Thinking about an aircraft partnership

I'm thinking about getting into an airplane partnership (or co-ownership)
and have a few questions.

When people say that you can't really save money with ownership over
renting, does that include partnerships as well? I would think that
with a 4-way partnership, the operating costs would be reduced to
a level such that it would be cheaper than renting.

One plane I'm looking at shows a monthly cost of around $50 with
an hourly rate of about $58/wet. This seems pretty good, but I'm
wondering what is missing. After all, how can $200/month cover
all the operating expenses (like hangar rental, insurance, annual
inspections, etc.)? ... I do have these questions in to the selling
partner and am currently waiting for a reply - FYI.

Before buying into an existing partnership would you still suggest
a full pre-purchase inspection? I would think at a minimum I would
want someone to go over the logs and make sure the partners are not
looking for a way to defray some of the costs of some looming expenditure.
Given that one of the existing partners is selling his share, this
doesn't seem like a realistic concern.

To do this right, I really should take a few months and read the
'how to buy' books, but then I felt this way before I bought my
first house, and that process turned out to be relatively easy.

Thanks for any opinions,

By the way, the airplane in question is a 1969 Mooney M20F Turbo.
Would any Mooney owners care to share some advice via e-mail?


--
Mark Hansen, PP-ASEL, Instrument Student
Sacramento, CA

Mark Hansen wrote:
I'm thinking about getting into an airplane partnership (or co-ownership)
and have a few questions.

When people say that you can't really save money with ownership over
renting, does that include partnerships as well? I would think that
with a 4-way partnership, the operating costs would be reduced to
a level such that it would be cheaper than renting.

I don't know about that. Either renting or partnering, you're spreading the cost
over a wider user base and increasing the utilization of an expensive asset. I
think the usual case is that by renting you can spread the costs more widely
than by partnering.

I'm currently in a 4-way partnership, and it's working sort-of OK, but next time
I'll look for a partnership with fewer people. It's just too hard to get that
many people all moving in the same direction. As a friend of mine points out,
when you take on one partner, you reduce your expenses by 50 percent (100 - 50),
and when you take on the second partner, you reduce your expenses only by 17
percent (50 - 33), and so on...


One plane I'm looking at shows a monthly cost of around $50 with
an hourly rate of about $58/wet. This seems pretty good, but I'm
wondering what is missing. After all, how can $200/month cover
all the operating expenses (like hangar rental, insurance, annual
inspections, etc.)? ... I do have these questions in to the selling
partner and am currently waiting for a reply - FYI.

That sounds like a good idea. There's no reason they shouldn't be willing to
open up their books for you.


Before buying into an existing partnership would you still suggest
a full pre-purchase inspection? I would think at a minimum I would
want someone to go over the logs and make sure the partners are not
looking for a way to defray some of the costs of some looming expenditure.
Given that one of the existing partners is selling his share, this
doesn't seem like a realistic concern.

It depends, but for me the general answer would be yes. Get someone to give you
an unbiased opinion on the condition.


To do this right, I really should take a few months and read the
'how to buy' books, but then I felt this way before I bought my
first house, and that process turned out to be relatively easy.

Yeah, it is possible to get into analysis-paralysis.


Thanks for any opinions,

By the way, the airplane in question is a 1969 Mooney M20F Turbo.
Would any Mooney owners care to share some advice via e-mail?

My partnership is an '81 M20J. You'll love the Mooney.

Dave

I've seen the ad for that same airplane at Exec! I also own an F model
Mooney and have a pretty good idea of the costs. Those numbers sounded
really low to me and I have a note in my PDA to call those guys and ask
some questions. The only way I can see that working is if they somehow
are able to do most of the maintenance themselves. There is a guy at
exec that has been very good at leting owners help out but just like
all other A&Ps, that only lasts until the first accident happens and
the FSDO calls him to the carpet for not supervising enough.

I keep my Mooney in Cameron Park and my partner and I have been looking
into selling a 1/3 share. We charge ourselves $45/hr dry which includes
an engine prop reserve and about $160/month (which would reduce). We
have outside tie down. Insurace is about $1600/yr and not included in
the previous numbers (we pay out of pocket) but would go up about
$1000/yr with a pilot w/o Mooney time.

-Robert, CFI
916 984 3448

One more comment if I may. If this is your first airplane you really
want to either buy into a partnership or make VERY good friends with
long time owners. We learned so much in the first couple of years and
blew through several thousand dollars in the learning curve.

