Pre – Pre Purchase – Thoughts and Actions
By Jerry Temple
When asked by the Editor to write an article on the subject of what to look
for in purchasing older aircraft, two to three thoughts came to me.
First, focusing on the purchase of a 300 or 400 Series twin Cessna, which is
my specialty, may be of no interest to many Cessna Owner’s Organization and
Piper Owner’s Society members. Second, a superb winning article that becomes a classic
throughout the ages, should address many aircraft types.
And third, how about an article on this subject that’s different.
So here goes different.
But, first, a commercial announcement. To cover this subject in depth, and as
much as I’d like, would exceed the proper length for this article.
I can share many Smart Buyer Mistakes, and will, on Sunday, July 24, 2005
at 1:30 P.M during day 3 of the pre-Oshkosh Cessna and Pipers Owners Convention.
Now for a very brief editorial. All magazines, i.e., sports,
gardening, child care, business and aviation must offer stories about the same
subjects from time to time. In
aviation we’ll no doubt see the annual articles on summer flying, winter
flying, mountain flying, etc. And,
it’s good. We all need reminders.
That’s why we do recurrent training and yes, thank goodness, we do have
new pilots and owners joining our ranks that may be reading some thing for the
first time. So, I acknowledge that
readers have no doubt seen articles
about pre-purchase inspections, corrosion, and aircraft purchases that had
nightmarish consequences. And,
you’ll see these again from time to time.
That’s good.
Today’s focus is on the pre – pre-purchase inspection actions and perhaps
those occurring during the “pre-buy”, but prior to closing/funding.
OK, so you’ve made the decision to purchase a certain model airplane.
This article will not address your need to trade or first sell your
current aircraft, your keeping the current aircraft, an IRC 1031 Exchange or
ownership issues. Let’s assume
the subject of insurance has been addressed.
If not, stop the music. If
there’s even the slightest question about obtaining insurance and the
associated training requirements, you’d better get those answered before
spending considerable time and money buying an aircraft.
The aircraft advertisements are out there, and they are better than ever.
You no longer have only a classified ad of 15-50 words describing an
aircraft costing thousands of dollars. Nor
are ads perhaps weeks old due to advertising deadlines.
Aircraft Dealers, Brokers and Individual Owners can advertise on aircraft
for sale websites with detailed specifications, photographs and often, more.
Perhaps you’ve spotted a few possible candidates.
Now comes the subject of due diligence.
In plain talk this means doing you homework or your research.
Perhaps your due diligence research began before you started
“shopping”. The selection of a
particular aircraft type might have come form a variety of sources, i.e.,
advertising, articles, personal experience such as a friend’s aircraft, rental
units or just “pilot intelligence”.
Now is maybe a good time to talk to owners and pilots of that type.
The Internet has made the ability to get answers to questions easier than
ever. It might be the time to join a specific owner’s
organization for that type or family of aircraft.
From such a group you’ll find pilots, owners, and technical personnel
who’ll provide answers, plus more. Attending
an owner’s group fly-in, convention or maintenance seminar, all before
purchasing or beginning to shop is a wise investment strategy. Personally, hearing the good, the bad and the ugly is
priceless. Exposure to products,
vendors and additional sources of support is worth the cost of membership,
attendance, travel, etc.
Now maybe is a good time to make the investment decision to employ
professional support. I’m not
refereeing to the plan to use a qualified maintenance shop for a pre-purchase
inspection. That’s an
uncompromising must., For most
types of aircraft there are aircraft Dealers and Brokers that specialize in
particular models or families of aircraft such as Cessna Skywagons or Piper
twins. Here again, the owner’s
organizations and its members can direct you to the professional sales sources.
Some may be Dealers or Brokers with aircraft they own, or are
representing, but as with any true professional sales entity, they have a vested
interest in producing a please and satisfied customer.
In addition, you’ll discover knowledgeable specialists that formally
support buyers. There are buyers
who will say, “I’ve owned a dozen aircraft and I do not need to pay anyone
to help me find and buy an airplane”. In
addition, there are buyers who say, “I do not make investments of thousands of
hard earned dollars, especially where the risks are great without professional
support”.
Regardless if you choose to conduct the acquisition of an aircraft on your
own or employ professional support let’s now roll up the sleeves and become
“Sherlock the Buyer”.
