Dual Ownership

[Marauder]

Last night I received an email from a long time friend and fellow pilot that I have known since the 80s. He moved out west in the late 90s. He told me in his email that he sold his business and is officially retired. He is looking to move back to the East coast for his kids and grandkids.

Since they are spread up and down the coast, he is contemplating moving to the mid-Atlantic area. He owns a mid 80s short body Baron and posed the question if I would be interested in partnering to some level in it. I have no intention on selling my Mooney but his Baron is FIKI and well maintained. And would give me some flexibility on flying on days I would normally cancel on.

So, here is my question. He was willing to consider different partnership types of relationships (ex. minority ownership). Has any of you owned a plane outright and done a partnership in another at the same time? Any thoughts?

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[rbridges]

Last night I received an email from a long time friend and fellow pilot that I have known since the 80s. He moved out west in the late 90s. He told me in his email that he sold his business and is officially retired. He is looking to move back to the East coast for his kids and grandkids.

Since they are spread up and down the coast, he is contemplating moving to the mid-Atlantic area. He owns a mid 80s short body Baron and posed the question if I would be interested in partnering to some level in it. I have no intention on selling my Mooney but his Baron is FIKI and well maintained. And would give me some flexibility on flying on days I would normally cancel on.

So, here is my question. He was willing to consider different partnership types of relationships (ex. minority ownership). Has any of you owned a plane outright and done a partnership in another at the same time? Any thoughts?

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I'd like to see where this goes.  I was trying to find partners locally in a 6 seater, just for the 5% of my missions that would benefit from it.  I wanted to keep the mooney b/c I didn't want to fly something that burned 16 gph+ every time I used it.  I think it would be great if it fills a niche for you.  Plus you could swap out your Narco with his #2 com when he isn't around.

[Hank]

Whatever works for you, Marauder. I know one person who twice upgraded planes--bought the new one, reworked it to suit him, and flew both for a while before listing the old one. 182-->M20F-->F33A. Others own half of one plane. I know two guys who are partners in four planes with each other.

Just be prepared to take all of your Mooney buddies to ride! Should be a good first year for learning how the Baron handles at a variety of weights and loads. Bring it South and I'll even go to ride with you, if your landing when you get here is decent.

[Marauder]

I'd like to see where this goes. I was trying to find partners locally in a 6 seater, just for the 5% of my missions that would benefit from it. I wanted to keep the mooney b/c I didn't want to fly something that burned 16 gph+ every time I used it. I think it would be great if it fills a niche for you. Plus you could swap out your Narco with his #2 com when he isn't around.

Too late for the Narco... GNC-255 on order...

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[laytonl]

I own 1-1/2 airplanes. I own the Mooney outright.

I have 1/2 ownership in a Cherokee Warrior. The Cherokee has been in the family for 35 years. My father bought the airplane in 1980 with a partner. I bought his partner out in the mid 80's. after my father passed away I owned the airplane outright. When I bought the Mooney I gave my son my fathers share of the Cherokee. I pay the taxes, insurance, and 1/2 of parts cost. He pays for Annual, all labor, inspections and hanger costs. I fly the Cherokee about five hours per year so my hourly cost is high!

Lee

[Marauder]

I own 1-1/2 airplanes. I own the Mooney outright.

I have 1/2 ownership in a Cherokee Warrior. The Cherokee has been in the family for 35 years. My father bought the airplane in 1980 with a partner. I bought his partner out in the mid 80's. after my father passed away I owned the airplane outright. When I bought the Mooney I gave my son my fathers share of the Cherokee. I pay the taxes, insurance, and 1/2 of parts cost. He pays for Annual, all labor, inspections and hanger costs. I fly the Cherokee about five hours per year so my hourly cost is high!

Lee

Thanks. Ever hear where the partnership is split other than 50:50? Or perhaps based on usage rather than a percentage?

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[Guest]

Last night I received an email from a long time friend and fellow pilot that I have known since the 80s. He moved out west in the late 90s. He told me in his email that he sold his business and is officially retired. He is looking to move back to the East coast for his kids and grandkids.

