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Loan on an RV14A after purchase

Lemos

Active Member
I’m going to be closing on the purchase of a RV-14A by Friday. I’ve exceeded my budget having entered into an agreement for a $300,000 purchase price. I’ve got the cash but I may want to do a $70,000 loan after the purchase has occurred. Does anyone have experience getting a loan after the aircraft has been purchased? Any pitfalls to beware of?
 
Yep

I’m going to be closing on the purchase of a RV-14A by Friday. I’ve exceeded my budget having entered into an agreement for a $300,000 purchase price. I’ve got the cash but I may want to do a $70,000 loan after the purchase has occurred. Does anyone have experience getting a loan after the aircraft has been purchased? Any pitfalls to beware of?

I’ve used my local bank for 40 years or more, buying airplanes for my business and the RV-10 for pleasure. Walking into a bank where you’re called Mr. Smith is a very welcome experience.

Good luck,
 
I’ve used my local bank for 40 years or more, buying airplanes for my business and the RV-10 for pleasure. Walking into a bank where you’re called Mr. Smith is a very welcome experience.

Good luck,


I do the same thing at my bank. Just walk in, tell them what I need/want, and they'll say "we'll take care of it".:)
 
At 300k you are going to need to provide some pics and information about this RV14. Is the canopy tinted with gold lime the Navy EA-6B’s once were?
 
10+14

Wow the fleet is building, do you also still have the RV-10 that you bought a few months back? :eek:
 
Certainly not here to rain on anyone's parade, but you may want to do some research on long term market trends. The meteoric rise in RV prices over the last two years may, in fact, be just another bubble that will burst badly when our markets finally correct. Yes, I know that it should have happened, but never seems to happen. That doesn't mean we throw out 100's of years of historical data. Certainly some of the rise is due to market acceptance of EAB aircraft; But how much of it. This covid thing has created some interesting market anomalies and am convinced several are bubbles that will soon explode.

$300K seems really high for an RV-14 and there is a good chance that at some point in the future could be worth 2/3 or less of what you paid for it. That would be pretty unpleasant with a loan to pay off if you have to sell it.

I bought a house in So Cal in '96. It was 4 years into the real estate bubble burst and still 1/3 of the houses for sale were short sells or bank repo's, where the owner walked away with a complete loss. I felt pretty bad about all the people that couldn't afford to move because they couldn't afford to pay off the note. For the year prior to the burst, folks would camp out for days just to be the first one to put down an offer on a new home; Pretty classic bubble behavior. To be fair, 5 more years into the future, those homes were back to the bubble bursting level and continued to rise. Though california real estate has always seemed to defy market trends.

I wish you luck, but encourage caution.

Larry
 
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If you want to save some money, I'll sell ya my 6A for $200,000. :) :)
 
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Did you say $300k? :confused:

Yes, RV values are very high right now!

Wow the fleet is building, do you also still have the RV-10 that you bought a few months back? :eek:

Negative Sir. I sold it, realizing that I preferred a 14A but not realizing that it was going to cost me more to get a 14A.

Is that 300 American dollars?

Yes Sir.

I will sell you my newly painted -14A, full G3X equipped, several upgrades, with 177 hours on the Thunderbolt for $250k and you keep the $50k savings in place of the loan.

Sir, I sure wish that you would’ve responded to my want to buy post on here. But a deal is a deal, I have entered an agreement for $300,000 for the aircraft I’m buying, and I will not be backing out.
 
... I may want to do a $70,000 loan after the purchase has occurred. Does anyone have experience getting a loan after the aircraft has been purchased? Any pitfalls to beware of?

None of which I'm aware.

Small bank run by a lifetime airplane guy:

Richard C. Crowe, President
Buckholts State Bank
PO Box 278 / 100 N. 4th St.
Buckholts, Texas 76518
254-593-3661

Don't sweat the commentary. Price is one thing, value is another. If it's worth it to you, it's worth it.

a deal is a deal, I have entered an agreement....and I will not be backing out.

