Don't Know How To Start

Model Specific Discussions about the Sling TSi.
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14milesperhour
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Joined: Wed Mar 24, 2021 12:28 am
Location: F70

Don't Know How To Start

Post by 14milesperhour »

So I figured I would just put this out here and hope that someone knows a way around my problem.

I have been flying for 2 years now, IFR pilot who primarily flies an SR-20 currently from my local flight school. Due to the higher renting costs the SR-20 is virtually always available so I don't usually have a problem getting the plane. That being said based on how much I pay for renting the plane, I've done my cost breakdown and 36 hours is my breakeven point. Any time after that and owning is cheaper. I came across the sling TSI while I was training. I trained out of Long Beach airport and flew into Torrance often so I saw the plane on the airport and loved it.

Now comes my problem. I am self employed and while I make enough each month to easily pay for a plane loan and all my other expenses while keeping my debt to income about 34%, banks hate me. When I started by business back in 2016 I was very much in a cash in more cash out situation. Savings went quick and I had four months of being late on payments. Because of that every time I have tried to even start the process I get a letter or email back saying "Due to delinquencies on your credit report we cannot provide funding at this time." When I was hunting this funding it was for a Cirrus since that is what I've been flying. I was hoping to get into a used 22. Then I contacted for the heck of it Sling in Torrance and got a quote for a build assist Sling TSI that is right in the same budget I was looking at for a 22 and I've wanted a sling for a while.

Now of course entering this world of kit builds... no one even finances these things apparently until you basically built it... which seems a rather interesting choice. So here is my question(s).

1) Does anyone know a lender who would finance a kit build if it is going to be done using a builder assist program
2) How did you finance your kit build? Right now my goal is to pay off my house and I am only a couple of years away from it being 100% paid off so I'd rather not take out a HELOC. I'd rather the debt go on the business anyways so I can write more off expense wise. Once I pay off my house then I will be able to pay for the plane cash rather quickly I would think... but the prospect of 3ish years of renting just makes me sad......

I am willing to keep waiting it out until I save the money to just buy it outright, I just know through renting I am throwing money away and there have been multiple trips my family would love to have done but we decided to drive instead because we didn't want to pay the clubs minimum $825 fee per day we keep the plane. I know I would be flying way more then I currently am if I was in my own plane and the Sling checks virtually every box I want (minus the small baggage compartment and not being as fast as a 22). Plus I'd rather have a new plane that costs me virtually the same as a used 22 with who knows how much more it will need as time goes along.
14milesperhour
Posts: 2
Joined: Wed Mar 24, 2021 12:28 am
Location: F70

Re: Don't Know How To Start

Post by 14milesperhour »

Also... while I know I could rent a less expensive plane (while fighting off all the flight students) my wife and this point refuses to allow herself or our two children in a GA plane that does not have a parachute. Yet another reason for wanting the Sling TSI. So I am stuck with the SR-20 if I want to fly anyone but myself until a Sling dream comes true.
Cluemeister
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Joined: Mon Nov 25, 2019 4:15 am
Location: Tennessee

Re: Don't Know How To Start

Post by Cluemeister »

EAA has a financing option through NAFCO. Although as I read the terms, I don't think it will benefit you in the early phase of building.

https://www.eaa.org/eaa/eaa-membership/ ... -financing

Perhaps a smaller HELOC loan to start the kit building, and then financing after a certain point of completion?

Good luck!
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PhilipRueker
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Re: Don't Know How To Start

Post by PhilipRueker »

Most builders pay for their kits with cash as they go, since the large bulk of people build the planes themselves (either from scratch, or quickbuild) without a build assist, thus saving the cost of the build assist itself and being able to pay for it as they go (typically first only paying for the kit, then later for things like avionics, engine, prop), since most people will take a few years to finish the build.

But it sounds like you want to have the plane faster to fly and are thus willing to spend the extra money to have a professional build assist program help you with getting it done faster, so you'll need the entire amount faster.
But if you're willing instead to go the traditional builder route, then as I mentioned above, that could help you afford the plane over a slightly longer period of time while you come up with the financial means for it. And you could always save a bit by doing solo flying in a C150/C172 instead of a SR20 in the meantime and only rent the SR20 if you're flying with your family for the reasons you mentioned.

As for financing options, aside from the few direct plane financing options available, some people use a HELOC on their house, for which you can typically use the money for any purpose and since rates at the moment are relatively low, this might even be cheaper than a direct airplane financing, assuming that you can pay it back quick enough in case rates rise, since HELOC rates are typically not fixed.
Building a Sling TSi in my Garage.
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ibgarrett
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Re: Don't Know How To Start

Post by ibgarrett »

A purchase/project like this I think takes a bit more of a financial angle than most purchases, especially because it's going to require you to invest time in it. There are a TON of half-built airplanes out there that people start, get busy with other life-things and move on from. So the last thing I think I'd recommend for someone to do is to take a loan out to pay for a plane you have to build... especially given you are going to be paying interest on the investment making it that much more expensive when you get busy on those other life things.

I found it interesting that you were flying the Cirrus and switched over to the Tsi as I did a video/blog post where I used a used Cirrus SR20 as my comparison plane with regards to costs, but that's besides the point.

You may have another option.

Given your location, and the fact the factory is right there, I'm wondering if you may be able to find someone (or someones) who also is interested in building a SlingTsi locally there and partnering up to build it with you. Granted you won't own the plane outright, but it will half your costs making it a bit more attainable without doing a lot of financial gymnastics. You'll start off with the main part of the build and that could take around a year to do, so you will be able to recover a bit financially that way. But with ANYTHING aviation, always over budget your costs and have a greater sum of money in the bank. That way when an "whoopsies" hits, you're not left with trying to figure out how to proceed. If they say it's going to be $1,000, plan on spending $2,500.

I'm personally planning about a 20% overage in costs and reserves in cash and even thinking that isn't enough. And I'm not quite sure how a lending operation works with a non-functioning airplane loan when it goes over budget.

Basically, something like this is best to pay cash for as much as you can and don't lean on the banks to make the dream come true. I've been flying for a dozen years now and have been flying airplanes almost as old as I am (52 years) to try to keep my expenses low to get to a point where I could afford to do something like this.

Just my $0.02 worth.
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lutorm
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Re: Don't Know How To Start

Post by lutorm »

I realize this is an old post, but I wanted to chime in that I'm with ibgarrett here, too. I would not, under any circumstances, take out a loan to finance an expensive hobby like an airplane. Maybe I'm just conservative, but needing to borrow for a car or a house is one thing, you need those, but an airplane is not a necessity. If I can't pay for that with cash, I'm not doing it.

I fully agree that renting is a money pit, but at those rates you wouldn't have to forego many of those flights before you could afford the empennage kit. At that point you won't have a problem spending money on flying because you'll be spending all your time on building! :D

Also, a flying club is usually way more affordable than renting from an FBO, if you can find one nearby.
Blog of various projects: https://blog.familjenjonsson.org/blog/
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