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19 Jun 2021, 13:39 [ UTC - 5; DST ]


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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 03 May 2021, 16:18 
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How does a seller prevent the possibility of their airplane being in pieces, at an airport away from home, and the buyer walking?

That is what the deposit is for.

Your deposit should cover the cost of everything that may happen to you if the buyer walks, including they left your plane in pieces with some mechanic.

I would let someone do a prebuy on my plane only if:

1. The put down a deposit big enough to cover my costs should the deal fall apart.

2. I have interviewed the mechanic doing the prebuy and found them competent and respected.

3. The buyer has prepaid the mechanic for the prebuy labor and expected expenses.

4. The purchase agreement only requires that I fix airworthiness issues.

5. The prebuy is not so far away as to be an undue burden on me should the plane get stuck there.

The real risk in a prebuy is that something serious is found which grounds the airplane. In a way, this is good to know since your safety was in jeopardy. In another way, it means the plane is stuck somewhere which limits your ability to choose which shop does the work. There are options using a ferry permit to fix that, however, depending on the seriousness of the issue.

I recall having a prebuy done on a Piper Comanche I was considering. The oil filter had chunks of metal in it, clearly from internal engine parts, probably a bearing. I told the seller that the airplane in unairworthy, the mechanics showed them the metal. I wasn't into buying a project, so I said no on any adjustment, this was too serious to proceed.

They asked the mechanic to put the plane back together and they flew it home. The mechanic tried to reason with them, but it isn't his call to make. They made it home, but I was sure glad not to have bought that airplane.

Mike C.


100%!
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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 03 May 2021, 16:24 
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I think its reasonable for the owner and potential buyer to agree on a prebuy shop. In general I'd think for a beech airplane, a certified beech facility should be OK but I wouldn't mind the owner rejecting a single facility due to a bad experience.

Also fine to have a discussion with owner and pre-buy shop on exactly what will be inspected.

One think that would concern me as a buyer is obvious lying by the owner . For isntance if they report all compressions in the 70s and a few flight hours later (on high time engines) a cylinder is below 30, I'm going to be much more concerned than if they had told me they had a low compression cylinder in the first place. It would make we worry that much more expensive items were falsified.


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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 03 May 2021, 17:56 
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Ferry permits cannot cover AD compliance

“3.) If an AD requires compliance before further flight and does not have a provision for issuance of a Special Flight Permits, the operation of the aircraft to which it applies would not be appropriate, and a Special Flight Permit will not be issued“

https://www.faa.gov/about/office_org/fi ... permit.pdf


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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 03 May 2021, 19:02 
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Ferry permits cannot cover AD compliance

“3.) If an AD requires compliance before further flight and does not have a provision for issuance of a Special Flight Permits, the operation of the aircraft to which it applies would not be appropriate, and a Special Flight Permit will not be issued“

https://www.faa.gov/about/office_org/fi ... permit.pdf


All depends on what the AD is and if they consider it a safety of flight issue.

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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 03 May 2021, 19:26 
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Username Protected wrote:
Ferry permits cannot cover AD compliance

“3.) If an AD requires compliance before further flight and does not have a provision for issuance of a Special Flight Permits, the operation of the aircraft to which it applies would not be appropriate, and a Special Flight Permit will not be issued“

https://www.faa.gov/about/office_org/fi ... permit.pdf

Charles,
I deal with this often. I think it was in year 2004 that Part 39 changed. Since then, unless an AD specifically prohibits a “ferry permit”, one is allowed. Of course this is still subject to the issuing FSDO and “inspector”.

“Before further flight” are the operative words.

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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 03 May 2021, 23:12 
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From a recent purchase of mine I can attest that even a pre-buy can hide things if the seller is hiding something and being inwardly mischievous about it. If it wasn't for covid restrictions here that stopped me looking at the plane personally I would have either saved $25K off the purchase price or walked away.


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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 04 May 2021, 01:31 
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Trust me, PPP loans are very much behind behind this buying frenzy.

