Refurbished M20J

[NotarPilot]

About a year ago I had an idea about the possibility of selling refurbished M20Js.  I wondered about the viability of starting a business that bought good condition basic older J model airframes and turning them into "like new" aircraft.  Starting airframes would be inspected (i.e. wingspar, steel cage) for any corrosion and perhaps the steel cage would be stripped and reprimered.

 

So my question is, would you be willing to pay similar costs of a new Cirrus SR20 or Skyhawk (Say $325,000-ish) for a completely refurbished "like new" J that had everything new except for the airframe?  It would be a new 0 time engine, new prop, new seat belts, tires, interior, windows, paint, gear motor, instruments, brake pads, etc, etc, etc.  Everything would be new except the basic airframe and skin. This would be for a basic IFR package with steam gauges and no GPS.  

 

Of course you could upgrade to a G500, Aspen, Garmin GTN or Avidyne IFD series GPS for additional costs.  Paint and interior would be to customer specs.  A three year spinner-to-tail warranty would come with the aircraft similar to what Cirrus and Cessna offer.

 

So do you guys think there would be a market for this or do you think most people willing to spend that kind of money would rather do that kind of a refurb themselves?

[mooniac15u]

I suspect most buyers would expect a GPS at that price point.

[NotarPilot]

The desired GPS would be added at the customer's request for an additional cost.

[Danb]

I think it would be a great idea but at $325k for a basic steam ifr plane I feel the market would be limited at best..If in the same bracket one could have a glass equipped fiki reconditioned say at minimum 252 speed there would be a market.....the Rocket reconditioned to like new would be sold prior to touching them...I'd consider a program where the owner delivers his airframe to be upgraded or zero timed up to there menu of specs...let's face it we feel we have the best airframe on the market...I was just looking at Lancairs not to buy but for performance etc...that would be tough competition...I'd love to find a run out beat up Rocket and have a reputable builder recondition the plane top to bottom...

[aviatoreb]

I think that sort of service - and include a standard IFR gps could be done for $225 not 325.

 

Of course I am just throwing numbers out based on what I have seen people do - but did you come up with 325 by carefully running some numbers?

[aviatoreb]

I think it would be a great idea but at $325k for a basic steam ifr plane I feel the market would be limited at best..If in the same bracket one could have a glass equipped fiki reconditioned say at minimum 252 speed there would be a market.....the Rocket reconditioned to like new would be sold prior to touching them...I'd consider a program where the owner delivers his airframe to be upgraded or zero timed up to there menu of specs...let's face it we feel we have the best airframe on the market...I was just looking at Lancairs not to buy but for performance etc...that would be tough competition...I'd love to find a run out beat up Rocket and have a reputable builder recondition the plane top to bottom...

 

That would be a cool service - complete refurb of owner supplied airframe.  I wonder how much that would be?

[bonal]

I'm not sure about the costs but I would think that you would want to make the panel updated and the cost to refit a panel with new or like new steam gauges might actually cost more than glass units all the new LSA are going with glass and they are keeping the price point around 100k plus or minus.

And with that I would definitely consider a 300k like new J over a same price 172 if and when I was ready to upgrade from My C

[dfgreene61]

I'm going through refurb right now.  So far I've done an extensive Lasar annual with 12.5K in fixes, added Aspen PFD, EA-100, GDL-88, GTN-750, battery backed AI, LED landing light.  Next comes new paint and new interior.  Once complete I'll be in it for around $160,000.  The engine is strong at 900 hrs but assume a new engine and prop and I'm around $210,000.

 

My guess from lurking aournd this forum is that most Money pilots are either 1) cheap 2) take pride in customizing their planes 3) cheap and like to customize their planes.  They are more likely to take on a refurb themselves than pay a premium for having it done turnkey.  My guess is that new (plastic planes) appeal more to a different pilot demographic.

 

Just seems like a tough sell.  The companies I've read about who are doing this sort of thing are tarketing the training market or alternative fuel.

[Marauder]

I'm going through refurb right now. So far I've done an extensive Lasar annual with 12.5K in fixes, added Aspen PFD, EA-100, GDL-88, GTN-750, battery backed AI, LED landing light. Next comes new paint and new interior. Once complete I'll be in it for around $160,000. The engine is strong at 900 hrs but assume a new engine and prop and I'm around $210,000.

My guess from lurking aournd this forum is that most Money pilots are either 1) cheap 2) take pride in customizing their planes 3) cheap and like to customize their planes. They are more likely to take on a refurb themselves than pay a premium for having it done turnkey. My guess is that new (plastic planes) appeal more to a different pilot demographic.

Just seems like a tough sell. The companies I've read about who are doing this sort of thing are tarketing the training market or alternative fuel.

Are we talking about the same plane?

[Piloto]

No matter how much you refurbish a 1977 M20J it will still be in the same category Blue Book listing as a 1977 M20J. This will limit the selling price. Check Controller.com to give you an idea of listing prices. And I don't think they sell above the list price. The strongest competitor against new planes is the used planes pool in the market. If I buy the refurbished M20J for $325K what would I get for it when I sell it vs. the $100K M20J. Resale value is an important consideration in the purchase of high value items. 

 

José

[MooneyBob]

No.

