MZeroA Nation, welcome back for part four of How to Buy an Airplane.
This time, we're going to do a wrap-up, a synopsis, a conclusion.
We're going to come up with the way that you can buy and own
and operate your own airplane.
Come on, let's do it.
Hey, MZeroA Nation, Jamie Beckett, back with you.
The good folks at the AOPA Foundation
let me out of the building for a short while,
so I can make this video and wrap up our discussion on how to buy an airplane.
So, let's do a little bit of synopsis.
Let's tie together all the parts we've seen in parts one, two, and three,
and see where we are now.
Do buy an airplane that fits your mission,
the thing you're going to do about 80% of the time.
Don't buy the airplane that fulfills that once-in-a-lifetime dream trip.
For most of us, that's actually not a great fit.
Find the airplane that does what you're going to do
with your friends and family or to advance your career most of the time.
Do establish a budget.
While having a mission is your primary guide
to the type of airplane that you're going to buy,
the budget, that's your primary limitation.
We can't all be flying a King Air.
We can't all be flying a Caravan, not to start, anyhow.
So, let's pick a mission and a budget
that is going to make this something that's truly doable,
not something that becomes a misery for us as we go along and have to engage
in the maintenance and the hangar and the insurance and all the other costs
that come to play when we own an aircraft.
Also, as we get into the process of buying this airplane,
do get with a local lawyer or CPA, Certified Public Accountant
and find out if it's best for you to buy this airplane as an individual
or in an LLC that you may be the only member of or as a corporation.
Each of us has our own specific financial setup, our own goals in life.
And, what works for me may or may not work for you.
Your state may have slightly different rules than my state.
So, make sure you get with a professional and talk about what your goals are,
and figure out the best way to do this
because it really can matter in the long run.
I also want to warn you.
This is a big don't.
This is a big, big don't.
You might want to get a piece of paper and write this down.
Don't fall so in love with the airplane
that you can't possibly imagine buying anything else.
It has to be this one.
That's just not a great way to go.
You'll recall, and if you haven't seen part one, two, and three,
please, go back and watch them because you'll find those helpful.
But, in those parts one, two, and three,
I told you about a Cessna 172 that I was actively engaged in buying.
I'm doing exactly what we're talking to you about,
the same process.
This would have been my eighth airplane.
And, yes, I said "would have been," because I followed my own advice.
I did exactly what I recommend you do.
And, in that process, I found out, while that airplane had a brand-new engine,
only 18 hours on it.
It had a spectacular glass panel
and everything I could ever want for information,
it had not received that same level of treatment to the airframe.
And, when I went to the pre-buy inspection,
and, yes, I paid for the pre-buy inspection.
It cost me $1,000 to find out that's not the airplane for me.
Now, that may seem punitive.
That may seem like something you don't want to get into.
But, the truth is, that $1,000-investment saved me
tens of thousands of dollars in repair work.
And, I would have been buying an airplane that, instead of flying it,
it would have been in a hangar, in a shop, being worked on for months.
That was the best decision I could have made.
Get that pre-buy.
Pay for that pre-buy inspection with the mechanic I choose,
not the one the seller chooses.
And, I get a real report on the condition of that airplane.
It made it very easy for me to go back to the owner and say "I'm really sorry.
I know we had a deal contingent on this getting through the pre-buy inspection,
but it didn't.
I'm not going to buy your airplane."
That is really important stuff, and it's all part of
keeping in the back of your mind, there's another one.
This is not the only plane like this on the planet.
Odds are good there are dozens or hundreds or thousands
of similar aircraft out there on the market in a price range you can afford
that's going to get you where you want to be.
And, remember, don't feel any pressure to skip that pre-buy inspection.
I actually have spoken to people who were negotiating the sale of an airplane.
And, they said, "Yeah, I really like it and everything.
And, I was going to get a pre-buy, but the owner doesn't want me to."
Well, that doesn't have anything to do with anything.
Getting that pre-buy inspection is your best insurance to know,
what am I actually getting?
It's not necessarily the paint or the hours on the engine or the panel.
There's a lot more to it.
And, you want somebody who's working for you, who's on your side,
to really go look at that airplane,
and give you a written report what's the condition of it.
You may be able to still buy that airplane,
but use that report to negotiate a lower price or better terms.
Or, you may decide, as I did with that Cessna 172,
this is not my airplane.
Now, don't ignore those big-ticket items that come back on the pre-buy.
And, whether that's the engine is,
it's high-time, or it doesn't have good compression on one or more cylinders,
or maybe, when they pull apart the oil filter,
they find metal bits in that,
you're going to be looking at a substantial investment
beyond the price of the airplane,
maybe, 30, $40,000 dollars, depending on the type of aircraft.
