I’m 17 and just bought a piper archer, got a good deal with the mechanics and I plan to work and help out to reduce my operating cost and get my requirements so I can get my A&P. Mike I was 15 when I watched your video on this, and lit a fire for me to do the same. Now i’m 17 on my way to my ppl and have an airplane paying for its self.
Hey guys, let me know if you find this follow-up to my Leaseback video informative and/or enjoyable. If you have any questions or would like to see anything else moving forward let me know here. And, please, hit the 'like' button and Subscribe for future videos!
Weird coincidence! I watched your videos then I went to take my first three lessons at a local Aviation school. I rented a Piper Archer II. Done few hours then I thought the tail number was familiar. Re-watched your videos and realized that I have been flying your particular Archer! Normally, I respect peoples' property and never abuse a rented vehicle. Although I have never had the privilege of meeting you in person; I go the extra mile being gentle to your plane... Just because I know of you through your RUclips videos. I really admire the extent of effort and the detailed information you present in those videos. Thank you for the great content and the pristine plane! I promise you I will never forget the master switch ON! Please consider changing the seat covers sometime in the future. The covers overhang makes it harder to reach for the trim wheel. Thanks again Omar
Ha! Glad to hear you have experienced 69D for yourself, Omar, and enjoy it! Thanks for treating it nicely -- the seat covers do make it a bit harder to reach the trim wheel, but there is electric trim on the pilot's yoke to take out some of that sting. See if that helps.
such. a great video ! u inspired me to look into that business model. thx ! we would love to hear more about how this business is going for you so far, really interested ! especially more details on how to pick a good place / school, how much an airplane can earn you in yield, maybe some of the biggest problems with this whole thing, and more on the business side of things. Thanks a lot, rly interesting !
Love your attention to detail! Like the color balance on the video, the subtle camera pans. founts etc. Dint expect this at all in an aviation insights focused video!
Considering buying a plane in FL, long time no flight for an African Bush Pilot w FAA multiple commercial instrument license, I like the Leaseback option! Thank you
Just get a partner or 2 if you wanna cut fixed cost. You will have more access to use it and not rack up 1000's of hrs of airframe time getting bounced off the runway daily by students. Most of the partnerships I know of the airplane is available 99% of the time for use. Fixed cost are divided equally and they contribute a small hourly rate to a pot for wear items.
That’s interested to see, but how can you get contract with flight school to leaseback. And is it required any specific kind of airplane to leaseback? Thanks
Can you provide an update? I’ve been considering doing this for a few years now and will be able to make it happen soon. Would love to hear you opinions now after you’ve been doing it over a longer period of time
Hi Mike! Great video! Very inspiring. The only thing I don’t think you discussed in your video is the tax benefits you can enjoy with this type of benefit. I am hearing that it can be significant. Can you do another video maybe explaining some of that??
@@MikeWebb-FlyingFinanciallyFree Mike here is my email. I'd like to connect with you. dwayne.gill@gmail.com My son and I thinking of doing this! Thank you!
Mike.....AWESOME. I am a fellow NAVY Vet, and just about to take my check ride for my PPL. I'd like to know more about this, as I think this may work well for me. I am at a very busy Flight School in MD. I plan to pursue my Instrument and ultimately would like to be a CFI. I am about 10 years from retiring from my post NAVY career, and am looking for a good way to get into ownership, with the possibility of upgrading to a HP aircraft by the time I retire. This could fit the bill for me. Thanks for these videos!!!
Thanks you, very informative video. I am about to start a lease back with my flight school. They are all DA40 fleet. They have 2 currently. One thing I am still thinking is, when it comes to the training. Do I use my airplane or I use their plane? Using their plane is basically pay 20% of the rental rate. Using my plane, I am paying the actual operating cost and losing the ability to make money(the hours for other renter to rent my plane). Have you thought about this? This sound counterintuitive that use their plane is actually cheaper than using my plane.😂
So I'm not looking to make tons of money if I were to go this route, but I am looking to offset costs or make enough money to cover future maintenance issues. With that said, how much control and flexibility do you have with your aircraft's use? Can you cap the total number of hours it can be used in a month? Could you arrange for it to not be used as a base trainer aircraft and only used for things like IFR and complex aircraft training?
Mike, thank you so much for that really great break down. It has actually spawned a ton of questions for me, but my biggest one is: All of time that the plane is being rented out is time it's not available for you to fly it. It also seems that if you really want to make a go of it, personal use needs to very much take a back seat to rental demands, otherwise, it might get get a reputation of not being available often enough to count on. So, that being said, how much has renting it out affected your ability to take it and go for a trip with your wife for a weekend trip or what have you? Thanks in advance and again really great work breaking it down, pacing , audio quality, video quality, the whole thing!
Thanks for the compliments! Initially, the plane wasn't too busy where it was difficult for me to fly it for personal use. Over time, as it became more popular, that was a concern. So, if I couldn't fly this plane I'd rent another essentially for free as it was paid for by the activity that was happening in my Archer. Eventually, I purchased additional planes and hardly ever fly the Archer for personal travel; it's too busy making money so I just leave it as is. Hope that helps!
@@MikeWebb-FlyingFinanciallyFree And how! What a high class problem to have. Congratulations to you and you have intrigued me immensely to one of my wife's biggest objections: the cost, not only of airplane ownership, but just flying period. Thanks so much for sharing and again, a hearty congratulations!
Mike at the about the 4min mark you mention your archer burns 10 gallons at cruise. However, you then mention you factor in 7.5 for your calculations. Why do you use the 7.5 gallons instead in your calculation?
Caleb, the actual cruise burn is closer to 8.5 gal/hour in real world numbers… but the reduction from 10 to 7.5 is because fuel burn is directly related to the engine RPM. In other words, even though the student/renter is paying the same whether sitting on the ramp or WOT in flight, the actual fuel consumed is dependent on the tachometer. And more specifically, the tach time for any flight is almost always between 70-75% of the Hobbs, or ‘flight’ time. So, using 7.5 gal/hour in my calculations accounts for both concerns above.
Mike. Thanks for the info. I would love to be able to ask a few questions like did you set up a LLC? Is there anything you regret or dislike? Where are you located? What level FBO did you look for? Etc.
Hi, T.J. Yes, I set up an LLC, mainly for tax purposes to keep all expenses/revenue separate and easily trackable. 2020 was rockier than previous years due to the pandemic, but activity picked up nicely at the end of the year. I'm in the DC area where a lot of flight training activity happens. A good, active school is a good partner to look for.
