I've already posted this on MaulePilots.org but was hoping some of you may be able to help.

I'm looking at financing the purchase of a Maule somewhere below the 100K mark withing the next 12-18 months and have been doing some research on financing aircraft. Jeremy's website has a link to Airfleet Capital and I spoke with them (Very professional and helpful) and they were saying that I can finance an aircraft 1982 or newer on a 20yr term with around 15-20% down. This seems very reasonable and would allow me to get into a lot more airplane than I thought.

My big take-away from the whole conversation was that it seemed much easier to get financing on a newer more expensive aircraft than in the older cheaper ones. With all the phantom issues that can come up with older airframes and corrosion, that seems like pretty good news to me.

What has been your experience with this? I know this topic can get personal so if you'd feel more comfortable doing a PM, that's great.

(I have property but a cash-out refi isn't an option right now.)

On another topic. I've been speaking with a gentleman trying to to sell his M5-210 at Birchwood. It's a beautiful airplane and has been very carefully restored but he's asking $75,000 for it and from all the research I've done, that seems WAY high. I'd love to buy it off him but frankly I know that the price and age is going to keep me from getting the financing. 446 SMOH and lots of extras but just seems real high from what I'm seeing on Trade-A-Plane, Barnstormers, and from talking to people who know. What's your all's impression? (I hope I'm not stepping on any toes here, just trying to do my due diligence)

AOPA financing (Bank of America) restrictions on age of aircraft and will not finance anything over 50 years old - but they may deal with the '76.

Also, NAFCO has no such restrictions. They will finance anything - subject to inspections and appraisals - even experimentals and unbuilt kits. You can always use the bank appraisal as leverage against the seller if you think they are asking too much money and you are not able to talk him down. From my research, I'd say a M5 210 is probably in the neighborhood of 50k - but if the restoration is extensive and recent and the engine is low time - those are all important factors.

I haven't bought a plane yet - but I did get a pre-approval for shopping purposes - and these guys seem professional and reasonable too:

https://www.airloans.com/

Tick,

Probably not the advice you are looking for . . . (and please no I'm not intending to preach) . . .

As an example, financing $100,000 worth of airplane at 6% for 20 years is going to cost almost $172,000 if the loan is taken full term and not paid off early. Sort of makes a "good deal" look not so much.

If you decide to sell or trade up (or down) long before full term, you'll have been paying mostly interest and will have little or no equity. In fact, and depending to a degree on the economy and demographics etc, you may well be deeply upside down when you'd like to bail.

My advice, which is especially true if the object of your desire is for personal use: But an airplane you can afford, or nearly so. Plan on no more than a five year loan at best. Be sure payments are low enough that they won't be burdensome and so you can pay it off early if you wish.

Only exception to the above would be for an aircraft used in buisness or that is absolutely essential and that truly pencils out. i.e. it can be amortized over it' projected useful life and will absolutely, positively make money or financial sense etc.

I tried to teach my kids this principal, though I'm not sure I succeeded: Buy an old but reliable used car and immediately start making "new car payments" to yourself (savings account). Then when you have enough, buy a better used car or even a new one if you want - for cash - and again, immediately start making payments to yourself. Never pay interest to a bank or finance company. You will go your whole life without paying finance charges for consumer goods and will save a fortune.

And $75 K for that airplane is very high. Keep looking....there are a lot of good used ones out there.

Have you investigated the cost of insurance as well?

MTV

Gold is the currency of a rich man
Silver is the currency of a gentle man
Barter is the currency of a common man
Debt is the currency of a slave

I really do appreciate the advice but financing doesn't scare me. I know that the financed airplane will be a liability, but my assets pay for it. (Any Robert Kiyosaki fans out there?) I totally agree with you for the most part, as I drove my nearly paid off used truck to work today, but a breakdown on a car is an inconvenience. A breakdown on your airplane can get dangerous fast.

My worry about purchasing an older aircraft cash is bringing it in to an annual a short time later only to find another 15K in repairs due to age and corrosion, as I've seen happen over and over again. I don't want to be the guy who "owns" an airplane but really owns a collection of aluminum and plastic rotting away on the ramp while I save up the money to get it flying again. I know that's not always the case and there are exceptions on both sides but a drive up and down the ramps of any small airport will show a lot of proof this happens more often than not.

If I wait to purchase something cash, even a much less expensive aircraft, it will be many years from now. If I can finance something reliable and well maintained for a 5 yr term, that would be ideal. The gentleman who is trying to sell his M5-210 I mentioned earlier, has now sunk thousands into his "bargain" airplane to get it safe and will never get that back because his break even price is way over fair market value. After three years of research I've come to the conclusion that I can either pay alot over time to fix or pay alot over time to finance. But either way the result is the same. I hope I'm not coming off as some young immediate gratification punk, it's just what I'm seeing from having been researching this for so long.

A great thread and worth the read.

viewtopic.php?f=46&t=8778

bumper wrote:I tried to teach my kids this principal, though I'm not sure I succeeded: Buy an old but reliable used car and immediately start making "new car payments" to yourself (savings account). Then when you have enough, buy a better used car or even a new one if you want - for cash - and again, immediately start making payments to yourself. Never pay interest to a bank or finance company. You will go your whole life without paying finance charges for consumer goods and will save a fortune.

