How to Own Your Plane for FREE! 

Amen to that. What a great video. Thanks for sharing. I stopped flying I think 12 years already. Hope I could get back on it someday, and its always been my dream to own a plane, and I've always said that leasing it would be a great idea. But as you said, the info out there is almost zero. Glad to hear a positive feedback about it. New subscriber here. Keep it up.

The planes I’d buy and put in leaseback would not be planes I’d ever consider as “personal” aircraft. They are a financial tax planning device, business equipment, first and foremost. Don’t buy the plane you want, buy the plane the market needs, and continue to find and buy, and place these pieces of equipment into the market. Think of yourself as a landlord, these are rental properties. Landlords don’t live in their rentals, they take the profit from a properly cash-flowed and tax-planned business and they pay themselves a draw, or salary, and that pays the mortgage on their home, elsewhere. This video is a great start in this direction, I would really enjoy hearing more.

Mike - You addressed the right things to consider in your video. But I will NEVER look at another leaseback after the one I did. I'll share my experience. I bought a 172 and placed it on leaseback with an FBO. Once this happened, they wanted to schedule it all the time. It was no longer available for the weekend trips I bought it for. In hindsight, this could have been negotiated. But generally, an FBO will want your plane on Saturdays and Sundays for sure - when they're the most busy. During the one year it was on leaseback, the elevator was damaged when a student parked it and pushed it back into a signpost. Another student hit the mirror on a fuel truck and cracked the nav light on the wingtip. Another student tore the center black foam off the yoke. People treat rental planes like rental cars. Every dollar I "received" for my cut from the hourly went toward maintenance. So I never actually came out ahead. I literally just paid for maintenance while the hours ran up. After I took it off leaseback, I had the plane when I wanted it, maintenance went down exponentially, and it was always in perfect condition. Based on my experience, there was NO advantage. So my advise to a pilot is to buy what they can afford and have a nice airplane available all the time in great shape.

Thought about this too, but decided that all the reasons I wanted my own aircraft were exactly the same reasons I didn’t want other people anywhere near it.

I’m just finding this video after 2 years of being uploaded, but THANK YOU for including a picture of a Globe/Temco Swift. The GC-1B Swift is my absolute all time favorite aircraft but not too many people know about them and there is hardly any of them left. They need more love and attention because they are truly AMAZING airplanes and I believe everyone should have an experience in a Swift!

Thank you so much for the info Mike! I have been bouncing back and forth on this topic. I appreciate the time you put into this and the info you passed along! Thank you!

Thanks buddy for making this great video!!!

Some flight schools have an awesome maintenance department that can be a huge perk in this arrangement if you aren’t an A&P.

Great video I am looking a buying a plane and weighing cost/use pros and cons. This video gave me something to consider that I was unaware of.

Excellent words. Appreciate the insight. Due diligence research and analysis paid off.

Really like your video. Very clear explanation!

Thank you so much! This is a life line to my pilot and business owner dreams!

I really enjoyed your video great advice. So cool to get aviation info from a fellow musician. I checked out your Gibson and Marshall amp in background. I play guitar too smooth jazz. I have a fender Stratocaster and Alvarez acoustic. I hope to own a Cessna Skyhawk in near future. Thanks Smk

This is a great video. Thank you so much for this information. Wonderful!!!!!!

I do agree about your airplane getting torn up through leasing. A guy leases his really nice Archer II to the school, students leave their trash, tear up the landing (me included), and one student spilled a cup/bottle of coffee in the plane.

Great video Mike! I've put about 20 hours on 69D, and you're right those upgrades make a HUGE difference in rental appeal.

I'm a current, inactive flight instructor who flight instructed for a living 15 years ago. All of the aircraft except for 2 at the flight school where I worked were lease-backs. After seeing what those aircraft went through with flight training, complex/instrument training and multi-engine training there's no way in hell I would ever let an aircraft I owned be used by a flight school. They don't call them "crash and goes" for nothing.

Excellent presentation. Thanks for taking the time and devoting the effort to educate us. I'm considering putting my Cherokee 140B (PA-28) into a leaseback arrangement. It is both a major metro area and an Air Force base flying club, but at a conveniently located civil airport with tower, major maintenance, etc. We shall see how it goes. Have not signed the papers yet. Watching this and other videos constitute part of my decision process. Edit: New subscriber. Will try to watch all your videos today. Particularly interested in the avionics upgrades you chose.

Excellent - thank you!

Great video thank you so much for sharing.

Excellent presentation!

Finally, some information I can use!