Great video mike really considering a lease back option was wondering if you have a recommendation on insurance companies the few I called state they won’t do it thank you!
i love this video, I was looking for a good guide to understand the business for a long time. Thank you. I would like to ask you a question: how do you do to give training with part 61, what requirements must be met? is very important project
You're welcome, Oscar! Part 61 training requirements are spelled out in the FARs -- no special requirements other than an airworthy plane and competent instruction. Part 141 is where the requirements are more stringent, involving approved curriculum and specific maintenance requirements.
Nice video. Thanks for putting it together. One thing you didn't mention was the rate split you negotiated with the FBO. Is there a range that one needs to have to make this arrangement economically feasible?
Thanks, Jon! At 5:18 I mentioned my situation. I do the standard 80/20 split, meaning they get 20% and I keep 80%. The economic feasibility of it is very dependent on several factors: your costs, the rental rate, and amount of hours flown.
@@MikeWebb-FlyingFinanciallyFree Thanks. I missed that detail. Another question: who is responsible for insurance and maintenance costs? I presume it is the owner and not the FBO.
Kidz Cooking you are correct; the owner is responsible for paying the insurance and maintenance. The plane is on the school’s fleet policy, however. It is possible other arrangements where either could be different.
How do you find company who lease back plane from someone like me? What did you do to find your lease back company? I'm looking for bit bigger plane like Pilatus.
Generally, you’d start with schools or other FBOs that need airplanes to conduct their business. With something like a Pc-12 it’s going to be a larger operation, either 135 or 91 managed operator. Start establishing a relationship with those places and ask if they’d be interested in a plane like that.
Maybe I missed it, but who pays to store the plane? Hangars and tie downs are hard to come by where I am so there's incentive to find a school that can use the plane and keep it nearby.
Hi - I’m considering doing a leaseback now because of this video. Would you be willing to provide the detail specifics on how you were able to extract the information from the flight school? I mean the information you needed to decide which airplane to buy and at what cost for the leaseback to work(?). How to wheel and deal with the flight school? Maybe email a leaseback checklist?
Hi BassPlayer, I'm working on a full online course that will detail all you mentioned above, and more. I've gotten so many requests for more info I figure it's the best way to get it out. Stay tuned.
Yep. If used properly and set-up in an LLC or other corporation you can write it off as any other business asset. The tax code is very favorable to business vs. personal use.
Hey Mike! I really enjoyed your videos! I also live in VA and fly at KFCI. I hope to follow your plan except its a smaller lower volume airport. Are there instances where its cheaper to just partner with someone and not lease back??
Hey Dan! Thanks for the compliments! A partnership could work better for some people, depending on what your ultimate goal is. It will definitely help with the costs as you share those with others, and would help with availability and potentially wear-and-tear. If you want to own your plane for free it won't fit the bill, however. Your end goal will determine which path you choose.
Mike, thank you for sharing. I'm thinking about taking lessons for private pilot certificate and thinking if a leaseback option may be better than renting the aircraft ? I would need to finance and was wondering if you would consider doing a video about financing and getting insurance, etc? Great content!
Glad I could share my thoughts with you and you enjoyed them! I am working on an idea to share all this and more. In the meantime, getting financing for a plane that will be on leaseback can be tricky; some lenders won’t do it. Others will, however. I recommend looking at small-town banks and similar places if the big players don’t allow it for you.
Hi Mike, great vid. Any thoughts/experience with higher value aircraft leasebacks - i.e. Cirrus SR22, it seems in the cloud I fly the few they have do seem to fly quite a bit even tho the $$ are much larger
Thanks for the comment, WadeMan T! Something like a SR22 can work, but the insurance cost is the big hurdle. Having it in a leaseback with a school/FBO will be expensive… so much so that it can be hard to break even. But, if you drive that cost down with higher deductibles it MIGHT work. Usually with planes like that the goal is to merely offset a portion of the ownership costs.
Just got into aviation so I'm not very familiar with everything. But when lease back of a plane and if you're "making" money, is this considered a taxable income? Is the plane registered under a LLC or personally under your name?
If you are doing leaseback wouldn't that count as business use for Section 179 of the tax code? This would allow you to write off a portion of the purchase price as well as maintenance costs.
Hi Mike. Very helpful. You mention the insurance being less than $5k per year and that is the FBO policy you are on. Which insurance company is providing those rates? I have only seen significantly higher insurance rates.
Thank you for the info! this was great as I am thinking of doing a leaseback with my flight club here in San Diego! Would you be able to share what your leaseback agreement looks like?
@@MikeWebb-FlyingFinanciallyFree can you send me the same? I will be doing a leaseback soon and would like to see how others are putting the agreement together. Thanks!
I definitely would love to do a lease back, the partner is the lease giver or the school with the FBO? and what if I have tax exemption; how would that effect costs?
Your partner (if you’re the airplane owner) would be the FBO. You’re the lessor and they’re the lessee. Tax exemptions only help your bottom line, of course! Specific advice would have to be sought by a tax professional which I am not.
How does the insurance work? As I understand it, the flight school has to carry the insurance becuase the aircraft is part of their fleet. But the insurance is a flat rate and would have to be paid regardless how often the aircraft was rented. Do you the owner have to give the flight school money up front to help pay for their insurance coverage of the airplane you are leasing them?
Hi, Doug. It can vary from school to school, but in most situations, yes, the insurance is carried on the school’s fleet policy. Typically, the school will subtract a monthly premium amount from the leaseback revenue due the owner.
I talked to a tax accountant and he said that if i buy an airplane and do a lease back the IRS are going to come knocking. Is it better to write off over 5 years instead of 100% depreciated it
Everyone's tax situation is unique so I'm not going to give any 'advice' here. If used for legitimate business purposes with good documentation it's no different than any other business asset. Bonus depreciation up front or over time is, again, dependent on your situation.
This is a great idea and one I'm looking into as well. Question - did the aircraft already have commercial registration - or did you have to convert it over from private? Was it easy?
Hi, Travis. Thanks for the compliments! The FAA registration doesn't need to change for this purpose. But in my State there is an option for a state "Commercial" registration, which I chose and it was $10 vs $5 for the non-commercial one. Figured it was the right choice
@@MikeWebb-FlyingFinanciallyFree thanks for your reply! I'm in Canada and it's a whole new set of regulations for Airworthiness that the aircraft has to confirm to. Still, I'm going to try and have a meeting setup with Transport Canada. Thanks again, I had been wondering if it was possible and now I'm going to give it a try! Thanks again
Makes sense you have to get on their schedule to reserve your own airplane. Do you also have to abide by the minimum hour requirements per day if you go for a weekend trip or use the airplane for x number of days?
No. Aside from scheduling it, I don’t have any minimum hours/day requirements or anything. My arrangement allows me to use my plane as much as I want and they are non-revenue hours. However, if I take it for a large chunk of time that’s likely to be a lot of revenue lost.
