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10-31-2018, 11:59 AM
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Join Date: Feb 2013
Location: Lafayette, IN
Posts: 8
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Co-Ownership Options
After 5 years of being the sole owner of an RV-8, I'm considering co-ownership with one individual. I've read previous threads on this topic and reviewed the pertinent AOPA information. However, I'd really appreciate comments from my fellow RV aviators on their actual experiences with tenancy-in-common and LLCs. Also, it occurs to me that starting a non-profit flying club with two members might be an option. Please share your thoughts, and thanks so much.
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10-31-2018, 12:17 PM
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Join Date: Feb 2015
Location: Fort Worth
Posts: 527
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If I were to go down that path, I'd start with the insurance company and an aviation lawyer.
Due to the Oplim differences of E-AB there could be more concerns of being "a club" instead of a partnership or block time lease.
No answers for ya, but some things to consider.
__________________
Rob
RV-6A (Purchased)
2020 Dues Paid, of course
Last edited by rolivi : 10-31-2018 at 12:18 PM.
Reason: spelling
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10-31-2018, 01:36 PM
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Join Date: Jun 2010
Location: Sunman, IN
Posts: 2,189
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Be careful
Do your research. Make sure that everything is spelled out and agreed to ON PAPER.
This applies even to best of friends. Unfortunately, the potential and actual costs involved in joint ownership can and usually does change people...and usually not for the better...
__________________
Bob
Aerospace Engineer '88
RV-10
Structure - 90% Done
Cabin Top - Aaarrghhh...
EFII System 32 - Done
297 HP Barrett Hung
ShowPlanes Cowl with Skybolts Fitted - Beautiful
Wiring...
Dues+ Paid 2019,...Thanks DR+
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10-31-2018, 02:25 PM
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Join Date: Sep 2012
Location: Omaha, NE (KMLE)
Posts: 2,247
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I went through this a while back with my RV-12. It's now in an LLC, with each of us equal owners of the LLC. That gives us several advantages: - The flexibility to add and remove owners and airplanes, if we decide to do so
- Ease of our spouses dealing with disposing of the ownership interest if one of us croaks unexpectedly
- Spells out in detail how things are handled -- sale, relocation, death, overhauls, upgrades, etc.
We have an operating agreement that covers how we fly, responsibilities for maintenance and cleaning, scheduling, etc. I pulled sample agreements from AOPA, a Beech forum, and one or two others. We made some minor and a few more substantial changes to meet our needs. Once we had it about where we wanted it, we brought in an attorney to do the final cleanup, look it over, bring up a few questions we hadn't thought of yet, etc. The whole thing cost us maybe 1 AMU to complete.
I think the most important part of the whole exercise was done well before we even started on the paperwork. We talked, a lot, to make sure that our personalities, expectations, and use patterns were compatible. So far we haven't had any scheduling conflicts or disagreements over maintenance or upgrades. We each contribute a fixed monthly amount to cover the hangar, insurance, and time-sensitive maintenance (transponder checks, ELT batteries, etc.). We arrived an an hourly wet rate that includes an overhaul reserve, and deduct what we spend on gas.
So far, so good. I'm flying more and spending less per hour. And I agree, make sure everything is agreed upon and spelled out on paper. If there are conflicts, they will likely not come up short term -- just later on, when memories of what was agreed upon can get fuzzy. Make sure it's all documented and signed.
__________________
Dale
Omaha, NE
RV-12 # 222 N980KM "Screamin' Canary" (bought flying)
Fisher Celebrity (under construction)
Previous RV-7 project (sold)
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10-31-2018, 06:18 PM
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Join Date: Oct 2006
Location: Garden City, Tx
Posts: 5,145
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Shared interest in an airplane (or business) is said by many to be as close a relationship as a marriage, and equally messy to dissolve. Be very VERY sure of your next move...
__________________
Greg Niehues - SEL, IFR, Repairman Cert.
Garden City, TX VAF 2020 dues paid 
N16GN flying 700 hrs and counting; IO360, SDS, WWRV200, Dynon HDX, 430W
Built an off-plan RV9A with too much fuel and too much HP. Should drop dead any minute now.
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11-01-2018, 02:47 AM
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Join Date: Oct 2009
Location: Sydney, Aust.
Posts: 820
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This is what happens when it goes pear-shaped with an RV-10. 
__________________
Once you have tasted flight you will forever walk the earth with your eyes turned skywards, for there you have been and there you will long to return - Leonardo DaVinci
My Flickr gallery: http://www.flickr.com/photos/35521362@N06/
RV-9A - Finished on 10th February 2016 after 4 years, 9 months and 19 days! The 1020th RV-9 flying.
