gitmo234 Posted November 21, 2017 Report Share Posted November 21, 2017 Hey All, I'm considering turning my 66 E into a partnership/share based asset, with me retaining the majority share. Does anyone have any examples setups, or experience in doing so? Looking at everything from buy-in, hourly rates, managing scheduling, etc as well as general input on how easy it was to do and ease of finding partners? Quote Link to comment Share on other sites More sharing options...
RobertGary1 Posted November 21, 2017 Report Share Posted November 21, 2017 I’d be curious how you handle assessments etc for unequal shares. -Robert Quote Link to comment Share on other sites More sharing options...
gitmo234 Posted November 21, 2017 Author Report Share Posted November 21, 2017 Originally I was thinking that % of ownership is % of contribution, but right now I'm also looking at means of establishment so I always had the right to buy everyone out and re-establish single owner control. I don't predict the need, but ultimately I still want the ability to fairly take it back. I'm just not sure how this is typically setup legally Quote Link to comment Share on other sites More sharing options...
Oldguy Posted November 21, 2017 Report Share Posted November 21, 2017 AOPA had some good documents on setting up a partnership or club over the past couple of years to get people back into flying. If you are a member, it might be worth a call to them to see what they can provide or point you towards. Quote Link to comment Share on other sites More sharing options...
ArtVandelay Posted November 21, 2017 Report Share Posted November 21, 2017 First I would put the plane in an LLC.You can split operation expenses equally, but upgrades would have to come out of your pocket. You’d also that to prefund the engine,prop overhaul reserves based on current hours. It would not be fair to have an engine with with 1900 hours and expect new partners to pay for equal percentage of an overhaul. If you treat them has renters instead of partners, just come up with a fair hourly rate. Quote Link to comment Share on other sites More sharing options...
MIm20c Posted November 21, 2017 Report Share Posted November 21, 2017 Not to be negative but I would never join a partnership where the members did not have equal voting rights. Planes are cheap, it’s the maintenance, storage, and upgrades that eat you alive. Only way I’d join your “club” is if I just paid an hourly rate to help cover expenses. Otherwise the plane turns into a partnership plane, not your plane anymore. 3 Quote Link to comment Share on other sites More sharing options...
gitmo234 Posted November 21, 2017 Author Report Share Posted November 21, 2017 (edited) It's not really about voting rights typically, its about my ability to say "this guy I partnered with is a dick, he's screwing up the airplane, and impossible to work with so I'm taking it back, here's what I owe you" or "my life and free time have changed, I can now dedicate more time to flying and I have enough time to want the aircraft back as a sole owner, here's what I owe you and when it changes" Edited November 21, 2017 by gitmo234 1 Quote Link to comment Share on other sites More sharing options...
ArtVandelay Posted November 21, 2017 Report Share Posted November 21, 2017 Treat them as renters: they put down a refundable deposit they pay an hourly rate make sure you have a copy of their insurance policy (insurance savvy types can recommend how it should be written), don’t forget the LLC. come up with some online way of reserving the plane. at any time you can take the plane back, return their deposits, easy peasy. 3 Quote Link to comment Share on other sites More sharing options...
mooniac15u Posted November 21, 2017 Report Share Posted November 21, 2017 It may be difficult to find anyone who wants to enter into such a one-sided agreement. Why would a partner want to invest in any kind of upgrades or expensive maintenance like an engine overhaul? Those things rarely increase the aircraft value enough to get your money back in a buyout. The value in those kinds of investments usually comes in the long-term use. If you can end the partnership at any time for any reason there is no guarantee of getting any return on big expenses. 1 Quote Link to comment Share on other sites More sharing options...
MIm20c Posted November 21, 2017 Report Share Posted November 21, 2017 I was a little to negative in my initial response but the previous two posters said it a lot better. Quote Link to comment Share on other sites More sharing options...
N201MKTurbo Posted November 21, 2017 Report Share Posted November 21, 2017 I would just set it up as a flying club. You could lease the plane to the club. Then charge by the hour. You will have to pay the same as the others. If the members want to work on the plane then trade their time for flying hours. Otherwise one of the other partners could consider you a dick and throw you out. 1 Quote Link to comment Share on other sites More sharing options...