So, keep that in mind,
that really great price on that airplane might actually escalate dramatically
after the sale, if that engine's not up to snuff.
Same is true for the instrument panel.
If that panel's got instrumentation in it that doesn't work or is so antiquated
that it doesn't even have a place in today's world,
like the airplane I used to own with the LORAN,
keep that in mind, you are going to have to do upgrades.
And, in a certificated airplane, a Part 23 airplane,
like a Cessna, a Piper, a Beechcraft,
those avionics can be quite expensive.
Don't buy an airplane just because it looks great on the internet.
The pictures might be beautiful.
You still need to know the specifics of that airplane.
I have a good friend who I respect tremendously
who bought an airplane for a great price off eBay.
Turned out when it got to the first annual,
the fuel bladders had been in it since 1959 and it had the wrong propeller on it.
It is a great airplane,
but she had to spend a bunch of money she hadn't expected to spend.
And, that's a big surprise some people can afford and some people can't.
That's why I really want you to take this to heart, that pre-buy inspection,
doing your due diligence before you agree to buy the airplane.
And, don't be in a rush if they tell you,
"There's somebody else looking at this from out of state.
If you don't jump on it quick, it'll be gone."
"Okay, because as Jamie told me, there's always another one."
And, I say that because there's always another one.
You can find another, absolutely.
But, make sure you or somebody you trust looks that airplane over in person,
looks at the logbooks, make sure it's all up-to-speed.
You look at the squawks that are listed on it.
Now, I mentioned terms.
And, let's talk a little bit about what I mean by terms.
Is the airplane being sold as is where is, or is it being sold with a new annual?
And, if it's being sold with a new annual,
who's picking the mechanic, the seller, or the buyer?
Are they going to deliver it to you,
or are you going to have to hire a ferry company,
or are you going to have to take a week off from work to go out
and pick up that airplane and bring it home?
Always, always be willing to walk away from a deal.
I know that sounds, "Well, that doesn't make sense.
I'm shopping for an airplane.
Why would I walk away from the deal?"
Not every deal is a good deal.
Even a good-looking airplane with a good price
may not actually be a good airplane that you're going to own at a good price.
So, always be willing to walk away,
just as I did from that 1966 172G model
that I was really looking forward to owning.
Now, let's talk about some real cost-cutting tips
that might make the difference for you between wishing you could own an airplane
and actually owning an airplane
because believe it or not,
there are some methods that you can use
to cut the cost of that aircraft dramatically
without actually cutting the selling price.
Be curious about the possibility of a co-ownership,
where you split the ownership of that aircraft
with one or two or three other people.
Believe it or not, bringing in just one other person
lowers your purchase price and your insurance and your hangar
and your maintenance by half.
All of a sudden, that airplane that was a stretch is easy.
Bringing in three other people brings you down to 25% of that purchase price.
Now, there is some leg work involved.
You do have to find people that you actually want to be involved with.
But, you don't have to socialize.
One of the advantages of a co-ownership is it's just financial.
If everybody agrees to the use of the aircraft,
everybody agrees to the way they'll do maintenance,
you're in pretty good shape.
You can cut the cost of that aircraft so dramatically
that it actually becomes inexpensive to own,
or you can own a lot more aircraft than you thought you could before.
Co-ownership is a really good option that can lower your price by half or more.
And, it's not that tough to do.
So, take that seriously and go talk to that lawyer or that CPA,
talk to your potential co-owners.
We don't call them partners.
They are co-owners.
And, see how you might be able to arrange that.
And, you can always write to me through MZeroA.
You can always write to me through AOPA.
There are co-ownership agreements out there in the world.
You can mimic those and make your life a whole lot easier
and really cut your costs on aircraft.
By the same token,
you could put that aircraft into a flying club.
People often talk about
leasing back an airplane to a flight school.
And, that's an option.
But, that means a lot of other people are using your airplane
and you have no control over it.
In a co-ownership or in a club,
you actually know all the other participants.
You can make rules about how that aircraft is going to be treated.
I once leased an aircraft to a flying club I did not belong to
and specified that they were responsible for all maintenance
and they had to clean the airplane every 30 days, interior and exterior.
I got that airplane back in pristine condition
and with new tires on it.
I came out very well, and so did the club.
I once rented another airplane, leased it to a flying club I did belong to.
I'm allowed to make a small profit on that, "small" being the keyword
because the whole point of a flying club is to keep costs down,
but now because of economy of scale,
multiple people who are all in the same flying club are operating that airplane
and taking care of it as if it's their own because they have a lease on it.
