Buying into existing partnership?

Gang,

I am planning to buy into an existing partnership. Should I be less
vigilant during prebuy than when buing a plane by myself? - maybe no,
but I would like to listen to some arguments.

Thanks
Chris

Chris wrote:

I am planning to buy into an existing partnership. Should I be less
vigilant during prebuy than when buing a plane by myself? - maybe no,
but I would like to listen to some arguments.

I did that. The plane was being maintained by a shop that I had an existing
relationship with, so I just talked to them about the plane. They already knew
me, and they knew the plane.

Otherwise, I would have gone for a prebuy inspection just as if I were buying
the whole plane. A prebuy is not that expensive and could save you some grief
down the road.

Make sure you check out the partners as well as the plane. I bought into what
sounded like a great partnership. It's worked out OK, sort-of, but if I had been
a little more diligent with my research I might not have bought into this one.
What I heard was that the plane was available a lot because my prospecitve
partners rarely fly. The part I missed was that, since they rarely fly, they're
not particularly interested in speedy fixing of squawks. My advice: find
partners whose goals and interests are similar to your own.

Dave

No, be no less diligent. It makes little sense from a safety point of view,
and will allow you to determine much about the group you are getting into.
Are they the fix it now types, or the let it go types.

It may seem to make sense from a financial sense based on risk assessment
and the fact that you are doing a full prebuy for a fraction of a plane;
however, finance is one factor out of three - finance, safety, and
relationship.

How old and what kind of plane are you getting into?




"Chris" wrote in message
...
Gang,

I am planning to buy into an existing partnership. Should I be less
vigilant during prebuy than when buing a plane by myself? - maybe no, but
I would like to listen to some arguments.

Thanks
Chris

About a year and a half ago I bought a 1/5th share of a 172. I did the full
AOPA liens/records search and looked at the most recent annual and that was
it. My CFI had known the plane and several of the owners for close to ten
years, and they all struck me as very trustworthy characters. So taken
together I did not feel it was necessary. The fact that any repair bill was
going to be split 5 ways played a big role in that decision. Also the fact
that it was a 172- other than the engine there just aren't that many things
that will swallow your wallet. I would do a full pre-buy on anything in a
2-way partnership, and on any complex bird with fewer than 4 partners.

So far my experience has been fine. I doubt the pre-buy would have caught
any of the problems that have come up so far, and it probably wouldn't have
saved me any money anyway.

-cwk.

"Chris" wrote in message
...
Gang,

I am planning to buy into an existing partnership. Should I be less
vigilant during prebuy than when buing a plane by myself? - maybe no,
but I would like to listen to some arguments.

Thanks
Chris

Dude wrote:
No, be no less diligent. It makes little sense from a safety point of view,
and will allow you to determine much about the group you are getting into.
Are they the fix it now types, or the let it go types.

It may seem to make sense from a financial sense based on risk assessment
and the fact that you are doing a full prebuy for a fraction of a plane;
however, finance is one factor out of three - finance, safety, and
relationship.

How old and what kind of plane are you getting into?

A 1966 Cessna 182

Chris

"Chris" wrote in message
...
Gang,

I am planning to buy into an existing partnership. Should I be less
vigilant during prebuy than when buing a plane by myself? - maybe no,
but I would like to listen to some arguments.

Thanks
Chris


There is more to look at than a pre buy, make sure they have an engine &
maintance fund in an escrow account in a real bank. I have seen some that
one person just hold the funds. I have seen it also ware they are at TBO and
they need an extra $10 to $15k for an overhaul so they vote and sell a share
or just want to split the overhaul with another person. Watch out for the
crooks! There's a sucker is Born Ever Day, Caveat Emptor.