Since they are spread up and down the coast, he is contemplating moving to the mid-Atlantic area. He owns a mid 80s short body Baron and posed the question if I would be interested in partnering to some level in it. I have no intention on selling my Mooney but his Baron is FIKI and well maintained. And would give me some flexibility on flying on days I would normally cancel on.

So, here is my question. He was willing to consider different partnership types of relationships (ex. minority ownership). Has any of you owned a plane outright and done a partnership in another at the same time? Any thoughts?

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Bigger wider door and more weight carrying, should be a winner.

Clarence

[KSMooniac]

I dream of partnering (or small club) on a serious traveling twin someday myself when I have a need and more budget. I also want a Stearman or Waco shared with a few folks as well. I'll keep my J for myself, though!

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[yvesg]

Thanks. Ever hear where the partnership is split other than 50:50? Or perhaps based on usage rather than a percentage?

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I was 1/3 partner on the Mooney I now completely own for a while many years ago. We had a clever system to devise who pays what: fixed costs were 1/3 each. Usage costs were paid by the users. Let me know if you need more detail. There was not any set hourly rate.

Yves

[Danb]

Chris I have had some clients with less than 50% ownership, like marriages most broke up one because the guy passed away, the most important thing is a strong contract, what happens when you want something done to the plane either a convience or necessity and he(they) sit on there wallet, this is the only reason I'm not in a partnership,they make total sense keeps the plane flying, fixed costs spread out etc etc, but....that's the big problem...but..I think I mentioned to you Saturday I turned down a partnership request in my plane..when we were talking to Larry, the decision was easy to turn down...now I'd actually love to be in a partnership in a Baron if all would work out fairly including the exit of the partnership...

[fantom]

Good advise from Dan, Chris.

 

Think of every contingency....list them and what you consider to be a fair and workable solution. Then put every one, especially how you want to handle fixed and variable costs, avionics upgrades, engine reserves, and so on into a air tight agreement/contract. Your buddy has been away for a long time, and his life situation has changed dramatically. Be careful, and handle this as a business deal, not a friendship deal, until you have all questions, issues and contingencies agreed to...in writing.

 

Your 'girls' will enjoy those large doors, added space and higher useful load. 

[Marauder]

Chris I have had some clients with less than 50% ownership, like marriages most broke up one because the guy passed away, the most important thing is a strong contract, what happens when you want something done to the plane either a convience or necessity and he(they) sit on there wallet, this is the only reason I'm not in a partnership,they make total sense keeps the plane flying, fixed costs spread out etc etc, but....that's the big problem...but..I think I mentioned to you Saturday I turned down a partnership request in my plane..when we were talking to Larry, the decision was easy to turn down...now I'd actually love to be in a partnership in a Baron if all would work out fairly including the exit of the partnership...

Thanks Dan. I have seen some interesting partnerships. Including one where the partners were finishing each other's sentences. Scary...

I have also seen partnerships that were really ugly. I think there needs to be a common ground on topics like maintenance. The CFII I fly with is a friend as well. He has been bugging me for years for us to partner in a Cub. But I know he is a lot less conservative than me when it comes to maintenance. I want to fix before it breaks, he fixes when it breaks. Not a good basis for a partnership.

My struggle with this offer is the amount of flying I would be doing in the Baron. If it was my primary plane, that would be a different situation than a limited usage situation. Also knowing he is moving here to visit his kids more often (and the fact he is retired) means the scheduling could be problematic.

I'll keep talking with him and see where it goes.

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[Joe Zuffoletto]

Marauder, have you considered renting from him instead? I think this makes the most sense, given how little you'll be flying the plane. It's also a good way to "try before you buy" in case you decide to become partners later.

 

I have a good friend with tons of M20K time who wants to fly my Acclaim. Neither of us was ready to jump into a partnership for various reasons so I'm renting it to him instead. It's working out well for both of us.

 

One nice thing about the Baron is that it will better accommodate your girlfriends.

[Cruiser]

What is your friend looking for? I mean if he is offering a partnership is it for equity or operational cost?

You mention he is recently retired, is he looking to reduce the expense of ownership? or is he looking for capital from a buy in?

I was in a non equity partnership that worked very well.

