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Joining the ranks of airplane owners

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Jim Logajan:
A little story on how I came to buy an airplane:

Our flying club wanted a plane with more useful load than the C-150 we are leasing. We had four members for a few months but dropped back to three. We had set  a limit of about $5000 each toward the purchase. We'd borrow the rest and looked for something under $45k - $50k as a stretch. That meant something like  Cherokee 140 or the like. C-172 prices had climbed into the flight levels, so they were out of the question.

I volunteered to guarantee a bank loan to the club's nonprofit corporation. I decided to seek a loan via AOPA Finance and spent a couple weeks working with them but they couldn't find any lenders under any circumstances that would lend to a flying club, regardless of who signed a personal guarantee. I asked if they had any lenders who would finance a purchase by my wife and I in which case we would lease our plane to the club. This was a week before Christmas. AOPA Finance said they'd look into it but never followed up. I was getting antsy so decided to try lightstream.com on December 29. Their rates for a 12 year term on $30,000 were between 9.34% and 13.74% (their rates for something other than an RV/Boat/Aircraft were typically even higher. AOPA was claiming rates between 7.1% and 9.99%) My wife was good with us covering the difference.

I plugged in claimed income and assets and submitted a loan request to Lightstream. Within hours I got an approval at 9.64%. I expected them to ask for supporting proof of income and assets but they didn't. And there would be no lien on the airplane (they make clear the borrower should NOT list them as a lienholder on any vehicle registration.)

As it happened I found two C-172s for sale below our limit: N7303A (on trade-a-plane; located Los Alamos, NM; asking $50k) and N7305A (on one of the Facebook aircraft sales groups; locate West Liberty, KY; asking $42.5k firm) Asking prices were close to vref.com estimates. I found it interesting coincidence both came off the assembly line one airplane apart.

Anyway, after doing some comparisons and dithering made an offer on N7303A. Closed on Feb 9, flew United to Santa Fe on the 11th. Flew the plane from Los Alamos to Rapid City on the 12th.

I'm leaving it up to the other two members on whether the club should lease or buy the plane from us. It feels odd to finally own a plane after all these years of renting since I considered an ownership stake being too expensive for just a hobby thing. Even if sold to the club I'll still have an equity claim on the plane.

Rush:
Congrats!  Renting vs owning a plane is kinda like the difference between babysitting somebody else’s kids vs having your own.  The latter comes with all the responsibilities but also all the joy.  Well maybe it’s not quite the same.  Your airplane can’t make little grand-airplanes for you.

The C-172 is still my favorite.

Lucifer:
12 year term at 9.64%?  For $30k?

I can see why Lightstream would love to make that loan.

Username:
Congratulations!  For me, owning is far better than renting.  I know who flew the plane last, I can leave stuff in it without worrying about it going missing, and I can just sit in the hangar next to it and watch the world go by.  Of course I have to get things fixed when they go bad. Maintenance cost is all on me rather than shared, but I take advantage of the downtime.  I have a good relationship with the A/P on the field and he lets me poke around while he has it apart.  I know far more about my own aircraft than I ever knew about a rental.  Owning is a game-changer.  Many afternoons I look up, see that the weather is fine, and just go to the airport and go flying.  No worries about someone else taking it out and no worries about when to get it back.

Glad that the purchase process was painless, and I wish you many years of happy ownership.

Jim Logajan:

--- Quote from: Lucifer on February 25, 2024, 07:17:58 AM ---12 year term at 9.64%?  For $30k?

I can see why Lightstream would love to make that loan.

--- End quote ---
Yup. Unsecured loans aren’t cheap. But since we intend to pay it off in about a year it was a little better than the alternatives. We could have paid for the plane entirely from our retirement investments but this is the last year we are doing Roth conversions and the tax consequences made a temporary loan the cheaper alternative.

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