Upper Limit on 1979 M20J Value?

[dwanzor]

I have been in the market for an M20J for a little bit now. I came across a 1979 J model that is an exceptionally clean and low time airframe (just over 2,000 hours). The asking price is $119k. It still has the original engine and has never been overhauled, so that would likely be the first order of business after purchase. 

Assume an overhaul and other firewall forward items cost $50k. That would drive the total investment to $169k. 

Other than that, it has some avionics upgrades, but could use more to be a great traveling machine (good GTN 650, but older single-axis autopilot, very old comm 2). Could easily spend another $50k installing a Garmin GNC500 autopilot and other required items (GI275's or G5's, plus new comm 2). 

There has to be an upper limit on what a 1979 J model could be "worth". $219k all-in seems to be above that to me, but I haven't really seen any similar planes for sale with new engines and upgraded panels, low time clean airframe etc. 

Now, end value is not necessarily the deciding factor, but I feel like it should be considered before undertaking this. 

Any opinions on a top end value for a bird like this? 

[KSMooniac]

You are likely correct, but you never get everything back that you put into it... You get enjoyment and utility in return, but not every nickel back when you sell it. Any 175k J that you see from the 70s likely has far north of 200k put into it if first bought at retail and improved by someone over time.

You can try to be patient and wait for one to hit the market with everything you want at a lower price, but you might be waiting for a long time when you could've been flying sooner and improving whatever you buy. That's a trade off only you can decide to make.



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[201Steve]

99/100 you get a discount when you buy the upgrades with the plane. You lose if you do it yourself. But as mentioned, how long are you going to wait? There are a lot of nice examples that you’ll never hear about bc they don’t make it to TAP etc. A couple phone calls and it’s sold. 

I thought I couldn’t afford one with upgrades already done. Then I did the upgrades and if I add it all up…. Doh! 
 

oh well, airplane money ain’t real money. AMU’s. 
 

 

[201Steve]

Also, what’s good about low time? It’s still a 50 year old airplane. The parts are just as likely to wear out on the ground than in the air (maybe more likely) after 50 years and we don’t suffer from structural fatigue like pipers. My 0.02, total time means almost nothing and it may be worse. 
 

 

[Fritz1]

J models, especially late ones tend to have the highest resale value as a percentage of ex factory sales price, have seen them listed at $250k, however as stated succinctly above doing your own upgrades like a lay away purchase is an expensive and time consuming endeavor, especially avionics are typically worth 30 cents on the dollar when the plane gets sold thereafter, soo finding a plane that is close to what you want is less expensive midterm, good airplanes come for sale and they typically get snapped up within a week or two, figure out what you want and get ready to pounce with purchase amount or financing ready, prepurchase technician lined up and insurance lined up

[toto]

1 hour ago, dwanzor said:

I have been in the market for an M20J for a little bit now. I came across a 1979 J model that is an exceptionally clean and low time airframe (just over 2,000 hours). The asking price is $119k. It still has the original engine and has never been overhauled, so that would likely be the first order of business after purchase. 

Assume an overhaul and other firewall forward items cost $50k. That would drive the total investment to $169k. 

Other than that, it has some avionics upgrades, but could use more to be a great traveling machine (good GTN 650, but older single-axis autopilot, very old comm 2). Could easily spend another $50k installing a Garmin GNC500 autopilot and other required items (GI275's or G5's, plus new comm 2). 

There has to be an upper limit on what a 1979 J model could be "worth". $219k all-in seems to be above that to me, but I haven't really seen any similar planes for sale with new engines and upgraded panels, low time clean airframe etc. 

Now, end value is not necessarily the deciding factor, but I feel like it should be considered before undertaking this. 

Any opinions on a top end value for a bird like this? 

You’ll drive yourself crazy trying to figure out whether an airplane is worth a specific dollar amount… we don’t really know what the market will look like the day you decide to sell, or what decisions you make today might influence the ultimate sale price. 

If you really like the plane, and it’s a platform that you can build on, I say go for it. 

And to repeat advice that you’ll hear often on MS… there’s no particular pressure to do all of the upgrades on day one. If you like the airplane now, and it’s airworthy, buy it and fly it for a year. You’ll learn a lot about what works and what doesn’t work, and you’ll probably end up making slightly different decisions about what you want to spend money on. 

