Advice on buying a 152?

[rajek]

I'm considering buying a 1978 Cessna 152 that the owner is leasing to a
flying club. I'd continue to lease it to the club and learn to fly in
it. (I have 3 1/2 hours now.) I'd hope that plane to earn enough money
to cover most of its maintenance and insurance, including a new engine
in a few years.

I met with the owner of the club this afternoon and we went over some
numbers. The plane and the club's other 152 have done a good job of
earning their keep so far. I could accept not quite breaking even.

I understand that renting is cheaper but I'm really excited about the
idea of owning a plane. I also really like that particular model. I flew
one on my last lesson and it was a lot of fun.

Asking price is $28,000. The engine has about 600 hours since the last
overhaul.

I'd also appreciate any comments or advice.

Thanks!

[Jay Honeck]

> Asking price is $28,000. The engine has about 600 hours since the last
> overhaul.

A bit high for a 152, no?

And, BTW: In ten years I have not met a person who made money in a
lease-back arrangement.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

[rajek]

Jay Honeck wrote:

>>Asking price is $28,000. The engine has about 600 hours since the last
>>overhaul.
>
>
> A bit high for a 152, no?
>
> And, BTW: In ten years I have not met a person who made money in a
> lease-back arrangement.

Thanks for the reply. Is that high? I'll have to do some more research.
I realize I'm not going to make any money. I'm mainly hoping to offset
the majority of the maintenance and insurance. So for me the purpose of
the leaseback arrangement is to make it more affordable to keep the
plane, not so much to make a profit.

[Dude]

I know one. He has had a plane at the same school for years, and always
made money. I know of a few others who are certainly making money. And
this is over the past 3 years with the doubling of insurance.

Funny, he was hard to get to talk about it. Also, the other winners were
hard to get hold of. Now the guys who don't make money are quick to talk
about it, and how it was anyone's but there own fault. I listened to the
guy that was making money, and even though I took a different approach, I am
doing okay.

I bought a new plane, and still have a nearly new plane. Could not have
done it without the leaseback. I have the option to take the plane off the
line, add extra's and refurb it to better than new. And I would still be
ahead so long as I avoid recapture. Avoiding recapture is simple enough, so
that's not a problem. I put all the tax rebates back into the bank loan and
refinanced, and now my payments are in the used plane range.

I will likely continue this year and trade up next year, and start over if
they still have the bonus. It all depends on if the hours go up in the
plane, or if I can sell my plane close to asking. If not, I can leave it at
the school and hope the hours increase a bit, or I can take it out, fix it
up, and have a plane I could not affford.

If you can create a business use and get depreciation without a leaseback,
then you may be better off. If you can afford the plane you want, then why
bother? If the plane you want is out of your reach you can make it work.




"Jay Honeck" > wrote in message
news:Wqvyc.1890$Hg2.18@attbi_s04...
> > Asking price is $28,000. The engine has about 600 hours since the last
> > overhaul.
>
> A bit high for a 152, no?
>
> And, BTW: In ten years I have not met a person who made money in a
> lease-back arrangement.
> --
> Jay Honeck
> Iowa City, IA
> Pathfinder N56993
> www.AlexisParkInn.com
> "Your Aviation Destination"
>
>

[Robert A. Barker]

"rajek" > wrote in message
m...
> I'm considering buying a 1978 Cessna 152 that the owner is leasing to a
> flying club. I'd continue to lease it to the club and learn to fly in
> it. (I have 3 1/2 hours now.) I'd hope that plane to earn enough money
> to cover most of its maintenance and insurance, including a new engine
> in a few years.

< SNIP>

> Asking price is $28,000. The engine has about 600 hours since the last
> overhaul.
>
Without much more info. on condition,avionics,etc. I
would tend to feel the price is high.

My brother bought a new Piper Archer ll some years ago and had a
leaseback with a local FBO.He was not
happy with others flying the plane.Renters are not as careful as owners.He
had to schedule time in his plane
and could not use it if someone else had already scheduled it for that
time.He did not offset enough of the expenses to make it worthwhile and gave
up the leaseback after a while. YMMV

A 152 is going to be used heavily by new students.They do not always
land softly.:-)

I bought a 1966 150 in excellent condition for $18,000
and have been a happy camper.