I tried too. And so after several years of "yeh, we got it" and "that makes so much sense Uncle Emory", and "thanks for helping us out of this jam", they went out and bought a new Subaru Outback with tax and license down.

Tick wrote: . . . . financing doesn't scare me. I know that the financed airplane will be a liability, . . .
My worry about purchasing an older aircraft cash is bringing it in to an annual a short time later only to find another 15K in repairs due to age and corrosion, as I've seen happen over and over again. I don't want to be the guy who "owns" an airplane but really owns a collection of aluminum and plastic rotting away on the ramp while I save up the money to get it flying again. . . .

If I wait to purchase something cash, even a much less expensive aircraft, it will be many years from now. If I can finance something reliable and well maintained for a 5 yr term, that would be ideal. . . . I hope I'm not coming off as some young immediate gratification punk, it's just what I'm seeing from having been researching this for so long.

Tick,

I cut out some of your post for this reply. It seems you've really made up your mind already at least on your course of action i.e. finance much of your plane. Much of your reply above is dedicated to justifying that.

Firstly, you are not exactly on track re. buying older used airplanes. With a good and competent pre-purchase inspection, there are many smoking good deals out there and, as you suggest, some real lemons too. You only have to be wise enough to not fall in love with what looks good on the surface while forgetting due diligence. Engine condition and airframe corrosion are all easy to check. There is essentially no life limit on a well maintained and restored aircraft. (I purchased a beautifully restored, much better than new 1946 7AC in '91 for $15K cash and sold it in '05 for $35K. Five years after I sold it, it won a "Bronze Lindy" - - so those deals are out there.)

If you haven't seen good "affordable" deals out there (and I don't mean simply determining if you can swing the monthly payments), then I'd think you haven't been looking right, or perhaps your sights are set too high.

One of my personal rules (for me anyway) that's quite simple, never finance toys. Now, I'll admit I didn't start out that way. I started with absolutely nothing as an immigrant kid. I have bought a few toys on time early on . . . but then I'm a slow learner.

Back in the 70's, when I was an Oakland cop, I'd press my nose against the Cessna showroom window on the graveyard shift. I knew I would never be able to afford something like that. 10 years later, I had a Mooney poster on my office bulliten board - - and while I could have financed one, I waited, putting all my spare money into my growing business. Wasn't 'till '91 I finally had everything in my life paid for, including the ranch - - then I bought a 4 year old Mooney for half cash and half money I borrowed from my business (but I paid that back within a year).

Sure, I could have been flying 10 years earlier, but it would have been to the detriment of my company, so I waited - - for me, the right decision.

I'm old and wise enough to know this will likely not change your mind. So I wish you the best and hope you'll be happy with your choice down the road.

bumper

BTW, a turbine Beaver on floats would be nice . . . think I'll wait some

I think I have failed in my attempt to not come off as a "instant gratification punk". I don't think you and I are off by much in our basic philosophy. We both follow the idea of delayed gratification. Where we differ is our tolerance of debt. As a real estate investor and entrepreneur I understand the concept of the cost of money as it applies to amortization of loans. I've also spent a long time now living humbly in one bedroom apartments (but owned the building). My weekends are spent removing the trash from apartment evictions as opposed to riding snowmachines with my coworkers. I don't want to give the impression that I just landed my big job out of college and now I'm out to get into debt up to my eyeballs.

I think the only place we differ is our idea of what's OK to do when purchasing the "toys". I follow the Robert Kiyosaki philosophy. Buy and build assets like properties and businesses. Let other people like customers, banks, and tenants help you build those assets so they make money even when you aren't at work. Forgo the new car, but rather than saving at .015% return, put your money in a rental property or business instead. Let that grow, and do it again and again for years. Then, use the money that those assets has produced to buy your liability (airplane) even if that is a leveraged liability.

I would LOVE to find that diamond in the rough of a great airplane for little money but what worries me (just like rental properties) is the stuff you find when the home inspector/A&P Mechanic has left. I'll keep looking though.

BTW, thanks for engaging in a really interesting conversation. I respect people who stick to their principles, even when I disagree. (Though as I said, I don't think you and I are far apart all told)

With a good and competent pre-purchase inspection, there are many smoking good deals out there....

Especially now.....

Engine condition and airframe corrosion are all easy to check. There is essentially no life limit on a well maintained and restored aircraft.

Listen to the wise man, Tick....

......but a drive up and down the ramps of any small airport will show a lot of proof this happens more often than not.

A lot of those ramp tramps are because, with an airplane, most people find with time and small planes they (or their wives) travel from 'somewhere they don't want to be' (airport) to somewhere else they 'don't want to be' (different airport).
We BCPers are different. We enjoy being at our home airport, and we use (and enjoy) our airplanes to fly to where 'we want to be' -the backcountry.



Oh, if only I could be smart enough to learn from other peoples mistakes....
lc