Much respect here.
 
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I think I will come out of retirement and start building RV's again. There are a few charities around here that could use a major cash infusion.
 
I think I will come out of retirement and start building RV's again. There are a few charities around here that could use a major cash infusion.

Parts alone are going to cost me over 200k on an RV7 build. That only leaves a $50/hr shop rate for labor before you hit the 300k mark on a new build.
 
Parts alone are going to cost me over 200k on an RV7 build. That only leaves a $50/hr shop rate for labor before you hit the 300k mark on a new build.

Holy cow is that correct :eek: guess I will not be changing out my -7 anytime soon.
Figs
 
What I've noticed in two years of flying a 10 is that there are way more people interested in buying one than building one. I don't see that changing.....
 
Holy cow is that correct :eek: guess I will not be changing out my -7 anytime soon.
Figs

The quick build kit was just over 40k for wings, empannage and fuse.
The new IO-375 was 46k with taxes.
The garmin panel was 52k with servos and some other bits.
The whirlwind prop was 13.5k.

So 4 big pieces run just over $150,000. I'll easily spend another 50k in finishing kit, firewall forward, paint, accessories, interior, shop supplies, etc. Plus I'll still have to pay California almost 10% in use tax when I register it. You can obviously do it cheaper, but if you want a "new" plane without going deep into the classifieds for used motor, used avionics, etc. it gets expensive fast. I could have gone with an O-320 and a fixed pitch prop to save probably 25k, but it would have taken more than 25k off the resale value, and more importantly I wanted the power and the CS prop.

EDIT: I just want to be clear, I'm not knocking people that go used or keep it simple with a 6 pack and a basic VFR plane. Everyone has a mission and everyone has an ideal aircraft configuration. But a new build with all the goodies gets over the 200k mark pretty quick.
 
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The quick build kit was just over 40k for wings, empannage and fuse.
The new IO-375 was 46k with taxes.
The garmin panel was 52k with servos and some other bits.
The whirlwind prop was 13.5k.

So 4 big pieces run just over $150,000. I'll easily spend another 50k in finishing kit, firewall forward, paint, accessories, interior, shop supplies, etc. Plus I'll still have to pay California almost 10% in use tax when I register it. You can obviously do it cheaper, but if you want a "new" plane without going deep into the classifieds for used motor, used avionics, etc. it gets expensive fast. I could have gone with an O-320 and a fixed pitch prop to save probably 25k, but it would have taken more than 25k off the resale value, and more importantly I wanted the power and the CS prop.

EDIT: I just want to be clear, I'm not knocking people that go used or keep it simple with a 6 pack and a basic VFR plane. Everyone has a mission and everyone has an ideal aircraft configuration. But a new build with all the goodies gets over the 200k mark pretty quick.

Not knocking anyone for buying new and heavily loaded with options. However, you do mention "resale value." Given the responses here, do you believe that you can realistically resell it for $300K to someone else? I agree with Dan about value and don't question anyone's value computations. However, if you do plan to sell it someday to recoup your investment and pay off your loan, then you must consider what others would be willing to pay for it. If you don't plan to sell it, obviously irrelevant.

Larry
 
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Not knocking anyone for buying new and heavily loaded with options. However, you do mention "resale value." Given the responses here, do you believe that you can realistically resell it for $300K? I agree with Dan about value and don't question anyone's value computations. However, if you do plan to sell it someday to recoup your investment, then you must consider what others would be willing to pay for it. If you don't, obviously irrelevant.

Larry

Oh, I don't expect to get anywhere near 300k for it. Our estimate has always been it'll take just over 200k in bits and pieces and realistically we could offload it quickly for 140-150k if something happened and we had to sell it. Hopefully that never happens. I've seen a few for sale before we started the build with a basic VFR panel that were asking 110-130k. I think a lot of people see the for sale price and assume if they're selling for that complete, that it costs less to build it from scratch. I don't know if I'll ever believe that.
 
