March 22, 2024 • 33 mins
Welcome to the Ultimate Jet Guide! In this video, we delve into the world of private aviation and aircraft leasing with our special guest, Zach Purvis of Aviation Ape. Discover how you can turn aircraft ownership into a lucrative passive income stream with Zach's expert insights. ✈️
Thank you to VREF for sponsoring this video. Get 10% off of VREF 3.0 here:
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Visit Zach Purvis' Course:
➡️https://profitableplaneleasing.teachable.com/p/profitable-plane-leasing-passive-income-in-aviation
In this episode, we cover:
• Learn how to leverage aircraft ownership for tax benefits and passive income. 💼💸
• Explore the benefits of aircraft leasing for both owners and operators in the private aviation market. 🤝✈️
• Zach shares his personal journey into aircraft ownership and how it led to a thriving business model. 🛫📈
• Gain valuable insights into the process of acquiring and financing aircraft, including private loans and funding sources. 💳💡
• Understand the operational costs and revenue potential of light sport aircraft for leaseback agreements. ⚙️💵
• Zach breaks down the financial figures, including acquisition costs, direct operating costs, and revenue projections. 💰📊
• Learn how aircraft leasing benefits flight schools and students by providing access to modern, cost-efficient training equipment. 🎓✈️
• Discover the mutually beneficial relationship between aircraft owners and operators in enhancing safety and efficiency in aviation training. 🤝🔧
Don't miss out on this comprehensive guide to unlocking the potential of aircraft leasing for passive income and investment opportunities in the private aviation industry. Subscribe to the Ultimate Jet Guide for more expert insights and insider tips! 🛩️🔍
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
So you're telling me that I can buy an aircraft.
I can take it as a taxwrite-off, maybe use it to learn
how to fly in or for personaluse.
It's very similar to Airbnbarbitrage and you can show me
how to do this in two minutes.
Speaker 2 (00:14):
Yes, sir, 100% sure can.
Speaker 1 (00:16):
Sorry for the interruption.
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.
Hello everybody and welcome.
My name is Tom Lelio.
I'm your ultimate jet guide andtoday we're pulling back the
(01:22):
curtain on private aviation whenit comes to aircraft leasing.
How this can be a benefit foryou and for other people as well
.
We have brought in the man, themyth, the legend, Zach Purvis
of Aviation.
Abe Zach, thank you so much forbeing here today.
Speaker 2 (01:36):
Hey, tom, thanks for having me on.
So yes, you can absolutely.
Speaker 1 (01:40):
I did not mean to cut you off on that, on that intro
man.
Speaker 2 (01:45):
Go ahead.
Yeah, so you can absolutelylearn passive income.
And aviation is exactly likeyou said, just like real
arbitrage, more like acommercial real estate.
So you buy an airplane, youfind an operator to match that
airplane to and lease it back tothem at an hourly rate.
You set up your lease exact waywhere you'll have monthly
(02:08):
minimums.
You have a guaranteed monthlyincome that you're getting off
that and you can structure thatits way to make sure that you're
profitable on that.
There's a big demand for it.
I'm getting calls almost everysingle day from operators trying
to find planes to match fortheir leases or for their flight
schools.
The training out there is inthe form of the planes is really
(02:30):
obsolete.
Most planes are these like Istarted in 1965, cessna 150,
avionics are out of date, notgoing, and you know they need
these planes to have the qualityof training for the aircraft.
You know to charge for whatthey're charging to fly these
things.
So, whenever you buy an airplaneyou can find an operator.
Match it to lease it back at anhourly rate.
(02:52):
You're getting passive incomeout that get huge tax incentives
off of it.
There's an appreciationschedule you can have.
You can also write off the themain is the fuel, the oil, the
insurance, so on, and most ofthat you can get the operator to
actually cover.
It is truly by the airplane.
Match it to an operator, sitback and start collecting income
(03:14):
and write off the asset base.
Speaker 1 (03:16):
Gotcha.
Okay, very cool, very cool.