Before placing call number one, know that you’ll need to develop your
questions for two different types of sellers, the Dealer/Broker, or the Private
Owner. In either case, you may find
a knowledgeable and informed seller or one with minimum information.
I suggest creating a list of questions that you’ll accept as a minimum
before advancing to further steps in the acquisition process.
Let’s now get smart and discuss philosophy.
Take your pick. Plato, Kinky
Friedman or Jerry Temple.
Logbooks and Records: Question: Are 100 percent of the
Logbooks available? This means from
day one to present. Yes or No.
If No, what chronological period is missing and what number of hours are
affected. Determine if this affects
only the Airframe and/or includes Engines and Propellers.
The reason for missing Logs/Records, if known.
The subject of aircraft logbooks and records could be a semester course
unto itself. But, for this article,
let’s say that we need to determine the exact status of Logbooks. This does not, and should not, rule an aircraft out of
consideration. We can have a good
aircraft with some Logbook issues versus a bad aircraft with complete records.
How extensive and how old are the log problems.
Subsequent years of quality maintenance, exchanged Engines and Propellers
do negate Logbook problems. Will it
affect resale? Yes and No.
Again, what’s the history since the problem period and what are your
plans for the aircraft. Examples:
Do you only plan to operate the aircraft under FAR Part 91 or is Part 135
Air Taxi in you plans. The ability
to document age and hours of the Engine, Propellers and Components varies under
Part 91 vs. Part 135. If an
Engine(s) overhaul/exchange is planned do you need to be overly concerned about
partial missing Engine Logs or Engine Accessories.
Yes and No. Are you planning
on an Engine Field Overhaul which will still have the missing Logs as a part of
its history, or will it become irrelevant with an exchanged/new motor with a new
Logbook.
It’s impossible to have a technical or philosophical discussion of aircraft
logbooks and records without also addressing the subjects of Foreign Ownership,
Damage History and Paint/Interior status.
Foreign Ownership: Regardless if all Logbooks are present, or there are some
missing Logs, there is the question -
“has the aircraft always been a USA aircraft”?
If not, the obvious next question is what country was it exported to?
And, are there separate Logbooks from that country or are the entries a
continuation of the US Logs. Are
they in English or another language? The
reason the subject of foreign ownership is a part of any discussion about
Logbooks and Records is all too often the original US Logs are lost when
aircraft are exported and later return to the USA. The stories vary but the
results are often all Logbooks prior to the start of the foreign Logbooks are
missing plus all of the new US Logs that were started upon the aircrafts’
return and new “N” number.
Can Logbooks be translated? Yes.
It’s expensive, but that’s of course, relative.
Shops will often have a person that can read the language the Logs are
in. That certainly aids in
maintenance research and decisions, but is not a permanent printed translation.
Does Foreign Ownership affect value and resale?
Definitely. For the very
reasons implied, if Logs were lost during the export/import process to another
country and maintenance, modification, etc., are not in English then for many
buyers, the risk is too high. What
we do not know or cannot be certain of is not viewed favorable.
Plus, right or wrong, there are prejudices regarding the maintenance in
certain countries or parts of the world.
Damage History: Since this article is oriented to the aircraft manufactured
prior to the mid-eighties the subject of Damage History is very relevant.
The very definition of Damage History must be established.
Rudder and Elevator damage due to hangar rash is not “Damage
History”. It’s just required repairs.
Repairs resulting from runaway toolboxes and tugs and vehicles may be
damage but, just repairs due to airport life.
Hail damage is either past or present. If past and fixed, “where’s
the Beef?”. If existing, what’s
the estimate to repair?
Major damage may have been minor, for such an event at the time, but will
historically be categorized as major damage.
The simplest example is a “Gear-Up”.
Regardless if due to mechanical reasons or pilot error, the past and
present must be researched, judged and considered.
When did the incident occur, the extent of damage, costs and type of
repairs, who did the repairs and degree of documentation?
As with missing Logs is the discussions even relevant to the existing
Engine(s) and Propeller(s). Let’s
take for example a 1977 Cessna 310R that had a Nose Gear collapse in 1982 when
the aircraft had 500 total Airframe hours.
The aircraft has always been a USA registered and based airplane. All Logbooks and Records are present. The Aircraft has had only eight owner since new, which is a
low number of owners, and the current owner has owned it for several years with
the present Airframe hours at 4500 hours. This
310R has flown 4000 hours since the Gear-Up in 1982.
