Mooney Bravo Valuation

[Boilermonkey]

I’m looking at a 1/3 share in a 1991 Bravo TKS.  The one heartache is the upcoming maintenance on the Bravo.   Thoughts on the current valuation (hull+cash reserve) of $150K ($50K per share).   And splitting the upcoming maintaintenance 1/3 each.

2125 TT

2125 SMOH

825 STOH & Bravo Conversion

2125 SPOH

~500 Since Turbo Overhaul

I assume the TKS pumps are also original, but it is functional.

Standard avionics, except it does have a GTN750 coupled to a KFC 150 AP & King HSI

It also has a King 74 transponder with ADSB

O2 tank has been removed and also needs to be replaced

Original shock disks

Recent MAG overhauls

Thoughts?

 

[Cruiser]

sounds like a lot of maintenance is due or nearly due.

How much is cash reserve (money in the bank)?

[LANCECASPER]

Forget Vref since it will probably value this airplane around what they are asking or maybe even a little higher. What people will actually pay for a run out Bravo is in the very low 100's and it will sit on the market for a loooong time before someone steps up to pay that.

Example:

 

Very few people want to buy it and then sink $70,000 into a factory reman including installation (removal, new or rebuilt engine mounts, re-install, etc, etc, etc). If by the time they are done with that project they have $175,000 into it some people will consider it. As it sits right now with deferred maintenance (see below - shock discs, oxygen tank and who knows what else) they should be thrilled to get 1/3 of $120,000 at the very most. Some people are upside down financially in an airplane and then sell it off in shares to recover their "losses". If they can sell all three shares for $50,000 each they can get $150,000 for a $100,000 airplane, or they can get their $100,000 out and still own 1/3. This sometimes works since people are only thinking about the $50,000 they are putting in, not the overall value.

Is there an engine reserve account with money in it set up for replacing the engine? If so that obviously adds value.

A new kevlar Oxygen tank plus the boss seal plus rebuilding the regulator plus installation is at least $2500. It has a 15 year life so it should have been replaced in 2006. Twelve years later it is now getting replaced. It sounds like people that have owned this airplane have cut corners. This is a high altitude airplane where you use oxygen on many of the flights.

I'm not sure where they have had the annuals done, but here's another example of deferred maintenance. On a Long Body the shock discs are usually out of tolerance within 5-7 years at max. This is a heavy Bravo with TKS, so probably 5 years on this one. They should have been changed at least three times by now. Again, it sounds like they are cutting corners on maintenance. Get down and take pictures of the discs to be able to blow them up and see the dates stamped on the shock discs. If these really are the original discs chance are it either has leaky fuel tanks or they have been resealed and on the way to another reseal. If the discs stop absorbing the shock the airframe absorbs it, including the seams of the fuel tanks. The sealant breaks loose over time and fuel starts leaking.

TKS wasn't available until around '95/'96 so it must have gone in for a retrofit after '96.

If you even consider this airplane you should have a pre-buy done like you would on any other airplane and negotiate what it takes to get it up to date on maintanance after the inspection.

 

[FoxMike]

Looks like a tempting deal in some ways.  Shock discs need replaced about every 6 years.  Might be an indicator of the maintenance history.  

Exhaust system cracks?

Any corrosion?

Any damage?

Who are your partners and are they knowledgeable about flying turbo systems.  If not plan lots more maintenance cost.

From experience I can tell you this is a very capable but expensive airplane to own.  It takes capable, current pilots to manage the airplane well which keeps the cost down.

[Boilermonkey]

Somewhat telling of the existing/prior owners extracting the value from the airplane.  The $150K valuation is multifaceted.  There is $20K of cash in reserve, $30K in equity, and a $100K loan the owners took out to get equity to do other things.  So, the asking price for a share is actually $50K divided by three...$16.7K and an assumption of one third of the debt...and the airplane.  The deferred maintenance and the debt are my two yellow flags.  Their annual is due in August, so I’d like to participate in that and do an extensive review to really understand the status of the airplane...and cost to get up to my standards.  As far as the debt, I don’t like debt.   I would have understood if it were to do maintenance, but to pull it out to buy other airplanes outside the partnership is a bit of a yellow flag...what else was not invested in?   Now I would essentially be paying $33K of the debt plus interest....whereas I would much rather just pay it.