So let's talk about, like, whatwas this journey like for you?
What got you into this?
Was this because you were justlooking for another investment
vehicle, another business, ordid you have a personal stake in
buying an airplane that youknow you're like?
Okay, well, if I'm going tohave to buy an airplane anyway,
I might as well look into andsee if there's a business
(03:38):
opportunity here as well.
Speaker 2 (03:40):
Well, it was actually all situational so I was just
getting my own private policylicense.
I just had an interest in it.
I always wanted to learn how tofly an airplane.
So I went to my local flightschool.
Actually a new guy that ownedthe school so I had a connection
there got in with them, startedflying and ran into exactly the
(04:00):
plane situation In an old 1965,cessna 150, radios weren't up
to date so I couldn't do mycross country time in it.
There was an all records allover the place, you know, and
then they only had that oneplane and a ton of students.
So every time that plane wasgrounded for maintenance I was
getting pushed back on thebacklog, other students were
getting pushed back on theschedule and you're just more
(04:23):
time than between flying.
You're spending more money.
You know they do say you fly asmuch as you possibly can
because it's not like riding abike.
You know it's a very skill thatyou lose.
Right.
So you know, solid demand wasthere.
I just went straight to the guythat owned it.
(04:44):
I was like, listen man.
I was like, if I just buy youan airplane, can you get rid of
this one and use this one foryour school?
I'll get you a brand new one.
You know, make sure it's it'sup to date, it's good, it won't
be down for maintenance everyother week and and we can, you
know, get this, this license,done for me and everybody else.
And they were like ecstatic theywere.
You said, yes, want to do that.
We've been looking for somebodyto do that.
(05:04):
We need more planes.
We have more students than weknow what to do with and our
planes always down, so we'relosing money.
So, yes, so I startedresearching it, looked into it
myself, found out that you knowAircraft leasing it actually is
a thing.
It's a more prevalent in thecommercial space with, like
airlines mostly Don't even owntheir own planes.
(05:26):
There's air lease capital.
There's a general electricaviation that leases a lot of
planes to American Airlines.
There's a B O C Aviation a lotof the big players out there but
there wasn't a Model or abusiness like that really for
general aviation, and so I sawthere.
Speaker 1 (05:45):
So just to be clear then so when, when a flight
school needs a plane, they'vegot a few, only a few options.
They can buy it themselves,which is going to be a large
capital investment, and mostflight schools just don't have
that lying around, or they canget it from somebody else.
And so in this case, you, youwere coming to them like a, like
(06:07):
an angel, being like, hey, Ineed to buy a plane anyway, but
you know, I want to offset mycost, so I would be willing to.
You know, lease the aircraftback to your, so my company will
lease the aircraft back to yourcompany.
Y'all use it, y'all take careof it, and then you pay me a
Lease amount that will offset my, my overall cost.
(06:29):
And those are the two main waysthat most flight schools Get
their aircraft.
But there's not a lot of peoplebanging on their door right now
.
That's like, yeah, I've got ahundred, two hundred, three
hundred grand to just give you,to give you a mobile asset that
you know who knows what you'regonna do with that.
I mean, you're gonna put a lotof wear and tear on it Because
(06:49):
you're constantly flying it.
You've got inexperienced pilotspiloting this thing.
I mean, there's a lot of riskthat goes into.
We can talk about that later.
But those are the two ways thatthat, that that flight schools
get their aircraft right, andyou're just kind of stepping
into one of those exactly.
Gotcha and so now okay.
So yeah, tell us kind of alittle bit more about how that
(07:10):
works.
Obviously, you said it's kindof already set up on the
commercial side and now you kindof want to.
You know, part of your businessmodel is sharing with people
how to do this on the generalaviation side.
Obviously, it has been done inthe past.
I mean, if you're in theaviation circle you probably
know somebody who does it, butit's very hard to find
information on this stuff.
So I know we're going a lot ofdifferent directions.