I have a 182 with a friend, my hesitation with doing something like this is that the plane wouldn't be available when we want it. Do you put in a schedule that it's available for lease? I ask cause, we'd want to be doing weekend trips or just get our flying fix whenever so could limit the time we'd be able to fly.
Hi, Jason. I totally understand your concern about scheduling conflicts if others have access to it. I accept that there may be times when I won't be able to fly my Archer bc it's booked by someone else, but I find that an acceptable tradeoff for the revenue it produces. You could explore an arrangement where you can determine only certain periods of availability for the 182, but I suspect it would not be very welcomed by a school or wherever you're trying to lease it to. In my situation, it's first-come-first-served, so I just reserve the plane well in advance when I know I want to use it. Spur of the moment flying often works, but if it doesn't I just rent something else while my plane is making money, therefore paying for the rental.
@@MikeWebb-FlyingFinanciallyFree Thank you for the quick response Mike! I think it's something I'm going to try and have my co-owner agree to look into more. He is definitely more hesitant on doing it than I am but certainly would be nice to recoup some if not all the costs. Question, on your fixed expenses do you just divide that by 365 to have a daily rate of what it costs and that is part of the hourly rate? Or are you trying to recoup those fixed costs over a shorter time frame?
@@triboarder06 The hourly rate for rental I based completely on what the market will support, not necessarily what my costs will be. My costs are irrelevant to a renter; they only care what price they have to pay to use my plane, which I base off of area comps. It just so happens that in my situation I will recoup my costs in a several solid months of activity.
Hi Mike, thank you for all of the information it’s really helpful! Besides having a commercial insurance, do you also need to open up a LLC or INC company in order to rent out the aircraft your self to being able to pay taxes after reporting that rental income? Not in a leaseback I mean. I would appreciate if you can assist me with this question. Thanks!
You should definitely set up an LLC or Inc if you’re planning on any type of renting; either to others or to yourself via a lease agreement between another company. Consult a tax precessional for the details.
Mike. Thanks for the insight. Just curious though how to you budget down time when the plane is in for maintenance or if someone dings a wing and need repair?
Hi, Larry. Downtime is no one's friend in aviation as no one (other than the mechanic if they're not waiting on parts) is making money. 50 hr oil changes and 100 hr inspections are part of the deal and are accounted for in maintenance reserve planning. I haven't had any serious damage like wing damage, but if it happened the offender would cover any insurance deductible.
The insurance is part of the fleet policy of the school. I pay a monthly amount to cover the premium charged for my aircraft. If an uninsured renter did damage, they would be charged the deductible. Many, if not most, renters also have renter’s insurance, as well. Some FBOs require that students and renters have renter’s insurance. Yes, all maintenance is out of my pocket.
Mike this is very interesting and I would like to talk to you further about this. I now you are i the States, I am in Canada, however I don't think this matters much. I have a few questions I would like to talk to you about personally, if possible. I am happy to call you or do a zoom chat. Let me know. Thanks Bill
Under my agreement I pay all maintenance-related fees, with the exception of things caused by employees, like CFIs (if they left a master on and ran down a battery that needs recharging, for example)
Damnit. I just binge watched your videos and now I'm shopping for airplanes and pressure washers. Not even kidding! Did you set up an LLC for your leaseback arrangment? If so, are there any tax advantages to your situation? Appreciate it.
Yes, I set up an LLC. Easier for expense tracking and potential protection. For tax purposes, gains or losses flow through to individual tax return. Hopefully that helps.
Hey Mike! I’m looking to learn more from you about this topic, is there any way I can give you anything in value as in my time or $ in return for your mentor ship, thank you
Hi Mike, Great video! I'm wondering how unexpected repairs enter into the equation, as those are in addition to your fixed/variable costs. Would one unexpected repair through the whole plan out of whack? Also, does the fear of a huge lawsuit/liability concerns affect leasing back, or is the hugely expensive insurance policy there to absorb that worry?
Thanks, Eric! Unexpected maintenance/repairs will happen from time-to-time. The maintenance reserve set aside for each plane should have some buffer to account for those, on top of regularly scheduled maintenance. That said, a major repair, like a premature engine overhaul from a prop strike, or something else major would deal a major blow to the plan. A wise man once told me to think at least 2-3 years horizon on a leaseback. Any given 12-month period could have some big ups and/or downs but over time a good fit should be a nice winner. The insurance is there to cover liability and proper setup of an LLC or other corporation can help, too.
Were you able to deduct 100% of the cost of the airplane in the first year by way of the bonus depreciation deduction? If so, can you give me a rough idea of how much taxes you ended up having to pay? I’m a CFI looking to potentially get an airplane, lease it back, and also instruct at the school I lease it back to. My hope is that this will aid in the low pay that most schools are paying CFI’s and potentially bring in a little more income. Thanks, great video!
Hi, Ryan. I could've done the bonus depreciation deduction you mentioned, but I decided I'd rather take the depreciation over several years and see how the revenue stacked up. With the ability to deduct all the expenses and standard depreciation my tax situation still proved beneficial. As the revenue grew, I was still in a good place. I think if you find the right fit for the school you're looking at instructing for it can be a great situation. I've seen it work before. Best of luck!
mike was great listen to you I am a student pilot and I am very interested in buying a Cessna 172 and do the same as you with my flight school! did you check with them first or you went to buy a plane counting on it? I am 74 years old and looking to a private pilot license at list! not cleared for solo yet but being very close! lessons with flight school are very expensive and that's why I it took me so long to get here! if I could to what you did I definitely will fly for cheap and more often! how does it work to leases back your plane? and what about buying? any help will be very appreciated! I liked your way to manage this and looking for a response! congrats on your flying skills and managing ! sincerely Maurizio Michi
Hi, Maurizio! Glad you enjoyed the video. Definitely talk with the school first and find out what they think would fit their customers' needs best. As for all your other questions, I'm working on something that will give you some great answers regarding the whole process.
The maintenance hourly reserve covers all inspections, generally. There are occasional things outside the norm, but over time the hourly reserve covers it.
@@MikeWebb-FlyingFinanciallyFree Can you give a little more detail on how you calculated that $17/hr for maintenance reserve? I get the engine and prop reserve, but some details on the maintenance portion would be great. Obviously the 100-hr inspections and oil change are part of that...what else? Thanks for the informative content, even 3 years later! I've watched multiple times. 😁
One big benefit you don't even mention is that most if not all of your fixed costs then become tax deductible since it's part of your plane rental business.
So the flight school is letting all that potential revenue go bye-bye because it doesn't want to buy a plane that can be bought for a lousy $6500 yrly loan commitment?
You are correct. It represents a financial risk to them and they are often operating on thin margins and would rather transfer the risk to someone like me.