Bob Barker N8749S


> I'd also appreciate any comments or advice.
>
> Thanks!

[Carl Orton]

Right now, you have insufficient information to make that decision.

$28K seems high, compared to the fleet average of 152's. Condition and
equipment are everything in the plane market. 600 hrs on the engine isn't
bad, but it could be better. How many airframe hours? Most 152's have much
higher hours than 150's do, because most were purchased in the go-go days of
flight training in the late 70's.

You mentioned nothing of the avionics. Granted, you can't stuff too much in
a 152, but if you have brand-new Bendix KX 155's in it, with a KLN 94 IFR
certified GPS or a Garmin 430, and you're beginning to total up some bigger
bucks.

You need to see what's out there. Check www.aso.com or www.controller.com to
see the general price ranges for your year and number of hours and
equipment.

If you're getting serious, get an online subscription to Trade A Plane. It's
relatively cheap compared to the paper copies. On their website (with
subscription) they have a very good appraisal tool that lets you spec your
exact plane's equipment, airframe, paint, and interior condition.

Carl


"rajek" > wrote in message
m...
> I'm considering buying a 1978 Cessna 152 that the owner is leasing to a
> flying club. I'd continue to lease it to the club and learn to fly in
> it. (I have 3 1/2 hours now.) I'd hope that plane to earn enough money
> to cover most of its maintenance and insurance, including a new engine
> in a few years.
>
> I met with the owner of the club this afternoon and we went over some
> numbers. The plane and the club's other 152 have done a good job of
> earning their keep so far. I could accept not quite breaking even.
>
> I understand that renting is cheaper but I'm really excited about the
> idea of owning a plane. I also really like that particular model. I flew
> one on my last lesson and it was a lot of fun.
>
> Asking price is $28,000. The engine has about 600 hours since the last
> overhaul.
>
> I'd also appreciate any comments or advice.
>
> Thanks!

[Jay Honeck]

> Thanks for the reply. Is that high? I'll have to do some more research.

Good answer.

Your best bet is Trade-a-plane on-line. Watch the ads, do your homework. I
think you'll find many, many 152s for less than $28K.

Check the panel carefully -- the price difference may be found there. At
your level of experience this won't be easy -- avionics can be a real can of
worms. Your best bet is to ask a trusted, experienced pilot friend for
help.

Given that many new pilots like yourself don't have mentors (a real, serious
problem in aviation, by the way), you may be left to fend for yourself. If
this is the case, your workload just doubled or tripled. Here's what you
should do:

Find out what avionics are in the plane, and post your results here --
you'll find a wealth of knowledge and experience here, and we'll be able to
help you assess the panel. (For a real assessment of condition, you'll need
an avionics tech of course -- but we can get you in the ballpark.)

Find out total time on the airframe in addition to engine time. Ask about
damage history -- many trainers have some.

Don't just look at this single aircraft -- 152s are literally everywhere.

Make friends with a mechanic that other guys on the field recommend -- this
person will be your life-line, and the guy who ultimately does your pre-buy
inspection. Do NOT buy this plane without a pre-buy inspection, performed
by someone other than the current owner's A&P.

Come here often and ask questions -- we all began where you are today, and
many of us learned some hard, expensive, and probably unnecessary lessons
along the way.

Good luck!
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
"rajek" > wrote in message
m...
> Jay Honeck wrote:
>
> >>Asking price is $28,000. The engine has about 600 hours since the last
> >>overhaul.
> >
> >
> > A bit high for a 152, no?
> >
> > And, BTW: In ten years I have not met a person who made money in a
> > lease-back arrangement.
>
> I realize I'm not going to make any money. I'm mainly hoping to offset
> the majority of the maintenance and insurance. So for me the purpose of
> the leaseback arrangement is to make it more affordable to keep the
> plane, not so much to make a profit.

[rajek]

Wow, thanks a lot for the advice and suggestions. It sounds as though a
leaseback is risky but it can work OK in the right circumstances.
("Work" defined as substantially offsetting expenses, not necessarily
making a profit.) The club owner did talk with me about some of the
factors that affect the plane's earnings -- season, upgrades, cosmetics
and so on.