[dwanzor]

36 minutes ago, toto said:

You’ll drive yourself crazy trying to figure out whether an airplane is worth a specific dollar amount… we don’t really know what the market will look like the day you decide to sell, or what decisions you make today might influence the ultimate sale price. 

If you really like the plane, and it’s a platform that you can build on, I say go for it. 

And to repeat advice that you’ll hear often on MS… there’s no particular pressure to do all of the upgrades on day one. If you like the airplane now, and it’s airworthy, buy it and fly it for a year. You’ll learn a lot about what works and what doesn’t work, and you’ll probably end up making slightly different decisions about what you want to spend money on. 

I think waiting on the avionics upgrades is a very real possibility. However, the original engine and being over TBO makes me a bit nervous. I would likely go ahead and attack the engine overhaul immediately. 

[toto]

6 minutes ago, dwanzor said:

I think waiting on the avionics upgrades is a very real possibility. However, the original engine and being over TBO makes me a bit nervous. I would likely go ahead and attack the engine overhaul immediately. 

Is there anything about the engine that suggests it’s unhealthy aside from the hours?

Do you know how often it has been flown in recent years?

[dwanzor]

11 minutes ago, toto said:

Is there anything about the engine that suggests it’s unhealthy aside from the hours?

Do you know how often it has been flown in recent years?

Very little use in the past 4 years, like 20 hours or less total. I think owner lost medical but I am not certain. 

It has bad an annual every year, including cylinder boroscope. I talked to the mechanic that has done the work and he feels confident in the engine. However, it is 45 years old and past TBO, so it feels risks to me. Full disclosure: I don't know a ton about engines. 

[toto]

17 minutes ago, dwanzor said:

Very little use in the past 4 years, like 20 hours or less total. I think owner lost medical but I am not certain. 

It has bad an annual every year, including cylinder boroscope. I talked to the mechanic that has done the work and he feels confident in the engine. However, it is 45 years old and past TBO, so it feels risks to me. Full disclosure: I don't know a ton about engines. 

My suggestion would be to get a good thorough prebuy with an independent mechanic and see what they say.

[MikeOH]

1 hour ago, dwanzor said:

I think waiting on the avionics upgrades is a very real possibility. However, the original engine and being over TBO makes me a bit nervous. I would likely go ahead and attack the engine overhaul immediately. 

If priced as a run-out, I'd look at this as a good opportunity!  I bought mine with a run-out price with 2100 SMOH figuring I'd need an OH soon.  That was SEVEN years an 600 hours ago!

YMMV, of course (mine had been consistently and frequently run), but YOU get to control the OH; much preferable to one sold with a 'fresh OH' of unknown (but likely crappy) quality.

[Pinecone]

Unless you are planning on selling it soon, it doesn't matter.

What matters is it what YOU want and want to own.

With what I paid for my plane and the upgrades, I can't get back what I spent, but I don't care.  I am enjoying the heck of it.

[INA201]

I agree with the notion of buy it equipped if possible with the upgrades already done by reputable shops.  I also agree with the notion of start with a basic plane and do all the upgrades and customizations yourself.  The later is what I did but I really love the whole process and it does cost more.  The enjoyment is worth the cost to me. Doing the later is also a cost of down time and non flying time.  There is also down time in waiting for the already complete plane to come to market. There will always be squawks on the complete plane too.     

[Will.iam]

1 hour ago, dwanzor said:

Very little use in the past 4 years, like 20 hours or less total. I think owner lost medical but I am not certain. 

It has bad an annual every year, including cylinder boroscope. I talked to the mechanic that has done the work and he feels confident in the engine. However, it is 45 years old and past TBO, so it feels risks to me. Full disclosure: I don't know a ton about engines. 

Ok you really need to read mike busch books about maintenance and engines. One of the quotes i heard him say is the first 500 hours and last 500 hours are free. By that he means the resale value doesn’t really change as people prefer and put a premium on an engine in the 500 to 1000 hours range. That is because a new engine with no hours on it is statistically more likely to fail than an engine at TBO so people want to see about 500 hours on the engine to feel comfortable that it was put together correctly. Still does not mean it will not fail at 501 hours but the probability goes down with a few hundred hours on the engine. Then there are the people worried at the other end of the spectrum flying past TBO and since for the longest time even now there are people that just know at TBO + xxx the engine will fail. Mike Busch with his years of data and experience pushed his engine 200% plus past TBO with no engine failure. Look at all that free time! He got literally a free extra engine as his went double the normal TBO and saved a huge amount of money. If you base your engine on condition instead of an arbitrary number and let the engine tell you when it’s time to overhaul, you might get lucky or you might have to overhaul sooner but rarely is the case that an engine fails without giving warning signs before the impending doom. 