Jg

Yup. Combined with historically low (and unsustainable) interest rates, a distortion in economic reality created by the federal government has been created and is unfolding before our eyes. Feels good now but will not end well.


I suspect we are Japan. Raising the interst rates will bankupt the country. I expect low rates are here for a very long time.
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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 04 May 2021, 07:59 
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Has anyone heard the team, Pre-Buy "evaluation"?

I made an offer on an airplane and the broker changed the contract to evaluation. That is so it's not an inspection and any air-worthiness items don't ground the plane. Funny thing is, I want the Pre-Buy to find any Air Worthiness items!


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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 04 May 2021, 10:09 
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Username Protected wrote:
Has anyone heard the team, Pre-Buy "evaluation"?

I made an offer on an airplane and the broker changed the contract to evaluation. That is so it's not an inspection and any air-worthiness items don't ground the plane. Funny thing is, I want the Pre-Buy to find any Air Worthiness items!


It depends upon what they mean by evaluation versus inspection and what is being allowed/authorized. They may have that because their client's engine is on a service program with a warranty or a power by the hour program where borescope inspections are verboten*.

This is a newer article from Chip with Jet Acquisitions:
https://jetacq.com/blog-post/all-about- ... spections/
...kind of ironic that I am quoting his company in the free advice he is giving in this thread. NO, I do not work for him. YES, if I bought a turboprop or higher I would hire his company to deal with the headaches and crap.

This is an OLD but good article from Mike with Savvy Aviation.
https://resources.savvyaviation.com/wp- ... -donts.pdf

This is a good article by Dallas Airmotive:
https://dallasairmotive.com/about/news/ ... e-question

My opinion:
The market is weird and there are fewer really nice aircraft coming on the market. Several that friends have looked at were spoken for by the time the ad hit Controller. The nice aircraft, and some crappy ones, are priced high but it's right where the nice ones need to be. Unfortunately some crappy ones are priced similarly, particularly a few that have not had turbines running as frequently as they should to stay healthy or within manufacturers guidance or covid guidance.

* The odd thing is that if they are on an engine program the borescope inspections may find something that the program would have to fix ahead of schedule. Something as simple as an NDT borescope inspection, that does no damage to the engine, voids the warranty the engine is on. Why? Because they will have to fix something. That something could go another 500 hours just fine and make it to overhaul or it may shed a blade. They are taking the chance that it will go that extra 500 hours to inspection and another say $52,000 to $104,000 dependent upon engine. It's cheaper to fix all of it while the engine is apart of after you have swapped engines and crated the old one back to them.


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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 04 May 2021, 12:01 
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Username Protected wrote:
Has anyone heard the team, Pre-Buy "evaluation"?

I made an offer on an airplane and the broker changed the contract to evaluation. That is so it's not an inspection and any air-worthiness items don't ground the plane. Funny thing is, I want the Pre-Buy to find any Air Worthiness items!


Sal,

Yes. In fact this is exactly what transpired on a prebuy for a Citation Excel we acquired for a client last December. It worked out really well for our client because they needed to put the airplane into service for tax reasons (Bonus Depreciation)

I was glad they didn't ground it, because in our situation a ferry permit would not have worked, the buyer had to use the aircraft for actual business trips before the end of the year.

Textron said it was a "Prebuy Evaluation" and not an "Inspection" so they were able to give the airplane back to us without putting anything in the logbooks or grounding the airplane.

After the first of the year we finished the workscope, the seller paid the bill and everyone was happy.

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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 04 May 2021, 16:10 
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I've had the issue of sending customer airplanes to shop several times, and concern other times.
My typical suggestion to the seller is that if the airplane is a single or light twin, I will allow full use of my shop for a buyer to bring their mechanic to for the prebuy. If larger, we will let it go to a mutually agreeable shop. I almost lost the sale on a Cirrus this winter due to this, but I had zero trust (based on a personal experience) in the shop that the customer wanted the airplane to go to. I gave him a heated shop with tools for as long as they wanted to do the prebuy.