I'll do some more research and post again when I have more information.

Thanks!

[tony roberts]

Leaving alone the price (which seems high) ask why the club will lease
off you. Interest rates are very low. They could borrow cheap and buy it.
Could it be that leaving you to carry the risk, the maintenance, the
abuse, the rebuilds, the AD's and the whatever else you can thik of is a
better deal for them? You bet it is!
Think about it. They want an aircraft, to put a student in, and let that
student pound it into the runway over and over and over until such time
as they learn to land it. (And once they do learn to land it, that
student will transition to THEIR aircraft, and a new one will start over
in yours. Add to that that they won't have a clue how to lean it -
Welcome to the stuck valve club/melted cylinder club, and they look
around and see you, with your hand up, begging them to use your airplane
to do it all in. Meanwhile, we have the seller telling you that his
aircraft is worth a whole lot more than comparable models, and is using
this arrangement to justify it as an income stream.

I guess the best advice that I can give you is turn around and walk.
When you find the plane that is right for you, you won't even consider
allowing that kind of abuse.

HTH

Tony

--

Tony Roberts
PP-ASEL
VFR OTT
Night
Almost Instrument :)
Cessna 172H C-GICE



In article >,
rajek > wrote:

> I'm considering buying a 1978 Cessna 152 that the owner is leasing to a
> flying club. I'd continue to lease it to the club and learn to fly in
> it. (I have 3 1/2 hours now.) I'd hope that plane to earn enough money
> to cover most of its maintenance and insurance, including a new engine
> in a few years.
>
> I met with the owner of the club this afternoon and we went over some
> numbers. The plane and the club's other 152 have done a good job of
> earning their keep so far. I could accept not quite breaking even.
>
> I understand that renting is cheaper but I'm really excited about the
> idea of owning a plane. I also really like that particular model. I flew
> one on my last lesson and it was a lot of fun.
>
> Asking price is $28,000. The engine has about 600 hours since the last
> overhaul.
>
> I'd also appreciate any comments or advice.
>
> Thanks!

[Dave S]

Oh yea..

Be VERY wary/cautious of a club, school or operator that encourages YOU
to buy a plane for the purpose of them leasing it back from you,
particularly if they also perform the maintenance in-house and bill it
to you.

Dave

rajek wrote:
> Wow, thanks a lot for the advice and suggestions. It sounds as though a
> leaseback is risky but it can work OK in the right circumstances.
> ("Work" defined as substantially offsetting expenses, not necessarily
> making a profit.) The club owner did talk with me about some of the
> factors that affect the plane's earnings -- season, upgrades, cosmetics
> and so on.
>
> I'll do some more research and post again when I have more information.
>
> Thanks!

[Dave Butler]

rajek wrote:
> I'm considering buying a 1978 Cessna 152 that the owner is leasing to a
> flying club. I'd continue to lease it to the club and learn to fly in
> it. (I have 3 1/2 hours now.) I'd hope that plane to earn enough money
> to cover most of its maintenance and insurance, including a new engine
> in a few years.
>
> I met with the owner of the club this afternoon and we went over some
> numbers. The plane and the club's other 152 have done a good job of
> earning their keep so far. I could accept not quite breaking even.
>
> I understand that renting is cheaper but I'm really excited about the
> idea of owning a plane. I also really like that particular model. I flew
> one on my last lesson and it was a lot of fun.
>
> Asking price is $28,000. The engine has about 600 hours since the last
> overhaul.
>
> I'd also appreciate any comments or advice.

If you're sure 152 is the model you want, surf over to
http://www.aeroprice.com/. For $20 or so you can get a valuation of the
particular plane you are looking at, or for $50 or so you can get their software
for evaluating as many instances as you like of a particular model (e.g. 152).
The expense is trivial compared to the value of the knowledge.

Dave
Remove SHIRT to reply directly.

[Dave Butler]

Dave S wrote:
> Oh yea..
>
> Be VERY wary/cautious of a club, school or operator that encourages YOU
> to buy a plane for the purpose of them leasing it back from you,
> particularly if they also perform the maintenance in-house and bill it
> to you.

