Looking for Partners
I find it quite amazing that after getting my private pilots license at the end of 2010, that I am going to be an aircraft owner. My license was a life long dream and now I am about to accomplish another dream.
Everything that I though I knew about how to go about buying an airplane was completely turned upside down this year. After analyzing my finances, I determined that my only chance of owning an airplane was to go in on a partnership. Luckly, the Aircraft Owners and Pilots Association has a program called the "Aircraft Partnership Program". This is like the "e-harmony" for wanna be aircraft owners who want to join a partnership. You create a profile with information on how much you want to spend, how much you fly, your hours, your ratings, your desires, and other like-minded individuals can come and evaluate one another and maybe make a connection.
This wasn't my first exposure to the idea of a partnership however. During my training days, my instructor and a few of his students decided they wanted to pursue purchasing an airplane. I sat in on a couple of meetings and at first it seemed like all our interests were in allignment with one another. We all wanted something a little bigger and more capable than our regular training aircraft, we wanted 4 seats, and we wanted something that was IFR. My needs are simple. I want something I can take friends for rides in, do a few short cross country trips, maybe even a weekend trip once or twice a year, and something I can get my instrument rating in. This plane originally started out as a Cessna 172, but a few of the other 'partners' wanted something even more capable... a Cessna 182. Now the price is going up fast and before I knew it, we were looking at a plane in between $200,000 and $225,000 with a G1000 glass panel and 'all the fixins'
I kind of fell out of that group, money was one reason, but the biggest reason being that I moved over an hour a way, back to Harford County to start a new job as an Army Civilian. My next contact was with a gentleman who lived in the same town as me and was looking for a cheap to own and operate airplane, leaning towards a Cessna 152, Citabria, or Decathlon. At this point, I did not have my tailwheel endorsement yet and I sure was tired of flying Cessna 150's. I really desired something with 4 seats and after a few more e-mails, that fell through as well.
A few months went buy and I was contacted by a gentleman, Larry, who was looking to add a partner to an already forming partnership that had 3. I would be the fourth (if I turned out OK). He had explained to me that he has owned a Cherokee 140 and that it had recently 'been lost' and he wanted to buy a new airplane. After a few e-mails and phone calls, I basically said that I was at a moment of flux in my life since my fiancee would be graduating and I was unsure where we were going to be living. I said that I would most likely know sometime in May. To tell the truth, although I was excited about the possibility of joining their group, I was worried that they would find an airplane, or another partner before I knew where I was going to end up.
However, a few months went by and a suddenly got a phone call from Larry, checking up on me. I had only found out a few days earlier that I was going to be living right down the road from where I grew up, only 3 miles from my parents and that I was ready to continue looking for an airplane. Larry invited me to a meeting to meet the other partners. I was both excited and nervous. My excitement obviously stemming from the prospect of maybe owning an airplane after all. My nervousness being that this group of guys was much older than myself, me being only 25 years old, and I was afraid they might stereotype me because of my 'young' age as being immature and probably not too financially stable.
I avoided mentioning how young I was during our first meeting and I am sure I looked scared stiff. These guys seemed to already know what they were doing, had already looked at airplanes even! Luckily it was 'beard' season for me and I do tend to look much older than I actually am when I have a full chin of whiskers. (I might even look a little wiser too, although I don't claim to be) They were excited to have me and I was excited to start the quest of searching for the perfect airplane.
Looking for the Airplane
After my first discussion with Larry and Mark, we had talked about our 'mission' for the airplane. My mission was to have a nice airplane that I can take friends up in, do $100 hamburger runs, go on some nice cross country trips, and get my instrument rating in it. These requirements were similar to every one else and we decided NOT to decide on a specific type of airplane, but rather, keep ourselves open to any type of airplane that was around $60k-$70k, was a solid IFR platform, and wasn't going to kill us on annual/insurance/fuel costs. Mark and Larry had both seen a Cessna 177 Cardinal and liked it and so that became our 'preferred' airplane but by no means were we going to limit ourselves to it.
We started our search and just to get some 'feelers' out there, I e-mailed out to everyone a few different planes that I had found, I really like Mooneys, Maules, and other taildraggers. It became apparent that a taildragger wasn't going to happen, which is fine with me. I can always rent the Citabria when I need my fix.
At one point, I had found a nice looking Cessna 177 Cardinal that was at the time, undergoing annual in Virginia and was going to be shown in Leesburg, a nice short flight away from Harford! I contact the broker selling the airplane, and obtained the information. The only concerning thing about the airplane, was that one of the cylinder compressions was low.....much lower than all the other cylinders. This gave us some concern, but we were going to go see it anyway. It had come on the market on a Thursday and I was going to be in New Jersey from Friday to Sunday and so we resolved to go and see it that Monday on my return. It was a rainy day Monday but Tuesday was looking nice so I called the broker and told him I would like to go and see the airplane. Unfortunately he had some 'sad' news for me and told me that a guy had flown out from the midwest to go and see it and that the plane was already under contract. WHAT?! It was only on the market for 4 days! I knew then that a nice IFR cardinal was going to be difficult to find, go see, and buy before someone else does.
We went a while without finding anything and then one day we came across a Piper Arrow II in South Carolina. It was beautiful and had a Garmin 530 GPS in it. Very nice. We discussed it quite a bit and the big plus was that it was getting a brand new 200hp engine. (drool) It was a little bit high for us, although still in the price range (barely for me) and we were on the verge of having the guy fly it up to Harford for us. Until... Mark got the insurance quote.
