Sell my E as is or overhaul engine then sell

[Spurious Moppet]

We had been thinking of selling our E model recently but a couple weeks ago I noticed it was suddenly using a lot more oil than normal (1 quart/hour). Left it at a shop to look into it. They ended up pulling a cylinder after scoping it and seeing some scoring and in the process also found a cam lobe and a lifter that was starting to get chewed up.

The engine was about 800 hours since overhaul and 700 hours since IRAN (after hitting the prop on a tow bar) by the previous owner about 11 years ago.

The airplane is pretty nicely equipped with GTN 650, GFC 500 and a EDM 900 engine monitor and some other stuff and generally in good mechanical shape.

I talked to Zephyr about timeframe to get it overhauled and they estimated 6 months.

I figure getting it IRAN or overhauled and reinstalled would be between $25-50k depending on what is found.

Trying to understand if it would be money ahead to pay for the engine work and then sell or just sell as is as a project for someone else.

Anyone have insight?

[KSMooniac]

That is a tough spot.   I'm now an experienced owner and have overhauled my engine once so far.  If I were to buy another plane, I would rather have one with hundreds of hours of service (in just a few years) after an overhaul, or one closer to TBO (and priced accordingly) so that I could overhaul it to my specs.  I would be VERY leery of one that was just overhauled and put on the market as I would be fearful of infant mortality AND corners that were cut in order to save money in anticipation of selling it soon and letting it be someone else's problem going forward.  This could be mitigated by getting an overhaul from a well-known shop with a great reputation, and hopefully a transferrable warranty.  The downside to this is that you most likely will not recover 100% of your expense on the overhaul when selling the plane, and in fact, it might be closer to 50-75%.

The immediate question to me:  is your engine/airplane airworthy?  You found wear/damage, but did your shop ask if you wanted to keep flying it?  Selling an un-airworthy airplane is a LOT harder unless it is going to be cut-up and hauled away, and that should not be an option for you with a nicely equipped plane and presumably no airframe damage/corrosion.  So could a buyer fly your plane away and then deal with the engine?  Your oil usage is likely due to a ring failure and not cam wear, but now you know you are "on the clock" with the cam, if it is still airworthy.  You could replace the rings, document the cam wear, and disclose everything to the right buyer.  I would also measure the valve opening/lift at each cylinder to see if the damaged lobe is losing profile right now vs. just pitting/chipping.  Many buyers will be scared away, though, but it would minimize your costs. 

With 800 hours on it, though, it might be worthy of an IRAN (from a great shop like Zephyr) presuming you don't have any other issues like a cracked case, metal that has circulated and scored the crankshaft, etc.  You could get a new cam and DLC lifters, IRAN the jugs, new rings and bearings, and get back together quickly.  You could also get the Centrilube STC mod for the cam shaft to help prevent what you have now.  You'll still have to price it as an 800 SMOH engine, but your expense will be far less than a full overhaul and you'll have a much larger selection of potential buyers compared to where you're at currently as-is.  

[hammdo]

I did the IRAN with new cam, dlc lifters, bearings and new cylinders, etc.. - took the shop 3 weeks..

[1980Mooney]

19 minutes ago, hammdo said:

I did the IRAN with new cam, dlc lifters, bearings and new cylinders, etc.. - took the shop 3 weeks..

Looking back at your old posts - was that back in 2020 or more recent and reflective of the current situation?

[Spurious Moppet]

28 minutes ago, hammdo said:

I did the IRAN with new cam, dlc lifters, bearings and new cylinders, etc.. - took the shop 3 weeks..

The 6 month estimate from Zephyr was for a full overhaul. Penn Yan estimated 5-6 months.

I think IRAN is a reasonable possibility based on the hours on it and that’s what Zephyr suggested up front.

[Spurious Moppet]

32 minutes ago, hammdo said:

I did the IRAN with new cam, dlc lifters, bearings and new cylinders, etc.. - took the shop 3 weeks..

Would you mind sharing who did your IRAN and how long ago was it?

[hammdo]

26 minutes ago, 1980Mooney said:

Looking back at your old posts - was that back in 2020 or more recent and reflective of the current situation?

This Past February…

Edge Aviation did it for me. A retired AP/IA was available at the time and took it on. I do have a 6 year relationship with the shop so was glad they could do it

-Don

[KSMooniac]

I wouldn't even replace the cylinders unless inspection shows something terrible.  Clean, measure, hone.  Address any valves if needed and use new rings.