Awesome video thank you for sharing your experience with this option. I am a realtor in a large metroplex area and have used a similar option in a Realestae setting for clients that are either selling or buy their homes quicker than they thought possible. It gives both parties ample time to either move or complete other transactions while the property transferring possession. I never even thought about leasing back equipment (Aircraft) in this same manner. I have always wanted to learn to fly and have logged millions of miles as a passenger. This seems like a viable solution to one of my questions about the cost of flying and leasing an Aircraft if I did acquire my private piolets license.

One of the aircraft at the flight school I just finished up at has a never-ending stack of new tires in the hangar. Probably goes through 2 sets a year or more.and a never-ending revolving list of small INOP items. They get treated like rentals. So you have to ask yourself, do you want to be a seasoned pilot that's always got your airplane in use, in maintenance, or down for repairs. And when the weather is nice and you'd like to fly, so does everyone else so you're essentially living in a renter pool. Its just not for me if I can only own 1 airplane.

Good on You for choosing to research deeper into this & then have the courage to go against the often times incorrect general perceptions of the Crowd. Who knows...as far as virtual comments go...for all We know negative commentary could be coming from those w/a vested interest in scaring ppl away from such a strategy > thanks for sharing 👍

Thanks for the great video Mike. I'm a pilot wannabe but I'll keep this in mind.

I agree. It can work. You must do your home work and find the demand and location(s). Most important how much you willing to invest. Don’t look at it as a way to make money.

A friend of mine had 3 planes on lease back, and was building a homebuilt. Of course he started with only 1 plane. But he said the secret was to have a good Accountant. He had his planes at Compton, CA. He had his first plane at the Torrance airport. He did okay. But Compton worked out better. And as you said, it is important to plan ahead. And accept renting one of the other planes at the FBO if necessary.

Thanks Mike, just started research to buy my first plane.

Plus One Flyers out of Southern California (a flying club) does all leasebacks. Seems to work for the 50 or so airplanes and owners. Also, a buddy of mine paid for his cherokee 140 in 2 years leasing it to an fbo/flight school. However leasing back a plane doesn't really solve the issue of owning without partners. You basically have a ton of partners (anyone who rents your plane). You have to get on the schedule if you want to fly. You still have to pay hourly except the money mostly comes back to you minus fuel hangar insurance oil engine reserve maintenance reserve etc etc.

Did a leaseback in 78, contract was no students. And I had a plane avilable when I need one. Worked out great.

Amazing video. Great voice. Do you have a podcast?

Great video

OK, I see a Taylor and a Les Paul in the background, you're doing well. So is a Music Vid coming next? ;-) And thanks for the Leaseback video.

Hey, that’s a great video. So how did it go down the road? Maybe you could consider shooting another video with the real expense breakdowns? Would be really great to know as I’m considering the same leaseback option.

Totally distracted by the Les Paul and Taylor in the background. Had to watch it again for the content!! Two episodes of enjoyment :)

Thank you .

Great video! Nothing is ever all good or bad. We have a few clients we work with that want to buy planes and consider leaseback as it MAY be a way to depreciate the plane as a business expense. We are looking into the tax laws right now. Again, thanks.

I think there’s one part that you left out of the video - The cost of the original purchase of the leaseback airplane. Where does that money come from? If you’re financing it, you have to have sufficient credit to buy a 100k airplane (if you want a decent one). Do financiers allow you to lease it back? Or if they do, they jack up the cost of insurance? I think for all intents, you’re essentially signing onto a mortgage for a house that you’re going to turn right around and rent out, correct? How many lenders allow that? How does it work for an airplane “mortgage” then? If you have to buy the airplane yourself without a lender, how would you ever make your money back, on the eventual sale of the airplane years down the road? Can you speak to those aspects of the leaseback process?

Good idea for a beater plane.

Hey Mike! Great info, just a question. How does the flight school feel about engine TBO time? Do they require you to overhaul at recommended TBO time or are you allowed to "over-tbo" if the engine is running fine and passes annuals.

Are there particular model plans that do better financially in leasebacks? For example, would a higher end plane like a SR-22 do particularly well as I assume there are fewer available and presumably command more $? Or are the 172s of the world do better financially?

Hey, So I want to fly a diamond DA 50 but way way to expensive for a 18 year old what do I do will that aircraft be able for me to lease my plane?

Nice and very informative video, thank you! My biggest question is: When the plane is rented out so well, what is the advantage for the flying school. Why didn’t they simply buy the plane and make all the money instead of paying you a certain percentage. Of course they don’t have the costs but paying you is kind of their (avoidable) costs and at one point it’s probably higher for them then just owning the plane, especially if it rents out well.