The owner had complete control and decision making authority, I shared annual expense - upgrade and repair costs.

Of course you know that unless you fly a whole lot more than you are now, it is not a $$$ wise decision on your part..........

[Marauder]

Marauder, have you considered renting from him instead? I think this makes the most sense, given how little you'll be flying the plane. It's also a good way to "try before you buy" in case you decide to become partners later.

I have a good friend with tons of M20K time who wants to fly my Acclaim. Neither of us was ready to jump into a partnership for various reasons so I'm renting it to him instead. It's working out well for both of us.

One nice thing about the Baron is that it will better accommodate your girlfriends.

What is your friend looking for? I mean if he is offering a partnership is it for equity or operational cost?

You mention he is recently retired, is he looking to reduce the expense of ownership? or is he looking for capital from a buy in?

I was in a non equity partnership that worked very well.

The owner had complete control and decision making authority, I shared annual expense - upgrade and repair costs.

Of course you know that unless you fly a whole lot more than you are now, it is not a $$$ wise decision on your part..........

Joe - I had thought about the rental path but hadn't mentioned it to him. I am concerned about the amount of usage I would get out of it.

Tom - I think he probably posed it because he had heard me whine a time or two about inclement weather that either forced a delay or cancellation of a trip. He is not in a bad financial situation so I don't think it is financially driven. Just being a good friend.

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[KSMooniac]

Another thing to consider in the debate of equity vs. non-equity or rental agreements is the value of a twin these days... I believe the prices are still dropping, so if you buy in today (at whatever percentage) you will likely face further declines.  I like the idea of renting initially to see how schedules work, maintenance/upgrade philosophy, etc. if the owner is willing to do that.  Just make sure you get named on the insurance.

[rbridges]

Maybe you could go half on fixed costs and pay a per hour wear and tear fee if you won't be flying much. kind of unorthodox but may be something to consider.

[Danb]

A lot of good ideas, if you could pull off a reasonable rental agreement such as joe has I'd insider that plus a good way to build up hours on a twin, if you then desire having a twin you've learned on that one then get one that has been untouched by one of your raving beauties

[jkhirsch]

I think it's a smashing idea. Especially considering you have indicated that he is doing it 'as a good friend.'

 

I would be highly inclined to basically let him handle everything, and "send you a bill."

 

Obviously you would want some input for your involvement.

[ryoder]

Maybe you could go half on fixed costs and pay a per hour wear and tear fee if you won't be flying much. kind of unorthodox but may be something to consider.

I want to defray some of my costs and am open minded to ideas like this. I wonder though about the insurance cost of renting an airplane to even one person.

I pay 280 for hangar and 100 for insurance monthly. If someone gave me two hundred a month and then sixty per hour dry rent I think it would be a win for both.

[ryoder]

Bigger wider door and more weight carrying, should be a winner.

Clarence

If marauder got bigger wider doors and more useful load he could then take two girlfriends on a trip at the same time. Twins in a twin maybe?

[Hank]

If marauder got bigger wider doors and more useful load he could then take two girlfriends on a trip at the same time. Twins in a twin maybe?

Wow, I thought he was looking at a Baron, not a DC-3 . . . .

[lahso]

I want to defray some of my costs and am open minded to ideas like this. I wonder though about the insurance cost of renting an airplane to even one person.

I pay 280 for hangar and 100 for insurance monthly. If someone gave me two hundred a month and then sixty per hour dry rent I think it would be a win for both.

Great thread. I'm looking at something like this for a friend who isn't ready to be an equity partner, but wants to rent from me. I haven't researched it well enough, and am unsure if renters insurance would suffice in case of an incident/accident, how to handle the "income" from a tax perspective, and if there are any reg implications. I own my plane as an individual, not as a LLC, so that may need to change.

 

The concept seems simple enough but I'm curious how others do this.

[M20F]

I want to defray some of my costs and am open minded to ideas like this. I wonder though about the insurance cost of renting an airplane to even one person.

I pay 280 for hangar and 100 for insurance monthly. If someone gave me two hundred a month and then sixty per hour dry rent I think it would be a win for both.

If it is just one person get them named on the policy.