Keep in mind too, that while a school may be running 100 students and 10 instructors, and have a large cash flow... that does NOT equal large cash reserves.... and even if you are buying a plane with a loan, you can expect to have to tie ~$20K of you cash in the deal that won't be back in your hands for a number of years. Take that times 5 or 10 planes, and that is a lot of cash for a flight school to not have in their coffers for paying salaries and rent and insurances... so it can be a win win i think.
Fly for free? I doubt that very much.... Wait until something breaks. Or, an engine needs to be overhauled.. I've always considered lease back to be paying for someone else to fly your airplane. Maybe I'm wrong....
Good video. Thanks. But I do need a PDF of this plan! I m starting now, and will buy my first airplane and that leaseback is for sure the perfect solution to me. I am at Brazil now. I have 8 cats, and to buy a airplane is the unic acceptable solution to me that I can move from here to a other country with them. I think I can do that agreement with the school even before to get the airplane for two reasons: first here have a lot of taxes, and I want to prove not being importing a airplane, and yes being catcher by the airplane and the pilot for to move out from Brazil. So that airplane will be mine but at a other country. Second, its a great deal zero costs and plus to make a money . I think a school that have their own engineer and they do a checkout for me before to give me my airplane to fly, is a better contract to me. And I will to put cameras inside and outside and will to monitor that use by these.
Any business can be made profitable with the right terms. I think your taking too much risk. I would put all MTC and insurance on the flight school. Get a basic lease amount per month and a variable for engine overhaul etc that goes in a separate account incase they close doors. Then it's there problem when it comes time to return the AC in a similar condition. I would even do new engines at the beginning and end of the lease. Less risk and should be able to make %15 or more of the AC value per year.
The conditions you're proposing, while they would be very nice in moving the risk to more of a shared posture, are very rare, in my experience. I've seen once or twice a similar setup, where the school absorbs MX and some other items and offers a base lease amount/month, but that also caps dramatically the upside potential. Less risk = less reward, generally. But certainly something to discuss with an open-minded leaseback partner.
@@MikeWebb-FlyingFinanciallyFree I have a former Captain getting 18% on that setup on both his planes. New engine required on the return or a big wad of cash. The down side is upfront cost of a new engine on delivery.
We are $135 for a steam Guage 40yr 172 down in Houston area. And these numbers can still be made to work. But as a freshly minted PPL, I'm looking forward to nevery paying that again
Leaseback is a great deal for the lessee, not so much for the lessor. If it were a good deal for the lessor, the lessee won't sign it. They will look for another sucker and convince them a leaseback is a good deal.
Hey Buck. Respectfully, I don’t know what your experience has been or who you’ve done leasebacks with, but sounds like you’ve been burned. Or, maybe like most folks who have similar views to yours here, you’ve never actually tried and are repeating the old ‘only suckers do leasebacks’ thing bc it isn’t easy. I can assure you it’s worked well for me, and I’m no sucker. But thanks for watching.
I’m 17 and just bought a piper archer, got a good deal with the mechanics and I plan to work and help out to reduce my operating cost and get my requirements so I can get my A&P. Mike I was 15 when I watched your video on this, and lit a fire for me to do the same. Now i’m 17 on my way to my ppl and have an airplane paying for its self.
That’s awesome, Lucas! Congrats for taking the first few steps to make something like this happen.
Hey guys, let me know if you find this follow-up to my Leaseback video informative and/or enjoyable. If you have any questions or would like to see anything else moving forward let me know here. And, please, hit the 'like' button and Subscribe for future videos!
Weird coincidence! I watched your videos then I went to take my first three lessons at a local Aviation school.
I rented a Piper Archer II. Done few hours then I thought the tail number was familiar. Re-watched your videos and realized that I have been flying your particular Archer!
Normally, I respect peoples' property and never abuse a rented vehicle. Although I have never had the privilege of meeting you in person; I go the extra mile being gentle to your plane... Just because I know of you through your RUclips videos.
I really admire the extent of effort and the detailed information you present in those videos. Thank you for the great content and the pristine plane! I promise you I will never forget the master switch ON!
Please consider changing the seat covers sometime in the future. The covers overhang makes it harder to reach for the trim wheel.
Thanks again
Omar
Ha! Glad to hear you have experienced 69D for yourself, Omar, and enjoy it! Thanks for treating it nicely -- the seat covers do make it a bit harder to reach the trim wheel, but there is electric trim on the pilot's yoke to take out some of that sting. See if that helps.
@@MikeWebb-FlyingFinanciallyFree I will next time! Thanks
such. a great video ! u inspired me to look into that business model. thx !
we would love to hear more about how this business is going for you so far, really interested !
especially more details on how to pick a good place / school, how much an airplane can earn you in yield, maybe some of the biggest problems with this whole thing, and more on the business side of things.
Thanks a lot, rly interesting !
Love your attention to detail! Like the color balance on the video, the subtle camera pans. founts etc. Dint expect this at all in an aviation insights focused video!
Thanks, Mihir! I tried to inject some quality editing -- albeit at an amateur level of skill. Always room to learn.
Great video, I appreciate the realistic numbers and reality of the wear and tear. Keep bringing these great videos, they def help a lot.
Thanks, Gabriel! Glad you found this helpful!
Bro, awesome!!! I've been wanting a plane for my business but can't really get it to pencil out. This could totally close the gap for me! Love it!
Glad to hear it, Nathan. Stay tuned as I'm working on a course that will detail everything I've learned with leasebacks.
Considering buying a plane in FL, long time no flight for an African Bush Pilot w FAA multiple commercial instrument license, I like the Leaseback option! Thank you
Just get a partner or 2 if you wanna cut fixed cost. You will have more access to use it and not rack up 1000's of hrs of airframe time getting bounced off the runway daily by students. Most of the partnerships I know of the airplane is available 99% of the time for use. Fixed cost are divided equally and they contribute a small hourly rate to a pot for wear items.
Super informative Mike! Thanks! Let’s hear about the avionics choices you made.
I’ll have to get on that one soon, Tony! Thanks for the compliment!
In my experience, tires, battery & brakes are also worth factoring in to variable cost calc. Call it $2.00/hr for all three.
That’s pretty reasonable, and I agree with the general idea of the number. I factor that into general ‘maintenance’ elsewhere.
Very interesting! Well done. Thank you for your breakdown and in such a clean streamlined manner. Great video!
Thanks, Jacob! I appreciate that!
That’s interested to see, but how can you get contract with flight school to leaseback. And is it required any specific kind of airplane to leaseback?
