New to this forum, First order of business is to find out where I should look to obtain a loan. I have found a RV I would love to purchase but am having a hard time finding financing for XP aircraft. Any suggestions
If you are having a difficult time finding financing on the get-go, you may want to rethink the purchase of an RV. No, offense, but these things are a lot more expensive then you may think. Especially if you are buying, because you will be more limited in what you can do maintenece wise. There are a few threads out here that have from $60-$90 per hour operating costs, and that would not include the monthly payment from the financing.
I'm not trying to be a dream-killer here, and I have no idea about your personal financial situation. Just make sure you know what is involved.
True and wise words Fresno. However, in this market if he is going to get one and go all the way, it's cheaper to buy than build, all things considered.
Also with insurance, hanger, mx, gas, oil, etc, etc, I think your operating numbers are low.
Although I did not need to, I did get a loan to maintain my cash reserves. In this economy, cash is king and leverage is cheap. Opportunities can happen at any time. But I did not buy that $100K RV-7 with all the bells and whistles either.
I guess what I am saying is that just because you want to get an aircraft loan does not mean you can?t afford the plane. But you should know your own situation. Don?t let your enthusiasm for flight become a financial train wreck.
I can't think of the name of the company, but there is one that advertises on this site.
I can't find a link to a sponsors page, but if there is one you would certainly find it there. Might be a good place to start.
Is an equity withdrawal from your property an option if finance is unavailable elsewhere, not sure of your options in North America, but that could be a viable option here in Oz if you required finance to complete the purchase/build.
True and wise words Fresno. However, in this market if he is going to get one and go all the way, it's cheaper to buy than build, all things considered.
Also with insurance, hanger, mx, gas, oil, etc, etc, I think your operating numbers are low.
The important number isn't just the price of the aircraft, but rather the cost of owning (and flying) the aircraft. You need to calculate the cost of the loan (if you finance) and the associated costs like hangar space, maintenance, taxes, and insurance in addition to fuel. Every year I take an honest look at the real cost of having an airplane by simply adding up all the costs and dividing by the hours flown. The $60 to $90 per hour figure is very low for those of us in places with high hangar rent. For example, if your hangar rent is $500 a month and you fly 100 hours a year, that is $60 an hour. It is great fun and very rewarding, but proceed carefully and enter into the game with your eyes open.
John Clark ATP, CFI
FAA FAAST Team Member
EAA Flight Advisor
RV8 N18U "Sunshine"
KSBA
Another vote for 1st Pryority. I've got a construction loan through them for my RV-10. Once I receive my registration the loan will be converted into a conventional consumer loan.
A buyer (or anyone else) can do any and all the maintenance on an experimental aircraft. You only need to have an A&P (or the builder who holds the repairman's certificate for that aircraft) to sign off the condition inspection.
A buyer (or anyone else) can do any and all the maintenance on an experimental aircraft. You only need to have an A&P (or the builder who holds the repairman's certificate for that aircraft) to sign off the condition inspection.
That is absolutely true - but I think he might be alluding to is that once you have to pay someone else to do the Condition Inspection, you no longer have complete control over your maintenance costs - you have to satisfy whomever is going to put their signature in the books. Truth be told, annual maintenance costs on an RV are pretty small (so long as you keep up with things), and paying someone for the annual MIGHT double your costs...
Double of a small number is...a small number (if I remember my math right).
I have gotten 2 loans in the past for experimental aircraft from NAFCO. http://www.airloans.com/ No pain no hassle. Last loan 2 years ago was at 7.4%. Ask for Bill.
(1) Go to Vans web site, use the calculator then add
(2) Tools
(3) Equipment
(4) Supplies
(5) Build space, electricity, natural gas
(6) 2,000 - 3,000 shop time @ $ XX.XX per hour
(7) Divorce
(8) Divorce Lawyers
(9) Loss of time with kids, friends
The cost of building is in fact VERY much more than the selling price. The current market doesn't even come close to representing the cost. All the above items are very real construction costs.
I appreciate the insight, I have done all the math and I am going to be in good shape. I'd love to build the airplane myself but I am a helo pilot in the Army and simply dont have the time to build myself. I have purchased a few books here and there about owning my own airplane and have found them to be really helpful in planning you purchase. I know the costs of owning an airplane are numerous and none of them are really cheap, but that being said, I dont want an airplane to make money, I want one for the freedom to go as I please Thanks again for the posts and happy flying, or building if you're still putting rivets in.
Chris
in a lot of cases, if you suddenly lose your job or terminate employment, the borrowed amount/loan is viewed as a dispersement and will be taxed and penalized
I was on the cash only program, but found I had $30K+ sitting in the shop and I had a long way to go. A friend said "I'll loan you the money, you gotta get that thing flying" I'll now fly this year, not in 3 years. Plus I get free hangar space while I assemble and afterward.
You only live once and you can't take it with you after you die. I say do whatever you have to do other than rob, cheat or steal to do what YOU want to do. (Make sure your kids are fed of course)
I financed part (About 40%) of my first airplane because I had no idea what it was really going to cost me. Glad I did because I went through cash like you wouldn't believe getting ready for it and that first month.... Training, hotels, insurance, pre-buy and a bunch of avgas because I couldn't stop flying it!
I took out a bridge loan from Red River State Bank in Halstad, MN. They are unbelievably easy to work with. I first met them at a booth at Oshkosh and couldn't be happier with the service they provide.
btw - I throw my vote in with whoever suggested that you can't take it with you. GO FOR IT!
Some recent experiences (within the last few weeks) with quick informal inquiries by email, no look at credit history etc...
Red River Bank (airloan.com) declined to take a look at financing the engine for my project, saying that they don't usually deal with aircraft under construction.
NAFCO (airloans.com) will finance at 9.25% for 5 years (under $25k) or 8.25% for 15 years ($25-50k). 12 month prepayment penalty.
I agree that you need to pay cash for toys or at least not borrow "too much".
Everyones situation and long term mindset is different. I personally like to stay very liquid and pay cash. That said, I used Security State Bank in texas for my first two flying "assets". Its a smaller regional bank in Central Texas area. I'm not sure they would do a loan out of their area, but they do like aircraft loans because many of the bankers and officers are pilots also and they understand the value of an airplane. It is old fashioned banking so have your stuff in order.
good luck and make sure you get some help from others on this forum with a pre-buy so you don't buy a "money pit". It is real easy to do.
If you're a credit union member try them. Navy Federal will finance for me using the plane as collateral at 6.25% for 20 years, no prepayment penalty.
Building vs buying as was mentioned also carries bigger costs than just the loan. Plus given whats on the market right now and the prices, the best anyone can hope for is to break even on their cost.
I financed my RV in October 2009 with Texas Dow Employees Credit Union. And no, I am not a Dow employee. Credit union rules have changed at some point in the past and now almost anyone can join them. They were very easy to work with. I would recommend them for buyers in this area.
Contact information: Victoria Sanchez | Business Services
TDECU-Your Credit Union | 208 Oak Dr. S. Bldg 100 Lake Jackson, TX 77566