Bob - S50 Posted November 21, 2017 Report Share Posted November 21, 2017 If you want partners, they should have voting rights (that's what we have). If you want total control but just someone to help share costs, I would do it like TeeJayEvans said. Each member puts down a small refundable deposit, say $1000 or $2000. If they damage the plane they forfeit the deposit but as long as they don't do any damage they get all their money back when they leave or you buy them out. We charge a monthly fee to cover fixed expenses: hangar, insurance, annual, GPS subscriptions, registration. At the end of each year, you could refund excess funds. We charge $250/month (4 of us) which is more than we need. We use the excess to build up a reserve because we are equal partners. We charge an hourly rate to cover hourly related expenses like oil changes, future engine overhaul, future prop overhaul, magneto inspections. For us that is $30/hour tach time. You would keep this money if they leave. Since you want total control, you should have to pay 100% of unexpected repairs and upgrades. We use a Yahoo calendar to schedule the plane. First come first served, nobody has a priority. Make the reservation and let everybody else in the group know. If nobody objects then the reservation is confirmed. We have procedures to follow if there is a conflict. Make sure to also have operating rules. Where can you go? How long can you be gone? How much fuel to you put in the plane when you are done? How do you operate the engine? Anything you find important should be spelled out. Best of luck. Quote Link to comment Share on other sites More sharing options...
Guest Posted November 21, 2017 Report Share Posted November 21, 2017 2 hours ago, gitmo234 said: It's not really about voting rights typically, its about my ability to say "this guy I partnered with is a dick, he's screwing up the airplane, and impossible to work with so I'm taking it back, here's what I owe you" or "my life and free time have changed, I can now dedicate more time to flying and I have enough time to want the aircraft back as a sole owner, here's what I owe you and when it changes" It sounds like you want a “shot gun clause”. If so it should work both ways. Clarence Quote Link to comment Share on other sites More sharing options...
gitmo234 Posted November 21, 2017 Author Report Share Posted November 21, 2017 1 hour ago, M20Doc said: It sounds like you want a “shot gun clause”. If so it should work both ways. Clarence That's sort-of it. Basically buy out the partner for the cost of membership + major contributions for upgrades in limited circumstances like excessive/repetitive damage. Although, thinking about it now, since I've done just done ADS-B in/out and some other upgrades, I'm not so keen on splitting it up just yet. I may just rent it out a bit to keep the hours up until my work schedule calms down. I'm currently working about 50+ hours a week, plus command of a military unit and a special detail assignment I'm working, and my employer is pushing very hard for me to start a PhD program Quote Link to comment Share on other sites More sharing options...
Oldguy Posted November 21, 2017 Report Share Posted November 21, 2017 1 hour ago, gitmo234 said: That's sort-of it. Basically buy out the partner for the cost of membership + major contributions for upgrades in limited circumstances like excessive/repetitive damage. Although, thinking about it now, since I've done just done ADS-B in/out and some other upgrades, I'm not so keen on splitting it up just yet. I may just rent it out a bit to keep the hours up until my work schedule calms down. I'm currently working about 50+ hours a week, plus command of a military unit and a special detail assignment I'm working, and my employer is pushing very hard for me to start a PhD program Whichever way you go, put it in an LLC. And when you go for insurance, be prepared for a bit of a bump if you are renting it out. It may depend on the experience level of your renters/partners, but if it is open for anyone to rent, with obvious requirements met, insurance may be painful. Quote Link to comment Share on other sites More sharing options...
RobertGary1 Posted November 21, 2017 Report Share Posted November 21, 2017 6 hours ago, teejayevans said: Treat them as renters: they put down a refundable deposit they pay an hourly rate make sure you have a copy of their insurance policy (insurance savvy types can recommend how it should be written), don’t forget the LLC. come up with some online way of reserving the plane. at any time you can take the plane back, return their deposits, easy peasy. That’s leaves a lot of insurance holes though. If the plane is totaled as a result of a brake line going out neither the owners policy will Pay (not approved pilot) nor the pilots (not pilot error). You really need to list all polots who’ll have regular access. Even open pilot warranty usually exempt anyone with regular access. Quote Link to comment Share on other sites More sharing options...
gitmo234 Posted November 21, 2017 Author Report Share Posted November 21, 2017 It may just be better to find a partner(s) who are on the same page as I am and arent maniacs, etc who understand whats going on vs trying to game it 100% on paper and structure, too. Quote Link to comment Share on other sites More sharing options...
RobertGary1 Posted November 21, 2017 Report Share Posted November 21, 2017 Also be careful with llc’s. Some states like California charge an operating fee (regardless of state of incorporation). Californian is $800 /yr Francise fee for llc’s reagrdless of the State they’re registered in if there is an aircraft based in California. -Robert Quote Link to comment Share on other sites More sharing options...
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