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19 Jun 2021, 14:24 [ UTC - 5; DST ]


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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 20 Feb 2021, 17:21 
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Anyone still wondering if this is a seller's market?

:sad:

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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 20 Feb 2021, 19:58 
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What's happened?


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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 20 Feb 2021, 20:04 
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Username Protected wrote:
What's happened?


Nothing to buy. Inventory levels are dropping, maybe to the lowest point ever.

I’ve never seen it like this, not even in 2008.

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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 20 Feb 2021, 21:11 
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I would have thought in 2008 there were a lot of planes on the market. U must be talking pre-recession?


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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 21 Feb 2021, 04:54 
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I would have thought in 2008 there were a lot of planes on the market. U must be talking pre-recession?


Yes, I probably should have said 2007-2008, the inventory hit its lowest point in early 2008 and then the recession changed everything, it was really the big companies shedding their big airplanes that drove prices down. Inventory can increase without anything dramatic happening, but when a big company sells a $50MM Gulfstream for $30MM what’s a $30MM airplane worth... the pressure went from the top down. Lots of immediate liquidations as boards decided they didn’t like the optics and ordered the airplanes sold immediately.

The pain was less for turboprops and pistons, but a lot of jets fell to nearly half of their pre-recession values.

The question this time is will it fall?

Covid seems to be a different dynamic. My gut tells me it will fall, that it always does. I’m just not sure when that will be.

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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 21 Feb 2021, 09:32 
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The bubble will burst


Last edited on 21 Feb 2021, 21:28, edited 1 time in total.

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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 21 Feb 2021, 12:38 
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Username Protected wrote:
I would have thought in 2008 there were a lot of planes on the market. U must be talking pre-recession?


Yes, I probably should have said 2007-2008, the inventory hit its lowest point in early 2008 and then the recession changed everything, it was really the big companies shedding their big airplanes that drove prices down. Inventory can increase without anything dramatic happening, but when a big company sells a $50MM Gulfstream for $30MM what’s a $30MM airplane worth... the pressure went from the top down. Lots of immediate liquidations as boards decided they didn’t like the optics and ordered the airplanes sold immediately.

The pain was less for turboprops and pistons, but a lot of jets fell to nearly half of their pre-recession values.

The question this time is will it fall?

Covid seems to be a different dynamic. My gut tells me it will fall, that it always does. I’m just not sure when that will be.


I was just getting into the market for an airplane in 2007. The market for pistons was insane. Plain old high time 182s were touching $200k.

When the bubble popped, the people who had to sell took a giant hit. Those who didn't have to sell wouldn't budge on their prices, so by 2009, you had a huge amount of the GA fleet that had changed hands at very low prices, while a whole other part was stubbornly overpriced (compared to the new market).

People became fixated on the "old market" for pricing, and so a lot of birds simply got pushed to the back of the hangar, the door padlocked while the owners "waited for the market come back", which never really happened. Even two years latter when I was making offers, a few owners yelled at me about how "unrealistic" I was being, despite the fact that my offers were completely in line with the market. One guy said "I'll cut my airplane up before I sold it for that" (it was a fairly garden variety Dakota that I had offered $135k.)


Best,
Rich

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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 21 Feb 2021, 12:45 
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There's always the "this time it's different" and in the end it's never different.

But I wonder if this time it's different. The bubble isn't driven by a hot economy, it's driven by a fundamental shift in the environment and capital/cashflow is being redeployed.

This isn't a bubble of people all of a sudden having more money so now they buy a plane, seems more an issue of people taking the money they already had and choosing to buy a plane instead of something else. When/if people's attitudes do back to "normal" they won't have to sell in a rush.


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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 21 Feb 2021, 15:13 
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Username Protected wrote:
Well I’m looking for a PA32 (non turbo) if anyone knows of any off-market ones


Know of a fixed gear 260 if you want an intro.

-J

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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 21 Feb 2021, 19:56 
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I bought/sold/traded 25 Citations with my own money in 2020. I probably single handedly moved the needle on the 560 market which is extremely tight right now.



How do you account for sales/use taxes on all those? Seems like 20-25 transactions would add up quick

Even if you use a Corp/LLC registered in another state, a Florida resident being a member would require remittance


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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 21 Feb 2021, 21:00 
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Company: Ciholas, Inc
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How do you account for sales/use taxes on all those? Seems like 20-25 transactions would add up quick

Dealer exemption on sales tax.

In some states, people pose as dealers so they don't have to pay sales tax. They even advertise the planes for sale but with no intention of selling as evidence for this. It can be frustrating for a buyer to see the advert and not get any response to it.

Mike C.

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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 21 Feb 2021, 22:33 
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I’d say at 25 Citations per year, if he’s not a dealer, who is?

Robert T


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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 21 Feb 2021, 22:48 
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Username Protected wrote:
I’d say at 25 Citations per year, if he’s not a dealer, who is?

Tarver is definitely a dealer.

Some others aren't.

Mike C.

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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 23 Feb 2021, 02:38 
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87 is up 50+ cents in 1.5 months from $2.03 to $2.57. My guess is Avgas will follow. Then we have 2007/2008 all over again but what will happen to 100LL and other dinosaur juice based aerovehicles, particularly if 100LL hits $10/Gal.

Will G1000 swoop in or will Swift pull ahead? At what point does the $100 hamburger become unattractive?

At what point does the board of the single member LLC put the Poo Poo on the Pilatapus? If corporate Aviation gets attacked again will they be shamed into parking their time machines?

Will YeZee grow up and stop renting grounded 747s for photo shoots because the APU fuel wasn’t hedged in 2020 like the airlines could afford to buy it at $0.80/Gal? Granted, I would be broken apart if Kim ditched me.


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 Post subject: Re: How to buy an airplane in a seller's market.
PostPosted: 23 Feb 2021, 08:05 
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Username Protected wrote:
Well I’m looking for a PA32 (non turbo) if anyone knows of any off-market ones


Know of a fixed gear 260 if you want an intro.

-J


Thanks but looking for a late model 300 or saratoga

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