Partnership Pricing

[Godfather]

I've been looking at partnerships to add another plane to the stable.  However, I have yet to find one that offers a competitive price.  Overall I find that current owners do not (want to) know the value of the plane they are trying to divide.

A funny recent example is a m20c that sold yesterday on eBay.  The new owner jacks the price  $8k minutes after the auction ends is trying to sell two other shares.

It looks like the only fair way is to find a group / few individuals and start looking for a plane together and pay market value for it.

 

[CaptainAB]

There a lot of ways to do it. And even quite a few ways to do it right. The operating agreement is key.

[Mcoyne34]

Seems to me like the best way would be to find partners first, then buy it together. 

[LANCECASPER]

13 minutes ago, Mcoyne34 said:

Seems to me like the best way would be to find partners first, then buy it together. 

There's a lot of truth to that, otherwise even though it might be 50/50 the one who owned 100% of the airplane to begin seems to always feel like it's their airplane that they are letting the other person fly.

[1524J]

I had the same partner on 3 different planes and we never once had a cross word about the partnership.....it's all about communication and expectations being clear....and realizing nobody is perfect. Our setup.... All fixed expenses were split. Initial money down, loan, insurance, hanger rent, and a reasonable fund for annuals. Then we paid a set amount for each hour flown which went into a kitty to pay for an overhaul and unexpected expenses.....which really are expected.....it's a matter of when, not if. When you flew the plane, it was refueled, all personal items removed, leading edges and windshield cleaned. Notepad logging hours and any squawks or concerns, kept in the same spot and reviewed before each flight. It worked for us.

[Danb]

Great topic im considering a partner since i fly my plane enough. Im neurotic enough that i hope would take good care of the plane asvi would.

[Becca]

We've seen this too.

We own a plane in a partnership, so we bought ours together so there were no shenanigans.  But we've seen some Mooney partnerships advertised in the area with a 1/4 or 1/3 share advertised for the price of what we'd consider the entire value of the airplane.  I think what's really going on is that some people would like to rent out their airplane as a profit making (ish) operation and aren't really looking for a partner but calling it one.  I think those people would be better served just selling block time and naming the person they are selling to on their insurance in exchange for splitting the price of the policy.  Call a bird a bird, a duck a duck, or whatever. 

But you are seeing this same thing with so-called "flying clubs" more and more.  We've seen FBO's attempt to rebrand their rental outfit as flying clubs -- but if the members don't actually own and operate a plane and elect a managing board, its just a discount on rental planes in exchange for monthly dues.  Even actual member run clubs sometimes resemble a scheme for the owners of lease-back airplanes to rent their planes out while the club members pay the insurance. 

I think maybe I'm getting jaded about the whole thing.

Edited June 3, 2016 by Becca

[yvesg]

I have been looking for a partner for over a year now, after bringing the aircraft to a certain level. Was quiet for a while and then suddenly lots of interest: One wanted to buy it outright. One wanted a small share while I wanted a 50% ownership. One wanted 50% but after some research found out past accidents/incidents. Each time it came close... I always started to feel bad and tell myself: don't do it.... you will regret it...

Each time In the past I did not listen to that little voice in me I would regret it so I always do now!

I think I will give up searching!

Yves

[peevee]

14 hours ago, Mcoyne34 said:

Seems to me like the best way would be to find partners first, then buy it together. 

that's almost impossible. It's best to buy the plane then sell shares. getting people to agree on something never works, at least in my experience.

Edited June 3, 2016 by peevee

[neilpilot]

14 minutes ago, peevee said:

that's almost impossible. It's best to buy the plane then sell shares. getting people to agree on something never works, at least in my experience.

Just the opposite experience.  I purchased a Mooney in 1989, and then another in 2012, both times with a partner.  Agreement was not an issue.

[peevee]

2 minutes ago, neilpilot said:

Just the opposite experience.  I purchased a Mooney in 1989, and then another in 2012, both times with a partner.  Agreement was not an issue.

Every time I tried they flaked on me. One of them was going to be a 50/50 and he waited until just after I leased a hangar to flake....

[Norian]

Does any of you guys live in south florida?im in the same boat!have a great deal on a plane,its just two of us and we need 1 or two more!