Let’s hope the underlying inflation issues come under control or we will inflate our hobby / passion out of existence.
 
I always find this an interesting discussion. There are plenty of ways to spend more on a build, regardless of how much you spend. And there are plenty of people that will tell you that you need to spend "at least $x to have a decent Y", but I have found it to be false. I was about 30% under that x number for my house, 30% under that when I built my car, and looking at around 30-40% less on my plane. In all cases, all new parts.

That said, prices are going up, new, used, parts, complete planes, experimental, and certified. Is it a bubble? I don't know, but I don't like it in any case.

back to the OP's question, I would imagine you can find someone to lend it if you can satisfy their $financed to $value ratio. I would think someone would give you $70k if you put your 14A on the line.

Tim
 
Interesting discussion but makes me feel better about the cost of my recent upgrade adding the GNX 375 and Aera 760 to my panel configuration for more utility. Does make me think that I need to up the hull value on the insurance though, wonder if some of this is behind the recent insurance rate increases.
Figs
 
US$ 300K RV14A

Hi AL,
I am only getting ready to build an RV14A in Canada and has already committed US$ 210K for material alone including taxes and transportation.
I fully agree with the price you are offering for the RV14A to buy and fly immediately as long as it is new with the right IFR avionics, interior, paint and was built with good care that fits your mission. No question.
In my case, I will be slogging for over a year or two to complete an RV14A after incurring an expenditure of US $ 210K in 2021 without considering my 2500 hrs of labour on a std. kit and the 2 year hanger cost since I am building it at my residence. One of the local builders quoted me US$ 120k to build it for me in 2000 hrs. provided I could buy and supply everything except the tools and wait in line for 8 months after putting in a 20% deposit.
The market for any new home built aircraft is crazy now. You must have also heard recently that Lycoming has increased their engine price across board by 13% starting 1st of July 2021.
If this trend continues, I might even extend my hobby in to a builders workshop for RVs. Just joking !
So you are doing it right. Congratulations ! Happy flying an RV 14A..
Good luck !
Sreekumar V Nair
 
Hi AL,
I am only getting ready to build an RV14A in Canada and has already committed US$ 210K for material alone including taxes and transportation.
I fully agree with the price you are offering for the RV14A to buy and fly immediately as long as it is new with the right IFR avionics, interior, paint and was built with good care that fits your mission. No question.
In my case, I will be slogging for over a year or two to complete an RV14A after incurring an expenditure of US $ 210K in 2021 without considering my 2500 hrs of labour on a std. kit and the 2 year hanger cost since I am building it at my residence. One of the local builders quoted me US$ 120k to build it for me in 2000 hrs. provided I could buy and supply everything except the tools and wait in line for 8 months after putting in a 20% deposit.
The market for any new home built aircraft is crazy now. You must have also heard recently that Lycoming has increased their engine price across board by 13% starting 1st of July 2021.
If this trend continues, I might even extend my hobby in to a builders workshop for RVs. Just joking !
So you are doing it right. Congratulations ! Happy flying an RV 14A..
Good luck !
Sreekumar V Nair

I am not sure where we are getting these numbers from, seem really high unless it is a CA$. Even with the increased prices, I don't imagine the kit is going to run more than $180-190k including paint unless there is some real special paint job. This would be for a fully loaded IFR.

And in regards to having it build, I would be willing to build it for you under the same terms for US $60k and it will be completed in one year.
 
