Maybe I Dodged A Bullet?

[Greg_D]

I went by my local shop today (not a MSC).  They said that they were completing an annual inspection on an M20C that I might be interested in.  They said the owner was getting a broker involved in the sale, so I knew I had to act quickly.  I offered $50K on the spot and the shop said that's what the seller was looking for.  $50K for a 1968 C model?  Was I crazy?  First the bad:  Late 1980's paint scheme in overall good shape but not the best paint job in town and a very dated scheme.  The interior, except for the new leather seats was in poor condition.  Now for the good stuff.  It had an STC'd 200 HP IO360A1 engine on it with 4 hours since overhaul.  Complete with 201 cowling, spinner, and windshield.  New polished prop.  O&N fuel bladders installed.  401 EPIRB.  New windshield, side glass, and glare shield.  It gets better.  An Aspen PFD and MFD.  Garmin GTN750 with everything internal (audio panel, etc).  ADSB in/out.  STEC 55X Autopilot. 201 control yokes with the STEC stuff (CWS, disconnect, etc).  

Sure enough, before the shop could call the owner, the broker showed up and got in the middle.  I made the offer to him and he said he's consult with the owner.  He came back a couple hours later and said they wanted $75K for it.

We got it cowled up and started the engine.  Ran fine, but then some "issues" popped up.  The Aspen units both seem to have AHRS failures and also wouldn't lock onto satellites.  Couldn't get the in signal from the GTN 750 either.  The the GTN750 displayed a message that the audio panel needed servicing.  A call to Garmin tech support said "take it to a dealer", which is also what the Aspen guy told us.  The last gotcha was that we couldn't get the cabin door to close unless someone pushed on it from the outside.

Anyway, I was curious what the fine folks here have to say.  Is it worth $75K.  Or $50K, or somewhere in between?

[lifendet]

Since the owner previously wanted 50k which is what you offered then the broker jacked it up to 75k I'd walk on that principle alone. Then you have all these issues with the Avionics going bonkers, could be a easy fix or not. I'd walk but that's me. Depends how bad you want it and how much your willing to spend to get it all squared away. 

Edited May 21, 2019 by lifendet

[Greg_D]

Additional info to consider....The airframe has 1700 TT and the engine was put on a couple of years ago and then the owner lost his medical, hence the reason for the sale.  The $50K number is what the shop thought the owner wanted for it.  It seemed like it was in the ballpark because the broker took the offer to the owner.  As soon as I heard who the broker was, I cringed.  The guy has quite the reputation.

It also has speed brakes (manual activation).  And manual landing gear.

Edited May 21, 2019 by Greg_D

[lifendet]

So the big question is are they willing to negotiate on the price because of the faults? 

[Greg_D]

I don't know and I hate dealing with the guy in the middle.  I told him to get $75K, everything had to be working.  The $50K offer was as is.  Maybe the $25K delta is worth it to have everything work.  Not many C models will fetch that kind of price, but there aren't many out there like this one.  I have zero experience dealing with Aspen or the newer Garmin stuff where repairs are concerned.

[MIm20c]

Are you looking to upgrade to a C or add one to the fleet?  Buying this one because it’s a good deal or really want another plane?

[Greg_D]

3 minutes ago, MIm20c said:

Are you looking to upgrade to a C or add one to the fleet?  Buying this one because it’s a good deal or really want another plane?

I have an Ovation right now, but it's way too much plane for my current mission.  My thought was to buy the C and then evaluate flipping it after I clean it up, or keep it and sell the Ovation.

[DXB]

Dang it.  It might have been worth writing a check for the 50k on first sight before the broker showed up and taking your chances - if it turned up with corrosion on the prebuy, one could still recover much of that upon  scrapping it.  Who cares about paint and seats.

Offer 55k and no further prebuy or investigation beyond a review of the logs and what you can accomplish in a half day looking for spar and tubular frame corrosion and other major airframe problems.  At 75, it needs a careful prebuy including making sure the avionics squawks you mentioned are easily fixable, and deducting the cost of any work needing to be done to get them in full working order.  Putting the autopilot through its full paces in the air, etc.  If all the avionics can be made to work flawlessly, and the engine doesn't croak quickly from sitting 2 years, it is worth 75 easily.   

If you buy it, get rid of that primitive engine monitor and Garwin cluster - they look out of place in an otherwise outstanding panel.  