It’s had twenty-three Annual Inspections and we’ll say for to six
separate pre-purchase inspections. The
Landing Gear has worked correctly for thousands of retractions and extensions.
The Aircraft performs normally. The
present Engines and Propellers are only three years old.
At some point, the damage that occurred in 1982 regardless if considered
minor or major, relevant to a Nose Gear Collapse, is no longer relevant and
cannot be considered a “bad thing”.
It is just history.
The Paint is rated an “8” and the Interior is a “7”.
Not too bad considering when these were done.
However, upon a careful review of the Logbooks and Records there’s not
evidence the FAA documentation for each of the materials in the Cabin.
There is a one sentence entry in the Airframe Logbook that all interior
materials meet FAA approval. Do
they? Name them.
Who did the tests? Who did
the Interior? The local auto guy
who has done lots of aircraft and boats. This
documentation is definitely required for a Part 135 Approval and it could be
argued that it could be an Airworthiness issue on a Part 91 Annual Inspection.
Want to chance it, unless you’re planning a new Interior anyway.
Remember this next sentence when researching interior makeovers and
reviewing the documentation associated with the installation of Avionics and
other Equipment. Stuff just can’t
show up. There has to be a paper
trail. Logbook entries, Form 337,
Weight and Balance, POH Supplements, etc.
One can now perhaps begin to see the connection between aircraft
Logbooks/Records, Foreign Ownership, Damage History and Paint/Interior.
An aircraft having one or more “warts” does not make it a bad
aircraft. But, it does make it a candidate that will require extra
research, which equals time and money.
Title Search and Other Reports:
Another area that “Sherlock” may investigate is Government Records.
These are primarily the Title Search, Chain of Title Report, FAA Form 337
Report and a National Transportation Safety Board (NTSB) Report. A brief review of each:
Title Search – generally obtained from an Aviation Title/Escrow firm, the
Title Search shows the current Registered Owner, usually, but not always, the
sale date and any liens on file with the FAA.
Title Searches can also list Form 337 “Repairs and Alterations” that
are on file with the FAA.
The Chain of Title lists all owners that have ever registered the aircraft.
It can show an export to another country and when imported to the US.
Example: Exported to Sweden
in March 1979. Imported to US in
May 1999 and registered to an Aircraft Dealer.
The FAA Form 337 is used to report to the FAA repairs or alterations.
I simply explain that we have negative and positive 337’s.
Some describe a major repair action and some are minor repairs.
Some shops may complete and file a 337 to protect themselves when another
shop would think it unnecessary. Though
the FAA has guidelines for when a 337 should be filed, it’s a gray area.
The positive 337’s can be for various equipment installations and
modifications. Even these positive
337’s or alterations can be simple or significant.
An alteration can be the addition of a STOL System or a Sun Visor. But when researching an aircraft for purchase a thorough
review of all 337’s on file with the FAA is important and can provide valuable
insight into a repair. Why?
Often the Logbook entry may be very brief and will provide little insight
into the repair. So here again the discussion of missing Logbooks and Records
or the subject of Foreign Ownership and the Logbooks and Records associated with
this are all tied together.
Accident/Incident Reports are usually available from the NTSB from the
mid-eighties forward. Again,
available from the Title Companies or from the NTSB, most aircraft have “No
Record”. But, often an aircraft
will have had an incident or accident that is on file.
The event, when it occurred, weather conditions, etc. will be described.
Extent of any damage, injuries, etc. will be noted.
It’s worth a look. As is often said, “I’d be rich if every time I advised an
Owner who stated his aircraft had “No Damage History” that it did, I got a
$100 dollars”.
The Title Search, Chain of Title, 337 Reports and an NTSB search can all be
completed in a day or two depending on the means the information is sent.
The cost is approximately $50.00 for a Title Search or Chain of Title
Report and other reports are reasonable. Even
with a total cost of $200-300 in government reports it’s a small cost in
relation to the planned purchase.
The Specification List – the Spec Sheet.
It’s on the Internet or has been sent to you.
Some lists are thorough and provide considerable and current information,
i.e., hours, equipment, key dates and special notations.