(07:30):
So once you just tell us howdoes it, how does it work, what
does it look like, what are the,what are some of the risks that
people need to be aware of ifthey choose this route to go,
you know for that, for theaircraft right.
Speaker 2 (07:41):
So there are people out there that will lease their
own Aircraft to kind of likeoffset their costs.
Like if you're getting your ownpilot's license or even you're
all the way to instrumentcommercial, you should could buy
an airplane, lease it back to aflight school and Just you pay
for what you use, basically, andwhatever they make money off of
will offset your cost.
And a lot of people would dothat break even or or just lower
(08:04):
their cost on that.
Now, that's a good option to do, is not bad at all.
But a lot of people that dothat they own a plane, they
bought that plane for themselves, and Lot of a lot of pilots out
there look at the plane as asthey're bait.
You know I mean like they're.
You're mostly involved andattached to that aircraft.
(08:24):
So being a trainer plane yes, astudent, you know has a hard
landing.
You know side loads the plane,you know Anything you could
think of.
You know what I mean.
You know those things can'tarrive.
You know even getting into theplane you're messing up the
interior, anything like that.
You know those problems canarise and if you look at that
plane like it is your baby it's,you're gonna have a whole lot
(08:47):
of heartache for the entirething, but at the end of the day
, if you look at it like it is amoney-making asset and you're
doing this as a business, thatis how this was really gonna
benefit Anybody that wants toget into it.
Because the way you set up yourlease, the the flights will.
You lease your plane to.
They have interest in thataircraft and to keeping it nice
(09:08):
and keeping it up and you canput that into your lease well to
to ensure that it's it's heldto a good quality.
Because if they, if Somebody,messes up the plane say they
side loaded, say you know thetire goes flat, they wear the
brakes out or what have youright the flight school has to
take responsibility and get thatplane back up and running again
(09:29):
and Able 100% to make sure thatthey're able to keep flying and
keep producing income.
It's not on the owner, it's onthe operator.
So I set that up in my leasesthat way strategically.
Same like in commercial realestate.
If you had a strip mall withwith three different offices in
it and like a barber shop, adollar general and a grocery
store, and I wanted to open up abarber shop in there and the
(09:53):
plumbing started leaking in theback, I don't call the landlord
and say, hey, the plumbingmessed up.
I need to come over here, fixit's in my best this is the
business to make sure that it isstill up and going.
So you hire your owncontractors come out there, fix,
fix your asset that you'remaking money with to keep it
going.
So it's kind of the same modelwith that but with aviation.
So you do this as far as youknow, if the Unfortunate knock
(10:17):
on wood, if there's an accidentwith the plane or any other
incident like that Something wedon't ever want to think about,
but it is real life it couldhappen.
But we have process proceduresin place for that to make sure
that if it was to happen, you're100% covered, your assets
covered in your liability.
Speaker 1 (10:35):
Do you have any?
Do you have any trouble gettinginsurance for an aircraft
that's gonna be, you know, usedin this capacity, or do you just
go on the the schools insurance?
Speaker 2 (10:47):
Correct.
Yeah, so I don't get theinsurance on the planes that I
have, strictly because of cost.
Because if you get insurance onMultiple, if you have one and
you're just starting out, it'sprobably not a bad idea,
especially if you're already apilot and you have hours and you
can get a decent insurance rateon there.
But what the way I do it?
Because I don't want to haveany lot liability as far as
(11:09):
insurance on the planes, I haveit in my leases that the
operators all the flight schoolsor clubs or other vacation
programs I'll listen to havetheir own insurances on there
and I make sure they havecertain mandates.
You know, per plane Wholevalues in different liability
coverage.
Just make sure if anything wasto happen with both protected.
Speaker 1 (11:27):
Got you Okay.
Well, what I want to do is Iwant to hear a little bit more
about the, the figures.
You know, what is an airplanecost?
What are the operating costs,what's the hangar cost, the
fixed cost and we'll go intothat in a second and and, and
you know, is it possible forsomeone to actually generate?
Well, what, what the incomelooks like, and maybe is there a
(11:51):
profit, not a profit, or is theprofit just in?