 

[MIm20c]

2 minutes ago, Greg_D said:

I have an Ovation right now, but it's way too much plane for my current mission.  My thought was to buy the C and then evaluate flipping it after I clean it up, or keep it and sell the Ovation.

I understand and can relate. I’m in the R and C back to back often and they are vastly different aircraft.  I also was pushed away from a Mooney when a broker from CA jacked the price $60k from what the owner wanted with the only upgrade being leather seats.

One thing I would NEVER do is try to flip a plane.  These things are money sucking animals and even simple upgrades or cleaning up can turn the flip upside down in a hurry. 

[larryb]

My view is to keep the Ovation. Buying and selling planes is a guaranteed way to lose money. Is this really worth the risk and hassle?

 

[Greg_D]

35 minutes ago, DXB said:

Dang it.  It might have been worth writing a check for the 50k on first sight before the broker showed up and taking your chances - if it turned up with corrosion on the prebuy, one could still recover much of that upon  scrapping it.  Who cares about paint and seats.

Offer 55k and no further prebuy or investigation beyond a review of the logs and what you can accomplish in a half day looking for spar and tubular frame corrosion and other major airframe problems.  At 75, it needs a careful prebuy including making sure the avionics squawks you mentioned are easily fixable, and deducting the cost of any work needing to be done to get them in full working order.  Putting the autopilot through its full paces in the air, etc.  If all the avionics can be made to work flawlessly, and the engine doesn't croak quickly from sitting 2 years, it is worth 75 easily.   

If you buy it, get rid of that primitive engine monitor and Garwin cluster - they look out of place in an otherwise outstanding panel.  

 

The plane is extremely clean.  I looked inside the tail cone and took some of the wing inspection covers off.  No sign of corrosion at all and the tail area had zinc primer.  I guess the big gamble is the engine.

[Greg_D]

30 minutes ago, MIm20c said:

I understand and can relate. I’m in the R and C back to back often and they are vastly different aircraft.  I also was pushed away from a Mooney when a broker from CA jacked the price $60k from what the owner wanted with the only upgrade being leather seats.

One thing I would NEVER do is try to flip a plane.  These things are money sucking animals and even simple upgrades or cleaning up can turn the flip upside down in a hurry. 

I've flipped exactly two airplanes.  One was a C model and I made $8K in about a month.  There's a local guy who details planes and I paid him $250 and the original paint looked almost new when he was finished.  The other was a 201 that didn't have logbooks.  The sale price was discounted heavily because of that.  There were a few squawks that were addressed and some major cleaning. The issue with the missing logbooks turned out to be an ex-wife who claimed she didn't have any idea where they were.  A $2000 check convinced her to look harder and they were delivered to me within a week.  Huge gamble with the logbooks, but I was able to resell the plane for a nice profit when all was said and done.  Both were special circumstances and I'm wondering if this newest discovery might be in the same category.

[MBDiagMan]

Have C prices gone up this much in the last two years?  I bought my C in February ‘17 for $45K.  The mechanics at Maxwell called it the best C they had seen in their shop.   The interior was long in the tooth,but it’s was recently painted with not quite as much panel as the one described by the OP.  When I started reading the OP, I thought he was lamenting because he paid too much at $50K and I was thinking that was just about right, but $75K???  I think that is way too much.

My $0.02,

[bradp]

Did I hear that right ... owner lost medical a couple of years ago.  When was the 4 hr overhaul performed? 

[Greg_D]

33 minutes ago, bradp said:

Did I hear that right ... owner lost medical a couple of years ago.  When was the 4 hr overhaul performed? 

Right around the same time.

[Greg_D]

1 hour ago, MBDiagMan said:

Have C prices gone up this much in the last two years?  I bought my C in February ‘17 for $45K.  The mechanics at Maxwell called it the best C they had seen in their shop.   The interior was long in the tooth,but it’s was recently painted with not quite as much panel as the one described by the OP.  When I started reading the OP, I thought he was lamenting because he paid too much at $50K and I was thinking that was just about right, but $75K???  I think that is way too much.

My $0.02,

The valuation tool on The Mooney Flyer shows this at just north of $100K, and that's with a stock engine.  This one has the 200HP STC'd engine.  I forgot to mention in the original post that this one also has speed brakes.

