you can swing it. If you can't then a partnership is the next best.
For the numbers you're looking at, Option B is pretty nice. Especially owning the hangar and having a funded reserve.

$22/hr is pretty sweet. You're going to pay for fuel no matter what. Even if you fly 100hrs a year in the cheapest bird you can think of, you'll never get near $22/hr for variable and maintenance costs, plus reserve.
This year, my bird cost something like $80/hr dry, last year about $70, for hangar, annual, and non-scheduled maintenance. And that does not include a maintenance reserve.

 

[docmirror]

Buy your own. Get an old Bonanza for about the same as the 172, put auto fuel in it and fly faster than any 172 on the same fuel burn. The fixed cost of hanger and insurance are fixed and basically the same no matter if you hanger a 150 or a complex single. Mx is going to be higher in the complex, but if you're going places, you'll spend less time spinning the prop and engine, and less time in the air. That's why people move up. I never understood stopping at a fixed gear 180/200HP single. Might as well get up and go.

 

[Mafoo]

Buy your own. Get an old Bonanza for about the same as the 172, put auto fuel in it and fly faster than any 172 on the same fuel burn. The fixed cost of hanger and insurance are fixed and basically the same no matter if you hanger a 150 or a complex single. Mx is going to be higher in the complex, but if you're going places, you'll spend less time spinning the prop and engine, and less time in the air. That's why people move up. I never understood stopping at a fixed gear 180/200HP single. Might as well get up and go.

How do you suggest I do this with a 30K budget?

 

[\__[Ô]__/]

Given the two options, i probably would lean towards option B - pending the details on the hangar situation. You also don't mention the engine time. If it's run out, that maintenance reserve isn't going to be around long. The situation with 2 people co-owners out of state and little usage sounds ideal for scheduling. But I wouldn't assume that will always be true. Having one guy sell his share might prompt one of the other owners to reevaluate their ownership. Or not. You have no way of predicting that. It's just something to keep in mind.

As for option A, it seem that if you have a budget of 30K, buying a 25K plane is setting yourself up for failure.

As for your hourly cost concern, have you run some sample numbers for option A to compare with your 95/hr number for option B?

 

[docmirror]

How do you suggest I do this with a 30K budget?

I will sell you one that is in great shape. Comes with fresh annual. Old Bo's are pretty cheap.

 

[iflyblog.com]

I went with option A - sorry I can tell you are really leaning towards option B.

I'm just not a partnership kind of guy. Makes sense because I never shared my toys on the playground either...

I think you will be happier if with whole ownership and hopefully as you get acclimated to owning, you can upgrade where needed.

 

[Dr. O]

First on ownership, if 30K is your budget then the purchase price of the plane cannot exceed 15K as you will spend the purchase price on maintenance over the first 3 years... Some don't even get past the first year...
Second, if you want a 4 place traveling machine 15K won't buy much so you are left with club or a partnership...

Now the current partner who says he never has a problem taking the plane for 2 or 3 days anytime he wants - that dynamic changes radically the instant you buy in and start doing the same, now doesn't it...

I am not taking a position on what you should do, simply pointing out how the world works...

cheers

 

[Velocity173]

I'm voting for option C. What happened to the 2 seat 170 Kt cruise and a 70 grand budget?

 

[John221us]

I went the sole ownership route, so I can't speak to partnerships. I enjoy having my own hangar and the plane available whenever I want it. That said, the maintenance is real and you can have big expenses outside of an overhaul. I have easily sunk the cost of the plane, again, in maintenance over the last two years and you don't get that back on resale.

 

[wabower]

If I'm a co-owner, the airplane is mine on the days I use it, which is all that really matters. If somebody else owns it on the days they're using it, that's fine with me since I couldn't be flying anyway. When it's time for the $30k engine or other big-ticket outlays that occur from time to time, those other guys are real handy to have around. A plane with an existing MX reserve is like finding a birds' nest on the ground with the eggs intact.

If a guy really needs a plane full-time, sole ownership is the only way to go. But if you assume that each month has ~360 hours of daylight and study the usage records of most planes in the fleet, you'll see that the utilization is pitifully low.

I went with option A - sorry I can tell you are really leaning towards option B.

