A few ??-may have someone buying in to my plane.

[rbridges]

I've only owned my plane for 10 months, so I'm new to airplane ownership.  Anyway, I've had someone look at my plane, and he's very interested into buying into it.  He's willing to pay 1/2 of what I paid last year.

So here's my problem.  I have no idea how to do this correctly.  It's a pretty nice '65 C model.  Manual gears and flaps.  It has ~800 SMOH and 200 STOH.  I don't see any major future maintenance with the exception of a reseal in the right wing.

I assume most people put money in an account to cover operating costs and then put the plane back full of fuel.  I have a guesstimate of how much it costs per hour to fly, but nothing concrete. 

I'm pretty lost on this whole thing.  It may not happen, but I want to be ready if it does.  Any suggestions?

[GeorgePerry]

There are other options that you might want to consider.  Instead of selling a 50% stake, consider a lease/share agreement.  I did this with a partner for about a year with my plane.  It really worked well and protected both from some of the 50/50 partnership pitfalls.  If you're curious send me a pm.

[jetdriven]

another thing is you spent the time and bore the risk of buyign the airplane from someone. Then likely had to put some money into it as soon as you got it.  Half of your purchase price really isnt 50% of the plane's value. IE he should pay you some for the money you put into the deal buyign the plane as well.

AOPA and others have a sample partnership agreement.  Basically you each own a share of the plane, split all the fixed costs, pay an hourly charge (on our J its 24$) for consumables, tires, engines, props, vacuum pump, gyros, radios, etc, and then fuel.  We then "bill ourselves" a wet rate based on gallons burned from the totalizer * the average fuel rate we pay.

Quote: rbridges

I've only owned my plane for 10 months, so I'm new to airplane ownership.  Anyway, I've had someone look at my plane, and he's very interested into buying into it.  He's willing to pay 1/2 of what I paid last year.

So here's my problem.  I have no idea how to do this correctly.  It's a pretty nice '65 C model.  Manual gears and flaps.  It has ~800 SMOH and 200 STOH.  I don't see any major future maintenance with the exception of a reseal in the right wing.

I assume most people put money in an account to cover operating costs and then put the plane back full of fuel.  I have a guesstimate of how much it costs per hour to fly, but nothing concrete. 

I'm pretty lost on this whole thing.  It may not happen, but I want to be ready if it does.  Any suggestions?

[John Pleisse]

Byron and George beat me to it. I would add if you have made improvements and you have a strong attachment to the AC you could become easily dissappointed. I would also buy Quciken and keep track of every dime. There is a partnership available locally in an old Luscombe. It was a highly eveolved financial enterprise...balance sheets, P & L, monthly statments...etc. Btw, how did you end up doing cylinders at 800 hours? Seems a little low and I am always on the lookout for indiosyncicies.

[Skywarrior]

Quote: N4352H

Byron and George beat me to it. I would add if you have made improvements and you have a strong attachment to the AC you could become easily dissappointed. I would also buy Quciken and keep track of every dime. There is a partnership available locally in an old Luscombe. It was a highly eveolved financial enterprise...balance sheets, P & L, monthly statments...etc. Btw, how did you end up doing cylinders at 800 600 hours? Seems a little low and I am always on the lookout for indiosyncicies.

[rbridges]

Quote: N4352H

 Btw, how did you end up doing cylinders at 800 hours? Seems a little low and I am always on the lookout for indiosyncicies.

[rbridges]

Jetdriven, I don't mind selling for half.  I do see your point.  I've put a few bucks into the prebuy (not a lot since I'm friends with mechanic), repairing the audio panel and did a few minor touch ups cosmetically.  The previous owner flew it down since I was only 100 miles away, so I didn't have to invest in a ferry pilot or a ton of fuel. 

It would be nice to split the fixed costs such as the hangar, insurance and taxes since the plane sits in the hangar 99% of its life.  I do have a lien on it, and his half would nearly take care of that. 

It has crossed my mind about what to do when it falls apart.  How do you handle his half?  Buy it back?  If so, at what value?  In this regards, George's idea about a lease/share option may be a good answer.

[jetdriven]

I cant believe someone would change all 4 cylinders because one went bad.  He should have subscribed to Mike Bush's columns or webinars and saved himself a few grand.