[1980Mooney]

2 hours ago, Spurious Moppet said:

We had been thinking of selling our E model - suddenly using a lot more oil than normal (1 quart/hour). -pulling a cylinder after scoping it and seeing some scoring and in the process also found a cam lobe and a lifter that was starting to get chewed up. The airplane is pretty nicely equipped with GTN 650, GFC 500 and a EDM 900 engine monitor and some other stuff and generally in good mechanical shape.

Zephyr timeframe to get it overhauled and they estimated 6 months. I figure getting it IRAN or overhauled and reinstalled would be between $25-50k depending on what is found.

Trying to understand if it would be money ahead to pay for the engine work and then sell or just sell as is as a project for someone else.

Look at it this way - 

• You are mentally at the point that you want to sell.  It is not the oil usage - it is because you are losing interest in flying/ownership.  And you are questioning whether to put more money into the plane.  If it was just an oil usage issue you would be mentally committed to find the best way to spend the money to get it flying reliably long term the way you want it.
• Anything you do will take longer than anyone suggests or thinks here.
• If you are wanting to sell, then committing to IRAN or OH will add months of delay - possibly many months depending on where you are, logistics and what they find - and that is months of insurance cost and hangar expense (and possibly avionics data costs).
  • And then depending on your location, logistics and timing of license/BFR/currency etc. and how you are going to sell it, you might have to spend more time/money on yourself in order to be current when you are actually able to retrieve your plane and put it on the market.
• If you spend "$25-50k" (depending on what is found), plus all your other out of pocket expenses getting it to/from the shop, variable expenses above, etc., do you think that you will be able to jack up the price an equal amount?
• It sounds like you have a pretty nice plane with a great panel.  You said mechanically everything else is in good shape.
  • Any "new" Mooney buyer is buying a "project" regardless.  These are 60 year old planes after all.  Something is always going wrong no matter how well maintained.
• @KSMooniac made a reference being leery of buying a plane with a "fresh annual".  I guess I would be more leery of a Seller saying it had a fresh "IRAN" costing "$25-50K" (and wanting a higher price).  That can be more subjective - and the "Seller" may have opted to not spend as much money as the shop suggested. - i.e. cut some corners that would have been nice to do at the time.
  • I would think "nice this was done but not increasing price at which I would buy much".
  • I like @KSMooniac latest comment to essentially do the minimum expense/time to get your oil consumption under control.
  • And then get it on the market.

[hammdo]

If I read this right, the AP also found an issue with the cam so, selling with that would mean discount for overhaul or IRAN $ in the price…

-Don

[Utah20Gflyer]

I would try to sell as is at a discounted price to account for the needed work.  I don’t think that the financial risk and headache of doing major work is going to be worth it considering you never intend on flying the plane again anyway.   Let the person who wants to fly it handle that.  
 

It really sucks that a highly depreciating event happened right before selling.  

[Spurious Moppet]

Thanks for the thoughtful input everyone. Very helpful perspectives. I had been becoming more inclined to sell in the past couple years before any engine issues were known or suspected, but my wife is fairly attached to the plane. So it is a little complicated. 

[TheAv8r]

I overhauled the engine in my M20E (also by Zephyr) last year, they were true to their estimate of 6 months. I got some extras from them but the range you're thinking of with $25-30k is accurate, but that's just the engine, not accessories, not labor to remove and replace. Keep in mind for it to be counted an overhaul, Lycoming at a minimum requires all fuel and oil hoses be replaced ($1200 when I did mine). You also have the prop governor, oil cooler, engine mount, engine shock absorbers, scat tubes, etc. to think about to do it right. If you're wanting to sell the plane after an overhaul - you want to do it right, it'll be the first thing a buyer questions if you don't.

Zephyr is a well-enough known shop that it carries some weight on it so even if it was a lower 50hr engine, recent and by Zephyr and done by the book, you could maximize the return out of it, but you won't get all the money back. However you're looking at a 6-8 month timeline, and the market for planes is not great right now.

[Slick Nick]

If I was a potential buyer, I’d rather buy an aircraft that needed an overhaul as opposed to one that just had an overhaul. Assuming it’s priced accordingly of course.

As a buyer, I’d look at that as an opportunity to do whichever upgrades I wanted, in addition to knowing exactly how every single hour post overhaul was flown behind the engine, instead of having to worry about how someone may have broken it in too easily, etc.