[jetdriven]

I don’t think Mike Bush’s corollary really applies to Lycoming 4 cylinders and lifter spalling anymore in todays reality.  This board is riddled with stories of folks buying a plane and planning on running it past TBO to get later blown up with a $40,000 or $50,000 engine shop bill because the cam started eating itself. We did two last year in our shop, it happened to me when we bought our plane 14 years ago. There’s no signs of this letting up. And on the other end, a freshly overhauled engine is going to go for a premium as long as it was done by a rated shop because of the incredible cost and waiting time. If it takes 6 to 9 months to get an engine done, that’s another $7000 or $8000 worth of utilization that you’re spending right out of your pocket that you don’t get to use your airplane. 
We just bought a Cherokee 180 from a friend of a friend, and the first thing it’s getting is an engine. The one on it was done in 1992 and although it runs great, between lender problems and general buyer hesitance, it’s only flying one time, to our hanger to have it removed.  Yes it is getting DLC lifters.

[AndreiC]

16 minutes ago, jetdriven said:

This board is riddled with stories of folks buying a plane and planning on running it past TBO to get later blown up with a $40,000 or $50,000 engine shop bill because the cam started eating itself. 

Is this something that is happening because of the way newer cams/lifters have been made more recently? If that is the case, the OP's plane may not have this issue, as the engine is original since 1979.

[Schllc]

Everything in aviation is a trade off, and being honest with yourself, and setting good expectations are a large part of a “successful” purchase. 

Buy something “all done”, pay a premium and fly.

Buy a project, spend the first year or more , and 50% more than planned (if you’re lucky), looking at it in a shop somewhere, and get it exactly how you want it.

Buy a good airworthy plane and do nothing more than it needs and fly.

Maybe you find a unicorn and get lucky.

Or any myriad of variations in between. 

The reality is that the purchase price is the least relevant economic part of aircraft ownership. The reason for this is because if you maintain and fly your plane, you will likely get at least what you paid for it,  but all the money it cost to own and operate is in the ether, and this is the real expense. 
 

Don’t forget you are buying an airplane to fly, and it’s a large discretionary  purchase that few people can really justify the expense as a necessity, and don’t obsess too much over finding the perfect plane, or the best deal in the universe. 
Educate yourself on the models, appointments and pitfalls, find the closest to your goal and pull the trigger. 
 

The reality is airplanes are like fruit, you can poke, sniff, squeeze and look, but once you take a bite you own it!  Few, if any are perfect, and at some point you have to commit. 

Get busy flying!

[jetdriven]

1 hour ago, AndreiC said:

Is this something that is happening because of the way newer cams/lifters have been made more recently? If that is the case, the OP's plane may not have this issue, as the engine is original since 1979.

Since the early 1990s, yes those things spall, and I agree with you that engines built built before that time are less susceptible to lifter spalling but in this case that is more than offset by the fact that the engine hasn't been apart in about 45 I'm years,  that carries the to its own set of risks. In either case id be prepared to eat it as soon as buying, but you could run it and hope.

[dwanzor]

58 minutes ago, jetdriven said:

Since the early 1990s, yes those things spall, and I agree with you that engines built built before that time are less susceptible to lifter spalling but in this case that is more than offset by the fact that the engine hasn't been apart in about 45 I'm years,  that carries the to its own set of risks. In either case id be prepared to eat it as soon as buying, but you could run it and hope.

I would 100% buy it fully prepared to spend the money on an overhaul. 

When you say "run it and hope", how likely do you think it would be to see signs of potential problems prior to having something catastrophic? That is the thing I am not well informed on, which would likely lead me to overhaul sooner rather than later. 

[KSMooniac]

I would 100% buy it fully prepared to spend the money on an overhaul. 
When you say "run it and hope", how likely do you think it would be to see signs of potential problems prior to having something catastrophic? That is the thing I am not well informed on, which would likely lead me to overhaul sooner rather than later. 