Thanks
Can you provide an update? I’ve been considering doing this for a few years now and will be able to make it happen soon. Would love to hear you opinions now after you’ve been doing it over a longer period of time
Hi Mike! Great video! Very inspiring. The only thing I don’t think you discussed in your video is the tax benefits you can enjoy with this type of benefit. I am hearing that it can be significant. Can you do another video maybe explaining some of that??
Thanks, Dwayne! The tax benefits are significant, you are correct. That's a good idea for another video -- stand by and I'll look to get one done!
@@MikeWebb-FlyingFinanciallyFree Mike here is my email. I'd like to connect with you. dwayne.gill@gmail.com My son and I thinking of doing this! Thank you!
Very insightful. Great information.
Thanks!
Great video! In the middle of my private pilots license now and looking at doing this with my flight school as well.
Best of luck!
Love the video. Think I heard your based out of Va also. Question- how did you go about finding the other party to do the lease back with?
I was already a student at this flight school so it made immediate sense to work with them. I was paying to use someone else's plane - why not mine?
I'm considering buying a plane and doing a leaseback and getting my PPL and Instruments rating on it. Thank you for your input!
You’re welcome! I hope it helps in your decision!
You should do a video on how you found your plane.
I'm considering it. Finding a plane in the first place is a big undertaking, no doubt.
Mike.....AWESOME. I am a fellow NAVY Vet, and just about to take my check ride for my PPL. I'd like to know more about this, as I think this may work well for me. I am at a very busy Flight School in MD. I plan to pursue my Instrument and ultimately would like to be a CFI. I am about 10 years from retiring from my post NAVY career, and am looking for a good way to get into ownership, with the possibility of upgrading to a HP aircraft by the time I retire. This could fit the bill for me. Thanks for these videos!!!
Glad you enjoyed them!
Loved these videos so much I subscribed. Nicely done.
Thanks, Marcos!
Thanks you, very informative video. I am about to start a lease back with my flight school. They are all DA40 fleet. They have 2 currently. One thing I am still thinking is, when it comes to the training. Do I use my airplane or I use their plane? Using their plane is basically pay 20% of the rental rate. Using my plane, I am paying the actual operating cost and losing the ability to make money(the hours for other renter to rent my plane). Have you thought about this? This sound counterintuitive that use their plane is actually cheaper than using my plane.😂
How do you calculate maintenance, engine, and prop reserves?
So I'm not looking to make tons of money if I were to go this route, but I am looking to offset costs or make enough money to cover future maintenance issues. With that said, how much control and flexibility do you have with your aircraft's use? Can you cap the total number of hours it can be used in a month? Could you arrange for it to not be used as a base trainer aircraft and only used for things like IFR and complex aircraft training?
Mike, thank you so much for that really great break down. It has actually spawned a ton of questions for me, but my biggest one is: All of time that the plane is being rented out is time it's not available for you to fly it. It also seems that if you really want to make a go of it, personal use needs to very much take a back seat to rental demands, otherwise, it might get get a reputation of not being available often enough to count on. So, that being said, how much has renting it out affected your ability to take it and go for a trip with your wife for a weekend trip or what have you? Thanks in advance and again really great work breaking it down, pacing , audio quality, video quality, the whole thing!
Thanks for the compliments! Initially, the plane wasn't too busy where it was difficult for me to fly it for personal use. Over time, as it became more popular, that was a concern. So, if I couldn't fly this plane I'd rent another essentially for free as it was paid for by the activity that was happening in my Archer. Eventually, I purchased additional planes and hardly ever fly the Archer for personal travel; it's too busy making money so I just leave it as is. Hope that helps!
@@MikeWebb-FlyingFinanciallyFree And how! What a high class problem to have. Congratulations to you and you have intrigued me immensely to one of my wife's biggest objections: the cost, not only of airplane ownership, but just flying period. Thanks so much for sharing and again, a hearty congratulations!
Awesome information thank you so much
Great video - thanks Mike. Yep, also noticed the Marshall acoustic amp - I have the same one :)
Rock on!
Thanks for the video! How does the 100 hour inspection work?
Thanks Mike! Wayne from Canada
Glad you liked it, Wayne!
Mike at the about the 4min mark you mention your archer burns 10 gallons at cruise. However, you then mention you factor in 7.5 for your calculations. Why do you use the 7.5 gallons instead in your calculation?
Caleb, the actual cruise burn is closer to 8.5 gal/hour in real world numbers… but the reduction from 10 to 7.5 is because fuel burn is directly related to the engine RPM. In other words, even though the student/renter is paying the same whether sitting on the ramp or WOT in flight, the actual fuel consumed is dependent on the tachometer. And more specifically, the tach time for any flight is almost always between 70-75% of the Hobbs, or ‘flight’ time. So, using 7.5 gal/hour in my calculations accounts for both concerns above.
Mike. Thanks for the info. I would love to be able to ask a few questions like did you set up a LLC? Is there anything you regret or dislike? Where are you located? What level FBO did you look for? Etc.
Hi, T.J. Yes, I set up an LLC, mainly for tax purposes to keep all expenses/revenue separate and easily trackable. 2020 was rockier than previous years due to the pandemic, but activity picked up nicely at the end of the year. I'm in the DC area where a lot of flight training activity happens. A good, active school is a good partner to look for.
I’m in VA in the Hampton roads area. Are hangers in this area that hard to get? If you are in this area
Great video mike really considering a lease back option was wondering if you have a recommendation on insurance companies the few I called state they won’t do it thank you!
The school’s policy that covers this plane is through Starr Aviation. Seems they’re used to insuring training aircraft.
i love this video, I was looking for a good guide to understand the business for a long time. Thank you. I would like to ask you a question: how do you do to give training with part 61, what requirements must be met? is very important project
You're welcome, Oscar! Part 61 training requirements are spelled out in the FARs -- no special requirements other than an airworthy plane and competent instruction. Part 141 is where the requirements are more stringent, involving approved curriculum and specific maintenance requirements.
very nstructive mr. Webb, thank you
Glad you liked it!
Nice video. Thanks for putting it together. One thing you didn't mention was the rate split you negotiated with the FBO. Is there a range that one needs to have to make this arrangement economically feasible?
Thanks, Jon! At 5:18 I mentioned my situation. I do the standard 80/20 split, meaning they get 20% and I keep 80%. The economic feasibility of it is very dependent on several factors: your costs, the rental rate, and amount of hours flown.
@@MikeWebb-FlyingFinanciallyFree Thanks. I missed that detail. Another question: who is responsible for insurance and maintenance costs? I presume it is the owner and not the FBO.
Kidz Cooking you are correct; the owner is responsible for paying the insurance and maintenance. The plane is on the school’s fleet policy, however. It is possible other arrangements where either could be different.
How do you find company who lease back plane from someone like me? What did you do to find your lease back company? I'm looking for bit bigger plane like Pilatus.