[steingar]

Sure, its a screaming goo deal at 50 AMU.  I'd shine it one and keep the Ovation.  These are airplanes.  Something goes wrong you can die.  I'll always take the airplane I know instead of the new unknown one.  

[bradp]

I’d be concerned about the break in on that engine - unless it was pickled you may have above average risk of some surprises early in its life.  I’d take me a 1000 hr regularly flown engine over a new one that hasn’t been run.   

[carusoam]

Something isn’t right...

50k-75k worth of bits and pieces... just the panel installed cost that... then add the engine and STC... Don’t blame the broker... he was just protecting the il-informed seller...  the seller has the right to use a broker for this.

 

If you are in the business of selling used radios and chopping planes up you will probably do well with this...

If you are in the business of re-selling used planes... you know how to buy it and price it appropriately and market it...

If you are not in the business of used machinery... your risk of making financial mistakes is higher than the other guys doing this for a living...

Simple mistakes happen when not being familiar with all the mod levels for avionics... some upgrades can be hugely expensive...

The guys that do this for a living have the luxury of being able to grab things off the shelf to make the plane whole again... or buy stuff off eBay and test on the bench before installing it...

Maintaining Stuff on the shelf takes gobs of expense... and experience.

Flipping planes successfully takes having a few things to minimize your risk...

Are you...

• a mechanic 
• instrument tech
• pilot with lots of experience
• finance person 
• lucky 

When you have all these skills... you can better discern the financial risk...

High end M20s have a pretty limited market. Great planes, but few people with the excess cash that is required...

Those people can be really discerning when it comes to who did all the mods and installs...

When paying 75amu for an M20C... would you rather buy from AAA or somebody else...

 

What would be the purpose of acquiring this plane...

• To have and to hold...  PPI on everything including the instruments and radios...
• To flip and make a buck...  PPI on everything including instruments and radios...

Go for it... It may work out, or you could lose your shirt...?

Sit on sidelines... You have dodged a bullet, but you didn’t get the plane or made a buck...?

 

As usual some risks are better for somebody else...

Everybody’s risk tolerance is going to be different.

PP thoughts only, not much of a financial risk taker... 

If I come home with another plane or car or.... there is another risk that could be painful...

Greg, are you married, with kids?   If yes, you dodged a bullet... 

Best regards,

-a-

[tigers2007]

A M20C with clean logs, low time and recent engine & prop O/H from a reputable shop, MODERN panel w/autopilot (Think GTN w/ADSB, G5’s...), good paint and interior, should fetch $65-85k. Probably closer to $70k.

 

Edit: should also have zero slop in the controls (i.e. new tube links), fresh pucks, etc at that price.

 

 

 

Sent from my iPhone using Tapatalk

 

[RobertGary1]

A M20C with bladders could have incredibly small tanks depending on the bladder install. Might be like flying a Russian trainer with tanks small enough to keep from defecting.

 

-Robert

[GDGR]

3 hours ago, Greg_D said:

The valuation tool on The Mooney Flyer shows this at just north of $100K, and that's with a stock engine.  This one has the 200HP STC'd engine.  I forgot to mention in the original post that this one also has speed brakes.

The valuation tool described, has been known to toss out crazy numbers. 

I’d suggest getting a hold of Jimmy Garrison, and using the more “applicable and accurate” valuation tools he’s developed. 

[Greg_D]

10 minutes ago, GLJA said:

The valuation tool described, has been known to toss out crazy numbers. 

I’d suggest getting a hold of Jimmy Garrison, and using the more “applicable and accurate” valuation tools he’s developed. 

Didn’t Jimmy develop the valuation tool described?

[GDGR]

34 minutes ago, Greg_D said:

Didn’t Jimmy develop the valuation tool described?

Maybe? https://themooneyflyer.com/valuation/M20CValuation.html
But, he went through an arduous process last year, and retooled it. The one Op described appears to be relatively basic, and leads to a lot of rounding errors, and assumptions. 

I stand by contacting Jimmy on his new valuation he put together in the past 12 months. 

[carusoam]

 No tool is that good to cover such a well modified plane...  essentially predicting the selling price of a unique machine at the high end of the market...

like determining the edge of the flight envelope, or beyond, from ordinary flight testing...

It would be better to have a tool to determine which person would afford such a fine machine...

Good luck with those tools...

In the case of Jimmy’s tool... used on this level of unique planes... it is not going to be the tool as much as it will be the person wielding the tool... 

-a-