The plan for putting it back into regular service is a good annual/prebuy, and then regular use. You might do an early oil change (15-20 hours) and inspect the filter and screen for metal. Rust from disuse will be getting worn off, so getting it out of the oil sooner is good. You can monitor filter and screen, maybe add oil analysis, etc, but beyond that, you can't do much unless you want to remove a cylinder to look at the cam and lifters. There is no other way to inspect on a Lycoming, unfortunately.

Pricing it as a runout engine is prudent in case it needs an overhaul soon. The biggest thing to check is to look for airframe corrosion as it may not be economically feasible to fix, whereas as engine can always be fixed and value scales appropriately. Not so if you're faced with $50k of corrosion repair.

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[AndreiC]

58 minutes ago, dwanzor said:

When you say "run it and hope", how likely do you think it would be to see signs of potential problems prior to having something catastrophic? That is the thing I am not well informed on, which would likely lead me to overhaul sooner rather than later. 

My impression is that our engines fail in two ways. One is that they start making metal, eating themselves up relatively slowly. This kind of failure is easy to detect with oil filter inspections. Maybe to be on the safer side one would do more frequent oil changes on an engine that is past TBO (perhaps every 25 hours including the oil filter), at least in the beginning until one gets to know the specific engine. Possibly, and here from what I read the opinions vary on the usefulness, you could also send oil samples to a lab to be analyzed, and after 3-4 oil changes you could start to see trends in metals that appear in the oil change. (My understanding is that one oil analysis is useless, as the absolute numbers are not that important; more important are the trends over time.) But my understanding is that from the time the engine starts making detectable metal, it won't die catastrophically within 25 hours, so you'll catch this kind of issue in time (but head for an overhaul once it happens).

The other kind of failure is the catastrophic failure: engine throws a rod or seizes up due to oil not reaching a critical part. My impression (and, again, I am not a mechanic so don't count on my opinion as being worth much) is that these kinds of things happen more from an improperly assembled engine (or one that is improperly operated -- for example if you get detonation) than from the engine being old. This is the "infant mortality" phenomenon. This is why people like engines with around 500 hours, since they proved already to be woking well.

My understanding is that as you get past TBO, especially with an engine that has not been run much in the last few years, the odds of starting to make metal increase. One reason for this would be if the camshaft starts getting pitted from corrosion. (The cam in Lycoming's design is sitting high in the engine, so any oil that is on it drips down after a while and the cam is sitting exposed naked to the atmosphere.) Once corrosion starts to happen in the cam, the surfaces that are supposed to be very smooth get rough, and it is only a matter of time until it eats itself up. This is why people like engines that have been run frequently, at least 50-100 hours per year. Where in the country the engine has sat also has an effect -- dry Arizona is much better than humid Florida. Also, if the engine has already been through many hours (500+, certainly your 2000) this is less likely to happen than on a new engine: I was told that over time a thin layer of carbonized oil residue forms that protects the metal from corrosion. But of course even this cannot last indefinitely -- things rub against each other and wear out.

For example flight schools (which fly their engines a lot, 500-1000 hours per year at least) frequently run their engines 3000 hours, so 1000 hours past TBO, with no ill effects. Another factor here is also that over time all kinds of rubber seals age, hoses can develop cracks, etc. This is another reason why Lycoming says that after 2000 hours *or* 12 years it is time to overhaul.

Take what I wrote with a grain of salt, as I said I am not a mechanic and all my understanding comes from reading threads like this and also operating Lycoming engines for around 25 years. Best of luck.

 

[toto]

4 hours ago, Will.iam said:

Ok you really need to read mike busch books about maintenance and engines.

Just a side note about the Busch books - they’re all available for “free” on Kindle Unlimited. So if you’re a KU subscriber as I am, you have access to all of the Busch books whenever you want them. I refer to them all the time. 

[LANCECASPER]

19 hours ago, dwanzor said:

I have been in the market for an M20J for a little bit now. I came across a 1979 J model that is an exceptionally clean and low time airframe (just over 2,000 hours). The asking price is $119k. It still has the original engine and has never been overhauled, so that would likely be the first order of business after purchase. 

Assume an overhaul and other firewall forward items cost $50k. That would drive the total investment to $169k. 