You know the taxes.
So let's talk about figures,but before we do that, I want a
quick cut to a quick commercialbreak.
So one.
Speaker 2 (11:59):
Thank you so much for watching.
Speaker 1 (12:00):
If you haven't already, go to circle a dot a
jet life arrow, calm and checkout our online community for
aspiring brokers and currentbrokers.
Here You'll find discussions,all thing Aviations based things
that you're going to want toknow as an aircraft broker.
You can also check out our freetraining as well as more
(12:21):
resources that are available tohelp you to become a better A
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That's circle dot, jet lifearrow, comm to begin your
journey within the brokercommunity, absolutely free, you
All right.
So that's pretty cool.
I'm really liking the streamingsoftware stuff going on here
Pretty fancy, but yeah so.
(12:43):
So, zach, tell us a little bitabout, like the, the, the fact,
the numbers, the numbers behindthis game that we're playing, so
we kind of get more of aconcrete idea of what we're,
what we're walking into.
Speaker 2 (12:54):
Absolutely so.
I'll just use my.
The very first plane I got, forexample, it was a 2022 Pipistro
Alpha trainer.
So I had that plane, boughtbrand new.
It was built and finished inItaly, then shipped over here
and then finally got it overhere to me.
That plane cost a total of$150,000.
That was the total purchaseprice, everything all included.
(13:15):
Out the door.
I had to pay for theimportation and then the the
taxes getting it here, but otherthan that, that was really all
of my upfront costs.
That's all I came out of pocketwas a total of $50,000 for the
very first one, and I will saygetting that first plane was the
hardest financial thing I everhad to do.
I called probably a hundreddifferent banks.
I went to every funding sourceyou could possibly think of and
(13:40):
that's what made me learn thereare a lot of other ways to get
funding for these planes andsizes banks there's a ton, and I
found almost every single oneof them.
Speaker 1 (13:49):
So can you elaborate on that?
Are you talking about privateloans, or are you talking about
specific banks that you need togo to, or can you elaborate a
little bit on that?
Yes, unless it's in the courseand they have to they have to
pay for that information.
That's fine too.
Speaker 2 (14:02):
Yes, yeah, it's all in the course as well, but, yes,
there is a bunch of differentways.
So you have private investors,there's government loans,
there's SBAs, if you're aveteran like Sure Okay, yeah.
Fun of veteran resources outthere as well.
And then there, if you findanybody that just wants to get
in on it with you, you can findprivate investors that you can
(14:23):
get.
Hard money loans are out there.
That's what I did for my veryfirst one.
It was a hard money loan to getthe plane here because no bank
wanted to touch it until it wasactually on American soil
because I was having an impactGotcha.
So finding financing for it wasa huge, huge challenge.
So I found one private person,wealthy individual, had an
(14:44):
interest in aviation.
He believed in what I was doingand he upfront gave me the
money super high interest rate.
But as soon as that plane gotthere plane got there 30 days
after.
I took that note with him paidPipistrel off cash plane,
received it in my hangar in ashipping container and as soon
as it was there my loan camethrough that day, paid him off
(15:06):
and then I just had my regularloan with the bank that I was
financing.
Speaker 1 (15:10):
Nice yeah, and what kind of aircraft was that again?
Speaker 2 (15:14):
That was the Pipistrel Alpha trainer.
It was the 2022 Alpha trainer.
Speaker 1 (15:17):
Are they not in production anymore?
Speaker 2 (15:19):
No, they're still in production.
They have like a.
They're actually just signed onwith a Mesa Airlines right now.
So Mesa Airlines is the airlineout of Mesa, Arizona, and
they're training all of theircadets out of Inverness, Florida
, at Wright Rudder.
They bought about 30 of thoseplanes that they're having all
of their commercial pilots buildtheir 1500 hours on.
Speaker 1 (15:38):
Okay, so this is what we're talking about, right.
Speaker 2 (15:40):
Yep, that's it right there.