As others have mentioned, you are buying more than a plane. You will
want to review the funds, how much do they have in the engine prop
fund and any other funds. How do they fund the plane? Is there an
hourly/monthly/assesment situation. Is it well balanced or does it
favor the guy who flys the most/least? Having bought several planes
and done pre-buys on a lot more I have mixed feeling on the pre-buy.
Certainly you want to do something basic, but many places want to do a
full annual. The problem with a full pre-buy is that it doesn't take
long to spend more money doing pre-buys on planes than you would have
spent on the plane, but end up with no plane. The cost to bring the
first plane up to your standards ends up being less than all the other
planes you spent pre-buy money on afterwards. You really need to do a
real risk assesment. Today, I determine how much of a pre-buy to do
based on the reputation of the owner. You can't be in aviation and not
have a reputation, the community is just too small. For every pilot,
there are at least several pilots and mechanics on the field that have
an opinion of you and how you maintain your plane. I've spend over
$10,000 having factory service centers do full pre-buys only to find
out afterwords that they missed $25,000 in repairs. I've done the kick
the tires and write the check and ended up with great planes. You
really have to make your own decision on how much pre-buy to do. Don't
be afraid to ask for only a couple hours in some cases.
The other problem with pre-buy is how to leverage price. If you
negotiate a price before hand and find a few thousand in repairs you
consider necessary (but the A&P will pass) do you go back ot the
seller? Now, he's going to interact with you as though he believes you
went back on the original deal. If you do the pre-buy before the price
negotiations you could pre-buy a plane and find you can't come
together on the price.
Of course the problem becomes much more difficult if you are working
from different sides of the country.
Lots of people can say, "I did it this way and it worked" but there is
no good clean way to do it everytime. In the end you need to
understand that it is not possible to buy a plane and not be exposed
to substantial possibility of large repairs. A brand new plane with
new engine can swollow a valve sometimes. The trick is to review the
risk and compare the price you are willing to spend to avoid the risk.
Basic Business 101. Don't just blindly spend tons of money on pre-buys
because people on the list say nothing short of a full annual will do.


-Robert, CFI

Chris wrote in message ...
Gang,

I am planning to buy into an existing partnership. Should I be less
vigilant during prebuy than when buing a plane by myself? - maybe no,
but I would like to listen to some arguments.

Thanks
Chris

Well, that's not a lot of plane dollar wise. I would make sure you do
enough diligence to make sure it is safe, and not going to fall apart soon.
A skylane isn't all that complex, and they don't tend to bite you like more
complex planes.

The main thing here may be relationship. Are these other guys the types you
want as partners from a personality, financial, and plane use angle? Try
taking a worst case look at each one. For instance, the guy who hardly ever
flies sounds like a great partner until you realize that he is never in a
hurry to get the plane fixed.



"Chris" wrote in message
...
Dude wrote:
No, be no less diligent. It makes little sense from a safety point of
view, and will allow you to determine much about the group you are
getting into. Are they the fix it now types, or the let it go types.

It may seem to make sense from a financial sense based on risk assessment
and the fact that you are doing a full prebuy for a fraction of a plane;
however, finance is one factor out of three - finance, safety, and
relationship.

How old and what kind of plane are you getting into?

A 1966 Cessna 182

Chris

Preflight the plane. See if everything works. Fly with one of the
partners, see if all the radios work, gyros. Note the condition of the
paint, interior etc. Bring it into the shop and have a mechanic give
it a compression test and cut open the oil filter. Check the logs and
the AD's.

Then there are the partners. Is the financial setup sound? Do they
really own the plane? Will you really have a LEGAL share? Do you trust
them? What is their financial situation?

Trade a Plane has a very good appraisal program (you have to
subscribe). Also, do a title search and see if there are any liens.

As for the bank account, you are buying a share of that also. So if
there is 10K in the bank account you are buying the a share of the
plane plus a share of the bank account.

Chris wrote in message ...
Gang,

I am planning to buy into an existing partnership. Should I be less
vigilant during prebuy than when buing a plane by myself? - maybe no,
but I would like to listen to some arguments.

Thanks
Chris

I'd be just as cautious. Been there.......

Also, read and understand the pertnership agreement as much as
your A&P understands the airplane.


Trip

In article , says...

Gang,

I am planning to buy into an existing partnership. Should I be less
vigilant during prebuy than when buing a plane by myself? - maybe no,
but I would like to listen to some arguments.

Thanks
Chris