Pre-Pre Purchase – Thoughts and Actions
By: Jerry Temple
Phone: (972) 712-7302 Fax: (972) 712-7303
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, email@example.com or see www.jtatwins.com.