Other than that, it has some avionics upgrades, but could use more to be a great traveling machine (good GTN 650, but older single-axis autopilot, very old comm 2). Could easily spend another $50k installing a Garmin GNC500 autopilot and other required items (GI275's or G5's, plus new comm 2). 

There has to be an upper limit on what a 1979 J model could be "worth". $219k all-in seems to be above that to me, but I haven't really seen any similar planes for sale with new engines and upgraded panels, low time clean airframe etc. 

Now, end value is not necessarily the deciding factor, but I feel like it should be considered before undertaking this. 

Any opinions on a top end value for a bird like this? 

Going back to the title of your post - Upper Limit on a 1979 M20J . . . 

As these airplanes age, value is so much more dependent on upgrades and maintenance history than model year. A 1979 airplane is now 45 years old. A 1989 airplane is 35 years old. The last J models ever made are now 28 years old. There are '79 models that are nicer than some models made in the 90's. (The one advantage of buying newer in the J's is that you get the advantage of all of the running improvements made during the model run including gross weight increase.)

1) If you think this is your Forever airplane, determine the absolute top limit of what you can spend - then the axiom that applies more than anything else is to buy the best example you can possibly find for that money. It will be a lot less expensive in the long run than than the cheapest one for sure. Six criteria that I use to value a Mooney are: Condition of the airframe, Powerplant (engine//prop),Instrument Panel, Paint, Fuel Tanks and Interior. It's rare where you find one that checks all six boxes, but not unheard of. If you find it, the price will seem high, but it's been mentioned before on this post, but worth repeating, if you keep it awhile as time passes, you'll get back what you paid for it when it comes time to sell. The real expense is what it will cost to own the airplane - that's where the best example airplane (most well-maintained) shines over one that ends up being a project. Thinking that you'll buy a "cheap" one and do everything to it that the nicest one already has is not a wise move, since it will be down and not flying and things will always cost more than you think they should. There are a lot of project airplanes sitting in hangars where people started down that path and ran out of money or interest in the airplane, or had an event that stalled the project. Buy one to fly.

2) One other strategy: Buying a solid one mechanically (Good powerplant, airframe and tanks, but lacks a new panel and cosmetics) that you want to build time in that's not your forever airplane sometimes makes sense if you just maintain it and don't get buried in upgrading it - then sell it for what you paid or even a little more and work your way up to your forever airplane. But you are still going into it with an airplane to fly for a purpose - to build time and work toward the airplane you eventually want. 

[Pinecone]

1 hour ago, LANCECASPER said:

1) If you think this is your Forever airplane, determine the absolute top limit of what you can spend - then the axiom that applies more than anything else is to buy the best example you can possibly find for that money. It will be a lot less expensive in the long run than than the cheapest one for sure. Six criteria that I use to value a Mooney are: Condition of the airframe, Powerplant (engine//prop),Instrument Panel, Paint, Fuel Tanks and Interior. It's rare where you find one that checks all six boxes, but not unheard of. If you find it, the price will seem high, but it's been mentioned before on this post, but worth repeating, if you keep it awhile as time passes, you'll get back what you paid for it when it comes time to sell. The real expense is what it will cost to own the airplane - that's where the best example airplane (most well-maintained) shines over one that ends up being a project. Thinking that you'll buy a "cheap" one and do everything to it that the nicest one already has is not a wise move, since it will be down and not flying and things will always cost more than you think they should. There are a lot of project airplanes sitting in hangars where people started down that path and ran out of money or interest in the airplane, or had an event that stalled the project. Buy one to fly.

Unless you are trying to flip, I think this makes the best sense. 

If I apply the 6 criteria to my plane:

Condition of Airframe - Excellent

Power Plant - Very good, low time FRM, but not flown much over past few years.  Found in pre-buy that lifters needed to be replaced.

Instrument Panel - Good.  Not what I wanted but flyable for many years

Paint - Excellent.  People think it is a fresh paint job.

Fuel Tanks - Very good.  No leaks, resealed, but a while ago

Interior - OK.  Original, carpets worn, pilot seat foam compressed.

I paid a premium, but, again, I think it was worth it.  And I have put a lot into it with a new interior and new panel.  But with a couple of things I would like to do, but not necessary, it is pretty much the perfect plane for ME. 

[TravelingIA98]

Howdy! I’m selling a clean 79 J with no damage history and a 450hr motor. Needs some avionics but it’s a very solid bird if you’re still looking!