Just the same picture that's onthe profile of the course with
that car on there as well.
Speaker 1 (15:47):
Gosh, it's like a, it's like a 152, but like from
2022.
Speaker 2 (15:52):
Basically, it's my favorite plane that I fly.
That's the one I fly myselfregularly every week.
Where do they run?
That's a $150,000 plane.
Speaker 1 (16:03):
Okay.
Speaker 2 (16:05):
Well, in 2022,.
I think they've raised theprices a little bit since then.
How fast do they?
Go, so that plane will cruiseat about 120.
Speaker 1 (16:14):
That's faster than a 172.
That's awesome.
Speaker 2 (16:17):
At four gallons an hour.
Speaker 1 (16:19):
At four gallons an hour, that's a great training
aircraft.
Okay, and is this the kind ofaircraft that you recommend
people are targeting?
Speaker 2 (16:26):
Yeah.
So I specialize in light sportaircraft just because you can
get newer planes, Yep Way betteravionics at a way less fuel
burden.
The maintenance on them is farless as well, because all the
light sports that I use they'reall Rotax 912s.
So whenever you get into likethat, TBO times because you have
(16:46):
to look into your costs as wellso 2000 hours for TBO on the
Rotax 912, you can get a brandnew Rotax 912.
Cost is right around the low20,000 mark and then you sell
your poor for 10.
So you're basically getting abrand new motor for right around
the 10 to 12, $13,000 mark andthen you have in your leases.
(17:07):
Well, every flight school alsohas a maintenance bay.
They're taking care of theirmaintenance.
So you have their maintenance.
Guys take care of the TBOwhenever it comes time to that.
So you're getting maintenance,basically the cost when you're
paying for course.
Speaker 1 (17:20):
Okay.
So I mean, are these lightsport aircraft useful for flight
schools that may have trainersthat or, I'm sorry, students
that want to go all the way upinto flying you know commercial
in the 737s?
Can they use these trainers ordo they require, like a
certified?
You know light sport, but Iforget what you would call it,
(17:41):
like a 172 or a 150.
Speaker 2 (17:44):
Right.
So the way light sports work,you can actually go with zero
never being able to fly a planeto being a commercial pilot in
any in one in that plane or theother two light sports that I
had, as long as they're TAA.
So all three of my planes areTA aircraft, so technically
advanced.
So you can do your privateinstrument commercial.
(18:06):
The only caveat to that is youcan't go into actual IMC and a
light sport aircraft but you cando your IFR training in a light
sport aircraft.
There's no regulation in youractual instrument training
saying that you have to actuallydo IMC, so you can do all of
your training under the hood.
It is equipped, it has the VOR,it has all the equipment to do
(18:26):
your instrument commercial.
Speaker 1 (18:30):
Right.
So from the investor standpoint, these light sport aircraft
that you're dealing with, youknow, around 150, maybe up to
what 200,000, if that.
Speaker 2 (18:42):
Right around.
Well, that would be if you wentto the 200,000 mark that you're
getting.
You're getting a lot of playingfor that money, especially in
the the light sport of rain.
Okay you can get a very, very,very well equipped aircraft that
will make you money and takeyou anywhere you needed to go in
, and I would say between underthe $200,000.
Speaker 1 (19:01):
Sure, okay, so, okay.
So for the investors, theydon't have to worry that they're
buying a light sport and that'sgoing to somehow hamstring them
in who they can, you know,offset or lease this aircraft to
.
So let's talk about morenumbers.
So acquisition costs roughly$150,000, $200,000.
It's four gallons an hour.
What are the rough estimatedirect operating costs for these
(19:23):
light sport aircraft?
And the direct operating costs,just for everybody knows, are
the costs of, you know,operation, like whatever comes
out the tailpipe, so your fueland that sort of thing.
So what are we looking at?
Direct operating cost wise.
Speaker 2 (19:35):
Right.
So you're looking at about, youknow, four gallons an hour that
it burns on there, the rest ofthe oil, hanger, maintenance and
the insurance, everything Ihave nothing to do with.
