First Purchase Price Question

UPDATE: Between the time the original note was posted and now, the deal
has
fallen through. Owner decided the plane was worth more to him even with
adding all the rework rather than selling for a loss.

Carl, you are a lucky man. You can *that* close to falling into a money pit
of immeasurable depth.

As Dan said, it's a buyer's market. You will find a "cream puff" out there
somewhere, and it probably won't be advertised. Just be patient.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

Carl, you are a lucky man. You can *that* close to falling into a money
pit
of immeasurable depth.

Dang chell specker.

That should read "You CAME *that* close..."
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

ADD'L INFO: Well, sometimes I don't put in ALL the details for brevity
purposes. The plane was actually a co-ownership arrangement, and I was going
to buy-out all 3. The point man understood what was going on with the
plane's condition, etc., but the others seemed to think they should still
get their full market value. Not a good arrangement. So, the end result was
that I would have had to pay close to normal market for the plane, and still
put $7000 + whatever other nightmares cropped up. Duh. I'm not *that* hard
up for a plane! The point man was decent about it, and I feel sorry for him.
No easy way out when you're dealing with others.

The A&P doing the annual would have also done my maintenance had I purchased
the plane (or any other). Like I said, this was the first time he'd seen the
plane. Prior A&P retired. I trust this A&P; I'm familiar with his work on
some rental planes I fly. And, yes, before you flame me, I *do* know that
the other guy was paying for the annual, his money talking and not mine,
etc.

So, we'll just see what turns up. Two other candidates have surfaced, both
within 40 minutes of home base, so I have hope ;-)

Carl


"Carl Orton" wrote in message
...
UPDATE: Between the time the original note was posted and now, the deal
has
fallen through. Owner decided the plane was worth more to him even with
adding all the rework rather than selling for a loss.

Thanks for the responses, though!
Carl

"Carl Orton" wrote in message
...
Hi, All;

Have looked at some a/c for sale, and have found one I'm interested in.

The bird has not been flown in over two years, and is out of annual.

The owner said that he would have an annual done before quoting me a
price;
guess he figures it will be worth more as a result. This was one of
those
situations where I noticed a plane that didn't seem to have much use, so
I
decided to contact the owner.

So, an annual was scheduled. The A&P (has never seen this a/c before)
says
that it needs quite a bit of work. Needs a top overhaul, some brake
work,
nose strut rebuilt, and some other lesser items. Otherwise, the airframe
is
in good shape; paint fair, but passes the 20' test, needs some carpet
and
plastic.

What is usual here for working up a price, realizing that there probably
isn't any typical way of handling the negotiations? At this point,
nothing
is signed. The owner is stating that if everything was working fine, it
would be worth "X" dollars, and he is considering the option of selling
it
for "X" minus the estimated cost of repairs for the items above.

My thoughts are that since a test flight has not occured, that more
things
might crop up, so the price should be decremented some more. Is there
any
rule of thumb for these situations? It's a common simple plane, but I'd
really prefer to work with something local at my current airport instead
of
continuing to hunt all over the state/country.

Thanks;
Carl

Mike, I think I know where you're coming from, but would like to seek
clarification.

How bad could the cam be? Although it wasn't *flown* in 2 years, it was
run/taxied regularly (monthly? who knows?). Yes, I'm aware that it got no
where near operating temp, acids in the oil, etc. I just wanted to clarify
that it wasn't really just sitting for 2 years. No way would I even look at
that unless it was priced to account for a factory reman!

But, I'm curious. I know that a pre-buy / annual won't find EVERYTHING. So
do you just go with gut feel? Do you reduce an offer price any to account
for unknowns on *any* plane? Or, does the fact that a plane is flown
regularly provide better confidence that what you're getting is close to
what's represented?

Thanks; getting better at finding the issues;
Carl

"Mike Spera" wrote in message
...
Hey Carl,

It would be interesting to track this as it unfolds. I doubt you would
get truthful and accurate numbers, but I'm sure the group would love to
see where this fellow ends up.

Top overhaul? Yeah right. Until they pull the cylinders and see the
corroded, useless cam. After 2 years of sitting - I would put money on it.

And I love the notion of "subtract all the necessary repairs from the
purchase price". I would agree if I could fly it for a year and do the
following annual with MY mechanic. We subtract all the repairs for the
year and anything that comes up in the next annual. Then I will tell you
that is a good method of figuring the plane's real worth. All the
"necessary repairs" are not going to jump off the plane and fall into
the mechanic's squawk book today. Guaranteed. But, after 80-100 hours of
operation, I'd place money on the fact that many, many items (initially
unnoticed) come up. I'll make it interesting, I'll pay for half of what
comes up and, of course, I'll pay for the inspections.

In the "subtract the repairs from the price scenario", who gets to
decide what the anticipated "repair price" will be? For this "top
overhaul", are we getting new cylinders or some off the rack, cut rate
rebuilds? If I am right and this top overhaul goes South, will it be a
new cam or regrind? Will we assume the case will be usable? Alternator
overhaul, carb overhaul, prop overhaul, muffler, exhaust stacks, hoses,
control cables, scat tubing, pulleys, and the list goes on and on.