Generally, you’d start with schools or other FBOs that need airplanes to conduct their business. With something like a Pc-12 it’s going to be a larger operation, either 135 or 91 managed operator. Start establishing a relationship with those places and ask if they’d be interested in a plane like that.
Maybe I missed it, but who pays to store the plane? Hangars and tie downs are hard to come by where I am so there's incentive to find a school that can use the plane and keep it nearby.
I, as the owner, pay for storage, but to your point, the school had tie down spots for my plane in the beginning and it was convenient to use theirs.
Hi - I’m considering doing a leaseback now because of this video. Would you be willing to provide the detail specifics on how you were able to extract the information from the flight school? I mean the information you needed to decide which airplane to buy and at what cost for the leaseback to work(?). How to wheel and deal with the flight school? Maybe email a leaseback checklist?
Hi BassPlayer, I'm working on a full online course that will detail all you mentioned above, and more. I've gotten so many requests for more info I figure it's the best way to get it out. Stay tuned.
@@MikeWebb-FlyingFinanciallyFree this video earned a sub from me. I would definitely love a course that teaches all the details of this.
@@Aaron-qh3hr Thanks for that! Stay tuned on the course ... it's a lot of work but I'm excited with how it's turning out. Packed with content.
Consider writing a book about it =D (new revenue, who knows =) Thanks for the info.
Maybe one day! There's a lot more to share on the topic and every day is a lesson learned to pass on.
@@MikeWebb-FlyingFinanciallyFree Hey Mike Im going to write mine down Tax-wise too, and im sure you know that part too
Yep. If used properly and set-up in an LLC or other corporation you can write it off as any other business asset. The tax code is very favorable to business vs. personal use.
@@jrwarner579 yes
Another reason you’re obviously authoritative is that Les Paul and …? leaning against the wall in the background 🎸👍🏼
That's a Taylor Acoustic. You may also have caught a glimpse of the Tobias 5-string bass back there, too.
Thanks Mike
Hey Mike! I really enjoyed your videos! I also live in VA and fly at KFCI. I hope to follow your plan except its a smaller lower volume airport. Are there instances where its cheaper to just partner with someone and not lease back??
Hey Dan! Thanks for the compliments! A partnership could work better for some people, depending on what your ultimate goal is. It will definitely help with the costs as you share those with others, and would help with availability and potentially wear-and-tear. If you want to own your plane for free it won't fit the bill, however. Your end goal will determine which path you choose.
Please don't forget to mention that you can only do leasebacks with certified aircraft
A good point, Gregory. Only certified aircraft are allowed for commercial purposes, generally.
Mike, thank you for sharing. I'm thinking about taking lessons for private pilot certificate and thinking if a leaseback option may be better than renting the aircraft ? I would need to finance and was wondering if you would consider doing a video about financing and getting insurance, etc? Great content!
Glad I could share my thoughts with you and you enjoyed them! I am working on an idea to share all this and more. In the meantime, getting financing for a plane that will be on leaseback can be tricky; some lenders won’t do it. Others will, however. I recommend looking at small-town banks and similar places if the big players don’t allow it for you.
@@MikeWebb-FlyingFinanciallyFree Mike, thank you for your quick reply. Looking forward to more of your videos,
Hi Mike, great vid. Any thoughts/experience with higher value aircraft leasebacks - i.e. Cirrus SR22, it seems in the cloud I fly the few they have do seem to fly quite a bit even tho the $$ are much larger
Thanks for the comment, WadeMan T! Something like a SR22 can work, but the insurance cost is the big hurdle. Having it in a leaseback with a school/FBO will be expensive… so much so that it can be hard to break even. But, if you drive that cost down with higher deductibles it MIGHT work. Usually with planes like that the goal is to merely offset a portion of the ownership costs.
Just got into aviation so I'm not very familiar with everything. But when lease back of a plane and if you're "making" money, is this considered a taxable income? Is the plane registered under a LLC or personally under your name?
I’m about to hanger at Hanover airport in Virginia where do you currently have your airplane at to make this happen?
I’m at KHEF, Manassas. Wherever there is strong training activity I’d say you can find success.
Thank you! I’m going to buy a 172 and do this. How do I buy the airplane though😅
Usually about 15% down and a good lender. :)
@@MikeWebb-FlyingFinanciallyFree Damn. Still got my back I’m a two year old video. Thanks Mike💯
If you are doing leaseback wouldn't that count as business use for Section 179 of the tax code? This would allow you to write off a portion of the purchase price as well as maintenance costs.
You are correct; one of the ways a leaseback makes owning/paying for a plane easier.
Hi Mike. Very helpful. You mention the insurance being less than $5k per year and that is the FBO policy you are on. Which insurance company is providing those rates? I have only seen significantly higher insurance rates.
Thank you for the info! this was great as I am thinking of doing a leaseback with my flight club here in San Diego! Would you be able to share what your leaseback agreement looks like?
Hi Marko. Potentially. If you give me your email I can send you something.
@@MikeWebb-FlyingFinanciallyFree can you send me the same? I will be doing a leaseback soon and would like to see how others are putting the agreement together. Thanks!
I definitely would love to do a lease back, the partner is the lease giver or the school with the FBO?
and what if I have tax exemption; how would that effect costs?
Your partner (if you’re the airplane owner) would be the FBO. You’re the lessor and they’re the lessee. Tax exemptions only help your bottom line, of course! Specific advice would have to be sought by a tax professional which I am not.
@@MikeWebb-FlyingFinanciallyFree thank you, much appreciated
Nice incentive to consider leaseback.
It’s worked for me!
How does the insurance work? As I understand it, the flight school has to carry the insurance becuase the aircraft is part of their fleet. But the insurance is a flat rate and would have to be paid regardless how often the aircraft was rented. Do you the owner have to give the flight school money up front to help pay for their insurance coverage of the airplane you are leasing them?
Hi, Doug. It can vary from school to school, but in most situations, yes, the insurance is carried on the school’s fleet policy. Typically, the school will subtract a monthly premium amount from the leaseback revenue due the owner.
I talked to a tax accountant and he said that if i buy an airplane and do a lease back the IRS are going to come knocking. Is it better to write off over 5 years instead of 100% depreciated it
Everyone's tax situation is unique so I'm not going to give any 'advice' here. If used for legitimate business purposes with good documentation it's no different than any other business asset. Bonus depreciation up front or over time is, again, dependent on your situation.
This is a great idea and one I'm looking into as well. Question - did the aircraft already have commercial registration - or did you have to convert it over from private? Was it easy?
