Type rating passed…! LOL…that isn’t very hard…
At the expense of revealing my profession here…
That loan documentation really doesn’t cover enough information!
By the looks of it, 10.80% is an annual interest amount, hopefully.
Interest is therefore $108,864 p.a. or $9.072 per month. The ‘monthly repayment’ isn’t really a ‘repayment’ but an ‘interest only payment’ - you are not amortising the principal of the loan at all, you are treading water.
We also don’t know how long the facility will be in place and what will happen at expiry - can you extend the term indefinitely or come termination date, do you need to pay the full amount back?
I would definitely find out about the above before signing loan docs in front of some dodgy banker…those guys are up to no good. Yeah.
That’s OK though in this case. I understand the $9,000 per/mo isn’t going on any principle…so I’m not making any progress toward owning the airplane…and that is OK. I just need the airplane to make money per month in excess of the interest to put in the bank so I can eventually buy it outright (or a bigger plane).
So it looks like you are correct - interest only loan, and there is a provision to make additional payments (interest or principle)…so I technically could work on paying down that loan. My goal is to not have it for very long at all though and build up enough cash to buy the plane outright. Maybe. We’ll see…LOL…
Of course…I already did buy the airplane…with the loan money. So I suppose the bank actually owns it in a way. What’s the saying - I owe the bank $10,000, I have a problem. I owe the bank $1,000,000, and the bank has a problem…
The game probably doesn’t model Specific Security Agreements so the Bank doesn’t own the plane, you do
Can you sell the plane back to the market for the same amount of money you bought it for or is there a mileage discount / depreciation of some kind modelled?
If you can sell it back to the market for $1.008m then effectively that $9k monthly payment is a monthly rent and you’ve got nothing to worry about at the back end.
If you will only get say $0.700m back when you sell the used plane, you may want to pay the principal down enough each month so that the anticipated settlement amount is the same as the remaining principal or you’ll have to have the difference available in cash.
I’ll stop now - people will start looking at me weirdly.
This is not your children’s internet.
No, there is a fairly steep penalty for selling it - probably 20 to 25%. Sort of like a new car driving off the lot penalty…
Then they won’t mind the Hello Kitty paint scheme I have planned…
Yes - that will be what I need to do. As a matter of fact, I could take the $431,058 (or most of it…just leaving enough to pay for basic operating costs like fuel and fixed monthly costs) and put most of that back on the principal. I took out the maximum loan (1M) when I didn’t need to. That extra 400K is making my balance sheet look better than it is.
Correct. I assume credit funds don’t earn any / meaningful interest. If so, the simplest way to optimise would be to calculate your comfortable working capital buffer (say 3 or 6 months running cost to be safe) and pay the loan off leaving only the working cap - that cash in the bank does you nothing but the debt has a cost.
Your interest cost will halve so you’ll want to recalculate the cap amount at the reduced debt level to be nice and lean (you’ll need less buffer with ~$4k monthly interest than with $9k).
Then keep paying off the debt with all your uncommitted cashflow until you’ve cleared it. Once you have enough cash that the cash + resell value of the current plane + max debt can buy you the Twotter, max out the debt, sell the current bird and get the Twotter back
Mind you, if we start looking at employing pilots, everything changes…the above just minimises interest cost to get the bigger bird back quicker.
I feel like I owe you an investment advice fee…
Have a kitten…
Man, how I wish Air Hauler 2 was X-Plane 11 compatible, I’d love to ponder these for my own ‘company’.
OK - so last night I took a big chunk of that loan money that was just sitting in my account and paid back $300,000 of it since I don’t need that sitting on my balance sheet. That left me with over $100K in my account just in case I wreck an airplane or something (I’m trying not to do that)…
And today I got back to work - picking up 3 outbound and 2 inbound contracts OG39 - KPDT - OG04 - OG42 - OG39 - KPDT
I actually made a mistake taking the contract for the 3,597 lbs. of mail to KPDT because my new bird can only hold about 3,000 lbs. of cargo and still have enough gas to run about 200-250 nm. That meant I had to go back and forth, but that is OK because you can pick up inbound contracts as well. (The plane doesn’t make any money if it is flying empty!)
Total revenue for the day was an impressive $68,642 over costs (fuel, landing fees) of $874.88. That doesn’t include engine wear and tear of course…I’ll have to figure out what the overhaul costs at the 50 hour marks cost and then divide that out to determine what it is going to be.
So hacking away at the remaining $708,000 loan balance at 60 or 70 grand per flight day shouldn’t take too long to dig myself out of that hole. Sure beats looking at that $100K+ bill every month!
In fact…with nearly $200K in the bank at the moment, I’m really only around 500K from being out of the hole…
And I’m really enjoying the Quest Kodiak - just a fun, easy and honest plane with some nice capabilities. It stops on a dime, can haul a nice load, isn’t near as pitch sensitive in as the Otter, and has overall been a great purchase…!
Blasting off out our home base at Longview Ranch…
Unloading cargo at KPDT…
Over to a little po-dunk strip east of PDT. The Quest has great brakes and reverse - stops in no time even on short, dirt strips…
Back over at Longview Ranch…
Are we seeing some Spring thaw at the lower elevations?
Those screenies are really pretty - I imagine the added detail of the landscapes makes it easier to feel familiar with the area and adds to the immersion. Returning to Longview Ranch probably feels like coming home.
Interestingly, Longview Ranch is a remote enough location that Google Streetview hasn’t visited in 9 years!
How much to buy a Twin Otter and what’s the approximate resell value of the Quest Kodiak?
The Twin Otter is almost $2 Million:
Selling the Kodiak will only get me back $430,000 - the purchase price was ~$860,000 - ouch, that is quite the “drive it off the lot” hit…! That is kind of why I didn’t sell the Cessna 185F back (it is still in my inventory). I couldn’t bear the thought of only getting 60% of its value.
I could staff the 185F with an AI pilot, but I’m sorta aiming to keep this a one pilot operation…
That Kodiak is kool. One day maybe Thranda will update the panel with ice protection. Until that time, the rumor is that you can program a key/button for it and via the magic of X-Plane, you are good to go.
Oh wait, you are in the FSX/P3D Kodiak. Ice protection?
That’s the Kodiak from Lionheart - it does have pitot and anti-ice switches for the engine (I think it is labeled BYPASS - like an ice vane).
Nice. Let’s see.
Max debt $1.008m, Kodiak resell value is $0.430m, hence an additional $0.510m cash required to buy the DHC-6.
Current net position -$0.510m and probably allow for a month’s upkeep so -$0.524m.
A mere $1.034m of flying to get the Twotter back! That’s nothing for MAC. 18 $60k revenue days of flying.
You have the 185F in your backpocket as insurance anyway so you don’t need much of a cash reserve
Hmm…I didn’t need to see this. Apparently Bert Pieke managed to shoehorn that Flight1 GTN into the Kodiak as well… My wallet is quivering…
Ah…stumbled on something today that I had forgotten about. Lionheart made available higher resolution panel textures (DXT5 at 2048 pixels) as an option. I installed those this afternoon and it cleans up the panel nicely for no noticeable penalty…
Before (click on images) (note the lettering over the switches and on the subpanel):
And after…(see how the lettering sharpens up):
I used his mod to replace the MFD with the GTN750 in the Embraer Phenom 300. Works pretty well.