Also, one quick way to justify a partnership is insurance. The cost of
insurance for 2 or 3 people is the same as for just one person. The
insurance company just charges you the solo rate for the most expensive
pilot, no extra charge for pilots. My broker says the 4th pilot does
increase the rate though. Beyond 4 is usually a "flying club" rate
which can be much higher for high performance aircraft.

-Robert

1) You divide the FIXED costs & capital by the number of people
involved. So the %
drops most greatly as you add 1 partner. This will typically be
about 1/2 of the hourly
costs.

2) If accounting is correct, hourly cost is almost independent of
number or
partners, except that many owners will wear everything out more
quickly.

3) The hassles go up as the cube of the number. 1 partner is almost
like
owning it yourself. Lots of partners, and it's like a club and
nobody takes
the extra effort to give it TLC.

4) If the airflesh is in pretty good condition, you would be much
better off
spending your time to examine the PARTNERSHIP. If busted, that's
much harder to fix than the aircraft.

5) Best if the partners do something different... don't have all the
same
days off, etc. If so, and there is only 1, you will probably not
even have
to schedule except for extended trips.

6) Having one gung-ho partner can be good if he doesn't completely
dominate the opinions of the others. Best if that partner likes
work.

Bill Hale

On 9/2/2005 14:14, Robert M. Gary wrote:

I've seen the ad for that same airplane at Exec! I also own an F model
Mooney and have a pretty good idea of the costs. Those numbers sounded
really low to me and I have a note in my PDA to call those guys and ask
some questions. The only way I can see that working is if they somehow
are able to do most of the maintenance themselves. There is a guy at
exec that has been very good at leting owners help out but just like
all other A&Ps, that only lasts until the first accident happens and
the FSDO calls him to the carpet for not supervising enough.

They did say that they do most of the maintenance themselves, and have
an IA to inspect and sign off...


I keep my Mooney in Cameron Park and my partner and I have been looking
into selling a 1/3 share. We charge ourselves $45/hr dry which includes
an engine prop reserve and about $160/month (which would reduce). We
have outside tie down. Insurace is about $1600/yr and not included in
the previous numbers (we pay out of pocket) but would go up about
$1000/yr with a pilot w/o Mooney time.

-Robert, CFI
916 984 3448



--
Mark Hansen, PP-ASEL, Instrument Student
Sacramento, CA

I am in a two-way partnership with a '79 "J" model Mooney and I'll try
to answer your questions. First of all for me owning is more expensive
than renting. But we own a lot more capable aircraft than the 172's I
was renting. My mission was to be able to take trips for weeks on end if
I so chose. That would be impossible renting. I also wanted to get a
faster airplane then the 110kts Skyhawk. Not that Skyhawks are bad mind
you, just that going 150-160kts is a lot cooler... :-)

Your prices seem a little low to me but I don't know the airplane you
are talking about. We charge ourselves $75 wet going by the tach-time.
This includes engine and prop reserves, gas and $2000 for the annual
expenses.

But, to me a 2-way parnership is just like owning the plane myself
except that I get to split the costs in half. I would never fly enough
to justify full ownership unless I hit the lottery or something (note to
self - start playing the lottery).

We have discussed adding a 3rd and last partner but are in no hurry to
do so. We are looking for someone to fit in with us. If it happens then
cool otherwise this 2-way deal is working out nicely.

If you buy into an existing partnership you could have a pre-buy done.
Probably a good thing to do but you should be able to tell if the
existing guys take care of the plane or not.

Let me know if you have any questions. The Mooney is a great airplane
and yes I am prejudiced

Jon Kraus
'79 Mooney 201
4443H @ TYQ

Mark Hansen wrote:

I'm thinking about getting into an airplane partnership (or co-ownership)
and have a few questions.

When people say that you can't really save money with ownership over
renting, does that include partnerships as well? I would think that
with a 4-way partnership, the operating costs would be reduced to
a level such that it would be cheaper than renting.

One plane I'm looking at shows a monthly cost of around $50 with
an hourly rate of about $58/wet. This seems pretty good, but I'm
wondering what is missing. After all, how can $200/month cover
all the operating expenses (like hangar rental, insurance, annual
inspections, etc.)? ... I do have these questions in to the selling
partner and am currently waiting for a reply - FYI.

