Garmin 430W and notes from 4/08/09 meeting

[Bob Irving]

As I understand it, the simplest way to do this would to make an outright
purchase of 976 from Eagle East. This is how Tim wants to do it as I
understand. Say the price tag EE comes up with was $45,000. We would need to
finance this amount through an aircraft lender. The lender would probably
require a 10% down payment - say $4,500. The balance of $40,500 would be
financed over a period of time - say 10 years at a specific rate of interest
- say 8%.  At the closing, Tim's existing note would get paid off and he
would obtain and transfer title to EEFC.  He keeps whatever "extra" equity
comes out of the deal. Most likely, the lender will require either a
personal guarantee from club officers OR a guarantee from a business entity
- like Eagle East. Maybe both.    

-----Original Message-----
From: eefc-core-bounces at workingcode.com
[mailto:eefc-core-bounces at workingcode.com] On Behalf Of James Carlson
Sent: Thursday, April 09, 2009 2:12 PM
To: toddmbs at yahoo.com
Cc: eefc-core at workingcode.com
Subject: Re: Garmin 430W and notes from 4/08/09 meeting

toddmbs at yahoo.com writes:
> I'm still unclear on the financing part for 976: how would 976 be paid
for?  There is 1. the remainder of the balance on the note, and 2. the
overhaul and upgrades.  If the bottom line cost of the plane is say $40k,
that has to be financed, right or no?  And if so, does the current note get
refinanced?  And does EE keep the note under it's name or is it transferred
to the club?  In either case, Tim or EE would still have to keep their name
on it as a guarantor - which really shouldn't be a problem for Tim because
he has nothing to lose by doing so, the plane is already his right now
anyway.

My understanding of what was said was that we'd pay off the note
balance (to EE's bank), EE would transfer title to us, and we'd pay
them a monthly amount to cover their current equity in the aircraft
(market value minus remaining note balance).

Since the amount left on the note is largish ($12K-$18K), we'd
probably want to finance that as well -- meaning that we'd end up
having two note payments each month, one to a bank and the other to
EE.  The sum of those, though, would likely be equal to or less than
we'd pay to a bank to finance the whole thing.

The bonus for us is that it may be easier and much less risky to the
club members to finance that amount than to finance a whole $60K for a
different aircraft.

If the club went down in flames, we'd be personally liable for a
proportion of the $12K to $18K (say a debt of around $2K to $3K each;
still financed), and we'd need to figure out what to do with the plane
(in our name) and EE's monthly payment.  The most logical choice would
be to give the plane back and have EE assume our remaining balance.

(Less a small fee for having blown the deal.  ;-})

-- 
James Carlson         42.703N 71.076W         <carlsonj at workingcode.com>
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