 

Our agreement is much the same as the AOPA or APA version on the web.  When one wants out, the other has first right to buy it out for some agreed market value. If a value cannot be determined or one partner cannot buy the other out, the plane is to be sold and proceeds split.  So, yes, you effectively lose control of your plane, but not as bad as when you are a 1/3rd owner, you might then find yourself without a plane altogether.

 

Having someone to split the enormous fixed costs is nice.

PM me with your email address and I can send you a copy of our agreement if you want ot read it.

[Becca]

Quote: rbridges

Jetdriven, I don't mind selling for half.  I do see your point.  I've put a few bucks into the prebuy (not a lot since I'm friends with mechanic), repairing the audio panel and did a few minor touch ups cosmetically.  The previous owner flew it down since I was only 100 miles away, so I didn't have to invest in a ferry pilot or a ton of fuel. 

It would be nice to split the fixed costs such as the hangar, insurance and taxes since the plane sits in the hangar 99% of its life.  I do have a lien on it, and his half would nearly take care of that. 

It has crossed my mind about what to do when it falls apart.  How do you handle his half?  Buy it back?  If so, at what value?  In this regards, George's idea about a lease/share option may be a good answer.

[Becca]

Duplicate post.

[ToddDPT]

I too think partnerships are a great idea.  1/2 partnerships having the best balance between the least amount of headache and the most available flight time.  Our buy-out agreement is similar to Jetdriven's.  We split the fixed costs and charge ourselves a hourly rate to fly (gas + maintenance) and keep a log in the plane recording inidividual flight time that we bill to one another each month.  We have a "company credit card" we charge fuel to and then just pay it off at the end of the month.  Definitely use Quickbooks.  It's very helpful.

One thing we do with respect to blocked flight time we just split the month and I have the plane "reserved" the first half of the month and my partner has the plane the second.  If he wants to fly the plane during the first half he just has to contact me and see if I'm using it or not.  If I am, he's out!  For vacations, we just let each other know well ahead of time and plan for it so there isn't any overlap.  Communication is the key.  

IMO you will be very happy with a partnership.

[rbridges]

thanks for the info.  That's a good idea to allow me to buy him out with 30 days notice.  I'll read the AOPA info, too.

[DrBill]

I had a 50/50 partnership with a now- friend.  We were aquaintances before and now good friends.  Ours were a little unorthodox.  We just split EVERYTHING 50/50 except for gas.  It worked great.  We bought the plane and a hangar and when he wanted out, I said find, you sell it since I bought it.  He was good with that and he advertised it and in a month it was sold.  That's how I just got into a Mooney.  Upon the idea of selling we agreed on a total price (w/hangar and golf cart) and when it sold, I took my half of the plane less the hangar/cart share so I ended up with the hangar and cart.  My Mooney ('65 E) just fits (1 ft to spare) in the hangar. It's one of those white fabric hangars and although 9 years old the roof is still in good shape although the door needs some repair (good fall project to take off, and into an awning shop for repair). 

We added an IFR GPS, digital radio and some other minor stuff to it and all expenses other than gas was 50/50.  No set-aside for majors.  We were lucky, each of us had the same idea on repairs. Make it right.  When we sold it a cylinder was low so we had it changed and we felt the new buyer got a good airplane. 

So, this is an option if you somewhat know the guy and know that he can afford to keep it up the same way you do.

Now that I got the Mooney and I've taken him up, he's thinking about buying "in". I don't think his wife will let him !

Dr. BIll

 

[Amelia]

I loved my 4-way partnership. The guys were great pilots,  knowledgeable about things mechanical, and generous with excellent Mooney advice. We paid a flat per-hour dry rate, out of which came most of the maintenance expenses. Anything extra we split four ways. We were in charge of leaving the airplane full of fuel after we flew it, and making sure it was clean for the next guy to fly. We agreed that all mx would be done promptly, that it would always be IFR current and airworthy. One guy kept the books and took care of arranging for maintenance- he was very organized and knew more about Mooneys than most mechanics.  It was flown on a first-come-first-served basis, and long trips had precedence over $100 hamburgers. I don't think there was ever a conflict. We always checked with that guy before we headed to the airport to make sure it wasn't reserved. Another splendid partnership was with a woman who liked the 'your week-my week' with swaps possible approach. That worked just fine, too. I miss 'em both- wish there were more qualified Mooney pilots around here who could afford half an airplane.