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  #1  
Old 02-13-2021, 09:57 AM
BobbyLucas's Avatar
BobbyLucas BobbyLucas is offline
 
Join Date: Oct 2019
Location: Belleville, MI
Posts: 280
Default How to value build-time in a partnership

I'm looking to take on a partner in my on-going RV-12iS build and we're looking for some advice about putting a dollar amount, or equity percentage, on build-time spent...

I know when selling an experimental you may not get much if anything for the time you've put in building it, but what about when building with a partner where the work-split is far from 50/50? I've already got 280 hours into my build and have someone looking to partner with me who probably won't have much time to help, so I will be doing the majority, if not all, of the work. We both agree that my time is worth something to the partnership; we just need to agree on a value.

How have other's handled this? An hourly "wage?" A certain % equity credit per hour? Or no value at all?
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  #2  
Old 02-13-2021, 10:53 AM
lndwarrior lndwarrior is offline
 
Join Date: Mar 2015
Location: Cloverdale CA
Posts: 297
Default Good one!

Never heard this question before but Iíll throw a thought out there.

Since labor is never really counted in terms of aircraft value, one would have to put a low value in it in your case. What about $10 an hour for your 280 hours?

I agree, it should be worth something to your would be partner.

You would feel that you are being compensated fur your time. He would feel that he had ownership of what you have done.

Not necessarily saying he should pay you the$2800, but perhaps it would be taken into account when one, or both, decide to sell.

Last edited by lndwarrior : 02-13-2021 at 10:59 AM.
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  #3  
Old 02-13-2021, 11:30 AM
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BobbyLucas BobbyLucas is offline
 
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Quote:
Originally Posted by lndwarrior View Post
Never heard this question before but Iíll throw a thought out there.

Since labor is never really counted in terms of aircraft value, one would have to put a low value in it in your case. What about $10 an hour for your 280 hours?

I agree, it should be worth something to your would be partner.

You would feel that you are being compensated fur your time. He would feel that he had ownership of what you have done.

Not necessarily saying he should pay you the$2800, but perhaps it would be taken into account when one, or both, decide to sell.
Yup, exactly. I assume we'll form an LLC that will own the plane... The value we agree on for labor would feed into the equation for percent ownership in the LLC. $10/hr was kicking around my head too, but nice to get other opinions. Just want to make sure no one gets the short end of the deal.

(EDIT: Percent ownership would still be equal, but I would pay for a small portion of mine in labor, while any non-builder partner would have slightly more out-of-pocket.)
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RV-12iS Empennage, Fuse, & Finish Kits #121228
N781PT Reserved
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Last edited by BobbyLucas : 02-15-2021 at 07:30 AM.
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  #4  
Old 02-13-2021, 11:39 AM
Marc Bourget Marc Bourget is offline
 
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Location: Stockton, California
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The potential problem with these "one on one" relationships is the ability not only to track hours, but the equivalent value of the work performed by your partner.

With my background (and equipment), I can probably construct parts and assemblies 2-3x faster than a novice and overall planning & work-flow skills virtually guarantee unequal contribution.

It takes mature personalities and objective thinking skills to maintain a strong, positive relationship.

Repeating my opening comment of "potential", I wish you the best!
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  #5  
Old 02-13-2021, 11:53 AM
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BobbyLucas BobbyLucas is offline
 
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Location: Belleville, MI
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Quote:
Originally Posted by Marc Bourget View Post
The potential problem with these "one on one" relationships is the ability not only to track hours, but the equivalent value of the work performed by your partner.

With my background (and equipment), I can probably construct parts and assemblies 2-3x faster than a novice and overall planning & work-flow skills virtually guarantee unequal contribution.

It takes mature personalities and objective thinking skills to maintain a strong, positive relationship.

Repeating my opening comment of "potential", I wish you the best!
Yeah, neither of us is looking to split hairs; just want to put some kind of build equity into the equation. Whatever rate we decide on will be a drop in the bucket of the total project cost. Who knows, if he does help build, it could even slow the process down (I don't know his skill level), but I would still have no problem crediting him the same hourly rate. I enjoy teaching and it's more fun to have someone to build with anyway. As an engineer, I've got the objective thinking skills down and, as a psychologist, he's got relationship skills... Heck, one of us may even have a mature personality! He's also got experience with fractional plane ownership. But I digress...

P.S. I track my time using an app called HoursTracker to clock in and out, pause for breaks, etc. Enginerding.
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N781PT Reserved
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Last edited by BobbyLucas : 02-13-2021 at 12:18 PM.
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  #6  
Old 02-13-2021, 02:39 PM
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Ironflight Ironflight is offline
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A few years back, we bought into a project where the airframe structure was primarily complete, but systems install and firewall forward were left to be done. Teh honest truth was that the original builder was stalled - he never would have finished without our joining in. We paid for half the materials cost to that point, and along the way, each of us contributed as more things were bought, traded, sold, etc....it became almost impossible to account for everything. In the end, the airplane was finished and flew, and our partner - now a good friend - found that he really didn’t;t have the skills necessary to fly the airplane, and asked us to buy his half, which we did.

At no time did we try to account for fractional labor on anyone’s part, because we all brought different skills to the equation, and in the end, no one felt cheated because of it. He might have put in more time, but I brought more knowledge. We’Re no longer partners, but are still friends - an important thing to me.

Personally, I think that going in to a partnership trying to account for every dollar and hour is sort of like going into a marriage making sure the pre-nup is perfect...it sort of implies that there is a divorce planned for the future. Yeah, I get the rationale behind it, but trying to account for very penny can sort of suck the fun out of the whole process.

When we first started thinking about a partnership on that project I first mentioned, I told our future partner that we’d work together with him for a month to see if we were compatible as workers and potential partners. If, at the end of the month, we were having a good time, we’d buy in. If not, then the month of work we’d put in would be our gift to him to help him get moving on his project. I think that sot of set the tone for a friendship which has lasted beyond the partnership.

Just one perspective for you - it worked for us, but it might not work for everyone....

Paul
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Last edited by Ironflight : 02-13-2021 at 05:14 PM.
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  #7  
Old 02-13-2021, 02:58 PM
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9GT 9GT is offline
 
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From personal experience: An airplane partnership destroyed a friendship amongst two friends, and my relationship with my brother-in-law that is irreparable. YMMV based on the personalities, dedication, and cooperation of all parties involved.
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  #8  
Old 02-13-2021, 02:59 PM
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wirejock wirejock is offline
 
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Default Insurance

Just another thought. I vaguely remember a conversation about my time with Gallagher. Seems like they would reimburse some hourly rate. Might be worth a call. Not that a claim would ever be filed but it wohld be another data point.
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  #9  
Old 02-13-2021, 03:05 PM
BobTurner BobTurner is offline
 
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Quote:
Originally Posted by wirejock View Post
Just another thought. I vaguely remember a conversation about my time with Gallagher. Seems like they would reimburse some hourly rate. Might be worth a call. Not that a claim would ever be filed but it wohld be another data point.
Not Gallagher-they are a broker, not the insurer- but one of the companies they represent, did state in the policy a (low) hourly rate they would pay if you chose to do a covered repair yourself. I seem to recall $10/hr.(?).
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  #10  
Old 02-13-2021, 04:56 PM
rocketman1988 rocketman1988 is offline
 
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Default I agree with Paul

If you are set on getting something for your time, agree IN WRITING what the process and value will be.

Money changes things and relationships destroyed because of it are irreparable...
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