I'm just not a partnership kind of guy. Makes sense because I never shared my toys on the playground either...

I think you will be happier if with whole ownership and hopefully as you get acclimated to owning, you can upgrade where needed.

 

[jtheune]

I'm in a 5 way partnership on a 77 182Q. The 155 and 22 per hour sound very reasonable to me. That is about what we pay.

 

[flyingron]

People are happy with both ways. Some like to fly a better plane and split the costs. Depends on who your partners are. I know some people who had great times (especially with partners who didn't fly very much).

Me, I like the idea of it being MY plane. I leave my headphones plugged in (at the worst they get swapped left to right when my wife flies). The plane is in exactly the condition I left it in the hangar (except when the mechanic comes over and does maintenance. If I want to go anywhere I have to ask no one (except the wife).

 

[Morne]

And paid for with all your money, all your risk for future big-ticket repairs and you're the worst pilot in the group. Nobody can utilize an airplane sufficiently to warrant total ownership.

Of course paid for with all your own money. That is how you get sole ownership.

I really think you have glossed over the potential pitfalls of partnerships. Unless related by blood there is no way I would do it. What happens when someone wants out and that MX reserve looks so fat? They hire a lawyer who sounds more like he does divorce than anything else. How solidly written is the partnership agreement? How are disputes resolved? Do the remaining members have any say on who can buy a share being sold by an exiting partner? You never know who might BECOME a partner in the future.

I think partner rules like having to fill tanks after each flight are a pain. What about when I got home last night after fueling hours? Should I have paid a call out fee to top off 23 gallons? I left my portable oxygen tank in the plane because I wanted to get home. Today I'll wash the bird and cleanup the interior on MY SCHEDULE.

What if you don't like how the others operate the bird? Tired of fouled plugs after the guy who refuses to touch the mixture knob flies? Do you really want those partners who fly very rarely to be banging your baby onto the runway the flight before your big trip? How about finding the avionics master still on every time you arrive?

Don't get me wrong, if a partnership is the only way you can afford to fly then GET IN THE AIR that way! But considering the colossal fall of used aircraft prices there is no better time to buy than now.

Besides which, the proper question is can you afford to operate the bird in either A or B above. If yes to both, then A all the way.

 

[wabower]

And I think you're blowing all this "what-if" stuff out of proportion in favor of sole ownership that has at least as many risks and significantly higher stakes. For openers, the structure should be co-ownership rather than partnership. What's to keep somebody from suing you or filing a lien on your plane as sole owner? If they prevail, will you lose more or less than if you had purchased only 20%?

Well-written JOA's aren't all that difficult to draft and execute. Insurance policies are wonderful insofar as protection of assets is concerned. Some additional bookkeeping will be necessary for a group, but the benefits often outweigh the costs.

If a guy can't handle the mechanics of filling the tanks or other mundane tasks, I would question his ability to find his way to the airport, let alone be an airplane owner. Stuff happens. When it does, you deal with it and move ahead. No harm, no foul.

We solved the headset problem by buying several sets that everybody liked and keeping them in the airplane along with some wipes. Ditto charts, plates, snacks, drinks and other stuff in the hangar. How tough is that?

Have you ever forgotten anything while flying or putting the airplane away?

I've been on both sides of this fence since 1964. As you say, either way can work, but it's not whether you can afford sole ownership, it's whether you want to afford it.

.

Of course paid for with all your own money. That is how you get sole ownership.

I really think you have glossed over the potential pitfalls of partnerships. Unless related by blood there is no way I would do it. What happens when someone wants out and that MX reserve looks so fat? They hire a lawyer who sounds more like he does divorce than anything else. How solidly written is the partnership agreement? How are disputes resolved? Do the remaining members have any say on who can buy a share being sold by an exiting partner? You never know who might BECOME a partner in the future.

I think partner rules like having to fill tanks after each flight are a pain. What about when I got home last night after fueling hours? Should I have paid a call out fee to top off 23 gallons? I left my portable oxygen tank in the plane because I wanted to get home. Today I'll wash the bird and cleanup the interior on MY SCHEDULE.

