Acclaim Ultra purchase group, thought experiment

[1964-M20E]

While there are varying degrees of effectiveness with partnerships just for fun I ran some numbers to see how achievable an Acclaim Ultra purchase and operation would be.  I know Mooney offers to set up a shared ownership program like this but I have not looked into the details of what they offer.

Given:

• 4 partners in LLC with all those misc details
• purchase cost with tax title and license $950k
• hangar $350/month
• annual $3.5k / year
• GPS subscription $1k / year
• insurance $3.5k / year
• engine overhaul at TBO $75k
• fuel $6 / gallon
• 14 GPH
• owner partner investment $100k each
• min 6 hours flown per month per onwer
• $170 / hour paid to LLC for every hour flown wet
• monthly fees per onwer to cover purchase costs $1.1k, ($550k financed at 4% for 15 years)

I figure the monthly cost to each owner, flying a minimum of 6 hours each month, is about $2.1k

While this is high, it appears to be doable if you can find 4 similar minded pilots in the same area that can share the plane.  I also think the many of us hear spend half this amount and even more already for a plane the we fly exclusively.

I did not necessarily look at a worst case but a conservative case to come up with these numbers.  Obviously playing with number of members, initial investments etc you can go on for days with the different scenarios.  I did not look at asset deprecation or anything else like that.

Those of you who don't have enough to do you can digest and rip this apart.  I also have a spread sheet if anyone wants it.

 

 

 

[neilpilot]

20 minutes ago, 1964-M20E said:

While this is high, it appears to be doable if you can find 4 similar minded pilots in the same area that can share the plane.

I consider the ability to find a 4-pilot partnership for a new Ultra an almost insurmountable challenge in all but a few geographical locations, if it can be done at all.

[smccray]

Problem is the owner of that plane is likely a business owner who needs access to a plane without dealing with the risk of scheduling difficulties of partners.  Add to that- 4 people is too many- there isn’t enough cost savings going from 3-4 people to deal with the challenges of adding another partner.

Prior tax law requires a new purchase to get 100% of the purchase price deducted on taxes.  New tax law allows any plane, new or used, to be 100% deductible which I expect to cause some challenges in selling new planes, but we’ll see what happens.

 

[Jerry 5TJ]

Numbers look Okay.  Not sure if you can get 15 year 4% on a plane right now, but that's a nit.

Finding good partners can be very hard.  

[1964-M20E]

No doubt scheduling conflicts would arise especially with 4 and near holidays.  I do like being the sole owner of a plane.  However, I do have a couple of friends that do fly my plane from time to time but if I have trip planned they are out of luck to use the plane.  Usually they fly just for fuel but I get other beneficial work from them.  One is a CFI in helicopters and the other is good for helping with projects around the hangar and removing and replacing  inspection covers. The only other conflict when I want to fly is the weather.

However, being a sole owner I do not foresee anytime in the near future me owning a new airplane from any manufacturer.

One of my friends is in a position where we could go in together, if I could only find 2 more.  I guess we could just look at a newer plane and we have looked at other options.

[Boilermonkey]

I'd do it, but I doubt there are three other similar pilots at KHFY....if there are let me know.

[FloridaMan]

My current financial outlay between my two airplanes is roughly $2000/mo before I fly. Hangars are over $500/mo here. I live in a shitty block construction apartment and have an 11 year old car with no payment, so I guess it works out. 

[MooneyBob]

I know guys who bought Columbia ( back then Cessna TTX now) under similar agreement. 

Those new expensive toys lose value very fast. First few years are brutal. 

Later one guy left LLC ( it could happen any time for multiple reasons) and it put enormous stress on remaining members. They even tried to sell the plane right away but it was upside down already. They kept it for few more years and they really suffered financially. Finally they couldn't keep up with the payments and they were forced to sell it. They had to come with a lot of money from their pockets to pay off the loan. Those guys lost tons of money. And they flew it very little. 

[LANCECASPER]

20 years ago after owning a Bravo for a couple years I took on a good friend as a partner. It worked out well. We later in 2000 sold the Bravo and bought a new Piper Mirage - that still worked well because we both highly valued the other person’s opinion and always looked out for their advantage - not a single disagreement. In 2002-03 Lycoming had two service bulletins which required the airplane to be down just short of a year combined. We ended up taking on a third partner and owning a Meridian for  a couple years. The third partner only looked for his advantage and took the joy out of owning an airplane with a friend - very bad decision on our part. (Example: He needed the airplane every Thursday. No problem, but to be fair the we each should have a guaranteed day each week that we can use or trade with the other partners. He was outraged at that thought - “I am a doctor and I fly to my other clinic that day” was his thought. His reasons were always superior to ours because he felt hwas superior in every way. Hard to be partners with someone who thinks that way.) Two are exponentially more likely to be compatible than three or four.