I put all of that onto myoperators so take care of all
the operational expenses.
So out of that hourly rate thatI get, that is a flat hourly
rate.
There's a couple of differentways that you can do leasebacks
(19:56):
that I've looked up.
The most common one is an 80-20split where the owner gets 80%,
the operator gets the other 20%, but out of your 80% comes out
the insurance, the maintenance,the hanger, the fuel, the oil
and so on and so forth, all youroperational costs.
So some months you could havehigher income, some months you
could have lower income,depending on what the
(20:17):
maintenance was for that month,and so on and so forth.
So I wanted to negate that,just to make it as easy as
possible.
That's my number one thing.
You just want to make super,super simple, so I just did a
flat hourly rate lease.
So I have in my contracts thatthey owe me a minimum of 40
hours a month at a X dollaramount per hour on the plane.
(20:40):
So no matter what, I'mguaranteed that dollar amount
times the 40 hours that the endof the month.
If they go over that, that'sgreat.
It's extra income.
Speaker 1 (20:48):
If they don't fly the plane that month, or they're
down for maintenance or theweather was just bad, so on and
so forth, you're stillguaranteed your 40 hour minimum
and the benefit to the last seeon that and the operator in that
situation is let's just sayit's $100 an hour, is what you
put on there, just for easy math.
They can charge whatever theywant above that, so they're in
(21:12):
charge of their own incomestream.
That's why that might be abenefit to somebody over the 80,
20, because no matter how muchthey charge like yeah, they're
making more, but there's thatsplit, so they're still
incentivized, even though you'regetting your guaranteed 40
hours, because they can justpack on as much as they want.
Speaker 2 (21:32):
Right.
Speaker 1 (21:33):
Gotcha Okay.
So we're looking at theacquisition costs and now we're
looking at the direct operatingcosts.
You're getting your hourly, sowhat does the revenue look like?
Speaker 2 (21:48):
Yeah, so the first plane I got actually bought me
that corn that was in thepicture.
That plane pays for that carmonth after month, every single
month.
The payment on that plane justthe one, for example, the first
one is $750 a month.
That one plane brings me inevery month passively between
$2,000 to $3,000 a month,depending on how much it flies.
(22:09):
Nevertheless that's the absoluteminimum that it always brings
in and it's done very, very well.
So it's paid for my car.
It's paid for itself the planepayment, and then it's helped me
increase my revenue to be ableto get more planes.
So after I got that one, I gotanother two planes within a year
(22:30):
and a half after that.
So that was three planes inless than three years.
Speaker 1 (22:34):
Gotcha, and you're in a frothy market too, so I mean
it's not like there were toomany deals to be had, but I mean
you found them, you sourcedthem and that's a testament to
your work ethic and things thatyou're learning from sources
online like Aircraft BrokerAcademy and hopefully some Jet
Life Arrow stuff, so that'sawesome.
So now you've done it, so whynot show others how to do it?
(22:59):
Because I think it's mutuallybeneficial for the guy who owns
the aircraft, the asset andflight schools.
Because, let's be honest, whenI was learning from my private
pilot license, you're operatingon stuff from the 1900s, you
know, a century ago.
So you know there's a benefitto everybody where, if we have
(23:19):
investors like yourself, youprovide the students with better
equipment to learn on saferequipment, more cost efficient
equipment.
Because I'm just out ofcuriosity, like you know what is
what's like an annual?
Well, you don't have to worryabout the maintenance bill
because the operator has toworry about it.
So the overhaul and everythingis going to be on the operator.
Speaker 2 (23:38):
Right.
Well, the only thing that is onme is, exactly as I said, the
TBO overhaul.
So I have that on a 60-40 splitwith my operators.
So the way I do it, I'll justgo ahead and tell you.
So on the one plane I have, Ido 65 bucks an hour for every
hour it gets leased.
So I take the 65 bucks an hour.
The TBO time is 2000 hours, soover the one engine lifetime is
(23:59):
going to be $130,000.
