Partnerships (again)

Thanks to everyone for the information, I think I have a basic idea of
how to structure the partnership, but the pont of reserves for the
avionics, and paint/interior. Any ideas on how to calculate those?

Also what about prop overhaul?

On 23-Sep-2003, Jim Howell wrote:

Thanks to everyone for the information, I think I have a basic idea of
how to structure the partnership, but the pont of reserves for the
avionics, and paint/interior. Any ideas on how to calculate those?

A good paint job on a typical single will probably run about $6,000 at
today's prices. Interior could be anywhere from a few hundred to a few
thousand depending upon what you replace and what materials you use. The
"need" for new paint, and even much of the wear and tear on the interior, is
related more to calendar time than to hours flown, so If you really want to
establish a reserve fund for paint and/or interior work you should charge
yourselves so much per month based upon how long you think it will be before
the work needs to be done.


Also what about prop overhaul?

For a fixed pitch prop the per hour cost will be pretty minimal. For a
typical constant speed figure a cost of around $1500 to $3000, with 2000
hour TBO. Prop overhaul is often (but not necessarily) done at the same
time as engine overhaul.

Remember that when you acquire the plane it is "as is". If you figure it
has 1000 hrs to go before engine and prop overhaul, and you figure, for
example, that the overhauls will cost a total of $20,000, then you need to
charge yourselves $20/hr for overhaul reserves even though the actual
per-hour cost is only $10/hr assuming 2000 hr TBO.

--
-Elliott Drucker

writes:

Remember that when you acquire the plane it is "as is". If you figure it
has 1000 hrs to go before engine and prop overhaul, and you figure, for
example, that the overhauls will cost a total of $20,000, then you need to
charge yourselves $20/hr for overhaul reserves even though the actual
per-hour cost is only $10/hr assuming 2000 hr TBO.

Or, to be more fair, set aside a $10K reserve (evenly divided) for the
portion of the TBO already used up, and then charge $10/hr for the
remaining time. Presumably, that $10K appeared directly as a discount
in the purchase price.


All the best,


David