How to place a value a plane that's been sitting?

[David_H]

I've been seeing a lot of C,E,G, and F models for sale over the past few months with "half-time" engines that haven't been run but a few hours over the last few years. 

It's hard to imagine taking a $25K engine gamble on a plane and have a high risk of having $65K tied up in a plane that would likely only bring $35-40K... maybe a little more depending on the model, equipment, and history. 

What happens to those planes? Does someone finally roll the dice and buy... or are the planes just doomed?

The "wait and let the market recover" mentality looks to be putting several planes in jeopardy of never returning to service. 

[StevenL757]

Welcome David.  The engine is one part of that equation.  A bigger concern on planes of that age range can be corrosion...particularly spar corrosion.  Where the aircraft has spent (or is spending) its life is also a factor.  Do a search for corrosion on here, and you’ll find a lot of good reading from folks’ personal experiences that will provide more guidance and context around your questions.  There are some very informative posts on the topic.

Steve

[gsxrpilot]

I would probably take the gamble but only under certain conditions...

1. It would have to have the right panel including a proper autopilot (Stec 30/altitude) at the minimum, and WAAS GPS.
2. It would have to pass a rigorous pre-buy at one of just a handful of MSP's that I would use.
3. Finally the offer would assume a runout engine. 

I would never take a risk on this type of plane because of the price. It would have to be a plane I really wanted for other reasons.

[mike_elliott]

6 hours ago, David_H said:

I've been seeing a lot of C,E,G, and F models for sale over the past few months with "half-time" engines that haven't been run but a few hours over the last few years. 

It's hard to imagine taking a $25K engine gamble on a plane and have a high risk of having $65K tied up in a plane that would likely only bring $35-40K... maybe a little more depending on the model, equipment, and history. 

What happens to those planes? Does someone finally roll the dice and buy... or are the planes just doomed?

The "wait and let the market recover" mentality looks to be putting several planes in jeopardy of never returning to service. 

If your buying an unknown plane, sitting out in the weeds with flat tires that hasnt run but a few hours over the last few years, you are buying a project and you and the seller know it. If you are buying a plane that was well maintained, owner lost his medical 3 years ago, has pickled the engine or keeps it in a climate controlled hanger or on a dehumidifier, dont insult him and waste your or his time with an offer that you know he wont accept. Any plane that will only bring 35-40K will be easy to put 65K into most likely. Yep, when buying in this range, it will be very easy to get upside down, but if you are flying, remember the value of that isnt free and should be factored in the equity equation.

[steingar]

Saw lots of hangar queens while I was looking.  No way in hell.  One of those things could turn into a project that could easily out consume its value.  I passed on them to find a flying airplane, and you should to.  There are very, very few bargains in aviation.  The best ones are reworked aircraft selling for a premium price.

[David_H]

Most of the planes I've seen lately fall within the "Hangar Queen" category. At some point those will almost certainly be demoted to "Ramp Queens". Once that happens, it's almost certain to be too late to save without being upside-down. 

It looks like a recipe for extinction since there are more plane going out of service that being brought into service.

It's very sad to see planes that could be returned to service get caught up in the downward spiral. 

 

[David_H]

5 hours ago, StevenL757 said:

Welcome David.  The engine is one part of that equation.  A bigger concern on planes of that age range can be corrosion...particularly spar corrosion.  Where the aircraft has spent (or is spending) its life is also a factor.  Do a search for corrosion on here, and you’ll find a lot of good reading from folks’ personal experiences that will provide more guidance and context around your questions.  There are some very informative posts on the topic.

Steve

I've been searching and reading this forum for a few years. Corrosion is certainly something to be concerned about.

Some of the corrosion threads I've read look to be the direct result of some that took the gamble and lost.

[David_H]

3 hours ago, gsxrpilot said:

I would probably take the gamble but only under certain conditions...

1. It would have to have the right panel including a proper autopilot (Stec 30/altitude) at the minimum, and WAAS GPS.
2. It would have to pass a rigorous pre-buy at one of just a handful of MSP's that I would use.
3. Finally the offer would assume a runout engine. 

I would never take a risk on this type of plane because of the price. It would have to be a plane I really wanted for other reasons.

Most of the planes I seen do not have an AP... which is a huge drawback. Most still have shotgun panels, no GPS, and poor avionics. That said, some would be absolutely fine for mostly VFR. 

A pre-buy looks to be a necessity... but getting to one is almost a problem since many can't make it past the log-book scan. The expected risks and expected sell prices don't balance out and it's not worth wasting any more time at that point. 