First flight 26th March 2016. Essential specs 145KTAS @ 2400RPM, 8000', 24.2LPH, Initial RoC 1800FPM.
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11-01-2018, 07:28 AM
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Join Date: Apr 2017
Location: Lake Elmo MN
Posts: 73
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No Good
Quote:
Originally Posted by KRviator
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After reading that bit of entertainment, I don't think a partnership sounds like a good idea. I wonder how the story ends?
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Donaven
Lake Elmo MN.
RV9A
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11-01-2018, 07:34 AM
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Join Date: Jun 2007
Location: Alexandria, MN
Posts: 304
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Full disclosure I haven't done this yet and am not a lawyer; so there may be unforeseen issues with my idea.
I too have been kicking around the idea of looking for a partner, but don't want a messy break up like others have indicated. For me the benefits I'm looking for are primarily to get the plane flying more and as a bonus lower my fixed cost. I've built this plane and it's not on my radar to sell it even if I don't have a partner so the capital cost isn't a concern to me.
One thought I've had was setting up an LLC and selling only 1% to my partner say for $800 at a $80,000 valuation. The partnership agreement would spell out that all fixed costs (hangar/insurance/and say $500 for a "no squawk" CI) would be paid monthly 50/50, and we would agree on a "wet rate" for hours used that would cover larger maintenance items and engine reserve. I would have the right to buy out the partner for any reason at $800, and he would have the right to force me to buy him out for any reason at $800. The partner would have no say in anything as far as upgrades but also wouldn't be expected to pay. The idea is that if there is any disagreement his only recourse would be to walk, keeping the purchase price low ensures that "payoff" isn't problematic for me. On the other hand I think there is value to my potential partner to have access to the plane with little capital down even without control.
__________________
Chris Odens
Alexandria, MN
RV-7 N914N
FLYING!!! as of 7/22/10
Build Log
Last edited by odens_14 : 11-01-2018 at 07:41 AM.
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11-01-2018, 07:34 AM
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Join Date: Oct 2014
Location: Milwaukee, WI
Posts: 300
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Quote:
Originally Posted by DaleB
I went through this a while back with my RV-12. It's now in an LLC, with each of us equal owners of the LLC. That gives us several advantages: - The flexibility to add and remove owners and airplanes, if we decide to do so
- Ease of our spouses dealing with disposing of the ownership interest if one of us croaks unexpectedly
- Spells out in detail how things are handled -- sale, relocation, death, overhauls, upgrades, etc.
We have an operating agreement that covers how we fly, responsibilities for maintenance and cleaning, scheduling, etc. I pulled sample agreements from AOPA, a Beech forum, and one or two others. We made some minor and a few more substantial changes to meet our needs. Once we had it about where we wanted it, we brought in an attorney to do the final cleanup, look it over, bring up a few questions we hadn't thought of yet, etc. The whole thing cost us maybe 1 AMU to complete.
I think the most important part of the whole exercise was done well before we even started on the paperwork. We talked, a lot, to make sure that our personalities, expectations, and use patterns were compatible. So far we haven't had any scheduling conflicts or disagreements over maintenance or upgrades. We each contribute a fixed monthly amount to cover the hangar, insurance, and time-sensitive maintenance (transponder checks, ELT batteries, etc.). We arrived an an hourly wet rate that includes an overhaul reserve, and deduct what we spend on gas.
So far, so good. I'm flying more and spending less per hour. And I agree, make sure everything is agreed upon and spelled out on paper. If there are conflicts, they will likely not come up short term -- just later on, when memories of what was agreed upon can get fuzzy. Make sure it's all documented and signed.
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This is exactly what I came here to say. We have an LLC / membership around our RV-10. Its just getting started, but so far so good. Have a like minded group of people and keep it small.
__________________
Matt
CFI / RV-10
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11-01-2018, 09:13 AM
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Join Date: Mar 2006
Location: Edmond, OK
Posts: 194
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I have been in a partnership and it has stressed the best of friendships.
I am now in a co-ownership. Is has been working flawlessly.
I am responsible for hangar costs, insurance, fuel, maintenance, planning upgrades, and cleaning. I am also responsible for sitting right seat when the co-owner wants to fly. My co-owner (wife) also asks if we need to buy anything for the airplane when we go to AirVenture. As long as I uphold my responsibilities, everything is great!
__________________
Dan Burdette
Skyview, ADS-B, Garmin 420W, TT Gemini AP
RV-9A, IO-320, E-Mag
Guthrie-Edmond Rgnl, OK (KGOK)
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