Got the cash, but prefer to finance, where?

[LANCECASPER]

23 minutes ago, DanSmith3 said:

Cash Flow and liquidity; ultimately that's always the answer

Think of financial swap instruments, trading fixed income for variable. 

Sometimes diverting cash or leaving cash to investment grade tax advantaged accounts, or protecting liquidity is more valuable than the 1% ish difference between investments and loan risk. Loans seem to be in the 7.25-7.5% range, investments are beating that and have been, but not always true. Generally you can expect 6% so making more (recent history), or losing not much (1%) average, is worth a small risk to some to have immediate liquidity.

The only thing I don't care for in that scenario is an unusual event where investment returns plummet, airplane values do the same and you are stuck paying for something that you owe more on that it's worth.

The longer I live the more I like things that are paid for. I haven't owed anyone a dime or paid any interest in decades now and I like the way that feels. Every person is unique though and I'm not saying that's for everyone.

[Tx_Aggie]

13 minutes ago, LANCECASPER said:

The only thing I don't care for in that scenario is an unusual event where investment returns plummet, airplane values do the same and you are stuck paying for something that you owe more on that it's worth.

The longer I live the more I like things that are paid for. I haven't owed anyone a dime or paid any interest in decades now and I like the way that feels. Every person is unique though and I'm not saying that's for everyone.

One does sleep a little better when they don’t owe a dime to anyone!

[A64Pilot]

On 2/26/2024 at 5:29 PM, LANCECASPER said:

The only thing I don't care for in that scenario is an unusual event where investment returns plummet, airplane values do the same and you are stuck paying for something that you owe more on that it's worth.

The longer I live the more I like things that are paid for. I haven't owed anyone a dime or paid any interest in decades now and I like the way that feels. Every person is unique though and I'm not saying that's for everyone.

I used to be that way for about 20 years, but the 2% loans made me borrow for the first time in twenty years. Truth is I’ll never pay off this house most likely as the loan is longer than my probable life expectancy, and that’s a little sobering, just as the truth that when it needs a new roof, not much point in going for a 30 yr one  

A whole lot of people were upside down in their houses not too long ago too so it’s not just airplanes, just we can do without them.

[Fly Boomer]

1 hour ago, A64Pilot said:

I used to be that way for about 20 years, but the 2% loans made me borrow for the first time in twenty years. Truth is I’ll never pay off this house most likely as the loan is longer than my probable life expectancy, and that’s a little sobering, just as the truth that when it needs a new roof, not much point in going for a 30 yr one

I know what you mean.  I asked my doc how much longer I could expect to live.  He said "don't buy green bananas".

[BlueSky247]

Bringing this one back up to thank the folks that recommended Dorr. I've been on the fence on whether to pay cash or finance and it would be good to get a sense from them where things are in aircraft loans this year.

[Danb]

On 2/6/2024 at 9:37 AM, Pinecone said:

I used Dorr Aviation.

They brokered the financing and got me a very good rate.  And they even gave me a keyring engraved with my N number when the deal closed.

My contact there was Alex Howe - ahowe@dorraviation.com

 

On 2/26/2024 at 5:08 PM, SilentT said:

Cash Flow and liquidity; ultimately that's always the answer

Think of financial swap instruments, trading fixed income for variable. 

Sometimes diverting cash or leaving cash to investment grade tax advantaged accounts, or protecting liquidity is more valuable than the 1% ish difference between investments and loan risk. Loans seem to be in the 7.25-7.5% range, investments are beating that and have been, but not always true. Generally you can expect 6% so making more (recent history), or losing not much (1%) average, is worth a small risk to some to have immediate liquidity.

I also used Door Aviation, easy to work with fair interest rates, over a year ago not sure now. Although they were fast and efficient like approved same day, working with many banks for clients  I had my ducks in a row, just be prepared. Once you find your plane it’d suck to have the lender I efficient.

 

 

 

 

[Danb]

On 2/6/2024 at 3:18 PM, PeteMc said:

I used Dorr Aviation over 30 years ago.  So if they are still around that's saying something. 

And if you talk to them.  Ask them why I didn't get an engraved keyring like @Pinecone got!!!!!  

ADDED: I went back and looked.  I worked with Bob Howe.

 

 

I got a keyring also.

[Pinecone]

2 hours ago, Danb said:

 

I also used Door Aviation, easy to work with fair interest rates, over a year ago not sure now. Although they were fast and efficient like approved same day, working with many banks for clients  I had my ducks in a row, just be prepared. Once you find your plane it’d suck to have the lender I efficient.

I setup financing before I found my plane.  I had a date that the rate was locked in until.

I also put money in escrow with Aerospace Reports so I go do a deposit instantly.

It helped that I was able to close immediately

[Danb]

48 minutes ago, Pinecone said:

I setup financing before I found my plane.  I had a date that the rate was locked in until.

I also put money in escrow with Aerospace Reports so I go do a deposit instantly.

It helped that I was able to close immediately

I did the same working mostly with Alex, when my PPI was completed we quickly closed, I as going to pay cash as Silent T mentioned but decided not to, we put something like 70% down so the bank was in a good position. Been over a year since closing time is flying by to fast.once I fix my oil leak we’ll be off somewhere, we are usually like to go somewhere for about a month from May to December., hardest part is finding places to go. Thinking of Tahoe we’ve canceled twice due to high winds, hopefully next time will work. May see you this summer somewhere 

D