Nobody wants to take the loss on an engine that wasn't run regularly. 

[carusoam]

When you find a plane that belongs in the too expensive category... but suddenly, today, is in the affordable range...

Somebody knows something...

If you don't know why this happens, you may be setting yourself up for a big challenge...

Some planes sell at deeply discounted prices. They get bought by people that have the experience to add value back into the airframe.

don't expect that normal people can bring a plane back from the weeds, inexpensively...

But don't expect that all planes sitting in the weeds are toast either....

Pre-purchase inspections were invented specifically for this purpose.

It is a huge game of risk v rewards.  Don't take on any more risk than you can afford.  Have a plan B, and C, and... when taking on ownership risks...

Some planes are best for a mechanic to own...

If you see a J at normal C prices...

If you see an F at a B price...

The whole plane is engine, instruments and airframe.... they all have to be there to make a plane usable...

Know how to....

• read logs
• research the plane's history
• Look over a plane from the outside
• select a PPI provider

That kind of thing...

nobody buys a plane hoping the engine doesn't fall off...

Hope and wishful thinking is a crappy part of any flight plan.

 

look at buying a plane more like the process of buying a house.  Less like buying a car...

 

Don't be surprised... a Chevy mechanic can do an excellent PPI if you are buying a used Vette too...

mitigate your buying risks any way you can.  

Best regards,

-a-

[carusoam]

11 hours ago, David_H said:

 

What happens to those planes? Does someone finally roll the dice and buy... or are the planes just doomed?

The "wait and let the market recover" mentality looks to be putting several planes in jeopardy of never returning to service. 

1) Those planes get bought...

• unknowingly...  it happens.
• get negotiated as if the engine is worn out... happens often.
• get a strong PPI to demonstrate what its real value is.  Happens when the buyer and seller are both knowledgeable...and interested in the sale...

2) Wait until the market recovers?

• The market recovered.
• Planes are selling.
• The economy is expanding.
• unemployment is very low.
• I saw a Lambo and a McLaren on the road yesterday... in ordinary holiday traffic...
• no fuel shortages...
• no 100LL issues...
• interest rates are as low as they are ever going to be...
• inflation hasn't started.

3) one thing that isn't changing much.... interest in being a PP costs a ton of dough... limiting the PP population...

Make it happen! Do it wisely. Nobody can make it happen for you.  

Encouraging PP thoughts only. Not a sales guy.

Best regards,

-a-

[Guest]

A corroded engine is easily replaced with a new engine.  A corroded airframe can be a death sentence for it.

Clarence

 

[MIm20c]

16 hours ago, David_H said:

The "wait and let the market recover" mentality looks to be putting several planes in jeopardy of never returning to service. 

On the other side you have the “wait for the market collapse” who really want a nice J for the price of a Chevy Malibu.  Serious pilots will find deals that bridge the gap, and many can find them in less than a year of hard looking. 

[David_H]

3 minutes ago, MIm20c said:

On the other side you have the “wait for the market collapse” who really want a nice J for the price of a Chevy Malibu.  Serious pilots will find deals that bridge the gap, and many can find them in less than a year of hard looking. 

You're right about there being another side. Selling is likely no easy task either. 

That said, the end result looks like it stays the same regardless of the side once a certain point is reached.

[MIm20c]

4 minutes ago, David_H said:

You're right about there being another side. Selling is likely no easy task either. 

That said, the end result looks like it stays the same regardless of the side once a certain point is reached.

Totally agree and I personally believe the problem will expand in a decade or two.  However, I choose to role the dice and hopefully log a couple thousand hours while it occurs. 

[Cruiser]

A smart buyer is going to factor the risk when there are multiple choices to pick from. 

If you had a choice of a mid time engine that was already through its first major or one with the same hours but not to its first major overhaul which would you choose?

All the good ones will be bought until there are none left the others get negotiated down or pulled from the market

[David_H]

44 minutes ago, Cruiser said:

A smart buyer is going to factor the risk when there are multiple choices to pick from. 

If you had a choice of a mid time engine that was already through its first major or one with the same hours but not to its first major overhaul which would you choose?

All the good ones will be bought until there are none left the others get negotiated down or pulled from the market

You bring up an interesting aspect... negotiate down or negotiate up? 

Just as a hypothetical example: a late 60s M20, factory shotgun panel, dated radios that could use some work, no corrosion issues, "reasonable" interior and paint, priced with a runout engine would be worth $20-25K perhaps... maybe slightly less?

