Financing with Missing Logs

[Brian Scranton]

Gents--trying to finance a bird with missing logs and I am running into brick walls at each turn. Wondering if anyone has any recommendations (beyond "find a plane with complete logs") for me. AOPA finance seems like they might be able to help...so, I am not dead yet. 

Short story: great 1975 Mooney M20F with turbo, 430, nice in and out...Vref is near $70K, deal is for $52K--logs since 1991 (when my seller acquired it) and a certified statement that although logs are missing, the previous A&P states that all ADs and Annuals were compiled with. 

Every A&P I speak with states that is a non issue from an airworthiness perspective--it is just about the resale. And for the banks, its about if they had to repossess the airplane, it would have a zero value due to missing logs (or so they say). 

Thanks for your help!

Brian

[M20F]

I used Wings Financial and all they wanted was 2 appraisals (used appraiser and a AI), great rates, no issues.  

[Brian Scranton]

And that was with missing logs?

[carusoam]

There are two separate issues here... Airworthiness and finance.

Not having a full history is a challenge.  Overcoming it, is often documenting each piece (model number, serial number) that has been put in the plane.  This leads to discussions on what hardware is at the center of the engine.

It would be advantageous if the most recent records include documentation of OH'd engine and prop.  That kind of thing.

From a finance point of view, Model and serial number of the major parts should be enough to match to the POH.  Fortunately these are on the exterior, relatively easy to find.

What the banks are usually trying to do is determine if somebody has cobbled together unrelated parts that look like a Mooney but is not an airworthy easy to re-sell Mooney.

An unknown or undocumented engine OH would be challenging to overcome if you couldn't get a copy from the people who did the work.

finding a finance company that knows what a GA plane is will be helpful.  I used BofA initially. They had a person that knew the ropes...

I am just a PP, not a mechanic...

Best regards,

-a-

[Hank]

I just used my local credit union. The plane was worth more than I was borrowing. Never asked about logs or nothin'

[Yetti]

Most of the M20F ADs are for earlier years than 1975.   Seems like you could pay an A&P to do a AD report and sign it off.  The comment about an engine rebuild prior to the current logs is valid

[Brian Scranton]

I know fellas. Logic evades this...banks are saying no, left and right! Again, though, AOPA seems like they will be able to help. I'll keep ya posted. 

[steingar]

Mine was missing some logs, old ones.  Just not that big a deal to me.  I financed with home mortgage, so no one needed to loan on the airframe.  To be honest, the Mooney is the first thing for which i ever went in debt.

This will grow more common.  The aircraft just aren't getting any younger.

[rbridges]

I thought they wanted copies to verify engine and airframe times but don't remember wanting the entire logs. I used US Aircraft finance at the time.  It's been several year's though. 

[LANCECASPER]

Be careful not to get enamored with the price you're paying vs. the price on the Vref valuation tool available for AOPA members. The Vref tool is always high and in some cases by a huge amount. 

Missing logs are also a way for an unscrupulous seller to hide previous damage history, thinking that the missing logs will be less of a hit on value than the damage.

You will also sell the airplane someday. Buying this one will make his problem your problem.

Edited February 13, 2016 by LANCECASPER

[ArtVandelay]

Actually vref is getting better, but it lags the market, when the market tanked it was still using old data, you can tell it's still somewhat dated, no GTNs, ADSB boxes, in the optional avionics selections.

[Awful_Charlie]

Is the difference in the rate on the loan enough to make a personal loan unattractive? I'm pretty sure just about any bank over this side of the pond would do a loan for whatever you want (even something without a re-sale value, such as a holiday) for 50k and only be interested if in you can pay it back, and not give a hoot about what you were using it for.

Edited February 13, 2016 by Awful_Charlie

[Bravoman]

1 hour ago, Awful_Charlie said:

Is the difference in the rate on the loan enough to make a personal loan unattractive? I'm pretty sure just about any bank over this side of the pond would do a loan for whatever you want (even something without a re-sale value, such as a holiday) for 50k and only be interested if in you can pay it back, and not give a hoot about what you were using it for.

I'm pretty sure the unsecured loan of which you speak has gotten much harder to obtain over here. That is why hard money lending has gotten so popular, but that is typically done by individuals at much higher rates, and even those are secured a lot of times. Back in the day a lawyer like myself with a practice could walk in to a bank and get a 200k loan on essentially a hand shake. Not so much anymore.