Good point. I'm one of those who has had a leaseback and was satisfied with the
experience. I may or may not have made a little money, it was close. The OP said
he was OK with just having the lease cover much of the expense and not
necessarily making a profit, which I think is realistic... but Dave S's advice
is good. I'd have my lease contract make *me* responsible for providing an
airworthy aircraft, so I can shop around for maintenance services. Giving the
lessee free rein to do maintenance as required and bill you for it is like
writing a blank check.

Dave
Remove SHIRT to reply directly.

[TTA Cherokee Driver]

Dude wrote:

> And I would still be
> ahead so long as I avoid recapture. Avoiding recapture is simple enough, so
> that's not a problem.

Do tell. How do you avoid recapture? (besides selling it for less than
the depreciated basis, of course). I've always looked at all these
"accelerated depreciation" posts and thought "recapture is going to kill
them." I would really like to know your trick for avoiding it.

[Peter Clark]

On Mon, 14 Jun 2004 11:54:39 -0400, TTA Cherokee Driver
> wrote:

>Do tell. How do you avoid recapture? (besides selling it for less than
>the depreciated basis, of course). I've always looked at all these
>"accelerated depreciation" posts and thought "recapture is going to kill
>them." I would really like to know your trick for avoiding it.

Like-kind exchange. Upgrade to a newer/bigger aircraft. The way I
understand it, it boils down to owning an aircraft for the rest of
your life and the estate has to account for/pay back any recapture.

[Patrick]

I just bought an IFR certified C152 1979 model for 21,500. Around
1000 on a 2400 engine. Immaculate and in VERY good condition. It has
been hangared for the last 19 years and flies extremely well. I too
was offered the chance to do a lease back with the flight school
locally, but DON'T DO IT unless you want to come out to fly and find
the thing bent, abused and in shoddy condition. Spend the money on
the plane, learn to fly, then sell it and move up.

You can find one that you like for 20 to 25 K easily and you'll be
much happier. The lease back options leave you open for all kinds of
expenses and you have to pay insurance, etc.

Be careful out there.

A new pilot and 152 owner.

Patrick Wilson
www.w4pw.org
68007


Dave Butler > wrote in message >...
> rajek wrote:
> > I'm considering buying a 1978 Cessna 152 that the owner is leasing to a
> > flying club. I'd continue to lease it to the club and learn to fly in
> > it. (I have 3 1/2 hours now.) I'd hope that plane to earn enough money
> > to cover most of its maintenance and insurance, including a new engine
> > in a few years.
> >
> > I met with the owner of the club this afternoon and we went over some
> > numbers. The plane and the club's other 152 have done a good job of
> > earning their keep so far. I could accept not quite breaking even.
> >
> > I understand that renting is cheaper but I'm really excited about the
> > idea of owning a plane. I also really like that particular model. I flew
> > one on my last lesson and it was a lot of fun.
> >
> > Asking price is $28,000. The engine has about 600 hours since the last
> > overhaul.
> >
> > I'd also appreciate any comments or advice.
>
> If you're sure 152 is the model you want, surf over to
> http://www.aeroprice.com/. For $20 or so you can get a valuation of the
> particular plane you are looking at, or for $50 or so you can get their software
> for evaluating as many instances as you like of a particular model (e.g. 152).
> The expense is trivial compared to the value of the knowledge.
>
> Dave
> Remove SHIRT to reply directly.

[Dave Butler]

> The lease back options leave you open for all kinds of
> expenses and you have to pay insurance, etc.
>

How many leased-back airplanes have you owned, then?

[Greg Hopp]

Dave Butler > wrote in message
> How many leased-back airplanes have you owned, then?

I own a C-150 with a patient, understanding partner. BOth of us are
new to the experience. It has worked out great so far, both of us are
on the same wavelength. I am trying to figure out why a lease-back
would work. The importance of ownership (to many) is that the plane
is as you left it, or as your partner left it. Since both of you own
a stake in the plane, it is well taken care of.

With a leaseback, you are another renter, but different in that you
bear the burden of all the expense, annual, 100 hr inspections,
break/fix, etc. and you still don't get to take it when you want to.
Where is the advantage to that?

In my experience as a first time owner, having a partner or three to
divide the expenses (and there ARE expenses) has made the experience,
overall, wonderful.