US$ 300K RV14A

Hi Mahrdad,
Good that you are looking at my numbers and asking good questions.
My numbers are all in US$ only.
If I had known that you will built it for me for US 60k, in a year, I would have surly placed the order on you and directed all the consignments to your workshop after I complete my due diligence. Now it is too late, I guess. In fact I had contacted 3 builders in US and they all said that they can build from 40k to 60k range depending on what is included but turned it down as they do not have time to take up a new assignment or goes silent without returning my calls. So i have to go it alone to meet my target even if it is challenging.
Here is my actual invoice numbers:
1. RV 14A Standard Kit 39,200
2. Engine Thunderbolt 390 EXP 119 215 HP (before the 13% increase) 46,700
3. Constant Speed M T Prop (Hydraulic) 14,250
4. Avionics G3X 62,312
5. Interior (seats, carpets, side panels, boot) including A/C 16,000
5. Tools incl. GST and Transportation 7,604
6. FWF Kit (no A/C or related parts) 7,685
So my total commitment as on date is US $ 193,751
I am yet to decide on the ELT, Battery, Cooler, Paint, Additional tank , special harness, alternate hydraulic hose bundle and so on and so forth.
Please don't think I am pulling a fast one. These are actual numbers and I need to include taxes, insurance, transportation and border crossing service.
So if I include a quick build kit instead of a Std. kit, hanger cost for two years and my labour cost, it will really go over what i had mentioned in my previous email.
Hope I am able to convince you the reality as on this date.
Thanks
Sreekumar V Nair
 
Don’t forget to add in all the bandaids. Subway sandwiches. Urgent care visit for the occasional deep cut and tetanus shot. All the little **** you pick up when you go to the auto store for a strap or a little tube of sealant. The beringer wheels and brakes add I don’t remember but are excellent.

I do think the avionics price is overstated. But the incidentals not mentioned probably consume that delta.

Truth is the 14 is worth exactly what someone will sell it for. Mine might sell for 275k but might be higher now! If it doesn’t sell I’m getting a priceless amount of fun out of it.

Too bad we can’t barn find a warehouse of perfectly preserved IO-390C. That is the single largest expense and more than my prior plane was worth total.
 
Don't forget the possible cost of paying for a Canadian MDRA inspectors wages and cost to travel to the USA for inspections while the plane is being built. Otherwise the plane will have to be USA registered then a 100 hours put on it before importing it into Canada. Having it built in the USA won't be a savings IMHO.
 
US$ 300K RV14A

Hi Norman,
Good point. Thanks for the info.
I am building it myself in Canada. Had already received a reply from MD-RA for my LOI with all the formalities updated. Also reserved a tail number with Transport Canada. Workshop is all set up with the necessary tools and just waiting for the kits to start arriving from Sept.
Thanks once again
Cheers
Sreekumar V Nair
 
Lemos:
BTW: Any dates set for the Oceano Fly-in yet? Can’t wait to see that new 14!
 
Hi Mahrdad,
Good that you are looking at my numbers and asking good questions.
My numbers are all in US$ only.
If I had known that you will built it for me for US 60k, in a year, I would have surly placed the order on you and directed all the consignments to your workshop after I complete my due diligence. Now it is too late, I guess. In fact I had contacted 3 builders in US and they all said that they can build from 40k to 60k range depending on what is included but turned it down as they do not have time to take up a new assignment or goes silent without returning my calls. So i have to go it alone to meet my target even if it is challenging.
Here is my actual invoice numbers:
1. RV 14A Standard Kit 39,200
2. Engine Thunderbolt 390 EXP 119 215 HP (before the 13% increase) 46,700
3. Constant Speed M T Prop (Hydraulic) 14,250
4. Avionics G3X 62,312
5. Interior (seats, carpets, side panels, boot) including A/C 16,000
5. Tools incl. GST and Transportation 7,604
6. FWF Kit (no A/C or related parts) 7,685
So my total commitment as on date is US $ 193,751
I am yet to decide on the ELT, Battery, Cooler, Paint, Additional tank , special harness, alternate hydraulic hose bundle and so on and so forth.
Please don't think I am pulling a fast one. These are actual numbers and I need to include taxes, insurance, transportation and border crossing service.
So if I include a quick build kit instead of a Std. kit, hanger cost for two years and my labour cost, it will really go over what i had mentioned in my previous email.
Hope I am able to convince you the reality as on this date.
Thanks
Sreekumar V Nair

Man, things have changed! I built my basic VFR 6A in the 1992-1998 era.
Total cost with paint : less than $50k! :D
 
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