Subtract $9K for the weeping tanks that will need resealed very soon.

Subtract $5K to get the radios back into usable condition if all goes well (no GPS).

That brings an offer down to $11-16K depending on a multitude of other factors! At that point, the conversation doesn't seem worth engaging in. 

Say the owner doesn't want to turn the plane into Beer cans though.. someone puts the negotiation time in to make the purchase, write the $16K for the purchase, $25K check for the rebuild, $9K for the tanks, and $5K for the radios.

Which brings us back to around $55-60K for a late 60s M20 with a shotgun panel, basic radios, "reasonable" paint and interior, no GPS, no AP, and a good engine... if everything goes well. That's not accounting for PPI costs, ferry costs, and other costs that I'm certain to be missing. The time investment of the endeavor is substantial as well.

[carusoam]

At 11-16 amu you have negotiated the whole thing down to the price of a non-flying airplane.

I sold my M20C for more than that in unairworthy condition. The buyer had to make significant improvements prior to flying/selling it.

buying the cheapest version of anything is a very expensive road to go down...

Especially if this is all new to you.

For reference... in Y2K... my M20C was bought for more than 30amu... mid time engine. Sitting for two years.

I outlined the probable risks, mitigated a couple of them, and flew for a decade, wearing the rest of it out...

You seem to be focused on a couple of issues.  You may want to broaden your scope.

Go see what you can get for 60amu and skip the mystery of what you can turn a 16amu airplane into...

Best regards,

-a-

[David_H]

15 minutes ago, carusoam said:

At 11-16 amu you have negotiated the whole thing down to the price of a non-flying airplane.

I sold my M20C for more than that in unairworthy condition. The buyer had to make significant improvements prior to flying/selling it.

buying the cheapest version of anything is a very expensive road to go down...

Especially if this is all new to you.

For reference... in Y2K... my M20C was bought for more than 30amu... mid time engine. Sitting for two years.

I outlined the probable risks, mitigated a couple of them, and flew for a decade, wearing the rest of it out...

You seem to be focused on a couple of issues.  You may want to broaden your scope.

Go see what you can get for 60amu and skip the mystery of what you can turn a 16amu airplane into...

Best regards,

-a-

I agree with you. It's really not worth the energy and drama to consider those planes. I strongly dislike knowing those planes are destined for doom though. 

More importantly, how does GA survive if the only way to really go anywhere is for a prospective new pilot to be ready to write a $60K check after coughing up $8-10K for the PP ticket? I have several friends that I frequently try to talk into getting their tickets. I have very little to say when it comes to costs... maybe my answer should be "too much" and quit trying to talk them into it.

[Skates97]

52 minutes ago, David_H said:

I agree with you. It's really not worth the energy and drama to consider those planes. I strongly dislike knowing those planes are destined for doom though. 

More importantly, how does GA survive if the only way to really go anywhere is for a prospective new pilot to be ready to write a $60K check after coughing up $8-10K for the PP ticket? I have several friends that I frequently try to talk into getting their tickets. I have very little to say when it comes to costs... maybe my answer should be "too much" and quit trying to talk them into it.

I have talked to a lot of friends about flying, but I don't try to talk any of them into doing it. If they have to be talked into it I don't think they will stick with it very long. It's expensive, takes a lot of time, and in my opinion you really have to want it. That doesn't require "talking into," it just requires a little taste of it to hook them. 

[gsxrpilot]

2 hours ago, David_H said:

You bring up an interesting aspect... negotiate down or negotiate up? 

Subtract $5K to get the radios back into usable condition if all goes well (no GPS).

You're at least $5K, and probably 10K light on your radio estimate. 

It truly is a tragedy, but it is also certainly the American way. Buy something, use it up, throw it away. 

I've said it before, my airplane will never sit and will never not be maintained. If/when I'm ever in the unfortunate situation where either I can't fly enough, I'll bring on a young time building pilot for the cost of insurance and make him a set of keys. And if I can't afford to maintain the machine, it will either be sold, or I'll take on some partners.

All this means that when the time comes to sell MY Mooney, it will certainly command a premium price. As you say, well maintained and regularly flown are getting more and more rare.  

By example, just look at the line around the block waiting for @Bob_Belville to kick the bucket. They're like vultures after what, with the upcoming paint job, will likely be the best E model in the world. In fact even though I fly a 252, I'm holding a place in that line as well. That will be a very valuable M20E.

[Niko182]

1 hour ago, gsxrpilot said:

You're at least $5K, and probably 10K light on your radio estimate. 