It is their own for the time that they've leased it.
It's a great way to cut your cost and still maintain access to the airplane.
One caveat to that,
if you lease your airplane to a flying club you don't belong to,
you can't fly that airplane.
It's leased to the club.
Only club members can fly it.
If you lease the airplane to a club you do belong to,
you have the same rights to the aircraft as everybody else,
but you don't have special rights as the owner.
So, I can't show up to my club in Central Florida and say,
"Hey, folks, I'm going to take the airplane for two months
out to Colorado on a vacation.
I'm sorry, but that's what I want to do."
If the rules of the club don't allow any member to do that,
I can't do it either.
So, that's a great way to cut cost with a little bit of limitation on you.
But, if you're the one who sets up the flying club, which you can do,
and you're the owner of the aircraft that's leased to the flying club,
which you can do,
you have an awful lot of input into how that aircraft is going to be used
and how you get the maximum benefit, as do all the other members,
while keeping your cost really, really low.
Now, there's one other way we can save a lot of money on aircraft ownership.
And, that's with owner-assisted maintenance.
It's not just the oil change or replacing a tire
that a pilot is allowed to do.
And, you are allowed to do it.
Part 43 of the FARs that covers maintenance says
you're allowed to do that.
In the experimental world, you've got even more latitude.
But, owner-assisted maintenance can save you a fortune
over the life of owning that aircraft.
Just one example is the owner-assisted annual.
Every aircraft needs to go through an annual inspection.
Experimental aircraft have to go through an annual condition inspection,
the difference being the experimental inspection can be done by an AMP,
the certificated airplane, the Part 23 airplane,
the Cessna, the Piper, the Bonanza, the Grumman,
they have to be inspected and signed off by an IA.
But, the owner of that aircraft can assist in the annual
by removing the inspection covers, by removing the interior,
which is surprisingly easy to do.
Basically, by working with the maintenance shop to do all the grunt work
that they'd be paying somebody else 95 or $100 an hour or more to do,
we do it ourselves.
Not only do we learn an awful lot about the aircraft,
we save a ton of money.
It's a great way to go.
And, you can do it year after year after year.
You become the second set of eyes that's maintaining your own aircraft.
So, now that we've gone through all this wrap-up,
now that we've talked about all these different variables for buying an aircraft,
maybe, you're a little nervous.
You've never done this before.
Man, it seems like a lot of money.
I don't know anybody else I could be a partner with
and get involved in a co-ownership.
Well, start.
Go online.
Pick up a classified ad.
Talk to people down at the airport.
Go look at the pilot shop bulletin board or in the planning room.
Start finding opportunities and make that phone call.
Meet up with that owner.
Go look at that aircraft that's for sale and start kicking the tires
and poking your head in the cockpit and see, is this good for me?
Would this work?
Start the process.
You're going to learn more and more with every new aircraft you look at.
You're not going to buy the first one, more than likely.
But, somewhere along the line,
you're going to find that airplane that's a good fit,
that meets your mission,
it meets your budget,
it calls out to you, it's the plane I want to fly,
and it really does meet all your parameters,
as you being a new aircraft owner.
Now, I told you I was not buying that 1966 Cessna 172G, and I'm not.
But, within just a few days,
I found another airplane that meets my needs
and it's being delivered today to the airport near me
to get a pre-buy inspection.
And, if this goes through the pre-buy inspection over the next two or three days
and comes out with a good report,
I have every intention of buying that airplane.
It's faster than the 172 I was looking at.
It's considerably cheaper than the 172 I was looking at.
It's completely different.
It's a low-wing instead of a high-wing.
It's a two-seater instead of a four-seater.
And, it's even got a smaller engine, even though it goes faster.
So, I'll tell you more about that another time,
but just so you know,
if you don't get the airplane you thought you were going to get,
it doesn't mean you're not going to get an airplane.
If you get out there and start looking, start talking to people,
start looking for potential co-ownership partners to work with,
you may find very soon that, not only can you afford an airplane,
you're really happy that you're going to be an aircraft owner.
Thanks so much, MZeroA Nation,
for watching all four parts of this How to Buy an Airplane series.
I hope it's been really helpful to you.
And, I promise you, these are the exact same steps I use when I buy an airplane,
the exact same steps Jason uses when he buys an airplane.
And, you're going to find, I truly, believe these are the steps that work for you.
Get out there.
Start shopping.
Start looking.
And, let's see if you can find the airplane that's just about perfect for you.
And, remember, not only good pilots
but good aircraft owners are always learning.
See you next time. Take care, you all.