Others are woefully weak. But
let’s assume you’ve a complete list of an aircraft’s hours, equipment,
avionics, etc. An evaluation of
Airframe, Engine and Propeller hours are also a subject for another semester of
study.
However an important element of Due Diligence is an evaluation of the
Equipment and especially Avionics. Is the equipment old and are parts still available?
Who does such repairs and where are they located?
Cost? Avionics can be a
challenge to evaluate. Again, how
old are the units? Are repairs
possible? It may be working today
but is it a throw away if it breaks? Relationship
of present Avionics and Equipment to items you’re considering installing.
Will they interface? If not,
results? Options? Avoiding
a call from a maintenance shop or an avionics shop with the discovery that this
airplane never had a QHZ installed when the extra Fuel Tank and Rotary 27 were
added means you cannot have the Autopilot or GPS you’ve paid for or certain
features will not be available. Remember
that article by Jerry Temple in Cessna Owners.
Maybe I should call him for help. What
should I now do.
I can create many analogies. Before a son or daughter applies to a college a great amount
of research should be made. There’s
more than a football weekend visit. Think
what’s at stake. Many months or
more can go into this important decision.
Building a new home. One
that’s very special. Way out in
the country or the first in a new sub-division. Before blue prints are initialed considerable research into
restrictions, covenants, new design techniques, new construction materials, home
system components, accessories, etc. Perhaps
a year or two in preparation.
Now comes the time to purchase an aircraft.
It may be your lifelong dream to own.
Cost matters but principle is dominant.
Like rent, a mortgage and other of life’s expenses, a used 1981 Piper
Arrow costing $100,000 or a 1981 Cessna 421C Golden Eagle costing $600,000 may
produce the same financial and emotional load for its buyer.
The weight of repairs and mistakes are the same.
This article was not designed to advise you to look for corrosion, rust and
damage. You’ve read that before
and will again. And, you’d often
previously seen articles telling a buyer to do a Title Search.
My attempt at being different is to advise purchasers to establish a
comprehensive game plan. Determine the right type of aircraft. Make certain of that decision.
Long before making an Offer to Purchase on an aircraft learn what you
need to know about that type of aircraft. Once
locating a candidate, or candidates, begin the Due-Diligence (initial research)
on each. Some get eliminated.
Like the reality TV shows, some are sent home and some move on to the
next challenge. Sometimes you’ll
have knowledgeable and cooperative Sellers.
They might be a Dealer/Broker or an individual Owner.
Sometimes a candidate aircraft may get sold while you’re conducting your
research. That cannot be avoided.
Don’t worry.
If you have the time and desire to become an expert on this type of aircraft
or simply an expert on the correct process to purchase an airplane then by all
means, proceed.
If you do not have the time or desire, yet want the results the same, or
hopefully even better, then invest in an experienced and skilled professional
that does this for a living. Most
everyone uses such pros every day of our lives to provide for, and protect, our
families, businesses and lives. We
call them our physicians, dentists, attorneys, landscapers, architects,
mechanics, accountants, handy-men, etc.
When an aircraft arrives for the Buyer’s pre-purchase evaluation flight or
as it’s being rolled into the shop for the Pre-Purchase Inspection it’s a
good feeling to know this aircraft’s history from day one.
Where has it lived? Who has
owned it? Maintenance history, i.e., repairs and modifications.
Knowledge of present Equipment and Avionics.
Repair facilities, upgrades, costs, effect on resale.
There will always be “squawks” discovered in a comprehensive
inspection. Always. In most
cases, the Buyer and Seller will work through these, especially if a
professional sales person is handling the sale.
Good pros make good and fair things happen.
But long before an Offer to Purchase is submitted or an aircraft is
undergoing a Pre-Purchase Inspection a Buyer should have acquired considerable
information on this model of aircraft, the researched aircraft to purchase, more
research about the selected airplane and then proceed with an offer based on the
maximum amount of reasonable information available.
Regardless if your selected aircraft is a Light Single Engine, High
Performance Single or Light to Cabin Class pressurized twin…..do it right.
Your investment will be maximized.
Jerry Temple began Jerry Temple Aviation (JTA) in 1994. JTA specializes in Cessna 300/400 Series twins and is considered to be the leading twin specialist in the world. Jerry Temple can be reached at (972) 712-7302, sales@jtatwins.com or see www.jtatwins.com.