Hi, Travis. Thanks for the compliments! The FAA registration doesn't need to change for this purpose. But in my State there is an option for a state "Commercial" registration, which I chose and it was $10 vs $5 for the non-commercial one. Figured it was the right choice
@@MikeWebb-FlyingFinanciallyFree thanks for your reply! I'm in Canada and it's a whole new set of regulations for Airworthiness that the aircraft has to confirm to. Still, I'm going to try and have a meeting setup with Transport Canada. Thanks again, I had been wondering if it was possible and now I'm going to give it a try! Thanks again
Great
Makes sense you have to get on their schedule to reserve your own airplane. Do you also have to abide by the minimum hour requirements per day if you go for a weekend trip or use the airplane for x number of days?
No. Aside from scheduling it, I don’t have any minimum hours/day requirements or anything. My arrangement allows me to use my plane as much as I want and they are non-revenue hours. However, if I take it for a large chunk of time that’s likely to be a lot of revenue lost.
Mike Webb Good. that is a great added benefit.
Yeah, and some FBOs don’t do it that way. It’s important to explore what a leaseback partner will allow.
What insurance company do you use?
Starr has been the carrier on almost all of the policies I’ve been a part of.
How much did the plane itself cost?
I have a 182 with a friend, my hesitation with doing something like this is that the plane wouldn't be available when we want it. Do you put in a schedule that it's available for lease? I ask cause, we'd want to be doing weekend trips or just get our flying fix whenever so could limit the time we'd be able to fly.
Hi, Jason. I totally understand your concern about scheduling conflicts if others have access to it. I accept that there may be times when I won't be able to fly my Archer bc it's booked by someone else, but I find that an acceptable tradeoff for the revenue it produces. You could explore an arrangement where you can determine only certain periods of availability for the 182, but I suspect it would not be very welcomed by a school or wherever you're trying to lease it to. In my situation, it's first-come-first-served, so I just reserve the plane well in advance when I know I want to use it. Spur of the moment flying often works, but if it doesn't I just rent something else while my plane is making money, therefore paying for the rental.
@@MikeWebb-FlyingFinanciallyFree Thank you for the quick response Mike! I think it's something I'm going to try and have my co-owner agree to look into more. He is definitely more hesitant on doing it than I am but certainly would be nice to recoup some if not all the costs. Question, on your fixed expenses do you just divide that by 365 to have a daily rate of what it costs and that is part of the hourly rate? Or are you trying to recoup those fixed costs over a shorter time frame?
@@triboarder06 The hourly rate for rental I based completely on what the market will support, not necessarily what my costs will be. My costs are irrelevant to a renter; they only care what price they have to pay to use my plane, which I base off of area comps. It just so happens that in my situation I will recoup my costs in a several solid months of activity.
Hi Mike, thank you for all of the information it’s really helpful! Besides having a commercial insurance, do you also need to open up a LLC or INC company in order to rent out the aircraft your self to being able to pay taxes after reporting that rental income? Not in a leaseback I mean. I would appreciate if you can assist me with this question. Thanks!
You should definitely set up an LLC or Inc if you’re planning on any type of renting; either to others or to yourself via a lease agreement between another company. Consult a tax precessional for the details.
@@MikeWebb-FlyingFinanciallyFree Thank you so much Mike! I really appreciate it.
Mike. Thanks for the insight. Just curious though how to you budget down time when the plane is in for maintenance or if someone dings a wing and need repair?
Hi, Larry. Downtime is no one's friend in aviation as no one (other than the mechanic if they're not waiting on parts) is making money. 50 hr oil changes and 100 hr inspections are part of the deal and are accounted for in maintenance reserve planning. I haven't had any serious damage like wing damage, but if it happened the offender would cover any insurance deductible.
Awesome info. One question, can you take your plane for a weekend trip? If so, what are the costs incurred?
Yes. Under my agreement I pay for the fuel only when I fly it.
How does the insurance work out on this? And who eats the bill when an uninsured renter does damage? And are the 100hrs out of your pocket?
The insurance is part of the fleet policy of the school. I pay a monthly amount to cover the premium charged for my aircraft. If an uninsured renter did damage, they would be charged the deductible. Many, if not most, renters also have renter’s insurance, as well. Some FBOs require that students and renters have renter’s insurance. Yes, all maintenance is out of my pocket.
Mike this is very interesting and I would like to talk to you further about this. I now you are i the States, I am in Canada, however I don't think this matters much. I have a few questions I would like to talk to you about personally, if possible. I am happy to call you or do a zoom chat. Let me know. Thanks Bill
Bill, happy to help. I’ve got a whole course coming soon. In the meantime, what can I help you with?
Do you pay all maintenance fees or do the flying school cover some? If so what does the flying school cover?
Under my agreement I pay all maintenance-related fees, with the exception of things caused by employees, like CFIs (if they left a master on and ran down a battery that needs recharging, for example)
I'd like to see the numbers for calendar yr 2020. No doubt utilization has dropped with the ongoing pandemic.
That’s a good idea. I can break down how 2020 works out through the pandemic and how I’ve weathered those storms.
I want to know more about this,, if you can help me with necessary information
Damnit. I just binge watched your videos and now I'm shopping for airplanes and pressure washers. Not even kidding! Did you set up an LLC for your leaseback arrangment? If so, are there any tax advantages to your situation? Appreciate it.
Glad to be of service! ;)
Yes, I set up an LLC. Easier for expense tracking and potential protection. For tax purposes, gains or losses flow through to individual tax return. Hopefully that helps.
Hey Mike! I’m looking to learn more from you about this topic, is there any way I can give you anything in value as in my time or $ in return for your mentor ship, thank you
Hi Mike, Great video! I'm wondering how unexpected repairs enter into the equation, as those are in addition to your fixed/variable costs. Would one unexpected repair through the whole plan out of whack? Also, does the fear of a huge lawsuit/liability concerns affect leasing back, or is the hugely expensive insurance policy there to absorb that worry?
Thanks, Eric! Unexpected maintenance/repairs will happen from time-to-time. The maintenance reserve set aside for each plane should have some buffer to account for those, on top of regularly scheduled maintenance. That said, a major repair, like a premature engine overhaul from a prop strike, or something else major would deal a major blow to the plan. A wise man once told me to think at least 2-3 years horizon on a leaseback. Any given 12-month period could have some big ups and/or downs but over time a good fit should be a nice winner. The insurance is there to cover liability and proper setup of an LLC or other corporation can help, too.
Why did you quit making videos ????
I was only really able to find the time for making videos during the pandemic… keep wanting to get back to it - time is the only issue.
Were you able to deduct 100% of the cost of the airplane in the first year by way of the bonus depreciation deduction? If so, can you give me a rough idea of how much taxes you ended up having to pay? I’m a CFI looking to potentially get an airplane, lease it back, and also instruct at the school I lease it back to. My hope is that this will aid in the low pay that most schools are paying CFI’s and potentially bring in a little more income. Thanks, great video!