What if you don't like how the others operate the bird? Tired of fouled plugs after the guy who refuses to touch the mixture knob flies? Do you really want those partners who fly very rarely to be banging your baby onto the runway the flight before your big trip? How about finding the avionics master still on every time you arrive?

Don't get me wrong, if a partnership is the only way you can afford to fly then GET IN THE AIR that way! But considering the colossal fall of used aircraft prices there is no better time to buy than now.

Besides which, the proper question is can you afford to operate the bird in either A or B above. If yes to both, then A all the way.

 

[ja_user]

This is a no brainer to me. Option B..

For option A, 30k just isn't enough to properly purchase, maintain, etc a 25k aircraft for long..

If you haven't owned before, go for the partnership. The cost to purchase, will be somewhat recovered when you sell, or it gets tottaled out or something? 22/dry is great, and if you throttle it back, it won't take 10GPh..

Do you have your private license yet? If not, go with Option 5 for sure, and get some more exposure to the joys of ownership. A good partnership is great, and a bad one really sucks.. Check all the paperwork and do every "what if" you can come up with...

 

[Mafoo]

I'm voting for option C. What happened to the 2 seat 170 Kt cruise and a 70 grand budget?

Yea, I am all over the place. The reality of it all, is I am not a rich man. Well, I could afford a lot more plane if my wife was all in, but she is not.

A 30K plane I could write a check for. a 70K plane I would need to make a few life changes. Right now I own a $30,000 Jeep, that I only drive when I drive to the airport to fly. I have a loan against it that I could apply to flying. I am willing to sell the Jeep, and apply it to the plane. The wife is less interested in that.

Right now for obtaining my PPL, I am burning through $2,000 a month, and not going into debt doing it. However my wife and I usually do more things over the course of a month then we are doing now. It would require both of us to want it more then our other forms of entertainment.

The above things is why the budget sounds more my speed. The following, are other reasons why I am looking at a 4 place certified aircraft:

• I can finish my PPL in it, so when I do get my ticket, I have experience in the aircraft
• Getting my ticket in it will save a few grand
• We can go places with our friends.
• I can do Pilots for Paws
• I have a much larger financial cushion, if I need to replace a big ticket item
• I am not mechanically inclined. I will need to have someone else work on it. An A&P with Cessna or Piper experience will be a lot easier to find.
• I never plan to crash, but if I am in a situation where that's going to happen, I would much rather be in a certified aircraft.
• I can do more things once I get there, because I can take more with me. My wife and I love to go backpacking. Not sure we could fit all of our gear in the RV (we probably could for back packing), but it's really going to smell horrible in that aircraft on the way home . This might be true for any of them.

Now the RV is a whole lot cheaper to fly, and I get where I am going a LOT faster. I love that idea, but do I love it for 40K?

That's the question. The options are endless, and each aircraft I can see a useful mission for my desires in it. This is what makes this a difficult choice.

The bullet points for the RV is simple. I really really really want one.

 

[wabower]

Dude. If she's not in, you're toast. Go low and keep the peace.

Yea, I am all over the place. The reality of it all, is I am not a rich man. Well, I could afford a lot more plane if my wife was all in, but she is not.

A 30K plane I could write a check for. a 70K plane I would need to make a few life changes. Right now I own a $30,000 Jeep, that I only drive when I drive to the airport to fly. I have a loan against it that I could apply to flying. I am willing to sell the Jeep, and apply it to the plane. The wife is less interested in that.

Right now for obtaining my PPL, I am burning through $2,000 a month, and not going into debt doing it. However my wife and I usually do more things over the course of a month then we are doing now. It would require both of us to want it more then our other forms of entertainment.

The above things is why the budget sounds more my speed. The following, are other reasons why I am looking at a 4 place certified aircraft:

• I can finish my PPL in it, so when I do get my ticket, I have experience in the aircraft
• Getting my ticket in it will save a few grand
• We can go places with our friends.
• I can do Pilots for Paws
• I have a much larger financial cushion, if I need to replace a big ticket item
• I am not mechanically inclined. I will need to have someone else work on it. An A&P with Cessna or Piper experience will be a lot easier to find.
• I never plan to crash, but if I am in a situation where that's going to happen, I would much rather be in a certified aircraft.
• I can do more things once I get there, because I can take more with me. My wife and I love to go backpacking. Not sure we could fit all of our gear in the RV (we probably could for back packing), but it's really going to smell horrible in that aircraft on the way home . This might be true for any of them.