Great video with useful information. I've been out of flying for about 8 years but getting back into it and seriously considering ownership and possibly leaseback for all of the reasons you discuss. One important topic you missed that I consider important is on one hand you can worry about renters lack of caring in their treatment of your plane and being hard on it BUT it's at least being used and flown. We all know that one of the best maintenance routines for anything mechanical (cars, boats, planes) is to be used and not just sit there. Would you rather own a plane and know that it's been flying with proper maintenance done because in leaseback OR own a plane that sits there most of the time and only used 40-50-80 hours a year?

Ok so you own the plane.. I would like to do this if possible to pay for the loan on a plane to eventually own it. Can you do this? Also why flight school lease backs and not rent for private flights?

I'm from South Sudan 🇸🇸 and I have just started my aviation company last month and I have been wondering how I can rent a small plane and how much does it cost?

I have many planes in this set up. You need to treat it like a rental. That’s it nothing else. Reliable and CFI that wants to fly your plane. That’s it nothing else. Fill it up with time and CFIs.

Been there, done that. My recommendation is to avoid the lease back option to ownership. There is no such thing as a free lunch. Between the sky high insurance costs, increased maintenance costs, limited availability to be able to fly “your airplane”, wear and tear and or abuse of the aircraft etc...... the sticker price is extremely high. I watched my insurance costs nearly triple, and maintenance is now required every 100 hours rather than once per year. The costs to the owner of a lease back aircraft can be staggering if the agreement between the FBO and the aircraft is not properly structured. Entering into a lease back agreement has enormous risk associated with it, be very cautious when heading down this road. Sometimes, these lease back agreements work out, but it is rare.

Do most flight schools have boeing 727 737 757 and 747 airbus series and Embraer and mc Donald Douglas series and stimulators

i wonder how long it would take for the leaseback to pay for the airplane outright? then after all said and done would be able to use the profits from selling it to get into a new one or an upgraded version if people are so worried about the wear and tear aspect of it. seems like a long but easy way to pay for an airplane.

How many hours / mo avg did your plane get rented for 2019? What area of US? Subscribed btw. Thanks

Nice video Do you own N3579D?

You seem like a solid guy... I say that because I see what I think is a genuine Gibson LP behind you.... that is all I have to go on. You leave out so much information. You do not talk about the size of your market - I'm in Lexington KY a 250k area with a decent airport and community. Not sure that is big enough. Please advise.

What is the average monthly cost ?

I am planning to do my PPL in Hungary , I am going to buy a used a/c from Spain , how could it help me in my training ? . I want to become a flight instructor

I’ve jumped into this by accident but I feel lucky. Would love to pick your brain and learn if you’re willing to share. I’m hoping you still check your RU-vid Channel.

I was talking to a pilot friend about this, and his had a pretty simple question which I could not answer. If you can make money renting a plane like this, why wouldn't a flight school just own and rent planes themselves vs offering to leaseback planes?

Mike how can i get in touch with you.

Who do you have your aircraft insured with? How much more does it cost to insure your plane for rental purposes?

What would be a really good way to save up to buy your own plane?

What happens if you want to take the plane for a few days (say for a long trip)

I had a Cessna 152 me and my father owned and we lease the aircraft to a field in Tampa Florida financially it was great we made a lot of money we got the aircraft for like $1,500 we had to put a new engine in it but it was not that much money but I only flew the airplanes one time after that my sister got her license with that airplane which was pretty cool but it was amazing how much that airplane flew. As far as money it made a lot but as far as me or my father flying the airplane forget about it. It just flu all the time. Financially was great what if you were looking for something to fly yourself that was not the answer.

do you happen to have an excel worksheet?

I own a Cessna 310R. What are your thoughts on leasing it to a flightschool ?

I had my C172 on leaseback at one flight school, under two different owners. The original owner agreed to let me do the maintenance to avoid paying for it, he did the inspection and said "Good job" or "What the heck, man? Re-do it." I had quite a savings for a rebuilt engine saved up. Then they sold the school to someone else. They did maintenance w/o asking and charged my account for it and I wasn't happy with the work done many times. The savings dwindled. The last straw was a CFI giving another CFI a flight review were taxiing around at another airfield looking at planes for sale, rammed my wing into a pole. "Take it off leaseback." It can be good or bad. Shop the people running the school.

Translation: "I work really hard and invest a lot to run a not-for-profit business where I get to fly a plane."

So, lets say I purchase a plane for about $100k. I get a leaseback agreement and I use it to pay off the loan of the plane over the course of several years. Eventually the loan is paid off and I officially own the plane. Can I back out of the leaseback agreement and take my plane all to myself? Or will it never be mine?

How does it work with insurance?