Hi, Ryan. I could've done the bonus depreciation deduction you mentioned, but I decided I'd rather take the depreciation over several years and see how the revenue stacked up. With the ability to deduct all the expenses and standard depreciation my tax situation still proved beneficial. As the revenue grew, I was still in a good place. I think if you find the right fit for the school you're looking at instructing for it can be a great situation. I've seen it work before. Best of luck!
Mike Webb Thank you!
What avionics upgrades did you make?
Hi, Eric. I’m actually working on that video currently. Stay tuned and it’ll be up soon.
Would you be willing to share your excel sheet, if used?
Thanks!
Potentially. We’d have to talk first.
You pay for the renters gas?
Yes, it's included in the Wet rate for the plane. If they get fuel somewhere else it's limited to the price I pay at the home field, though.
mike
was great listen to you
I am a student pilot and I am very interested in buying a Cessna 172 and do the same as you with my flight school! did you check with them first or you went to buy a plane counting on it?
I am 74 years old and looking to a private pilot license at list! not cleared for solo yet but being very close! lessons with flight school are very expensive and that's why I it took me so long to get here! if I could to what you did I definitely will fly for cheap and more often! how does it work to leases back your plane? and what about buying? any help will be very appreciated! I liked your way to manage this and looking for a response! congrats on your flying skills and managing ! sincerely Maurizio Michi
Hi, Maurizio! Glad you enjoyed the video. Definitely talk with the school first and find out what they think would fit their customers' needs best. As for all your other questions, I'm working on something that will give you some great answers regarding the whole process.
So. .. you're my hero. #subbed
Ha! Happy to have you on board.
Mike,
Can I email you? I have some questions and need your advice.
Hi, James. Sure, but I’d prefer you provide your email to me, if that’s cool.
Fredwied@gmail.com
Are 50 and 100 hour inspections free now? I didn't here a cost for those.
The maintenance hourly reserve covers all inspections, generally. There are occasional things outside the norm, but over time the hourly reserve covers it.
@@MikeWebb-FlyingFinanciallyFree Can you give a little more detail on how you calculated that $17/hr for maintenance reserve? I get the engine and prop reserve, but some details on the maintenance portion would be great. Obviously the 100-hr inspections and oil change are part of that...what else? Thanks for the informative content, even 3 years later! I've watched multiple times. 😁
Did you or the school determine the rental rate?
I determine the rate, taking into account the other planes at the school and the market, in general.
One big benefit you don't even mention is that most if not all of your fixed costs then become tax deductible since it's part of your plane rental business.
You are absolutely correct if you have the structure set up for accounting it all properly. I’ve reaped some great tax benefits!
i would like to be a pilot and fly my own plane ✈
If only I could convince my wife
Always an important clearance to get, no doubt. :)
So the flight school is letting all that potential revenue go bye-bye because it doesn't want to buy a plane that can be bought for a lousy $6500 yrly loan commitment?
You are correct. It represents a financial risk to them and they are often operating on thin margins and would rather transfer the risk to someone like me.
Keep in mind too, that while a school may be running 100 students and 10 instructors, and have a large cash flow... that does NOT equal large cash reserves.... and even if you are buying a plane with a loan, you can expect to have to tie ~$20K of you cash in the deal that won't be back in your hands for a number of years.
Take that times 5 or 10 planes, and that is a lot of cash for a flight school to not have in their coffers for paying salaries and rent and insurances... so it can be a win win i think.
@@meliudaj You get it. Thanks for chiming in!
Fly for free? I doubt that very much.... Wait until something breaks. Or, an engine needs to be overhauled.. I've always considered lease back to be paying for someone else to fly your airplane. Maybe I'm wrong....
Good video. Thanks. But I do need a PDF of this plan! I m starting now, and will buy my first airplane and that leaseback is for sure the perfect solution to me. I am at Brazil now. I have 8 cats, and to buy a airplane is the unic acceptable solution to me that I can move from here to a other country with them. I think I can do that agreement with the school even before to get the airplane for two reasons: first here have a lot of taxes, and I want to prove not being importing a airplane, and yes being catcher by the airplane and the pilot for to move out from Brazil. So that airplane will be mine but at a other country. Second, its a great deal zero costs and plus to make a money .
I think a school that have their own engineer and they do a checkout for me before to give me my airplane to fly, is a better contract to me. And I will to put cameras inside and outside and will to monitor that use by these.
Any business can be made profitable with the right terms. I think your taking too much risk. I would put all MTC and insurance on the flight school. Get a basic lease amount per month and a variable for engine overhaul etc that goes in a separate account incase they close doors. Then it's there problem when it comes time to return the AC in a similar condition. I would even do new engines at the beginning and end of the lease. Less risk and should be able to make %15 or more of the AC value per year.
The conditions you're proposing, while they would be very nice in moving the risk to more of a shared posture, are very rare, in my experience. I've seen once or twice a similar setup, where the school absorbs MX and some other items and offers a base lease amount/month, but that also caps dramatically the upside potential. Less risk = less reward, generally. But certainly something to discuss with an open-minded leaseback partner.
@@MikeWebb-FlyingFinanciallyFree I have a former Captain getting 18% on that setup on both his planes. New engine required on the return or a big wad of cash. The down side is upfront cost of a new engine on delivery.
Hey Mike can I have your email
Brotha? I’m a student pilot looking to enter a leaseback soon. Would like to ask for some advice
Wow, $150 an hour for a 40-year-old Archer these days. Glad I don't have to rent.
Yup. With a modern panel, that is. I’m working on a video that details what’s in there.
At my flight school we pay $150 for a 50 year old 172
We are $135 for a steam Guage 40yr 172 down in Houston area. And these numbers can still be made to work.
But as a freshly minted PPL, I'm looking forward to nevery paying that again
I bet you are!!
@@meliudaj where in Houston do you fly out of? I’m west, near Houston Executive (Brookshire).
Leaseback is a great deal for the lessee, not so much for the lessor. If it were a good deal for the lessor, the lessee won't sign it. They will look for another sucker and convince them a leaseback is a good deal.
Hey Buck. Respectfully, I don’t know what your experience has been or who you’ve done leasebacks with, but sounds like you’ve been burned. Or, maybe like most folks who have similar views to yours here, you’ve never actually tried and are repeating the old ‘only suckers do leasebacks’ thing bc it isn’t easy. I can assure you it’s worked well for me, and I’m no sucker. But thanks for watching.
This is like cheating. lol i like it!
Can I also hear about the mansion you live in for free? Please e-mail me that information.
That's on my other channel; the fantasy one. This one's for folks with open minds.