[midlifeflyer]

Banks are very heavily regulated when it comes to ascertaining loan-to-value issues. Plus, from a reality standpoint, aircraft repossession and resale in case of default is not easy even when everything is perfect. So they understandably shy away from loans where resale might be even more difficult. You and I might be willing to put up our money and take a financial risk in situations where they are not.

[DAVIDWH]

My local bank was really demanding.

They required an insurance policy. Case closed.

As for future guidance, you might want to revisit the movie Forest Gump.

What was the take away, oh yea, " Run Forest Run" !!

I encountered a couple of no logs for sale aircraft in my search and I just moved down to the next phone #.

A little patience can sometimes work out well. Purchasing aircraft is a lot like buying tires and batteries, you only get what you pay for.

[PTK]

Missing airframe logs requires a "run, don't walk" type of attitude! I see no good reason or excuse for an airplane to be missing logs. It illustrates blatant disrespect for and total lack of appreciation in the importance of safekeeping logs, Imo. 

My original logs are in a safe deposit box. I update them as needed. I have a copy on a thumb drive and that's what mechanics get.

Yes, there are good honest sellers of airplanes with missing logs because they were "lost" over the years. But there are lots of big question marks with no good excuse. None. It's not the buyer's or the bank's problem. 

Does the fact that the bank doesn't want an airplane with missing airframe logs tell you anything?!

If the bank doesn't want it, do you?

 

[gsxrpilot]

On the other hand, my airplane doesn't have logs prior to 1982. But I've got a stack of notebooks, two feet tall that have every receipt, STC, work order, etc. Also Don Maxwell went over it with a fine tooth comb and pronounced it good. It's been two years and still very happy.  Enough people know my plane, I don't think I'll have any trouble selling it if I ever decide to. In fact the previous owner has called twice already asking if I'd sell it back to him.

[Oldguy]

While you may not be able to get the logs back, you should be able to get all of the 337's and registration information going back to the planes manufacture. And if you even consider buying this plane, do it and look over them with a fine tooth comb.

My first plane was missing the original log book (1 of 3), but everything looked great. Only when I went to sell it later and pulled all of the FAA records (which I didn't do when I bought it) did I find the log book was missing due to the fact it had been declared destroyed in a windstorm, the registration cancelled and subsequently rebuilt. Took an enormous haircut when I sold it (50%). Caveat emptor.

John

[Yooper Rocketman]

I sold my M20F to a doctor down in Griffin GA (N929PG).  I had installed a factory OH IO360A1A and had about 600 (or maybe 800) hours on it,  The guy called me a few years later and said he lost the engine log book and asked if I could recreate it.  Lucky for him, I used the plane for business so still had every receipt and records of every service and repair.  He sent me a blank engine log and I spent several nights researching and recreating the log book, including getting the A&P and IA endorsements where required.  He offered to pay me whatever I wanted, but I didn't have the heart to charge him for his misfortune (the log book had been lost by a mechanic working on his plane).  Anyway, sometimes if you find a past owner with their s**t together, and the lost book is not too far back in the a/c age, you might be able to recreate one.

The OP's case doesn't sound like this would be an option, but I would be looking up those earlier owners if I could to see what gives.  Checking the FAA records for 337's and major alterations, as stated already, would be a must too.

Tom

[LANCECASPER]

https://aerospacereports.com/services

[Brian Scranton]

WINGS FINANCIAL!!!! Those guys ROCK! Thanks Mike...

[carusoam]

Brian,

Looks like you may be here a while.  Consider updating your avatar details when you get a chance.

Congrats on getting over your early hurdle.  There will probably be more to come.

We'll keep a light on...

Best regards,

-a-

[FlyboyKC]

On 2/16/2016 at 7:56 AM, LANCECASPER said:

https://aerospacereports.com/services

I second this. Yes its $75-$99 but money well spent. You get a title search, and all the information thats on record for that aircraft. 337s from the FAA and even a accident report from the NSTB if the plane was involved.

I once had a 64 Cherokee 140 that I bought in 2000. I discovered from the FAA 337 it had part of the wing replaced. When to the NSTB and found that in 1970 the plane had a hard landing. There was only a single line entry in the logbook. 30 years later it was flying strong and many eyes had inspected it so I had never worried about it. But the fact remains that things can be missed in the logbook.