In order for us to fly it and take passengers and really start to utilize it. We needed 10 hrs each of instruction with a CFI, then 10 hrs of solo before we could even take passengers! THEN our annual insurance premium would have been close to $4,000...major OUCH! It goes without saying that we decided that the Arrow was not going to be the plane for us. But boy was it beautiful.
During this time of looking at the Arrow, we had another airplane in mind, a Cessna Cardinal in Michigan. It was out of annual, out of IFR cert, and hadn't been flown much in the past 4-5 years. However, it had been hangered its entire life, only had 220 hrs on the engine and had a nice Garmin 430. After deciding not to pursue the Arrow we turned to Jim and his "Michigan Cardinal" as we all called it.
Jim was selling his Cardinal by necessity and not by choice. Unfortunately he had had a heart attack some years ago and was in a battle with the FAA to get his medical back. The FAA, being, well...the FAA was not budging. Jim is an older gentleman and not too good with technology so getting pictures and information from him about the airplane took some time. The plane appeared to be a beautiful shape. Appeared to have new paint, relatively nice interior and avionics. It had a Garmin 430 a GTX 330 Mode S transponder with traffic (T.I.S.) a functioning autopilot (heading only) slaved to both NAVs, dual glideslopes, and dual altimeters. Did I mention the long range fuel tanks? So we decided to go see the plane. Originally it was going to be Larry and Mark and Mike and I were going to stay home. Which was fine with me. However, a few days prior they decided that I should go too, which worked out nicely since it was my regular day off from work anyways. Now we go to see it!
Looking AT the Airplane
Once we had all agreed that Jim's Cardinal, or "The Michigan Cardinal" as we were calling it, was a plane that we wanted to go and see, we had to find a time. Mike and I, the two youngest in the group, and the two with the least experience, decided that we would stay behind while Larry and Mark went to go and look at it. From the pictures alone, Larry and I were very excited and thought the plane looked great and seemed like it had lots of potential. Mark and Mike didn't seem to like the interior too much and were thinking that IF this was the airplane for us, that we would probably upgrade the interior someday. Fine with me, now lets go look at it!. At the last minute, for some reason, the guys decided that they wanted me to go along too. Also fine with me.
We hadn't decided if we were going to land at Jim's house (he had a 2100ft grass strip at his farm) or to land at nearby Toledo Suburban. We would decide when we got out there. Therefore, we ended up flying the 172SP instead of the Arrow III at Harford. The flight out there was looking "iffy" the night before, since there was some weather rolling in. We decided that we would go IFR out there, and we made an uneventful flight out there. We landed at Toledo Suburban.
Once at Jim's, the plane looked amazing (in my eyes) the paint was nearly pristine except for the front wheel pant and a slight ding on the elevator trim. The interior, which looked just OK in pictures, was in much much better shape than we had thought, The plane had an older secondary radio but it did have a G430 and a GTX-330 mode S transponder with ADS-B traffic awareness. SCORE! Also a big benefit, the plane had a single axis autopilot, dual glideslopes, and dual altimeters. SCORE #2!
Jim showed us all the features of the plane and then he said, "lets pull it out and start it up!" We pulled it out of the hangar and Larry hopped into the pilot's seat. Jim said "I only use a half a prime and it starts right up"........what?!.... every plane I have ever flown with a primer needed AT LEAST 2-3 primes. Sure enough, he primed a half and the plane started after a turn and a half of the propeller. Amazing! I KNEW the engine was strong and compressions are good. Very nice. We also did a self operated 'pre-buy' inspection and examined all parts of the airplane as related to a pre-buy checklist i had downloaded from www.cardinalflyers.com. Everything looked great and 'passed'. We took pictures of the log books to review with Kevin at Harford once we got back home.
We thanked Jim and he drove us back to the airport so we could go home. Next step, discuss if we wanted to buy it.
We Want to Buy it.... Now What?
First up was to determine how the purchase was going to go. Because Larry owns his own business, and to protect him, we decided to set up an LLC to own the plane. We would then rent the plane dry to ourselves for $20/hr and pay for all hourly expenses (fuel, etc) ourselves, but the LLC would own the airplane. We had a slight hickup when a few of the partners decided they wanted to register the LLC in Delaware to avoid Maryland state sales tax, but I reminded everyone that 3 out of the 4 of us work for the US Government and that registering in Delaware was probably not the smartest thing to do. So we did end up registering in MD and paying the sales tax, which wasnt all that bad.
The actual purchase turned out to be more of a fiasco than it should have been. You see, two of the four partners already had the money (in cash) ready to go, the other two of us, including myself, had to get a loan. We went through Bank of America and they were very helpful, and offered us a great rate. So here we are, financed, ready to go. Well this is where Jim throws us a curve ball. He wants half in cash and he also wont release the bill of sale until he gets his money upfront. Hmmmmm, ok. Well the problem arises when the bank (BoA) wants the bill of sale before they will release the funds. Conundrum! There was a lot of back and forth between us, Jim, the bank. We were trying to decide if we needed to go escrow, etc etc. Finally, we convinced the bank, and Jim that we would process the transaction at a local Bank of America branch right down the road from Jim's house. We flew Mark out to Michican with nearly $30,000 in cash on him (i know what your thinking, lol) and Mark completed the transaction. YEAY! We now own an airplane!