Best,

Greg H.
N4691X
'67-G

[Darrel Toepfer]

rajek wrote:

> I'm considering buying a 1978 Cessna 152 that the owner is leasing to a
<snip>
> Asking price is $28,000. The engine has about 600 hours since the last
> overhaul.
>
> I'd also appreciate any comments or advice.
>
> Thanks!

http://www.whodat.net/n714yz

Engine time is about the same, alot less on the price, nicely equipped
and low time on the airframe...

[G.R. Patterson III]

Greg Hopp wrote:
>
> With a leaseback, you are another renter, but different in that you
> bear the burden of all the expense, annual, 100 hr inspections,
> break/fix, etc. and you still don't get to take it when you want to.
> Where is the advantage to that?

The terms of leases vary. You may indeed bear all these expenses; if so, you also get
the lion's share of the rental proceeds. In some leases, the FBO pays all the
expenses and you get a small part of the rental proceeds. In either case, your income
from rental is the "advantage to that"; you are indeed just another renter when it
comes to flying the plane.

Ron Natalie used to point out that a leaseback is a business, and you should treat it
as one. If you do that, the plane is just a business asset and you're likely to make
money at it. If you lease your aircraft out as a way to make the payments on "your
baby", the results will not please you.

George Patterson
None of us is as dumb as all of us.

[Dave Butler]

Greg Hopp wrote:
> Dave Butler > wrote in message
>
>>How many leased-back airplanes have you owned, then?

My question above was directed to a poster who seemed to be expressing an
opinion based on no experience. Since he didn't respond, I'm guessing -his-
answer would be -none-.

>
> I own a C-150 with a patient, understanding partner. BOth of us are
> new to the experience. It has worked out great so far, both of us are
> on the same wavelength. I am trying to figure out why a lease-back
> would work. The importance of ownership (to many) is that the plane
> is as you left it, or as your partner left it. Since both of you own
> a stake in the plane, it is well taken care of.
>
> With a leaseback, you are another renter, but different in that you
> bear the burden of all the expense, annual, 100 hr inspections,
> break/fix, etc. and you still don't get to take it when you want to.
> Where is the advantage to that?

With a leaseback, you are whatever the terms of the lease say you are. You are
responsible for whatever the terms of the lease say you are responsible for. You
can take it whenever the terms of the lease say you can take it. If you don't
like the terms of the lease, don't sign it.

Assume for a minute that the terms are those that you assume in the previous
paragraph. The advantage might be that you gain experience in aircraft ownership
while reducing your out-of-pocket expense. Your aircraft gets flown, instead of
sitting on the ramp corroding. The fixed costs of tiedown, insurance, annual
inspections, etc are amortized over a larger usage base, lowering your hourly
cost. I'm sure you can think of more. Heck, it's even possible to come out
financially ahead. There are lots of people with different goals and different
expectations. Some will see an advantage in a lease, and some won't.

>
> In my experience as a first time owner, having a partner or three to
> divide the expenses (and there ARE expenses) has made the experience,
> overall, wonderful.

I've had two partnership experiences, one excellent, one troublesome.

Dave

[Michael]

Dave Butler > wrote
> My question above was directed to a poster who seemed to be expressing an
> opinion based on no experience.

I've never owned a leased-back plane. Until fairly recently, I've
never had a root canal done either. However, I know quite a few
people who have owned leasebacks. I also know quite a few people who
had root canals done. Interestingly, my impression of what it was
like to get a root canal wasn't really changed much by having one -
the impression I got from my friends was pretty accurate. It was
painful and expensive, as are most root canals, and to be avoided if
possible. Much the same applies to leasebacks.

> With a leaseback, you are whatever the terms of the lease say you are.
> If you don't like the terms of the lease, don't sign it.

True but disingenuous. You are highly unlikely to get favorable
terms.

The reality is that there isn't much (if any) money to be made in
airplane rental. The money is made by selling fuel, maintenance,
tiedown/hangar space, and maybe instruction. The rental airplanes are
just there to keep the business going.

> The advantage might be that you gain experience in aircraft ownership
> while reducing your out-of-pocket expense.