So, what if I go to the annual and it is great?....minus the things I’ve listed.   Is it worth $150K?   Knowing there is $80K of OHs in the future....so is it a $230K aircraft with the OHs completed?

[KSMooniac]

On any old vehicle you're buying the previous owners as much as the vehicle. The current bunch doesn't come across as diligent IMO from the info provided. Shock disks especially...that is a very minor expense relative to other Bravo items, yet hasn't ever been done? Wow. How are the fuel tanks?

Listen to Lance.

Sent from my LG-US996 using Tapatalk

[Niko182]

my guess for the reason they're looking for a third member is to decrease the $70,000 load coming up in the next couple of months. youll pay 50 grand for your buy in and right after that at least another 25K just for maintenance in the next couple months. as @LANCECASPER stated, it seems like they are trying to own a bravo affordably, meaning cuting corners to save a few dimes, speaking relatively to the value of the aircraft. Not saying the engine needs an overhaul as it might still be running great but 2125 is pretty high, and it might not be runnout, but the way the owners have been maintaining the aircraft, they probably want a partner just to take part of the load off the overhaul price. 

Obviously this is my opinion. I could however be completely wrong.

Edited May 21, 2018 by Niko182

[LANCECASPER]

51 minutes ago, Boilermonkey said:

 Is it worth $150K?   Knowing there is $80K of OHs in the future....so is it a $230K aircraft with the OHs completed?

Absolutely not. You never get dollar for dollar on an overhaul, upgrade, etc. You are fortunate to get 50 cents on the dollar on an overhaul and I seriously question if you get that since book values already assume that the engine is at mid time and then just credit you back for hours below that. I would think that if you put $80K into it you would still have a hard time getting $180K out of it, so maybe not even 50 cents on the dollar. 

[thinwing]

I think you guys are forgetting something...he is not buying the entire Bravo.His 1/3 share amounts to 50 k with close to 7000 in the bank for reserves...so actually 43 k in with a 16.7 k down payment .Where on earth is he going to find another partner ship ?The advice against this seems to be low value of the Bravo with high time.The real issue...can he get along with the two other partners,how's the scheduling?How does his complex time compare to the other two?How will that effect insurance?I agree a prebuy assessment is good..but with two other people footing the bill ,he is likely to be most active flyer...regardless,pricing this at 100k vs the 130k the partners are really asking begs the question how many sub 100 k bravos are there out there?

[TomR]

This seems on the surface to be a real ball of wax. None of us can speak to the actually condition terms etc except for you and the mechanics doing the prebuy. I’d say if your seriously considering, budget a substantial amount of money for things that are discover 6 months down the road. You know the state of the engine but the ancillaries are likely to add up in a big way

[LANCECASPER]

19 minutes ago, thinwing said:

I think you guys are forgetting something...he is not buying the entire Bravo.His 1/3 share amounts to 50 k with close to 7000 in the bank for reserves...so actually 43 k in with a 16.7 k down payment .Where on earth is he going to find another partner ship ?The advice against this seems to be low value of the Bravo with high time.The real issue...can he get along with the two other partners,how's the scheduling?How does his complex time compare to the other two?How will that effect insurance?I agree a prebuy assessment is good..but with two other people footing the bill ,he is likely to be most active flyer...regardless,pricing this at 100k vs the 130k the partners are really asking begs the question how many sub 100 k bravos are there out there?

True and when you want to do upgrades or even maintenance that they don't want to do how will that work?

I had a great relationship two different times, once in the late 90's in a Bravo and then the same partner in a Mirage and once many years ago in a Cessna 182. Both times the two of us saw eye to eye and realized each other's strengths. I had a horrible experience once when I was one of three partners. As has been mentioned there is nothing as good as a great partnership and there's nothing as horrible as a bad one.