Before buying into an existing partnership would you still suggest
a full pre-purchase inspection? I would think at a minimum I would
want someone to go over the logs and make sure the partners are not
looking for a way to defray some of the costs of some looming expenditure.
Given that one of the existing partners is selling his share, this
doesn't seem like a realistic concern.

To do this right, I really should take a few months and read the
'how to buy' books, but then I felt this way before I bought my
first house, and that process turned out to be relatively easy.

Thanks for any opinions,

By the way, the airplane in question is a 1969 Mooney M20F Turbo.
Would any Mooney owners care to share some advice via e-mail?

On 9/2/2005 14:14, Robert M. Gary wrote:

I've seen the ad for that same airplane at Exec! I also own an F model
Mooney and have a pretty good idea of the costs. Those numbers sounded
really low to me and I have a note in my PDA to call those guys and ask
some questions. The only way I can see that working is if they somehow
are able to do most of the maintenance themselves. There is a guy at
exec that has been very good at leting owners help out but just like
all other A&Ps, that only lasts until the first accident happens and
the FSDO calls him to the carpet for not supervising enough.

I keep my Mooney in Cameron Park and my partner and I have been looking
into selling a 1/3 share. We charge ourselves $45/hr dry which includes
an engine prop reserve and about $160/month (which would reduce). We
have outside tie down. Insurace is about $1600/yr and not included in
the previous numbers (we pay out of pocket) but would go up about
$1000/yr with a pilot w/o Mooney time.

Sorry, Robert. I hit Send too quickly on the last response...

I would be interested in talking about that share. I would like to
be based at Executive, but to be honest I don't think it really matters
all that much. Can we start a dialog?

Thanks,


-Robert, CFI
916 984 3448



--
Mark Hansen, PP-ASEL, Instrument Student
Sacramento, CA

On 9/2/2005 14:22, Robert M. Gary wrote:

One more comment if I may. If this is your first airplane you really
want to either buy into a partnership or make VERY good friends with
long time owners. We learned so much in the first couple of years and
blew through several thousand dollars in the learning curve.

This seems like one of the primary advantages...


Also, one quick way to justify a partnership is insurance. The cost of
insurance for 2 or 3 people is the same as for just one person. The
insurance company just charges you the solo rate for the most expensive
pilot, no extra charge for pilots. My broker says the 4th pilot does
increase the rate though. Beyond 4 is usually a "flying club" rate
which can be much higher for high performance aircraft.

Understood. I assume the new partner would just pick up the additional
premium then - sounds fair to me ;-)


-Robert



--
Mark Hansen, PP-ASEL, Instrument Student
Sacramento, CA

On 9/2/2005 14:51, Jon Kraus wrote:

I am in a two-way partnership with a '79 "J" model Mooney and I'll try
to answer your questions. First of all for me owning is more expensive
than renting. But we own a lot more capable aircraft than the 172's I
was renting. My mission was to be able to take trips for weeks on end if
I so chose. That would be impossible renting. I also wanted to get a
faster airplane then the 110kts Skyhawk. Not that Skyhawks are bad mind
you, just that going 150-160kts is a lot cooler... :-)

And when I'm comparing ownership vs renting, I'm doing so with comparable
aircraft. It wouldn't be fair to compare the costs of owning a Mooney
against the rental of a 172. The closest I have to compare locally is
an Arrow III, complex which rents for about $135/hr (wet).


Your prices seem a little low to me but I don't know the airplane you
are talking about. We charge ourselves $75 wet going by the tach-time.
This includes engine and prop reserves, gas and $2000 for the annual
expenses.

My guess is that they keep the operating costs low, and pony up the
cash to handle even scheduled maintenance. I've asked them how they
work this though, so we'll see...


But, to me a 2-way parnership is just like owning the plane myself
except that I get to split the costs in half. I would never fly enough
to justify full ownership unless I hit the lottery or something (note to
self - start playing the lottery).

Heh, heh...


We have discussed adding a 3rd and last partner but are in no hurry to
do so. We are looking for someone to fit in with us. If it happens then
cool otherwise this 2-way deal is working out nicely.

If you buy into an existing partnership you could have a pre-buy done.
Probably a good thing to do but you should be able to tell if the
existing guys take care of the plane or not.

Let me know if you have any questions. The Mooney is a great airplane
and yes I am prejudiced

Thanks very much for the advice.


Jon Kraus
'79 Mooney 201
4443H @ TYQ



--
Mark Hansen, PP-ASEL, Instrument Student
Sacramento, CA