Untrue. The only experience in aircraft ownership you will gain is
the experience of writing checks. You will be paying huge money for
insurance that allows rental. This can easily double or triple your
fixed costs. Of course that means the plane has to keep flying to
generate revenue, and that means you can't wait until you have time to
fix it yourself. The result is that you don't actually learn to fix
anything - which is the most important part of gaining experience in
aircraft ownership.

> Heck, it's even possible to come out financially ahead.

I suppose it might be possible. I've never seen it happen.

I've seen the occasional mechanic who did all or almost all his own
maintenance come out ahead - by assuming his time was worth nothing.
I have NEVER seen a first-time owner come out ahead on a leaseback.

My point is not that it's impossible to have a good experience with a
leaseback - but anyone who has to ask about it on the net is not going
to have a good experience, and that's certain.

Michael

[Dave Butler]

Michael wrote:
> Dave Butler > wrote
>
>>My question above was directed to a poster who seemed to be expressing an
>>opinion based on no experience.
>
>
> I've never owned a leased-back plane. Until fairly recently, I've
> never had a root canal done either. However, I know quite a few
> people who have owned leasebacks. I also know quite a few people who
> had root canals done. Interestingly, my impression of what it was
> like to get a root canal wasn't really changed much by having one -
> the impression I got from my friends was pretty accurate. It was
> painful and expensive, as are most root canals, and to be avoided if
> possible. Much the same applies to leasebacks.
>
>
>>With a leaseback, you are whatever the terms of the lease say you are.
>>If you don't like the terms of the lease, don't sign it.
>
>
> True but disingenuous. You are highly unlikely to get favorable
> terms.

I don't take kindly to being called disingenuous. Let's elevate this discussion
above name-calling, OK? You've made a lot of valuable contributions to this
group, Michael, but calling people disingenuous because they don't agree with
your position is not a positive contribution.

I stand by my position. You're not likely to get favorable terms if you just
accept the terms that are offered. You're free to negotiate any terms you like.
If you don't get what you want, you are free to walk away.

>
> The reality is that there isn't much (if any) money to be made in
> airplane rental.

Quite true.

> The money is made by selling fuel, maintenance,
> tiedown/hangar space, and maybe instruction. The rental airplanes are
> just there to keep the business going.
>
>
>>The advantage might be that you gain experience in aircraft ownership
>>while reducing your out-of-pocket expense.
>
>
> Untrue. The only experience in aircraft ownership you will gain is
> the experience of writing checks.

....and this is based on your experience of -no- leasebacks?

> You will be paying huge money for
> insurance that allows rental. This can easily double or triple your
> fixed costs.

That's why you collect rent for the use of your aircraft. Assuming, of course,
that your lease contract requires -you- to pay for the insurance.

> Of course that means the plane has to keep flying to
> generate revenue, and that means you can't wait until you have time to
> fix it yourself. The result is that you don't actually learn to fix
> anything - which is the most important part of gaining experience in
> aircraft ownership.

.... in your opinion.

>
>
>>Heck, it's even possible to come out financially ahead.
>
>
> I suppose it might be possible. I've never seen it happen.
>
> I've seen the occasional mechanic who did all or almost all his own
> maintenance come out ahead - by assuming his time was worth nothing.
> I have NEVER seen a first-time owner come out ahead on a leaseback.
>
>
> My point is not that it's impossible to have a good experience with a
> leaseback - but anyone who has to ask about it on the net is not going
> to have a good experience, and that's certain.

.... in your opinion.

[Michael]

Dave Butler > wrote
> > True but disingenuous. You are highly unlikely to get favorable
> > terms.
>
> I don't take kindly to being called disingenuous. Let's elevate this discussion
> above name-calling, OK? You've made a lot of valuable contributions to this
> group, Michael, but calling people disingenuous because they don't agree with
> your position is not a positive contribution.

Point taken, and I apologize. However, I still don't agree that it is
possible for the owner of a single airplane to get favorable leaseback
terms from an FBO, especially a first time buyer. The only people
I've ever heard claim otherwise were those who benefit by leasebacks
and those who haven't tried but believe it can be done. If you have a
specific counterexample, I would love to hear about it.