But, as you said, they guy got greedy. He has been fooled by his own
marketing and is trying to "buy" the airplane himself by taking on all
the repairs. He just did you a tremendous favor. You get to watch what
would have happened to you.

My prediction: the total bill to get this thing in reasonable flying
condition plus 6 months of flying will double or worse. More likely,
when the bills start to mount, he will try to cheap out the remaining
repairs or he will bail out and put it on the market again unfinished.

I would look at a prospective plane like this: what does it have going
for it? Paint, interior, engine, airframe, and avionics. If one is weak
and the price is right, the bird is usually worth a look. Two or more
and my interest fades no matter what the price.

Opinions vary,
Mike

Carl Orton wrote:
UPDATE: Between the time the original note was posted and now, the deal
has
fallen through. Owner decided the plane was worth more to him even with
adding all the rework rather than selling for a loss.

Thanks for the responses, though!
Carl

"Carl Orton" wrote in message
...

Hi, All;

Have looked at some a/c for sale, and have found one I'm interested in.

The bird has not been flown in over two years, and is out of annual.

The owner said that he would have an annual done before quoting me a

price;

guess he figures it will be worth more as a result. This was one of
those
situations where I noticed a plane that didn't seem to have much use, so
I
decided to contact the owner.

So, an annual was scheduled. The A&P (has never seen this a/c before)
says
that it needs quite a bit of work. Needs a top overhaul, some brake
work,
nose strut rebuilt, and some other lesser items. Otherwise, the airframe

is

in good shape; paint fair, but passes the 20' test, needs some carpet
and
plastic.

What is usual here for working up a price, realizing that there probably
isn't any typical way of handling the negotiations? At this point,
nothing
is signed. The owner is stating that if everything was working fine, it
would be worth "X" dollars, and he is considering the option of selling
it
for "X" minus the estimated cost of repairs for the items above.

My thoughts are that since a test flight has not occured, that more
things
might crop up, so the price should be decremented some more. Is there
any
rule of thumb for these situations? It's a common simple plane, but I'd
really prefer to work with something local at my current airport instead

of

continuing to hunt all over the state/country.

Thanks;
Carl








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Jay, et al:

Well, all along I figured it would need some major work. The A&P even found
a prior illegal repair (bondo!) that will result in one portion being
re-skinned. I just thought that the owners would realize they were throwing
money down *their* pit for insurance/full hangar, want to get out, and want
to deal with a cash buyer. HAH! As I said, 1/3 of the group had the
"correct" (i.e., agreed with me) viewpoint, but 2/3 still had unrealistic
dreams of market value.

Yes, I count myself lucky.
Carl

"Jay Honeck" wrote in message
news:y6Qmb.33959$Tr4.60835@attbi_s03...
UPDATE: Between the time the original note was posted and now, the deal
has
fallen through. Owner decided the plane was worth more to him even with
adding all the rework rather than selling for a loss.

Carl, you are a lucky man. You can *that* close to falling into a money
pit
of immeasurable depth.

As Dan said, it's a buyer's market. You will find a "cream puff" out
there
somewhere, and it probably won't be advertised. Just be patient.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

Carl Orton wrote:

UPDATE: Between the time the original note was posted and now, the deal has
fallen through. Owner decided the plane was worth more to him even with
adding all the rework rather than selling for a loss.

That seems to be typical of owners who let a plane sit for a while - and is also
the reason the plane sits instead of being sold.

George Patterson
You can dress a hog in a tuxedo, but he still wants to roll in the mud.

Carl Orton wrote:

Mike, I think I know where you're coming from, but would like to seek
clarification.

How bad could the cam be? Although it wasn't *flown* in 2 years, it was
run/taxied regularly (monthly? who knows?). Yes, I'm aware that it got no
where near operating temp, acids in the oil, etc. I just wanted to clarify
that it wasn't really just sitting for 2 years. No way would I even look at
that unless it was priced to account for a factory reman!

A Continental cam would be OK under those conditions. A Lycoming cam
would still be toast.



But, I'm curious. I know that a pre-buy / annual won't find EVERYTHING. So
do you just go with gut feel?

Sometimes.

Do you reduce an offer price any to account
for unknowns on *any* plane?

No, you can try but unless the buyer just has to get out he won't do that.


Or, does the fact that a plane is flown
regularly provide better confidence that what you're getting is close to
what's represented?

That's almost always the case.

Carl Orton wrote:

Jay, et al:

Well, all along I figured it would need some major work. The A&P even found
a prior illegal repair (bondo!) that will result in one portion being
re-skinned.

Nothing wrong with Bondo if it's done right.

ADD'L INFO: Well, sometimes I don't put in ALL the details for brevity
purposes. The plane was actually a co-ownership arrangement, and I was
going
to buy-out all 3.

Wow. I've rarely seen a hangar queen that was owned by a multi-person
partnership. Usually at least ONE of the partners likes to fly, and keeps
the bird running.

Are these older folks? The only time I've seen this kind of thing happen
was in a partnership made up of guys who had all lost their medicals -- and
they STILL wouldn't sell.

Hope springs eternal, I guess...
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

In article , "Carl Orton"
writes:

So, we'll just see what turns up. Two other candidates have surfaced, both
within 40 minutes of home base, so I have hope ;-)

Good luck Carl. And sometimes buying within the state can save on taxes.

Chuck