Did you pay cash for your Bearhawk kit & build assist or did you finance?

[Dougla$]

There’s a saying that if you have to ask how much the monthly payment is for something, then you can’t afford it. I agree with that (I always pay cash when I buy a vehicle, NO car payments for me). But unfortunately I don’t have enough wealth to just pay cash for a kit (including the engine, avionics, etc.). I could technically pay cash for a used $100kish aircraft, but it would take an uncomfortably large amount of my entire nest egg. Looking on Bearhawk’s website, I estimate that a Patrol would cost roughly $250k including the build assist (maybe it would be a bit less if I don’t go crazy with the avionics or paint). I’m an investor in the stock market, and several years ago I wouldn’t have been able to pay cash for even an automobile for $30k, let alone a $100k airplane, so my wealth has been building as time goes by. And perhaps in a few years my wealth will have compounded enough so that paying cash for a $250k airplane won’t be a big deal. But the idea is that it can be better to leave the cash invested and just finance, even though I could actually afford to pay all at once. I would lose a lot of compounding power if I took too much money out of the market.And if I had several million invested, I would already be on Bearhawk’s waiting list, as it would be just a tiny fraction to pay cash.

I’m not trying to create a long-winded discussion about the stock market, I’m just giving an idea of why I’d contemplate financing. But for those who own Bearhawks, how did you go about paying? Did you finance or pay all at once? Perhaps you paid cash for the kit but financed the build assist or vice vs.? I’ll probably end up buying used off of Barnstormers, as it will probably be more affordable than buying new & doing build assist. And I know I could save $80k by just forgoing build assist, but there is NO WAY I can build by myself. And lastly, I’m aware that just buying the aircraft is only half of the financial battle. Maintenance, hangar fees, insurance and the occasional expensive repair bill as well as fuel are all part of ownership.

[Battson]

The best part about homebuilding is you can pay as you go. If money is tight, spend more time, and keep saving.

It's been demonstrated time and time again, a half-finished kit project is often worth a lot less than the sum of the parts. So, I would never finance a kit build, because there is too much risk.

[svyolo]

The people that are predominantly successful in building and flying an aircraft, do it because they WANT to build an airplane. The build assist route makes it almost guaranteed that you are successful in finishing. I am not a fan of financing anything if I don't have to0, outside of a house.

Financing a kit build WITHOUT build assist would be extremely risky. I wouldn't do it unless you have a track record of building and finishing airplanes. Unfinished projects sell for a huge discount to the sunk cost of the components.

Financing a kit build WITH build assist, at least you are nearly 100% sure to end up with a finished, quality aircraft that you can probably sell.

For myself I hate financing, but I might consider it for a build assist.

[Bcone1381]

It seems to me like your a risk taker. If have enough invested to pay for the whole thing, and the financing cost is half of what your historical data says you can make on you investments in the future, then financing the entire thing makes sense if you are a risk taker. Why remove those dollars that are at work if historical data shows you know how to manage the downturns and the black swans that might come along.

The cost of an insulated heated workshop just large enough to build a Bearhawk in 2017 is about the cost of build assist.

[gregc]

If you haven't already done so, I would ask a few lenders and insurance companies for actual numbers. You may be a risk taker but they are not and the terms may make financing unrealistic or completely unavailable.

[geraldmorrissey]

Consider talking to an unbiased financial advisor and explain your plan. If you don't have one, rent one. Be prepared with all the numbers. Also have a serious conversation with your family. The 250k just gets you to the finish line then the monthlies kick in. More important then the money, you must fly the plane regularly to keep it in top condition. If you have never owned an airplane, find some experienced owners and get their insite.
Good Luck
Gerry
Patrol #30

[TJ_Slice]

I paid cash for my kit. We had a rental property that we bought in 2017, and sold in January. We ended up with about $250K of equity. I let my wife buy a new car with some of it, and the rest went into a money market account that is only for my airplane.

I get a very safe 4% interest, plus we also put an additional $2500/month into it. Anything airplane related, including tools, comes out of that account.

I expect the graphs of money in and money out to converge right about when I am done.

[predragvasic]

...I would lose a lot of compounding power if I took too much money out of the market.

Depending on how your money is invested, and who is your brokerage, there may be a great option of borrowing against that investment with an extremely low interest rate. In some cases, you can borrow up to the entire value of your portfolio, with the interest rate as low as 3% (in today's market), and the monthly payments are simply deducted from your portfolio (by automatically liquidating assets). Obviously, you can also just make the monthly payments on your own. In either case, the portfolio continues to grow, and you get the liquid cash, with a fairly minimal cost.

[fairchild1934]

All of that is why I am scratch building. Probably have to know more stuff and have many different small and large skills-- but it take the economic hair-straightening fear out of forking out 80K for a kit. Keep in mind- you can buy a pretty serviceable certified plane for 80K.
Tim
I would NEVER go into debt for something like that------- but I have a great aversion to debt thanks to dave ramsey---- (think you dave-)

[Skyward II]

If you were to spend $250k building a Patrol, you would be upside down by 50% once completed if you were to sell later. Something to think about. Go buy a Husky A1C or Cub type and start flying immediately…

[TrueAirSpeed]

Just took a tour of the Husky plant in Alton, Wy yesterday and the tour guide said that a new A1-C’s price STARTS at $500k. Gulp!

[Skyward II]

Just took a tour of the Husky plant in Alton, Wy yesterday and the tour guide said that a new A1-C’s price STARTS at $500k. Gulp!

Yep. Afton. Used, low hour A1C are readily available…

I live just up the road from the factory. They are all over this valley.

[TJ_Slice]

If you were to spend $250k building a Patrol, you would be upside down by 50% once completed if you were to sell later. Something to think about. Go buy a Husky A1C or Cub type and start flying immediately…

Put me down for at least a dozen brand new, new engine, factory build assist Patrols at $125K. No way they would go that cheap. Not even close.

[Skyward II]

Put me down for at least a dozen brand new, new engine, factory build assist Patrols at $125K. No way they would go that cheap. Not even close.

OK. I’m certainly not here to argue. I’m currently building a Patrol. Last low hour Patrol sold was right at that mark and took several months. I would love to believe mine will be worth more. I’ve been in the buying-restoring/repairing-selling aircraft realm for the last 5 years. The market has been softening for the last year or so.

Trying to pass on sound advice to an inquiry. Thanks for the feedback. I’m listening…

[Battson]

In my experience, most completed Bearhawk kit builds tended to recover their build costs - this is past tense. As long as the builder avoided overcapitalising on things like IFR avionics, or contracted labour. If you built it yourself and kept costs reasonable, you generally got your money back.

That said, things are always changing. Build costs have risen sharply, well beyond normal inflation, due to increases in materials, labour, and import expenses. This is not about kit manufacturers inflating prices; it reflects broader shifts in input costs, duties, levies, and tariffs (don't go there).

The key point is that building today costs nearly 3x what it did a decade ago, while resale values have not increased at the same rate. While factory-made aircraft haven't increased in price tby a factor of 3x yet, time will tell.

The best time to build is always now. The longer you wait, the more it is likely to cost.

You’ll almost always come out ahead building rather than buying a brand-new factory aircraft. That’s the reality of free labour and no certification costs. Currently, it’s about half the price of the nearest competitor. It’s important to compare new-build Bearhawk costs with new factory aircraft pricing; that’s a fair comparison. Used aircraft will always be cheaper, homebuilt or factory.