This is the tactic utilized by luxury/exotic car owners.... I have had this thought for aircrafts....

Bad idea usually. My experience was leasing back a Cherokee 140. Monthly revenue about $1200. Monthly repair and Maintenance about $1500. Renters and learners tear the Plane apart.

I noticed he didn't give any financial breakdown of his activities. The number of hours rented and etc.

Looks like you have owning a plane dialed-in..... Now, lets talk about the Les Paul & amp!

All the problems you noted are very real. You will end up moving it out of the school. Plane needs to be checked by mechanic every 100 hours. You have to reserve time to fly your own airplane. It's really a hassle. You have to do all of repairs, and you will have them from the abuse.

How has covid affected the flight hours?

I don't live in an area with an overly large population density. But, the flight instructors here are literally turning people away or postponing time with them. Would considering the demand for planes for instruction and CFI demand be a valid reason for a leaseback?

I think the only advantage goes to the flight school or FBO. The renter pays too much, and the owner pays for the maintenance, plus, he can never use the damn plane when he wants to....

Leasers in our club claim to make no profit, and they have to pay for parts, we use our club maintenance mechanic,,we keep switching planes so much the president of the club decide to lease a fleet a of diamonds and solved the problem

Low hour pilots that just got license needs hours so you lease or rent your plane for them it’s simple

free?! good way to get views 👏 😎

Mike web, I would love to talk to you personally. Let’s make both our income 100x this year

Numbers?

To make it worth the while the plane must be treated as business equipment to be used roughly. Not treated like it's your baby being violated by students. But therein we find the problem. Good business people understand that while a leaseback can make money and has some tax advantages, there are far better ways to make money, and just buy a " business plane" to fly around by themselves and reap the bigger tax advantages. Leaseback owners don't approach it as a business, which means the plane #1 purpose is to generate income, vs. to lower your cost to fly. So it's basically incompatible with the leaseback set up.

I had aircraft. Problem was I just lost a lot of money ...no worth own that ...

I hate the word "free". Nothing is ever free. It can be at the expense of someone else, but it still has an expense..

Whoa! Slow the bloody cursor down!

math makes about zero sense. You basically are getting paid, but it goes to 100 hour inspections, etc... he mentions adding value such as a 172 with a g1000 but a decent one used goes for about 260K so when you throw the cost of the plain itself in the mix, it is a total loss leader. Anyone who says they are making money doing a leaseback is (in my opinion) ignoring a lot of the numbers.

It’s free until you get the maintenance, and repair bills.💲💲💲

"No one makes money while the aircraft sits on the ground." Au Contraire! Local flight school changed leases to to pay lessors based on Tach time, and continuing to charge students based on Hobbs time. Amazingly, when that policy changed the instructors began having newbies start up on ramp and idle for 10 min before taxi. Pretty sure instructors were getting paid more for Hobbs time than ground instruction. Probably as a kickback based on differential between Hobbs & Tach. Students and lessor getting burned by the FBO. FBO's complete control of maintenance also got abusive, claiming that their insurance wouldn't let them use retread tire owner already had and instead insisted on installing a $200 tire they already had. Talk to other lessors who've been dealing with the FBO; If the FBO won't pass along your info and help put you in touch, consider that a warning.

Every hour put on the plane reduces the value. Every accident reduces value. Every hour means closer to engine overhaul and possibly prop. Always assume renters have no respect for other peoples' property.

The most expensive item is an engine overhaul. You fly the plane 1/10 of the time, but pay 100% of the cost to overhaul. $20,000 - 30,000. Or more.

So you just walk up to a Flight School and say, "Hey, buy me an airplane and I'll lease it back to you at a standard rate." Or do you walk up to an airplane sales lot and say, " Hey, give me a plane and I'll lease it to ABC flight school and when they pay me I'll pay you."" See, you really don't explain how to do what you are suggesting. At what point can you pay zero dollars to get a plane?

In todays world airlines are down 50% on pilots due to furloughs and that trend will stabilize for the next 3-5 yrs. Which means flight schools are going to be doing furloughs so this idea is a big "No-Go". Maybe again in 8 yrs but you won't be able to own any gasoline or diesel vehicles by then.

Folks stay away. This video is 100% click bait bs. Nothing is free and with a plane especially.

The best way to own an aircraft is to do what I do. I get rental income from real estate of about $114,000 a month and I set aside certain properties to be fun money. Even then I’m not dumb enough to even buy a Cessna. In order to not be stuck under the weather you need to spend a lot more than I’m willing. The next thing you need to do is just move where you want to be so you don’t need to buzz around getting somewhere slow without a potty. If you want to buzz around buy a light sport or motor glider.