Even then, we have run into a few issues where the airplane was grounded at a distant shop that we had difficulty with. One shop wanted to charge my customer almost $200/hr "security fee" to watch us get the airplane ferryable out on the ramp. That was after they damaged the airplane to the extent that we couldn't ferry it and we paid them $6000 for repairs just so we could ferry it.

Some airplanes have to go to a specialist, preferably one that I'm at least remotely familiar with. We sent a customers C-421C to TAS, and my Aerostar went to Juliet Delta Aviation. In both cases, the shops and the customers were very familiar with everyone's expectations.

I'm still amazed that a seller allowed one of my customers to ferry a C-441 halfway across the country to a relatively small shop (that Hagen also uses) for prebuy with almost no questions asked. I think he was more comfortable when the shop owner called him about three days before delivery and described/proved that the famous 441 shop that had been doing the maintenance missed approximately 15 calendar item phase inspections over the past four years...

A clear understanding, preferably in writing is very important when using an outside/unfamiliar shop... Mike hit the nail on the head also..


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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 04 May 2021, 16:45 
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Username Protected wrote:
I made an offer on an airplane and the broker changed the contract to evaluation. That is so it's not an inspection and any air-worthiness items don't ground the plane. Funny thing is, I want the Pre-Buy to find any Air Worthiness items!

The broker is correct.

What they are "evaluating" is whether a proper "inspection" would find an item that is "unairworthy". The "evaluation" does not, however, declarer anything is actually "unairworthy".

No mechanic I know would ever agree to a prebuy where they have to sign the log books afterward, so that means they are never really inspections. A prebuy "evaluation" is a much more precise term.

The only time this isn't true is if the prebuy inspection is really a full blown proper annual or phase inspection. The buyer and seller have to be agreeable to that, which is rare though not unheard of.

Mechanics hate doing prebuy evaluations. They are stuck between seller and buyer who want very different outcomes and that can be awkward. They don't want to find something serious and have a seller fly off in that condition when the deal fails to go down. But the prebuy often leads to more revenue when the buyer has work he needs done before further flight.

Mike C.

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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 05 May 2021, 00:01 
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Mike is right that a “prebuy” and phase / doc inspections are two different things, though we usually combine them.

If you only do a prebuy, the shop is inspecting whatever they inspect according to their prebuy criteria. This is often a limited inspection and not one where the airplane is fully opened up like a major Doc or Phase.

Conversely, if you only do Phase or Doc inspections you may be missing something that would be caught during a prebuy inspection.

A great example is gear corrosion on Citations, it’s optional on a Textron prebuy and many other shops don’t mention it at all. I strongly advise all of our Citation buyers to select at least a base level inspection of the gear. This is extremely important because the exposure is substantial. On the last one we did, both axles failed, they were $14k each... and ProParts doesn’t cover them (corrosion)

BUT...

It gets worse! Those axles, once failed, are pressed out of the trailing links, once they are out the inside of the gear is inspected, fortunately for the seller they were good... because the trailing link arms are $58k each!

So, the exposure thus far... $144,000.00 not covered by PP!

That $8k charge to inspect the gear suddenly looks cheap.

I don’t know what the gear legs cost to replace, we didn’t get that far... but I’m going to guess that serious gear corrosion could cost someone $200k - $250k on a 525 or 560... I’m scared of what it might be on a larger airplane.

It’s also important to stress that the issue with Citation axles isn’t environmental, they get hot and discolored, that is considered corrosion and the remedy is to clean them. Once they are cleaned, they use a micrometer to measure them, if the diameter is no longer within limits, they fail and have to be replaced.

If you buy a Citation, have the gear inspected, even if it lives in the desert.

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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 05 May 2021, 09:44 
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Username Protected wrote:
Mike is right that a “prebuy” and phase / doc inspections are two different things, though we usually combine them.

If you only do a prebuy, the shop is inspecting whatever they inspect according to their prebuy criteria. This is often a limited inspection and not one where the airplane is fully opened up like a major Doc or Phase.