[Cruiser]

a couple of things. 

1. They are still valuing the buyin at $150k if not in the airplane in assuming a 1/3 share in debt with no equity for it.

2. Even with $20k in reserve, the maintenance is going to create a deficit.

Is this a new share being created or is it a buyout of an existing share.

 

[thinwing]

Good point...you have to get a sense how theses guys work...gear pucks they could still be in spec per the book (unusal as that sounds)composite tank timed out ,these guys are used to on condition Steel tanks and have been charging it themselves up until they changed partners or simply stopped high altitude. (tank 1500 from Jimmy garrison)the engine it self is not runout (though you price it as such)but with a complete top at 800 hours  and a turbo done 500 hours ago ,these guys are not completely screwing up the maintance.The op is considering a considerable upgrade in performance ,power to climb,icing protection for not huge investment 

[thinwing]

38 minutes ago, Cruiser said:

a couple of things. 

1. They are still valuing the buyin at $150k if not in the airplane in assuming a 1/3 share in debt with no equity for it.

2. Even with $20k in reserve, the maintenance is going to create a deficit.

Is this a new share being created or is it a buyout of an existing share.

 

100k owed,no equity??you really think you can buy a adsB ,wass equipped,TKS Bravo for 100 k?

[Boilermonkey]

a couple of things. 
1. They are still valuing the buyin at $150k if not in the airplane in assuming a 1/3 share in debt with no equity for it.
2. Even with $20k in reserve, the maintenance is going to create a deficit.
Is this a new share being created or is it a buyout of an existing share.
 

Existing partnership. One owner does not fly much, another had this as a second plane and is selling to move into turbines. The third owner just bought in last year to join the other two that had it for years.

For me it still comes down to the valuation truely being $150k when the engine, prop, shock disks, O2...all need replacing/OH. What else is lurking...I don't know...maybe the ran it out and are running away...or they treated it well and their time is up? The annual and inspection should tell. But it looks like a comparable Bravo with a low time engine would be in the $200k-$225k range...right?

The point about the people...I know the newest partner, he was in the M20C partnership I am currently in...great partner. The other remaining partner I haven't met.

Sent from my Pixel using Tapatalk

[Awful_Charlie]

I'm in the wrong country to make a better estimate, but my feeling is that for a 1991 with a run out engine, you're much nearer to 100 rather than 150. Deduct a bit more (say 3k for the oxygen cylinder, another 2k for the shocks, other maybe questionable required works, then I think something around the 100 mark is more on the money.

With a new engine, everything up to date, I'd be surprised if this was a 200k aircraft, unless perhaps if it had new paint & interior, fully up to date and extensive avionics etc

Just my 0.02

[rpcc]

there is "worth to you" and "market value" - two very different things.  These bravo's seem to sit FOREVER on controller no matter the price or condition - not sure why that's the case - perceived complexity maybe, just not enough people with the skill to fly them and the mission that it was designed for.  So for a head on market value comparison, I don't believe the plane is worth 150k - the runouts are probably 80k to move them within 30-60 days - just a guess - talk to one of the brokers aaa or delta if you want to learn about the market value.

from a "worth it to you" perspective, it may be worth that price.  It probably very hard to find a partnership in a bravo near by.  

 

 

[Oldguy]

Money aside, much of a partnership comes down to how decisions are made and disagreements resolved. I will make the assumption there is a written partnership agreement you should review quite thoroughly. Having an aviation-knowledgeable attorney (are you an AOPA member?) look at it might not be a bad idea. Risk on a C is likely much less than a Bravo, so making sure it is a workable partnership would be high on my list.

Most of the planes we fly are a deficit the first time we put any money into them. I can't recall anyone on here buying a plane with the intention of flipping it and making enough of a profit on it to justify the time and cash put into it. Going into something like this with eyes open and aware of the potential downside is the best one can do these days.