[N601RX]

I think if a couple of people are serious about buying a plane under a partnership they should go ahead and form the partnership/LLC/Bank Account and place some amount of money in it.  This commits everyone.  Then go look for a plane/hanger. 

[capthaak]

I think if a couple of people are serious about buying a plane under a partnership they should go ahead and form the partnership/LLC/Bank Account and place some amount of money in it.  This commits everyone.  Then go look for a plane/hanger. 

I spent around 5 years until the planets aligned to find the right partners. Having a similar mission certainly helps! We formed the LLC, opened the checking account, then bought our J model, after considering other aircraft. Efficiency won and everyone is happy. My only worries are when one decides to leave.

Sent from my iPad using Tapatalk

[gsxrpilot]

I was trying find a partnership to buy into a couple of years ago. After failing to find one, I went ahead and bought an airplane thinking I'd find a partner after the fact. I quickly decided I could afford the plane by myself and then didn't want any partners.  I've thought it would be nice to have a faster Mooney like a Bravo but would need a partner to help with the expense. And I just don't want a partner in my primary airplane.

I've been thinking lately of buying a second airplane just for fun. I'm thinking something cheap, aerobatic, and fun. And I believe in this situation a couple of partners would be fun. Not just for the cost savings, but for the camaraderie.  So if anyone in Austin or San Marcos would like in on the fun, let me know.

[Godfather]

28 minutes ago, gsxrpilot said:

I've been thinking lately of buying a second airplane just for fun. I'm thinking something cheap, aerobatic, and fun. And I believe in this situation a couple of partners would be fun. Not just for the cost savings, but for the camaraderie.  So if anyone in Austin or San Marcos would like in on the fun, let me know.

This is what I'm trying to do.  Already have a primary plane so I don't mind sharing a fun plane.

[mike_elliott]

18 hours ago, Mcoyne34 said:

Seems to me like the best way would be to find partners first, then buy it together. 

I had a great partnership with a gent who got me involved in flying. First, we bought a c150 together, then a M20F together. He was totally trustworthy, and a very accomplished pilot. Only because he moved logistically away did our partnership end, I offered to buy him out of the F, naming a price I thought was fair, because I felt bad about him paying 1/2 of the fixed costs while not really using the plane. He also had the choice to buy me out at that price.

Because I knew Jay for a number of years prior to us being in this partnership, I also knew of his character. A partnership is a financial marriage to an aluminum mistress, and the partners cannot feel jealous, taken advantage of, take advantage of, or have different expectations of their aluminum mistress. The right partner, like in most things in life, is key. Don't settle for the first one with the right amount of zero's on the check.

[Bob - S50]

We went the find the partners first route.

I found 3 others interested.

We each said how much we could put in.

We decided what kind of plane we wanted (J).

We agreed to financial and operating agreements.

We all looked until we found one.

We all agreed on the changes we wanted to the one we bought.

None of us could afford to buy a J on our own.  The only way we could have one was to find partners to pool money to get something we liked.  However, our partnership allows for uneven ownership.  Each owner gets an equal vote on decisions.  The only time it makes a difference is if we sell the plane.  When we do, we each get a share of the proceeds in proportion to our ownership percentage.

[Jerry 5TJ]

It is much harder to find a good partner than to find a good plane.  The plane you usually can fix with cash, not so a partnership.  Find a partner you like and trust first. 

I've had several good and one great plane partnership experiences.  

I would be happy to enter another with someone this year and together buy a ... Something Better.

 

[N201MKTurbo]

I was in a partnership when I bought my current Mooney. I was flying the plane about 20 times as much as my partner. Even though we had a signed agreement about splitting the fixed costs and paying the hourly per the hours flown, my partner thought that I should be paying 95% of all the costs. It ended badly and I lost a friend.

My advice in a partnership is to make sure all partners have similar missions and that the flying is about equal.

[eman1200]

I've been looking in the Charlotte area for a while now. Finally talking with someone who seems serious. Who knows though.

[chrisk]

I saw this and would really like to find a few partners.  Of course, I need about 400 more hours before I can fly one.

 

http://www.barnstormers.com/listing.php?id=1144154