> I stand by my position. You're not likely to get favorable terms if you just
> accept the terms that are offered. You're free to negotiate any terms you like.
> If you don't get what you want, you are free to walk away.

Doesn't quite work that way. Nobody will sign a leaseback contract
with you for an airplane you don't own. Once you've invested the
capital, you are indeed free to walk away - but you've already
invested the capital.

> > The reality is that there isn't much (if any) money to be made in
> > airplane rental.
>
> Quite true.

Then what makes you believe a leaseback can work? If there isn't
money to be made there, then how are you to make money there?

> > Untrue. The only experience in aircraft ownership you will gain is
> > the experience of writing checks.
>
> ...and this is based on your experience of -no- leasebacks?

No, it's based on the experience of my friends who tried.
It's like that root canal thing.

And what is your experience with leasebacks?

Michael

[G.R. Patterson III]

Michael wrote:
>
> Point taken, and I apologize. However, I still don't agree that it is
> possible for the owner of a single airplane to get favorable leaseback
> terms from an FBO, especially a first time buyer. The only people
> I've ever heard claim otherwise were those who benefit by leasebacks
> and those who haven't tried but believe it can be done. If you have a
> specific counterexample, I would love to hear about it.

An aquaintance of mine had several aircraft on leaseback at Kupper airport through
the 90s. The terms of the lease were that he provided the plane and the FBO performed
and paid for all maintenance and provided insurance. He got something like $10/hour
from the rent. At one time, he had three older 172s on lease. His worst experience
was when a student wrinkled a firewall. That plane was down for 6 weeks, producing no
income, but it was the FBO that had to swallow the repair bill.

He banked most of the rental money. As each engine hit TBO, the plane was upgraded to
180 hp (at the owner's expense) and the rent was increased. His portion of the rent
also increased, of course. As the rental income accumulated, he had each aircraft
painted. The next step was to fix up the interior. At that point, he would have the
FBO restrict the rental to moderate time pilots who could be expected to treat the
planes well. Eventually he pulled each aircraft off the line and sold it for
considerably more than he had invested. In at least one case, he sold the plane as
soon as he finished the interior work. I think he did not have any avionics
improvements made.

He retired to Carolina last year. Dunno whether he sold the last one or took it with
him, but he had sure turned it into a good-looking plane last time I saw it.

George Patterson
None of us is as dumb as all of us.

[Dave Butler]

Michael wrote:
> Dave Butler > wrote
>
>>>True but disingenuous. You are highly unlikely to get favorable
>>>terms.
>>
>>I don't take kindly to being called disingenuous. Let's elevate this discussion
>>above name-calling, OK? You've made a lot of valuable contributions to this
>>group, Michael, but calling people disingenuous because they don't agree with
>>your position is not a positive contribution.
>
>
> Point taken, and I apologize. However, I still don't agree that it is

Apology accepted.

> possible for the owner of a single airplane to get favorable leaseback
> terms from an FBO, especially a first time buyer. The only people
> I've ever heard claim otherwise were those who benefit by leasebacks
> and those who haven't tried but believe it can be done. If you have a
> specific counterexample, I would love to hear about it.

OK, my successful counterexample is from my own experience, which I have
described previously in this forum (google is your friend), but I'll briefly
describe it again. See below. My lease was not to an FBO, so I guess you can
argue it is not a "leaseback", but just a "lease". In common aviation usage,
this sort of lease is commonly referred to as a leaseback.

>
>
>>I stand by my position. You're not likely to get favorable terms if you just
>>accept the terms that are offered. You're free to negotiate any terms you like.
>>If you don't get what you want, you are free to walk away.
>
>
> Doesn't quite work that way. Nobody will sign a leaseback contract
> with you for an airplane you don't own. Once you've invested the
> capital, you are indeed free to walk away - but you've already
> invested the capital.

I agree. I was assuming you already owned the aircraft, which is not the OP's
situation.

>
>
>>>The reality is that there isn't much (if any) money to be made in
>>>airplane rental.
>>
>>Quite true.
>
>
> Then what makes you believe a leaseback can work? If there isn't
> money to be made there, then how are you to make money there?

You said not much, not none. I agree the margins are thin and the risks are high.

