Sport Pilot Talk

Alright guys, I hope y'all aren't too hard on me for this, but I need some help.

I have never owned an airplane but I have been around them my whole life. I grew up on a grass strip and my dad owned 15+ planes over the years. It was ultimately what came to his financial demise. He bought more plane than he could handle (Twin Otter) and it sunk him after an A&P pencil whipped a plane with rust damage. He's admitted that he should of done a better job with the pre-purchase inspection. That mid 6 figure repair bill and a pain killer addiction took him to a dark place.

So, I have some hesitation when it comes to buying a plane. First of all, I know its a reach. Here is a break down of what my financial picture looks like:

- Airplane is $80k
- I put down 15% of that ($12k)
- I have $23k in my bank account right now
- My wife and I make a combined $150k per year
- We are debt free besides our home
- I didn't factor in that I would have to pay insurance annually in one lump sum. That is an additional $3k (yeah, it hurts).
- So that puts me at $7k liquid funds (before any pre-purchase inspection fees or other general purchase costs).
- Seller has agreed to do a fresh annual before purchased and pay for anything it needs, except the Rotax Circlip service bulletin which he has a 'credit' for.
- Lastly, this plane retails new at $97k. It is a 2017 model with 35 hours on the Rotax 912ULS 100hp. It really is in perfect condition and he just says he wants it to go to a good home. Which I genuinely believe.

With watching the market for this plane, they are selling for $82k with 250 hours on them. Worst case scenario, I can sell it and likely make some money or break even if I need to.

Obviously I'm scared about buying it. It's my second biggest purchase next to my home. But it's my dream. My dad is the one person I have to talk to about it and he says "just buy it". He also makes terrible financial decisions.

Just need some help here guys. Low time pilot just trying to chase a dream. Let me know if I'm making a bad decision. Airplane: AeroTrek A240

Is 23k your total savings, or just what you have allocated for a plane?

If that's the grand total, you're not ready to buy a plane. If you sink 15 of it into the plane, one Major Life Event (a new roof, a medical problem, a dead car, loss of a job,etc.) will sink you. Don't be this foolish. Save a while longer.

First, airplanes are not easy to “just sell” if needed. You would probably have to wait if you want fair price. It’s always a buyer’s market, and if you need to sell fast it will mean giving it away.

Your father unfortunately went in very deep. Your one little plane is a different situation.

The economy is doing pretty good. Maybe see if you can add additional safety nets (a line of home equity or other credit resources) that could cover you in an emergency... and otherwise be very financially responsible.

Planes are rarely a “good idea” financially. We buy them to live, experience and to fly!

... also, shop around for that insurance. $3k seems extremely high.

Thanks Richard (and Half Fast)! You both had great advice.

I've been following some of your recent posts with your Sport Cruiser. I absolutely love that plane.

My final two airplanes came down to a SC or AeroTrek. If I could afford one as nice as yours, I'd be all over it.

Glad to see you've been able to fly some!

No matter what you end up buying, I'd suggest you start by watching my EAA webinar "How to Buy a Used LSA", online at: http://avsport.org/webinars/videos/prebuy.mp4

gtylerdowdy wrote:Thanks Richard (and Half Fast)! You both had great advice.

I've been following some of your recent posts with your Sport Cruiser. I absolutely love that plane.

My final two airplanes came down to a SC or AeroTrek. If I could afford one as nice as yours, I'd be all over it.

Glad to see you've been able to fly some!

Thanks you gtyler! I’m glad that you have found the posts helpful. There is a wealth of knowledge from members on this board. Be sure to watch Dr. Paul’s video above. It has some excellent information which is essential to pre-buy, which are related to for financial concerns. Specifically to BUY SMART!

It's a great airplane.
It is also clear that your gut is screaming at you not to buy it... always trust your gut.
I waited until I retired and had enough money for my son to go to college, and my oldest son's medical bills, etc... before I pursued my dream of owning a plane. Then again, my parents were Depression era... so I come by my conservatism honestly.
What does your wife think?

I'd respectfully suggest that if you have reached the point of asking total strangers if you can afford to buy something? You can't afford to buy something.

I’ll repeat Half Fast’s concerns.

When you say $23k “in the bank”, is that the sum total of your savings and investments? If so, that needs to be built up. Enough “cash” to get through emergencies, and then an IRA or 401k.

But with $150k coming in, it might be possible to both build up savings and investments while budgeting in a plane. Karen and I don’t have a budget per sé, but track every penny we spend by category. I recommend doing so and taking a critical look at where that $150k goes each year. It can be eye-opening, and show where you might be able to easily cut back to afford a plane.

Admittedly, one can live like a king on $150k/year in rural America - not so much in San Francisco or Boston or NYC. What’s your situation there?

Good on you not having debt beyond your home. But there’s nothing wrong with carefully managed debt, as long as you’re realistic about your ability to make payments. And interest rates are at or near historic lows, so there’s that.

Anyway, from the little I know I think you could make it work. You may regret your decision, but I think it’s more likely you’d regret not giving airplane ownership a shot. Regardless, good luck and feel free to contact me directly if you like.

WWDRD

What Would Dave Ramsey Do?

You need a lot more than $23k in the bank. $1000 emergency fund, 6 months of income should one or both of you loose your job ($60k?), max your 401K's / IRA's. Got kids? College fund. With a plane, you should also have some sort of emergency fund least a broken widget sideline you until you can save enough for it.

Look at it this way. Flying is an expensive hobby. Owning vs renting is a more convenient and more expensive way to fly. If financially you need to dial back flying, just rent less. Not an option if you own - you loose that flexibility.

Taking on debt for a rental property that could make money/appreciate in value is one thing. Taking on debt for a hobby - IMHO not recommended.

Don't let flying get in the way of taking care of family.

I too am a Dave Ramsey disciple and see bad things here. In my real world job I'm an investment accountant and I rarely think borrowing is good. Im not saying don't buy a plane, I'm saying don't buy a plane yet. If you and your spouse have the same goals you will be there in no time. Seriously buy Dave Ramsey's book or better yet borrow (the only borrowing I like) it from the library.

An old Army CSM once advised a 2LT (me!), "If you want something in the worst way, that's usually how you'll get it." Think it through to it's logical conclusion, if it passes the "make sense" test, then go for it.

HAPPYDAN wrote:An old Army CSM once advised a 2LT (me!), "If you want something in the worst way, that's usually how you'll get it." Think it through to it's logical conclusion, if it passes the "make sense" test, then go for it.

I'm totally stealing that nugget of wisdom.

HAPPYDAN wrote:An old Army CSM once advised a 2LT (me!), "If you want something in the worst way, that's usually how you'll get it." Think it through to it's logical conclusion, if it passes the "make sense" test, then go for it.

Hmmm.... NONE of my “toys” passed the “make sense” test. Maybe that’s why I’ve gotten bit in the ass a few times! Then again, I’ve lived an amazing life.