[Piloto]

That Ultra better has gold funnel relief tube.

José

[TTaylor]

The $150 per month I pay for our partnership in the F is looking pretty good .  That covers hangar and insurance.  We paid for the plane with cash. I guess I don't need a new plane, but it is always nice to dream.

[gsxrpilot]

I tried to find a partnership to join, or a partner to join me, when I bought my first Mooney back in  2014. I couldn't find any and so bought the plane on my own. Once I discovered that I could afford the running costs on my own, I was glad I hadn't found a partner.

I can't imagine having a partner in my plane now.

[aviatoreb]

When I bought my first airplane, a Diamond DA40 in 2007 it was precipitated by the crash of the economy in 2007 - and the school I rented from went bankrupt so I had no further access to fly something - being that I am in a rural location and the airport in 1 mi from my house but other airports are not so close...  I decided if I would continue flying I need to buy something.  But...being someplace where people like cheaaaaap flying no one was on the same sheet of music as me in terms of wanting something clean and relatively modern. Well that plus the sudden drop in prices in airplanes (and anything with an engine - remember all the boats and cars on people's front lawns for sale?) I ended up getting a fantastic price on a 2003 DA40 - like 40% of the price from just a year before.

After 2 years of that I really decided I like single owner ops. And the pride of just owning it...

SO next plane I got moving up was this Mooney Rocket that I still have - which recently I just renewed with paint, interior, etc.

I would prefer an older Mooney of my very own than a brand new Mooney co-owned. I figure 1/4 of a $950k plan is more expensive than 100% share of a fine M20K 252 or rocket or M20J or many other fine variants.  Even an older ovation all fixed up...

Edited October 10, 2018 by aviatoreb

[Joe Zuffoletto]

 You could get an excellent used TKS Acclaim Type S for $400K or so with one other partner and have a much easier partnership situation to deal with. Your insurance will be cheaper, your annuals a bit more, but it won't lose nearly as much value in the first 3-5 years.

[Piloto]

2 hours ago, gsxrpilot said:

I tried to find a partnership to join, or a partner to join me, when I bought my first Mooney back in  2014. I couldn't find any and so bought the plane on my own. Once I discovered that I could afford the running costs on my own, I was glad I hadn't found a partner.

I can't imagine having a partner in my plane now.

How about this one

[smccray]

24 minutes ago, Piloto said:

How about this one

WAAAAY too much maintenance.... I suspect operations would be fun (at least at first).

[smccray]

Piloto served that up- figured I'd take it... What does it mean that I'd rather have the Acclaim?

[ArtVandelay]

What does it mean that I'd rather have the Acclaim?

You’re getting old?

Looks like she’s engaged anyway.

[aviatoreb]

2 hours ago, Piloto said:

How about this one

Is that a Clark headset?

[StevenL757]

1 hour ago, aviatoreb said:

Is that a Clark headset?

Nah, she's a Bose gal...  :-)

[1964-M20E]

4 hours ago, Piloto said:

How about this one

silent partner

[CaptainAB]

Wet 170 per hour? Maybe because Mooney is paying for all parts the first two years? I’m going to guess your insurance will at least be double that number, probably triple depending on the pilot qualifications. And some want quote you with four named pilots?

I think based on hanging out with the cirrus guys that buy new, if you have to plan and budget a 950k piston single, you probably aren’t the buyer they are looking for.

but how cool would it be to have three partners and buy a used acclaim for cash. Is that extra door really worth 600k? 242 knots at 300k is like 1200 per knot, sounds almost reasonable. 242 knots at 950k. Ouch.

[Seth]

Fill & Fly is 3 years all maintenance covered including annual up to 300 hours (I think).

That should help with the first few years.

 

-Seth

 

[Raptor05121]

8 minutes ago, Seth said:

Fill & Fly is 3 years all maintenance covered including annual up to 300 hours (I think).

That should help with the first few years.

 

-Seth

 

What kind of TT numbers are first-gen Acclaims running to date? 300 hours isnt much when you figure what the Acclaim was designed to do. I could easily see that ending within 12-18 months

[Stephen]

6 hours ago, Piloto said:

How about this one

6 hours ago, Piloto said:

How about this one

Naaah, both the girl aand the Cessna look like trouble to me ... pass