new plane owner wanting to reduce costs right away...

I'm a new plane owner, and in an unusual stroke of luck I own the plane
outright. The problem is that financially I'm not in a position to
maintain it (or own it for that matter...), so I'm looking into various
partnership setups to help offset costs such as fractionals,
co-ownerships and leasebacks.

Thought I'd post "yet another question" about which of these
partnerships might be more viable than the others given my ownership.
most of the reading that I've done thru this group and in various other
articles thru out the web seem to be geared towards a partnership where
the plane is still being paid for by the partners. I'd assume that a
partnership where the plane is already paid for would allow for a more
attractive buy in given the possibility of a lower buy in price to
cover the operating expenses, as well as a lower cost per hour to the
partner.

If I form a partnership where the other partners pay some amount in to
a general fund as the seed money how would my share get paid in? I'm
not interested in putting X grand into the pot since I'm placing the
plane into the partnership with a paid in full status and wanting to
keep my share of the valuation - how would this work?

these questions and more I'm sure, thanks in advance

"BigGuy" wrote in message
oups.com...
[...]
If I form a partnership where the other partners pay some amount in to
a general fund as the seed money how would my share get paid in? I'm
not interested in putting X grand into the pot since I'm placing the
plane into the partnership with a paid in full status and wanting to
keep my share of the valuation - how would this work?

If you own the airplane outright, then it's your asset. You can charge
partners whatever you like to own whatever fraction of the asset you like.
Of course, the closer to fair market value you make the base value of your
airplane when calculating the cost to own a specific fraction, the more
likely you'll find a partner willing to pay your price.

If you can find someone to pay $100K for a 25% share of a $50K airplane,
there's no reason you can't charge that. In reality, you should try
your best to charge a fair price for the fraction. Charging more than fair
market value will discourage partners from joining, while charging less than
fair market value will undermine your own equity in the partnership.

Any partnership needs a solid contract to make clear the relationship
between the partners, their rights and responsibilities, and how the
partnership can be modified or dissolved altogether. AOPA has lots of
resources to help with that.

You might also try rec.aviation.owning. It's a much more appropriate
newsgroup for this discussion than this one.

Pete

"BigGuy" wrote in message ...
I'm a new plane owner, and in an unusual stroke of luck I own the plane
outright. The problem is that financially I'm not in a position to
maintain it (or own it for that matter...), so I'm looking into various
partnership setups to help offset costs such as fractionals,
co-ownerships and leasebacks.

Well here is the kicker, you'll always have to put in your share of the
maintence cost.
And your share of the fuel used by you, when you fly.
Now if you sell 1/2 to another partner, then you're no longer
the soul owner.
But that half of the total value of the plane should get you
some decent amount of flying hours and maintenance work.
If after you have used up the money from selling half of a
share you still can't afford it. Then you sell the other half
and spend that money renting versus owning.
Or you can sell the whole plane now and spend the money
renting some newer, different, faster, roomier and no
worries about tie down fees, maintenance fees all you'll
have to do is pay the owner to rent his plane.

Ownership is nice, but renting is worry free.

David

Sell 1/2 the plane to one other partner (or 1/3 each to two more
partners). Bank that money and use it to pay your costs. When your
kitty runs out, sell your remaining share to yet another partner and
you are out of the plane entirely.

You will probably need a lawyer to set up the partnership, but it
shouldn't be too costly.

If you are really struggling to make ends meet, you should probably
sell the plane. Aircraft ownership is expensive and pretty much a
luxury.

Big Guy
Find a buyer for the aircraft and just keep renting as the need arises.
From what you say, you are in no position to incur or carry the costs
of private aircraft ownership. Best bet is to just sell your share of
the action.

Its much easier to get partners for an existing plane than for one you
are thinking of buying. People just don't seem to want the hassle of
selecting and getting the plane.
The partners need to have ownership in the plane in order for the
insurance to work. Otherwise you'd be renting the plane and paying 3X
for insurance.

Personally, I wouldn't partner with someone who couldn't afford a plane
on their own. You just never know what could come up. I've partnered
because a plane turns to crap if it doesn't get 150ish hours per year.
However, I may need to write a $10,000 or more check at any moment if
something happens. A Mooney owner near here just paid $40,000 to
replace a rusting rear spar. That kind of thing can pop up at any time.
-robert

Talk with an aviation lawyer, you need legal advice. The
AOPA can get you a list of lawyers that specialize in
aviation.


--
The people think the Constitution protects their rights;
But government sees it as an obstacle to be overcome.
some support
http://www.usdoj.gov/olc/secondamendment2.htm
See http://www.fija.org/ more about your rights and duties.


"BigGuy" wrote in message
oups.com...
| I'm a new plane owner, and in an unusual stroke of luck I
own the plane
| outright. The problem is that financially I'm not in a
position to
| maintain it (or own it for that matter...), so I'm looking
into various
| partnership setups to help offset costs such as
fractionals,
| co-ownerships and leasebacks.
|
| Thought I'd post "yet another question" about which of
these
| partnerships might be more viable than the others given my
ownership.
| most of the reading that I've done thru this group and in
various other
| articles thru out the web seem to be geared towards a
partnership where
| the plane is still being paid for by the partners. I'd
assume that a
| partnership where the plane is already paid for would
allow for a more
| attractive buy in given the possibility of a lower buy in
price to
| cover the operating expenses, as well as a lower cost per
hour to the
| partner.
|
| If I form a partnership where the other partners pay some
amount in to
| a general fund as the seed money how would my share get
paid in? I'm
| not interested in putting X grand into the pot since I'm
placing the
| plane into the partnership with a paid in full status and
wanting to
| keep my share of the valuation - how would this work?
|
| these questions and more I'm sure, thanks in advance
|

"FLAV8R" wrote:
Ownership is nice, but renting is worry free.

It's worry free? I dunno about that!

Having rented, owned and worked at a flight school, no one sees to
maintenance like *most* pilot/owners. Yeah, I know about mandatory
regulations, but in the gray areas, where a decision can be made as to
whether to fix something now or wait till next annual, which decision do
you think the flight schools go with?

On 17 May 2006 09:22:53 -0700, "BigGuy" wrote
in .com::

so I'm looking into various
partnership setups to help offset costs such as fractionals,
co-ownerships and leasebacks.


Here are some issues to consider:

1. Each member of a true partnership is responsible for debts
incurred by other members.

2. Each time a 'share' in the aircraft is sold it is subject to
state personal property/use tax, unlike the transfer of corporate
stock certificates.

3. The state of Nevada (and Oregon) has no personal property tax
for aircraft.

4. ...

Do a little research here http://www.corpmakers.com/ before you
reach a final decision.

This is not true in the state of California. (I called the FTB to
verify this).

2. Each time a 'share' in the aircraft is sold it is subject to
state personal property/use tax, unlike the transfer of corporate
stock certificates.