How To Buy A Project Plane And Not Lose Your Lunch
Looking to buy a project plane? It seems easy enough, but is it something you should consider?
If there is one thing a hot market will create is a lack of inventory. The fewer the aircraft available to the buying public, the more appealing project aircraft become. There are varying degrees of what some call a project aircraft, from the easy stuff like cosmetic updates to total restoration that can take years to complete.
Keep in mind that there are no easy wins when it comes to project planes. It’s a commitment. Continue for more information and insider tips on buying a project plane without losing your lunch.
Don’t forget to read our other blogs packed with information to help you with all of your aircraft-related needs.
How To Buy A Project Plane And Not Lose Your Lunch
Before deciding to move forward and buy a project plane, consider avoiding a full refurbishment only to turn a profit. Because chances are, it won’t be worth it, and it’s not a recommended investment to make. It would be best if you bought a project aircraft because you want to buy an aircraft for a lot less than you normally would and you are convinced the refurbishment will cost less than what a turn-key aircraft will. The plan should be to refurbish it to make it your own and keep it for a substantial period to offset the depreciation that new avionics and other modifications will be subject to. Buying a project aircraft requires expertise, mechanical know-how, and time, lots and lots of time. If you lack any of these traits, you will be hiring a shop or mechanic to do them for you.
1. Find Someone Who Knows The Airframe
If you are dead set on doing a full refurbishment, then the next natural step is to find somebody to work on the aircraft for you. Don't work on an aircraft yourself. With no experience, it’s essential to find someone else who knows the airframe; even if you are a qualified mechanic, you will be better off with some assistance.
Depending on where you are in the world, several shops across the globe have expertise in certain models. Seek them out, talk to each one of them, and take the time to interview them. Get customer referrals, talk to their customers, and get an in-depth analysis of previous work done.
Like online restaurant and business reviews, it matters when you talk to people with different experiences. For example, you may encounter someone who sat around and waited six months longer than they were supposed to. Or you may find that another customer got everything that they were promised in a fair amount of time.
When finding someone to work on your aircraft:
Interview them about their experience with your aircraft
Ask for customer referrals
Pick the person you want to do business with based on reliable information.
2. Avoid A Full Restoration Project
Unless you are extremely experienced, you want to avoid doing a full restoration on an aircraft. If you've never dealt with a full total restoration project before, it's probably not a good idea to do it as your first aircraft purchase as a new aircraft owner. This is because you’ll have little to no control over your spending, and it’s easy to blow past your budget completely. Once you start to go down the total restoration rabbit hole, you will be consumed with every building aspect. You will also start to recognize that few companies specialize in each airframe to provide full restoration services. Depending on the airframe, you may be facing a substantial amount of time before you can even get the project started, and this is one area that is best left to the experts. The money you will save in the long run is worth its weight in gold.
3. Know What To Look For And What To Avoid
There are numerous items you’ll need to complete a total refurbishment. There’s the expected and the unexpected.
The primary number one killer of aircraft is corrosion, which is often unrepairable. This means you might be in a situation where you've just taken on a project that you can't complete. Because of severe corrosion, your only option at that point is to scrap the aircraft entirely. And trust us, it happens more than people want to talk about.
The reason corrosion can be a death sentence to an otherwise attractive-looking aircraft is that it’s difficult to stop once it starts. As an example, the paint may look good. But then you start removing it, and you find things lurking underneath that can reveal a much deeper problem.
Read How To Spot And Prevent Aircraft Corrosion here.
4. Be Aware Of The Hazards Of Blowing A Project Plane Budget
Before making a purchase, consider your funds. If you have no experience in the aviation or aircraft-owning industry, you run the risk of blowing a budget you think you have. As an inexperienced aircraft owner, there's little you'll be able to do to control your expenses, and you can easily surpass your budget with essential fixes and maintenance.
Take whatever budgetary numbers the shop is giving you and add 20% to whatever that number is. This should cover you if something serious happens, such as an unplanned replacement of a motor or corrosion repairs. From there, other maintenance should bring everything into compliance. This portion of the refurbishment usually involves the propeller and the engine. But depending on what type of aircraft it is, it can involve all sorts of other subsystems that need attention.
Worry Less About The Project Plane Interior
We’ve said it before, and it still rings true. Worry less about the interior because it won’t be at the forefront of your budgetary concerns. The reality is, interior work is easy to do. Find a shop with in-house expertise to do the interior work. Then, get the most out of your money with modern cosmetic procedures that lift the look of your aircraft without making it undesirable to future buyers.
Attempting to appeal to a specific audience is important. You can have special features such as an aircraft painted black or a pink interior, but that’s more likely to backfire than pay off in the long run. This is why so many planes are white with a neutral-colored interior. Experienced brokers and dealers are typically good at doing refurbishment projects because they know the general public will not find it appealing to infuse over-the-top additions.
A Realistic Idea Of What A Budget Looks Like
Be careful about locking yourself into a budgetary number unless you know the aircraft is mechanically sound. When it comes to refurbishments, you want to start with a piece of paper. Figure out your wish list and then try and match that to a budget.
You may find that your make or break within your budget is both avionics and mechanical issues. As an example, you might find yourself in a situation where you've allocated $200,000 to do a refurbishment. From there, $75,000 or $80,000 of that is for your panel with all the latest and greatest Garmin bells and whistles. Then, you find that you only have $45,000 or $50,000 left after you’ve gotten the mechanical stuff done.
While you may have your heart set on the latest and greatest panel, you no longer have the $80,000 budget for the avionics that you thought you set aside.
The Banks Won’t Play Ball.
Another critical factor that weighs in on your project plane is that there are not many banks out there willing to finance restoration projects. From the bank’s perspective, there’s too much skin in the game to take on such a gamble.
What you will be looking at are typically cash deals or cash buyers. They will be willing to refinance, but as soon as the project is complete, they will try and pull their money back out of it. While a full refurbishment is doable, be careful.
5. Be Aware Of A Realistic Timeline
All of the work may sound quick and easy. But unless it’s a soft market when shops aren't bustling, you’ll have a hard time demanding a short timeline. You can probably get an airplane in and out in three to four months in a softer market.
Today, you're probably looking at six months due to several uncontrollable events such as supply chain holdups. The fact is, many manufacturing companies are experiencing bumps in the road, which means it’s going to take a long time to fix. A push like that could leave you looking at another 18 months or even two years before operations get back to normal. Don't be surprised if you go to order stuff, and it's not readily available.
The good news is most of the avionics are on the shelf. You're not likely to have a problem or run into issues with things like batteries and other items less in demand. However, if you need an updated engine installed, you can expect longer wait times, such as the year 2022. If you can't wait, then a project plane is probably not for you.
Reliable Aircraft Appraisals
Whether you’re on the hunt for a new or used aircraft (or still want to buy a project plane), turn to the team who knows best. We offer comprehensive appraisals to determine an aircraft’s current retail and wholesale market value or historical market value. Since 1994, we have provided clients with accurate aircraft appraisal services to help them make better buying decisions.
Have questions or need an aircraft appraisal you can trust? Contact us today.