It truly is a tragedy, but it is also certainly the American way. Buy something, use it up, throw it away. 

I've said it before, my airplane will never sit and will never not be maintained. If/when I'm ever in the unfortunate situation where either I can't fly enough, I'll bring on a young time building pilot for the cost of insurance and make him a set of keys. And if I can't afford to maintain the machine, it will either be sold, or I'll take on some partners.

All this means that when the time comes to sell MY Mooney, it will certainly command a premium price. As you say, well maintained and regularly flown are getting more and more rare.  

By example, just look at the line around the block waiting for @Bob_Belville to kick the bucket. They're like vultures after what, with the upcoming paint job, will likely be the best E model in the world. In fact even though I fly a 252, I'm holding a place in that line as well. That will be a very valuable M20E.

id have to say he has a pretty good competition for the top E.
https://www.controller.com/listings/aircraft/for-sale/21352509/1966-mooney-m20e-super-21
Pity the market for people willing to spend 160K on an E is so small. I do believe it is worth every
penny though.

Edited December 27, 2017 by Niko182

[gsxrpilot]

17 minutes ago, Niko182 said:

id have to say he has a pretty good competition for the top E.
https://www.controller.com/listings/aircraft/for-sale/21352509/1966-mooney-m20e-super-21
Pity the market for people willing to spend 160K on an E is so small. I do believe it is worth every
penny though.

I really don't believe that E's for sale. I think the market for a $160K E is so small as to be nonexistent. I actually don't think any E is worth that much. 

And for my money, I'd still rather have @Bob_Belville's E. I know it's history, I know who's done the maintenance, and I'm pretty sure it's not getting a dark paint job like that one. I  just don't like the paint at all.  But that's just personal.

But most importantly... and the point of this whole thread, is that one from Controller isn't flying. Bob's is flying all the time. And a Mooney that's getting regular use is always going to be worth more than a hangar queen.

Bottom line, I still believe Bob's is the best E in the country.

[Niko182]

Just now, gsxrpilot said:

I really don't believe that E's for sale. I think the market for a $160K E is so small as to be nonexistent. I actually don't think any E is worth that much. 

And for my money, I'd still rather have @Bob_Belville's E. I know it's history, I know who's done the maintenance, and I'm pretty sure it's not getting a dark paint job like that one. I  just don't like the paint at all.  But that's just personal.

But most importantly... and the point of this whole thread, is that one from Controller isn't flying. Bob's is flying all the time. And a Mooney that's getting regular use is always going to be worth more than a hangar queen.

Bottom line, I still believe Bob's is the best E in the country.

That is true. I dont know bobs E so i cant comment but im just stating that this is another very nice E. And a flying plane will always be better than a sitting one.

[gsxrpilot]

Just now, Niko182 said:

That is true. I dont know bobs E so i cant comment but im just stating that this is another very nice E. And a flying plane will always be better than a sitting one.

You are correct that it's a fully restored and upgraded E and anyone would be proud to own it.  We all know Bob around here and know that he doesn't sit still.

Just compare the two N numbers on FlightAware. :-)

[Yetti]

I think you are looking at the situation wrong.   You want to fly.  You need a plane.  There are planes that have had maintenance done and ones that have not. All planes will need maintenance done in the future.  Engines are a crap shoot.  Best you can do is avoid rebuilds in the 1990s.  Pick your budget range.  Have 10K in the bank to do more maintenance when you get one.    Check for corrosion in the common spots.   Make a deal and go flying. The ability to do mechanical stuff will directly proportional to how much you spend on the plane.   Make friends with the local mechanic.   

The last couple of weeks I have ripped out a chimney and replaced it with 4 large windows.  If someone else had done it, it would have cost $30K.   Since I did it, it cost under $3K.   Probably added $50K to the asking price of the house, did not matter who did the work. Same thing for a plane.

During the same time, the three year old Gil Battery started sounding weak in the plane.   So I ordered a Concorde.  Spent an hour pulling, cleaning and priming the battery box.  Will spend another hour top coating, and installing the new battery.  If someone else had done it would have cost $600-$750 for battery and labor.   Since I did it, it only cost $309 for the battery.  May have added $1K to the asking price of the plane for someone that knows because it has been maintained well.

To get a good price on Mooneys.   Post the ones you are interested in here.   You will get some good feedback on the value.

"getting"  a plane has lots of costs associated with them.   Travel to and fro, PPI, hotels, Ferry cost,  a couple of weekends. just that can add up to $5K easy.   If you find one close to you then you can save some dollars right there.