Are RV-7's selling for over $300K?

[justa6ereh]

After reading in this very forum about all the F-ups that "reputable shops" have done over the years, I put far more trust into me building my own engines. As you did as well, I built several automotive and motorcycle engines before tackling my AV IO-360 18 years ago. Read all the SB's and SI's and manuals, plus cardinal knowledge articles like Paul wrote, and do it!

This attitude really irritates me...to equate building an RV-anything, quick or slow build, with putting together an IKEA cupboard and assert that doing so doesn't require any tools, techniques or knowledge is just flat-out insulting.

I guess you're another one of those guys who went out and mined his own bauxite and smelted his own ore, and anybody who didn't do it precisely as you deem appropriate to be considered a "builder" is merely an imbecile with a metric hex key.

Shees. Sorry for the rant, but this sort of thing frosts my balls.

This attitude really irritates me...to equate building an RV-anything, quick or slow build, with putting together an IKEA cupboard and assert that doing so doesn't require any tools, techniques or knowledge is just flat-out insulting.

I guess you're another one of those guys who went out and mined his own bauxite and smelted his own ore, and anybody who didn't do it precisely as you deem appropriate to be considered a "builder" is merely an imbecile with a metric hex key.

Shees. Sorry for the rant, but this sort of thing frosts my balls.

Well…I hadn’t intended to wrinkle the feathers of RV types…( more the 2 week builder assist ) types, where a guy takes a mini vacation and flies home the airplane he built… but nonetheless, please accept my humble apology for the grossly inappropriate analogy.

the RV crowd still has to do stuff by hand, the plastic airplanes….well…more than a cupboard, but si’gnificantly less than several years back when the wood crate and
Cardboard boxes showed up.

Sad to say, I did not mine bauxite in the process of my six homebuilts…( I bet I inhaled a bunch of it though, while sanding away!!)

Anyway…as usual, my piddly poor sense of humor was only comical to me…so, once again.

Please accept my apologies.

 

[justa6ereh]

When demand plummits, companies are typically sitting on lots of inventory, trying to recoup capital expenditures, pay off debt, etc. as demand falls, they always lower prices to recoup some volume and more importantly, maintain cash flow. Cash flow is the hidden killer that creates mosy bankruptcies; well documented but poorly understood. Companies never keep raising prices in the face of cratering demand. That just hastens the fall. Not a ceo on the planet that would rather have a chapter 11 on his resume instead of a large revenue downturn. Most all companies fall victim to shrinking revenue and income during market downturns, only the poorly run wind up in bankruptcy.

Lycomings prices have at least doubled in the last few years. I doubt their costs have increased more than 40%. Gobs of profit that is well above the corporate norm and easy to give back in the name of survival.

Larry…they are a private equity group…period…exclamation point. Their objective is simply to create as much profitability as humanly possible.
Nothing else comes before that. They will continue to define the upward limit of their pricing model, till the second it breaks.

Then they’ll dump it and leave a messy aftermath.

OR…they’ll be wildly successful, adding other businesses into the fold….and using words like Synergy and put 6 to 8 more together…drive up the revenue and profit, force down their costs…and sell if for Two to Three times the multiple they paid for pieces and walk away like it was a hot potatoe….then an even bigger corporation will step in…and the process will repeat.


Steve

 

[Dugaru]

I hope both are sold at the asking price. That should increase the values of our RVs

Just don’t tell the property tax people!

 

[lr172]

Larry…they are a private equity group…period…exclamation point. Their objective is simply to create as much profitability as humanly possible.
Nothing else comes before that. They will continue to define the upward limit of their pricing model, till the second it breaks.

Then they’ll dump it and leave a messy aftermath.

OR…they’ll be wildly successful, adding other businesses into the fold….and using words like Synergy and put 6 to 8 more together…drive up the revenue and profit, force down their costs…and sell if for Two to Three times the multiple they paid for pieces and walk away like it was a hot potatoe….then an even bigger corporation will step in…and the process will repeat.


Steve

We can agree to disagree on that.

Private equity or not, a company forced into receivership due to non existent cash flow is worth FAR less than a company with a going concern, but no meaningful income from declining demand. Yes , the MO is to squeeze as much profit out of the entity as possible without care for the long term health, but they also want to maximize cash from the sale on their way out. No sense creating a $500M of lost value in the exit sale in order to squeeze out an extra $100M in income on the way out. They are way smarter than that.

 

[jackking123]

Are they worth it? Depends... Both those examples are nice from pictures, but devil is in details.
ASKING and getting are two different things. They are worth it if someone is willing to pay. Supply demand... Prices may vary widely... on and on.

Engine, Prop, Panel, Paint, Interior, Build Quality and "Provenance", meaning great documentation. Pedigree, like completed by expert builder, Oshkosh Lindy Award Winner.

Engine - New factory IO-390 210HP or or IO-360 180HP? Used/Rebuilt O-320 150HP, or Auto Engine Conversion...​

Prop - Fixed pitch Sensenich, or blended airfoil or carbon fiber "Claw" Hartzell, or other fancy CS Prop.​

Panel, sky is limit, full glass, IFR, 2-axis autopilot, pro built, wired, labeled, or basic DIY, rats nest wiring, day VFR, handheld GPS.​

Paint - Pro top of line $25,000 paint job, or decent DIY paint, or 30 foot orange peal abomination paint job.​

Interior, wide range of options here, including leather.​

Build Quality, you can see fit and finish or not.​

OPTIONS, lighting (New LED Nav/strobes/landing or old incandescent NAV & Xenon strobe), Brakes (Beringer - expensive), on and on.​

Condition, hangered, total hours, and most important LOG BOOK is impeccable.​

Does if fly nice? Some "Deluxe" luxury over equip RV's weigh too much. Heavy paint, interior, panel, engine, prop takes away the delight of light control feel and payload. Some of these plush RV's have BEW that are too heavy. To me that is a deduction not a bonus.

These are amateur built planes with no standard configuration, but if a S-LSA with a Rotax, fixed prop, 120kts, cost $400,000, why not the $300k for a RV-7. You can get a nice RV-4 for $60,000. I can't afford $300k and why I built my own. What is it worth to me...

 

[ronrapp]

You can't choose to buy that which you cannot afford.

Credit makes it possible for people to do that every day. Before real estate prices tumbled in 2008, people who had no income and no job were approved to purchase homes with 100% financing and negative amortization loan products.

Not smart. Might not have even been legal. But there were people who chose to buy things they could not afford. Today, credit cards, home equity lines of credit, and other such things make it possible for people to buy things they cannot afford. Sometimes including airplanes.

I look at the endless stream of $180,000 Escalades around my kids' school in the morning and wonder if that isn't what's happening in many of those cases. Can that many people afford a car like that?

Who knows.

--Ron