[jrwilson]

New cirrus or 172 has G1000 at that price point.

[bonal]

What kind of warranty would it have. And i did look at the J on controller and Jose makes a good point. I think the kicker would have to be a normalized engine to make it a real seller.

[Rwsavory]

Not for me.

[Jeff H.]

I would be your target market. I would not consider buying such a plane with steam gauges. In fact, would need to present a better value than the alternatives to even consider purchasing with a full G500 + GTN750, etc. panel.

As Piloto pointed out, it's still a used aircraft. Financing and insurance issues will also present challenges at that price point.

I enthusiastically support your idea exploration and entrepreneurship. Just my honest reaction to the concept.

[dfgreene61]

Yes Marauder, that's the one!

[BigTex]

The problem is that you're competing against the used market, not new planes.  So basically, right off the bat you factor in a new interior, 0 time engine, glass cockpit and paint you are already into six figures before you even factor in the donor plane and labor. 

 

The only way it will possible work is do what AOPA is doing with their 152's with very basic instrumentation and even then the jury is still out if that will work.

[lamont337]

New cirrus or 172 has G1000 at that price point.

I only did a brief google search so consider the source: I see new Cirrus prices north of 600K and 2012 C172S prices at $307K. Maybe I'm looking in all the wrong places.

 

G1000 is great and all, but the C172 still a 120kt airplane. At that price point I'd take the rebuilt J.

 

Then again, I doubt I'd ever spend 300K on an airplane...

[jrwilson]

Though I do like the concept

[Bennett]

I've done the complete refurbishment of an 1983 J. If you search this forum set, you can see my comments about costs. Candidly, I don't see it as a viable business model. I believe that most of us who have done so, have no expectation that the market value will match the costs. I just wanted a completely custom Mooney, and after flying Mooneys for more than 20 years, and other aircraft for close to that number, I knew exactly what I wanted. I am happy with the results, and wouldn't change a thing. My my dream airplane is not the same as others would want. My point is that you can build out a Mooney to better than factory quality for far less than half of the cost of a new Mooney, or what the factory would have to charge for a new J.

[donkaye]

I've upgraded my Bravo with nearly every conceivable piece of avionics out there and I have much less than that amount in the plane.  I suspect your plan is not a viable one.  

[Av8]

Bennett makes good comments. A better than new plane can be built from an older airframe - but it can't get the price/value - makes biz model you talk about hard.

When I was looking 197x j models ranged from sub 50 essentially airframe, but never topped 200 for new everything so to speak.

I have a 78 J @ 6 months (see my post abt purchase) and am doing some work on it. Talking to bank that advertises in MAPA, knows the market, feedback was bank wouldn't want to loan much over 100k on a 197x J model. Piloto comment is on point - vref/values are limited. So you would be limited to cash buyers.

Check out recent posts on panel upgrades - they are passion, hobby and toy driven not ROI. Stand by for my DIY interior upgrade and panel upgrade coming in Q1.

While your logic is sound, market forces prob. Prohibit it Working.

[jetdriven]

It's funny how many airplane buyers refuse to pay over 70K for a plane, but then sink another 75K into the one they but for 70K. They could have bought that setup for much less. In Jim's case, that plane doesn't exist. But for your average nice P&I badass panel 201 the market stops dead at 125K. Some guys I know partnered in and bought a 201. Really shiny paint but midtime engine that needs a lot of stuff done, original interior, and 20K in hail damage. They paid nearly a hundred grand for it. Upgrades next.

[ArtVandelay]

It's funny how many airplane buyers refuse to pay over 70K for a plane, but then sink another 75K into the one they but for 70K. They could have bought that setup for much less. .

When I was looking , I couldn't find what I wanted, But I'm particular.

So now I can get exactly what I want and nothing more. You'll need to drop the price to $149K to be competitive for early models.

[PTK]

...I'd consider a program where the owner delivers his airframe to be upgraded or zero timed up to there menu of specs...let's face it we feel we have the best airframe on the market...

I would too! There's only one problem with this however, and it's beyond our control. It is impossible to arbritarily "zero" an airframe! A zero airframe is a newly built airframe. Aluminum does not have an endurance limit. Therefore it reaches a point in its stress as a function of cycles curve where even a small amplitude stress will cause it to fail.

It's a question of when not if.

Hence the values reflect this. They hit a hard ceiling and stop.

It's like in real estate, location, location, location. Here it's airframe, airframe, airframe! Both variables we can do nothing about!

... My point is that you can build out a Mooney to better than factory quality for far less than half of the cost of a new Mooney, or what the factory would have to charge for a new J.

Not so! I respectfully disagree. Let's not kid ourselves! For the purposes of this discussion, a used Mooney cannot be compared to a factory new one. Not apples to apples. They're totally different markets.

I can possibly agree one can equip a used Mooney better than the factory for less cost.

But one cannot "build better than factory quality for far less than half of the cost of a new Mooney."

The value of a factory new Mooney is in the new airframe primarily. For the reason I stated above.

Incidentally, this is the problem with the op's proposal as I see it. Squeezed between a rock and a hard place. Used airplane values on one side and truly new airplanes on the other. He'll be selling a used airframe no matter what he does to it. There's no market in between these two very different animals.