PILOT SPIN
Pilot Zone => Pilot Zone => Topic started by: Jim Logajan on February 25, 2024, 12:10:53 AM
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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.
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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.
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12 year term at 9.64%? For $30k?
I can see why Lightstream would love to make that loan.
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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.
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12 year term at 9.64%? For $30k?
I can see why Lightstream would love to make that loan.
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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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.
The interest is higher because you’re bypassing all the red tape nonsense. It was worth it in this case. It’s more risk for the lender but they only accept those with very high credit scores. Direct to consumer lending should be more common. We invested in Lending Club which was similar, but peer to peer, where you can choose your loans to buy and then collect a portion of the interest as it is paid off. But I think Lending Club has stopped because too many states outlawed peer to peer loans, including the one we were in when we bought into it. But we’ve been getting dwindling amounts of interest each year, our 1099 for 2023 was for $0.20. LOL! I think that’ll be the last one.
Yes, they actually sent a 1099 to the IRS for twenty cents. I guess we better report that income! Otherwise the IRS’s new agents armed with assault rifles will come raid our home because they found out we like Trump.
I don’t know that much about it, but it seems the big banks lobbied state governments to put a stop to the competition. But there should be nothing illegal about an individual making a loan to another individual using a platform and not going through a mega bank.
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I LOVE the vintage panel and the modern iPad. It looks somehow, perfect.
Have a great time with your new family member.
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I LOVE the vintage panel and the modern iPad. It looks somehow, perfect.
Have a great time with your new family member.
Thanks!
Last year I had talked to a local member of the EAA Chapter about buying one of his Ercoupes. He owns four (two are airworthy) along with a motor glider. He's retired and got an A&P "just because". Spoke with him again at the EAA chapter meeting this evening. He is willing to do some mods I'd like done to the plane: replace the old pull starter with a light weight starter, add a spin-on oil filter adapter, and maybe a vernier mixture control. The only other annoying thing is that the radio is down by the left knee and the upper bezel of the radio makes it hard to see the top of the digits without bending the head down. Might try moving the radio to the bay on the passenger side or maybe even install a Trig TY91 radio to go into one of those unused dial holes to preserve the classic round instrument panel look.