Conversely, if you only do Phase or Doc inspections you may be missing something that would be caught during a prebuy inspection.

A great example is gear corrosion on Citations, it’s optional on a Textron prebuy and many other shops don’t mention it at all. I strongly advise all of our Citation buyers to select at least a base level inspection of the gear. This is extremely important because the exposure is substantial. On the last one we did, both axles failed, they were $14k each... and ProParts doesn’t cover them (corrosion)

BUT...

It gets worse! Those axles, once failed, are pressed out of the trailing links, once they are out the inside of the gear is inspected, fortunately for the seller they were good... because the trailing link arms are $58k each!

So, the exposure thus far... $144,000.00 not covered by PP!

That $8k charge to inspect the gear suddenly looks cheap.

I don’t know what the gear legs cost to replace, we didn’t get that far... but I’m going to guess that serious gear corrosion could cost someone $200k - $250k on a 525 or 560... I’m scared of what it might be on a larger airplane.

It’s also important to stress that the issue with Citation axles isn’t environmental, they get hot and discolored, that is considered corrosion and the remedy is to clean them. Once they are cleaned, they use a micrometer to measure them, if the diameter is no longer within limits, they fail and have to be replaced.

If you buy a Citation, have the gear inspected, even if it lives in the desert.


Textron is taking a micrometer to wheel axles because the main issue here is extracting money from you not your safety. I fully maintain that it is impossible to economically operate any airplane (new or old) and use service centers for maintenance. Anyone can use a micrometer on any part on any airplane and figure out a way to fail it


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 Post subject: Re: QUIT buying airplanes without a PREBUY!
PostPosted: 05 May 2021, 12:01 
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Company: Jet Acquisitions, LLC
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Username Protected wrote:
Mike is right that a “prebuy” and phase / doc inspections are two different things, though we usually combine them.

If you only do a prebuy, the shop is inspecting whatever they inspect according to their prebuy criteria. This is often a limited inspection and not one where the airplane is fully opened up like a major Doc or Phase.

Conversely, if you only do Phase or Doc inspections you may be missing something that would be caught during a prebuy inspection.

A great example is gear corrosion on Citations, it’s optional on a Textron prebuy and many other shops don’t mention it at all. I strongly advise all of our Citation buyers to select at least a base level inspection of the gear. This is extremely important because the exposure is substantial. On the last one we did, both axles failed, they were $14k each... and ProParts doesn’t cover them (corrosion)

BUT...

It gets worse! Those axles, once failed, are pressed out of the trailing links, once they are out the inside of the gear is inspected, fortunately for the seller they were good... because the trailing link arms are $58k each!

So, the exposure thus far... $144,000.00 not covered by PP!

That $8k charge to inspect the gear suddenly looks cheap.

I don’t know what the gear legs cost to replace, we didn’t get that far... but I’m going to guess that serious gear corrosion could cost someone $200k - $250k on a 525 or 560... I’m scared of what it might be on a larger airplane.

It’s also important to stress that the issue with Citation axles isn’t environmental, they get hot and discolored, that is considered corrosion and the remedy is to clean them. Once they are cleaned, they use a micrometer to measure them, if the diameter is no longer within limits, they fail and have to be replaced.

If you buy a Citation, have the gear inspected, even if it lives in the desert.


Textron is taking a micrometer to wheel axles because the main issue here is extracting money from you not your safety. I fully maintain that it is impossible to economically operate any airplane (new or old) and use service centers for maintenance. Anyone can use a micrometer on any part on any airplane and figure out a way to fail it


I agree with you on Legacy airplanes, but anything we do that's less than about 20 years old probably goes to Textron. Even if my client doesn't plan to maintain the airplane at Textron we still want a Textron prebuy and to check for gear issues because the airplane will likely go to Textron for a prebuy when they sell it and I don't want the previous owners corrosion issues to become our clients financial responsibility.
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Jet Acquisitions
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