Capflyer

Capflyer

Well Known Member
I was asked if I would be interested in a 25% partner on my still under construction RV7. I'm currious to hear from those that are partners how you structured them and how you valued the plane. Since this individual will not be doing much of the work on the build since it's almost completed, how to handle it. It would be nice to get an infusion of cash into the project and he probably wouldn't fly enough to hamper my enjoyement.
 
Capflyer said:
I was asked if I would be interested in a 25% partner on my still under construction RV7. I'm currious to hear from those that are partners how you structured them and how you valued the plane. Since this individual will not be doing much of the work on the build since it's almost completed, how to handle it. It would be nice to get an infusion of cash into the project and he probably wouldn't fly enough to hamper my enjoyement.
Click to expand...

get a lawyer!

it will save a lot of headache
 
Partners

I had a flying buddy as a 50/50 partner in my -6. we bought it together already built. The partnership went along great, until one day, he really understood the limited insurance we can get on the expermentals (100,000 per pax seat only). Knowing how little 100,000 is in a "claim". He started putting limits on who we took flying ie:family or known RV buddies.....people that may have known the risk. Well, eventually it lead to me buying him out of the partnership. He was bothered by the exposure "I" would be exposing him to as a half owner and vice versa. He bought a 182...for family flying.
If you look too close and think about it too much.....you won't fly at all.
but better to know what you are getting into before you enter a partnership.
I don't really like lawyers, they are a necessary evil in my book.
That said, partners are great, having someone to share flying with and motivate you to fly instead of work, etc etc....
Good Luck
 
The AOPA co-ownership agreement is very good. Have used a derrivative of it for a flying AC partnership. Check it out.
 
Get the basics right and then don't seat the small stuff

Capflyer said:
I was asked if I would be interested in a 25% partner on my still under construction RV7. I'm currious to hear from those that are partners how you structured them and how you valued the plane. Since this individual will not be doing much of the work on the build since it's almost completed, how to handle it. It would be nice to get an infusion of cash into the project and he probably wouldn't fly enough to hamper my enjoyement.
Click to expand...
Keep it simple and be sure it is someone with whom you can get along with on ordinary things.

If he becomes a partner before it is finished, don't try to count hours of work.

If he is going to help, jointly decide what he is going to do and then help each other as needed.

If he is not going to help (and that is OK) then value the plane fairly and let him purchase based on the valuation. Make it so that any partner can buy out the other at some value that is either set in advance or has a means of determination.

Don't sweat the small stuff. Remember, you are **partners**!

Agree to respect each other's desires and needs to fly the plane.

Determine **IF** there are any MUST HAVE times for either partner.

Decide how annual condition inspections will be done ...hopefully together but don't over analyze it.

Have fun flying the plane!

James
... in a happy partnership for many years now
 
The only problem I see is you are paying 75% of everything and he will probably be able to fly whenever he wants and only paying 25% of maintenance, insurance, blah,blah,blah. I would calculate the TBO on the engine and add an hourly fee for an engine repair fund. I would either switch him to 50% or I would go get two additional partners at 25% each. This would give you money for another plane, hangar, or what ever you want and you will probably be able to fly the plane as much as you want. Upgrades are a lot nicer when you only have to pay for half or a quarter of them.
 
Give yourself an out

In my partership agreement, I wish we had a 'butthead clause', to be inacted when one of the parters is being a pain. Something like, if all other partners unamimously agree that he is a problem, he has 30 days to either buy all of them out or sell his share to them.

I can promise I would have one less partner in my Mooney by now if that were the case.

Better advice would be: no partners, if you can afford it. I'm guessing if you are 75% into the rv, you've had that discussion with your inner self already.

Good luck!
 
There are partners and there are partners...

I was in a partnership with my C172 and use a version of the AOPA agreement. I didn't know the guy very well when I bought into his plane. After a little over a year I had had enough of him and proposed that he set a price and I would either buy or sell at that price. He didn't want to do that then I suggested a price that I would be willing to sell at (or buy) and he said that it wasn't enough.
Long story short I ended up paying about $2000.00 more than the plane was worth just to get rid of him.
The most important thing about a partnership, is that everyone has the same approach to owning the plane and that they get along.

Kent
 
Partnership in an RV

Here is some free Texas Legal Advise. Since I am licensed to practice law only in the State of Texas and the Federal Court system my advise is limited to only individuals in Texas.

First you should never have a partnership unless it is a limited partnership. A corporation or limited liability company is OK as well. That way neather party is liable for any actions or obligations created by the other party, except to the extent of the value of the airplane.

Second, any agreement should have a buy sale agreement that specifies that if one party wants to sale his interest that the other party has the right of first refusal at a specified price (usually the intial investment amount put into the deal by each party.

Third, try and find an attorney who is an RV builder/pilot. He will understand lots more about how to help protect you than some joe blow off the street.
 
Thanks guys. It's great to hear some different perspectives on partnerships. It seems that having a partner in an experimental is a little more difficult in laying out all the variables such as who does the annuals, maintenance, etc. All good points. I would want to structure it such that the partner is responsible for half of all fixed expenses and tack on an hourly rate to cover the variable costs. The 25% share would be their equity in the plane rather than how the costs get split up. The point about a buy-out price up front is a good idea. I'll check out the AOPA agreement as well.

I'm looking hard at my finances to see if there is any way to keep from having to do this. Having a partner sure complicates things.
 
Partner

Mike

Don't take a partner. You will regret it later.

I have seen two different partnerships that ended badly.
In one case two good friends became very bitter adversaries(sp).

For 25% it ain't worth it.

My .02 cents.

Bryan Carr
 
Give it up

I have been in two partnerships myself, that were workable only because we all were willing to make it work. And, those were production airpanes. I can't imagine the possible remorse that someone with a chunk of their life invested in the airplane might have if it becomes difficult.
My advice: If you can be comfortable with the idea that you are giving the airplane up to a partnership, and the partner(s) are known to you well enough that you are sure of compatability, then continue consideration.
However, for me, I wouldn't be comfortable letting go of my investment like that.
 
smenkhare said:
get a lawyer!

it will save a lot of headache
Click to expand...
Just remember, lawyers' primary concern is making money OFF YOU! It can be done without them. Read, investigate, ask around. It can be done without striking a very over-priced arrangement with those in the legal mafia.
 
You must log in or register to reply here.