>
>
>>>Untrue. The only experience in aircraft ownership you will gain is
>>>the experience of writing checks.
>>
>>...and this is based on your experience of -no- leasebacks?
>
>
> No, it's based on the experience of my friends who tried.
> It's like that root canal thing.
>
> And what is your experience with leasebacks?

I owned a PA28-180, leased to a flying club, for -I don't know- several years,
long enough to go through 2 engine overhauls on it. I started out with a
partner, ended up as sole owner. The aircraft was used by a flying club for
instrument training and whatever club member do with airplanes, no primary
training. I used 350 hours / year as a planning number.

After sale of the aircraft and recapture of the depreciation, I made a small
amount. You could argue that the amount I made was not worth the amount of risk
in the investment, and I'll certainly stipulate that I was lucky. There were
intangible benefits that made it worth it to me. I did -none- of my own
maintenance, so by your criteria, I guess I learned nothing from the exercise. I
don't feel that way about it, though.

Incidentally, this same aircraft was sold to another club member, who also
leased it to the same club. Not sure, but I think her lease experience was not
as positive as mine. It's now been sold to yet another club member, who
continues to lease it to the club. The current owner is a friend and coworker
and comments positively about the status of the business, but I haven't examined
his books.

Dave

[Michael]

"G.R. Patterson III" > wrote
> > Point taken, and I apologize. However, I still don't agree that it is
> > possible for the owner of a single airplane to get favorable leaseback
> > terms from an FBO, especially a first time buyer.

> An aquaintance of mine had several aircraft on leaseback at
> Kupper airport through the 90s.

So he wasn't a first time buyer or an owner of a single airplane, right?

Michael

[G.R. Patterson III]

Michael wrote:
>
> "G.R. Patterson III" > wrote
> > > Point taken, and I apologize. However, I still don't agree that it is
> > > possible for the owner of a single airplane to get favorable leaseback
> > > terms from an FBO, especially a first time buyer.
>
> > An aquaintance of mine had several aircraft on leaseback at
> > Kupper airport through the 90s.
>
> So he wasn't a first time buyer or an owner of a single airplane, right?

I believe that he was both at one time. After he saw how well the deal worked on his
first plane, he bought another, then a third.

George Patterson
None of us is as dumb as all of us.

[Michael]

Dave Butler > wrote
> OK, my successful counterexample is from my own experience, which I have
> described previously in this forum (google is your friend), but I'll briefly
> describe it again. See below. My lease was not to an FBO

Well, that does make a difference. Clubs are a whole 'nother kettle
of fish. Main difference is this - the club isn't trying to make
money (usually), so what little money there is to be made can be made
by the owner.

> I agree. I was assuming you already owned the aircraft, which is
> not the OP's situation.

If you already own the aircraft and can afford to walk away from the
contract if you don't like it, that implies that you can comfortably
afford the aircraft yourself. So would you agree that the first piece
of advice should be - if you can't comfortably afford or don't want to
afford an airplane unless it's going to go on leaseback, you should
not even consider buying?

> > Then what makes you believe a leaseback can work? If there isn't
> > money to be made there, then how are you to make money there?
>
> You said not much, not none. I agree the margins are thin and
> the risks are high.

Which goes back to my point about clubs. If the club is willing to
cede the entire profit margin to the owner, and cares only about
having the aircraft available for the membership (which may well be
typical) there just might be some margin available. With an FBO, you
would need to either do your own maintenance (essentially operating at
breakeven or a loss, but being paid for your work) or own multiple
aircraft to realize economies of scale. Neither is particularly
viable for a first time buyer.

> After sale of the aircraft and recapture of the depreciation, I made a small
> amount. You could argue that the amount I made was not worth the amount of risk
> in the investment, and I'll certainly stipulate that I was lucky.

So you were lucky to have made a small amount. How small? Did you at
least do better than putting the cash into T-bills?

> I did -none- of my own
> maintenance, so by your criteria, I guess I learned nothing from the exercise. I
> don't feel that way about it, though.

So what do you feel you learned about airplane ownership? I'm
genuinely curious - as far as I can see, all the things that have to
do with knowing how to own an airplane have to do with maintenance.
Everything else seems trivial to me.

Michael