[mike_elliott]

While a Bravo would seem like a great plane for a partnership, perhaps it might not be the best choice for one unless you are REALLY comfortable with the other 2 partners, trust each other explicitly and have the same mindset on maintenance, operating costs, insurance coverage, responsibilities,  ongoing costs expectations,  and Pilot training to a standard for all pilots. If this is a partnership borne for the need to reduce individual fixed costs of ongoing maintenance, hangar and insurance, all planes are about equal here. If it is being borne to help defer the cost of a major firewall forward, Its overpriced, IMO

Right now, A good low time Bravo will be in the 200 - 225K range. The ones that sit lack the qualities it takes to be called good. The earlier ones lack some of the updates the later ones had like the 4 puck brakes, instrumentation,.

[thinwing]

Question nobody asked you boiler,you are currently in a partnership on a C model...why are you considering upgrading to the Bravo?IFR rated?Fly in clouds with ice or wish you could?Need the additional speed or altitude?Cant afford single ownership so partnership seems viable?The partner that left your C group ,now in the Bravo group,what were his reasons?Is he satisfied with the arrangement?The guy you are buying out,he can sell his share for a dollar if he wants ,is he negotiable ??Good luck with deal if you get serious.

[Bravoman]

To give you my own real world example  I bought my 98 in 2013 for 170 K. It was a pristine no damage history example, non TKS with 930 hours TT. Since then, I have replaced the engine with a factory reman, and I certainly did not expect the original engine to crump out on me within  a couple of hundred hours, but it did.  I have replaced everything in the aircraft, including alternators, overhauled  the prop and governor  when I hung the new engine, essentially all the accessories right down to the starter,  gear pucks, no back spring, you name it. I have also added a lot to the panel.I thought I was getting an excellent deal initially when I bought the plane, but I would never be able to sell it for what I have in it. I rationalize it by thinking to myself that I have essentially a new bird for less than  half the cost of a new one, and I plan on keeping her for a good long time. I’m sure this is the same story of many others here on the board. Bottom line is I see significant probable future expense given the factors laid out by the OP.

Edited May 22, 2018 by Bravoman

[thinwing]

What happened to the engine at 1100 hrs?

[Bravoman]

My case cracked as I was taking off out of Dalton, thankfully where my MSC is located. Had to do a quasi emergency landing with oil covering my wind screen. There was a thread on it that I started here shortly after it happened.

[Boilermonkey]

20 hours ago, thinwing said:

Question nobody asked you boiler,you are currently in a partnership on a C model...why are you considering upgrading to the Bravo?IFR rated?Fly in clouds with ice or wish you could?Need the additional speed or altitude?Cant afford single ownership so partnership seems viable?The partner that left your C group ,now in the Bravo group,what were his reasons?Is he satisfied with the arrangement?The guy you are buying out,he can sell his share for a dollar if he wants ,is he negotiable ??Good luck with deal if you get serious.

Yes, I'm currently in a three person partnership with a C model.  I am IFR rated and find myself canceling trip because of weather.  In some cases it is due to service ceiling and in some cases the chances of ice (and I am  conservative and don't have plans to launch into ice, but would like to have protection should light ice arise en route).   I also am limited in range/speed with a 1962 M20C.   I also like the safety of additional service ceiling in terms of glide distance.  The C is very affordable.

I think my former partner in the Bravo is happy....   As far as the negotiability of the party selling their share, because they took out a $100K loan they have recaptured their equity already and are instead in a position of needing to service the debt & expense.  With the maintenance looming they will be in a position where they don't have any equity to work with and have a large investment they will need to make for an airplane they don't want to be in, but have two other pilots who need to fly.  I can imagine/hope that the LLC bylaws dictate that they must pay the costs required to keep the airplane functional.  That's a bit of a rock and a hard place.  I'm undecided if I want to insert myself in that situation versus an airplane and partnership that don't have these issues.

[rpcc]

How about just buying time from them.  That would save you from the financial mess this will likely become.  Maybe cost you a bit more than if everything worked out.