Info on purchasing a plane in shares

[Bill Britton]

For lack of finding a better section to place this question, I figured I'd put it here, in the RV-10 forum, since I'm building one. If anyone has any suggestions of a better place to place it please let me know and I will move it.

Anyway, A friend of mine approached me yesterday and asked if I'd be interested in purchasing a Cherokee 180 with him. My -10 build is going on over 3 years now and I'm only ready to start on wings ( I don't have a lot of time to work on it with my job and 2 kids and my wife was diagnosed with breast cancer this summer--the summer of our 10th anniversary). Knowing this, I kinda jumped at the opportunity and told him I'd definitely be interested just to get back into the air.

Anyway, he's found a really nice Cherokee 180 in the KC area and has actually already gone to have a look at it. He likes what he saw. I won't go into details on the plane since that's not why I'm here posting this ad. However, if anybody knows of a good A&P/IA in the KC area please let me know.

We are both very low time (I have around 200 hours in mostly cessnas, however my training was in a Piper Tramahawk(LOL) and I do have a little Cherokee 180 time). He has not received his license yet but all he lacks is the checkride.

Neither one of us have ever owned a plane. I know we need to have a pre-purchase inspection done on the plane. The seller has agreed to go ahead and pay for an annual at the time of the inspection so the plane will be sold to us with a fresh annual.

My questions are really kinda endless right now so I'm just looking for info on what to do and how to do things. I've obviously informed him that eventually--if I ever get my -10 flying--I'll probably sell my half out--whether it be to him or somebody else that we'd both approve of. If I ever did sell out do I sell for the current value of the plane or for what I've got into it??? How do we insure it. Jointly or both have separate policies???

There's lots of questions--actually not really--but lots of information I think we need to get before jumping into this head first and then running into trouble later. I think it's a wonderful idea for me because I can have a plane to build time in and get my IFR license in to better prepare me for my -10.

Anyway, I've rambled on long enough. If anybody has any information that may be helpful to us please let me know.

Thanks,
Bill Britton
RV-10 #40137
Tailcone finally complete and ready to start the SB wings

 

[rleffler]

Being a fellow RV-10 builder and just selling my Cherokee 180, I'll share a few comments.

On the ownership side, go read the articles on AOPA's site about partnerships, etc. Your best bet would be to set up a LLC and put the Cherokee in it. That will avoid licensing and resale issues if you put the aircraft in both of your names. Then all you have to do is to sell your share of the LLC, the FAA doesn't care and the tax man won't ding your partner again. That is not to say the LLC isn't without issues. The AOPA site's articles are quite good. I would also consult an attorney.

An owner provided annual will provide no value to you other than meet the FAA's minimal obligation to have an annual performed. I would recommend that you hire an A&P/IA that hasn't been involved with the day to day maintenance and/or the previous annual. You need to pay for this person to do the pre-buy and the annual. This will ensure they are working for your interests, not the owners.

You may also want to consider getting an appraisal done. This is a subject of many a debate. Vref and Trade-A-Plane prices aren't typical of real market pricing. I used National Aircraft Appraisers Association on two aircraft. With he first aircraft, their research found an off field incident that the current owners were unaware. In both cases, I used their write ups to assist in the negotiation process.

You can also get some of this information through a service that AOPA provides. You can get the information directly from the FAA too, it just takes longer. AOPA will get it to you overnight. They can provide a copy of all FAA records for the aircraft and copies of all registered liens. In both cases, I found liens that weren't appropriately closed with the FAA. It's much easier to handle these before the sale, than afterwords.

As far as selling goes, I owned mine for just a little over three years. I also completely overhauled the panel too. An article on my upgrade can be found here. Even after investing in all the new avionics, I still broke even. So I ended up with getting about 300 hours with the only out of pocket expense was fuel.

As far an insurance goes, you have to insure it as the enity that owns the aircraft. I got a good deal through EAA/Falcon, but any aviation insurance agent should be able to assist you with how to obtain insurance. Push your partner to get his checkride done quickly. Not having a student on the policy will help with the rates.

Good luck and hope things go well. The Cherokee 180 is nice aircraft. Do follow up and get your IFR ticket. It will help lower your RV premiums when the time comes.

Email me if you have follow up questions.

bob

 

[JDRhodes]

I'd echo the above comments as well. Since you know that you'll want out of the partnership in a few years, make sure your partner knows that up front. Even if you don't know when you'll dissolve the partnership, the best time to do it (on paper) is when you set it up. No surprises that way.

Insurance - a two-way partnership won't hurt you on insurance rates at all. They don't really consider it a "club" until you have 4 or 5 "owners." You can insure in an LLC name or with both of your names as Named Insureds. Find a good agent to do it for you. I know one!

 

[Transporter]

A&P in KC

Carl Kraus at Midwest Executive Aircraft, Inc. in Lee's Summit (816) 246-4560 can either do a pre-buy inspection for you/recommend someone. He's also a member of EAA Chapter 91.

Mike

 

[Bill Britton]

Thanks

Thanks for the information so far guys. Of course we will have someone who is not affiliated with the plane or the sellers do the annual/inspection. If I would do something like the LLC mentioned above do I need to cantact an AOPA attorney or can any local attorney handle that kind of thing???

If we get to the point we need someone in KC to look at the plane we'll give Carl a call.

Thanks,
Bill

 

[Bill Britton]

Re-Opened

Not sure why the thread got closed to start with but it's now opened back up if anybody has any more advice.

Bill