Now the RV is a whole lot cheaper to fly, and I get where I am going a LOT faster. I love that idea, but do I love it for 40K?

That's the question. The options are endless, and each aircraft I can see a useful mission for my desires in it. This is what makes this a difficult choice.

The bullet points for the RV is simple. I really really really want one.

 

[EppyGA]

Dude. If she's not in, you're toast. Go low and keep the peace.

Read my mind Wayne. Could be big trouble if she's not in at all. I love that my wife has been on board since the beginning and loves flying with me.

 

[Dean]

If you can afford to take on ALL the risk of ownership, go it alone. But if you can't, like many others have said, option B is your best route. I for one am not a partnership type of person, I have heard too many stories about partners not getting along.

 

[Mafoo]

Dude. If she's not in, you're toast. Go low and keep the peace.

Yea. I have a flight with the guy Friday to take a look at the plane. I want my wife to have at least a little right seat time (so if we only go up once, I will sit in the back).

My wife has only been in a small plane once, and it was the back of a 172 when I took my discovery flight. Riding up front will be an entirely different experience.

She is the kind of person that I know will be into it, once she gets the bug. She is just frugal, so the only thing holding her back at the moment is money.

We need to get that cost/benefit needle moving

 

[ja_user]

Yea. I have a flight with the guy Friday to take a look at the plane. I want my wife to have at least a little right seat time (so if we only go up once, I will sit in the back).

My wife has only been in a small plane once, and it was the back of a 172 when I took my discovery flight. Riding up front will be an entirely different experience.

She is the kind of person that I know will be into it, once she gets the bug. She is just frugal, so the only thing holding her back at the moment is money.

We need to get that cost/benefit needle moving

You need to take her flying some, so she can experience it and enjoy it with you...

If you don't have your license yet, I would suggest a XC with your instructor (even if you have already done them), with her in the back.. Take her and the instructor to lunch somewhere an hr away, spend some time and come back...

Once you get your license, take her to some close but interesting places to get her into it...

Some people like us will fly just to fly, but most want to be going somewhere...

 

[Sac Arrow]

I've done both. I owned a Turbo Arrow outright for several years. It killed me financially. I'm currently in a partnership, and it's working out well.

Don't forget that you have things like maintenance, cleaning, etc... which are also generally shared responsibilities so you don't have to deal with it yourself every single time you need to see the A&P.

 

[poadeleted20]

Option A: Is there such thing as a "nice" 180 Cherokee or 172 for $25K? I'm thinking more like $35K for a good one with reasonable IFR gear (I'm thinking you want that). Also, if you want a paper on ownership costs for a plane like that, email me on the side (email only, please).

Option B: Is that Hawk XP worth $82K (5x24 minus the 38K in the bank)? Probably more likely so than finding that "nice" plane for $25K, but still might be a tad on the high side. And how much do the other four folks fly it? BTW, that fuel burn and speed sounds accurate for a Hawk XP based on my 20 or so hours in one recently.

 

[Mafoo]

Option A: Is there such thing as a "nice" 180 Cherokee or 172 for $25K? I'm thinking more like $35K for a good one with reasonable IFR gear (I'm thinking you want that). Also, if you want a paper on ownership costs for a plane like that, email me on the side (email only, please).

Option B: Is that Hawk XP worth $82K (5x24 minus the 38K in the bank)? Probably more likely so than finding that "nice" plane for $25K, but still might be a tad on the high side. And how much do the other four folks fly it? BTW, that fuel burn and speed sounds accurate for a Hawk XP based on my 20 or so hours in one recently.

Email forthcoming

And they also own a hanger worth 45K, so that needs to be factored into the price.

To rent the same hanger at the same airport, is $475 and up a month:

http://flyleb.com/hangar-31-and-37/

 

[poadeleted20]

And they also own a hanger worth 45K, so that needs to be factored into the price.

Make sure that's not one of those deals where after 30 years, the airport owns the hangar, but otherwise, between the $38K in the bank plus the $45K in the hangar and the airplane, the total package for $120K is starting to look like a real bargain.