So if I had to cover the entireengine overhaul and didn't sell
the core at all, it cost mebetween 20 and $25,000.
After it's still the core,between 10 and $15,000.
That out of the $130,000 profitis nothing.
Speaker 1 (24:15):
Yeah, so you have to be disciplined that you're
putting that engine reservesaside from your profits.
Speaker 2 (24:22):
Right.
Speaker 1 (24:23):
Yeah, so you just kind of and that's in any kind
of lease kind of a situation,real estate, whatever so, yeah,
so, okay, great, so you're doingthis, so let's kind of go
through this.
Tell us a little about thiscourse that you got going on
here, man.
Speaker 2 (24:36):
Yeah.
So when I started doing it, Ijust it's an untapped market.
And what really led me to startthe course is all of the demand
that I've been getting.
I get calls and DMs onInstagram, facebook, you know,
TikTok, all over the place,social media, everything about
these flight schools that findme and saw what I'm doing and
(24:58):
they want to do the exact samething.
They want to get more planesfor their flight schools because
they can get better quality oftraining, get more pilots, make
more money and just keep thatthing flying more there and get
more variety of aircraft.
If you're going to get a start,a flight school, with one
airplane, you can only do somuch, and then, once in a while,
I mean just.
Speaker 1 (25:19):
I mean just very, very like yeah, you're very
limited.
Speaker 2 (25:24):
Right.
And if you're limited that intothat aspect, what else are you
going to do?
And if you're going to be inany kind of business, a business
is develop the scale.
You want to scale, you want togrow.
And if you can work withsomebody else that can get the
money-making asset for you andyou're only paying for what
you're using, then it's awin-win for everybody.
And I'm all about win-wins.
That's the number one thingI've always learned in sales If
(25:47):
you can help somebody else getto their goal, they'll
ultimately help you get to yourstoo.
So the way I'm seeing all this,I get these operators that are
calling me saying they want theplanes, they want to do it, and
I single-handedly I can't caterto every single one of them and
get every single plane for everyflight to go out there, but I
100% can teach people how to doexactly what I did, because
(26:08):
there was nobody out there toteach me.
I can teach them exactly whatto do how to set up the business
, how to set up the taxstrategies, how to set up the
leases and the business plan anddo exactly what I'm doing and
connect them to the operators sowe can help get these planes to
them because it's really whatthe industry needs.
The pilots deserve it, theflight school is needed and you
can develop a really healthypassive stream of passive income
(26:31):
in this situation and it'sunsaturated.
You go to Facebook, instagram,all the social media, and you'll
see ad after ad after ad afterad for dropshipping and Airbnb's
and Renoir Petrage and all thisother kind of stuff, and
there's nobody I mean, I don'tknow any other person out there
(26:51):
besides myself and you know AirLease Capital.
That's leasing airplanes forpassive income individually, for
themselves, and especially notsomebody that started a business
doing it.
Some people that have their ownindividual plane to do it to
offset their own cost, but notdoing this as a business.
Just make straight passiveincome and help provide for the
(27:12):
future of aviation.
Speaker 1 (27:14):
Yeah, man, I appreciate that and I feel like
in a lot of ways, this isaviation.
Right, people are doing this.
They've been doing it since the1970s and 1980s.
But what I find awesome aboutwhat you're doing is you're
bringing it to the light.
Like I say here, you're pullingback the curtain on private
aviation, on general aviationand how the business works.
(27:36):
So my hat's off to you.
You know a kindred spirits inthat regard.
I mean, just as we kind of wrapup, I would just say two quick
things, obviously.
Number one this is notfinancial advice.
This is not like a get richquick thing.
You know, we're not, you know,advisors.
We just teach what we've doneright.
So even with JetLife Arrow,when I'm training someone how to
be a broker, like I can trainyou how to make half a million
(27:59):
dollars a year, because I'vedone that.
If you want to make a milliondollars a year as a broker, well
, maybe we'll figure that outtogether.
But I think most people wouldeven be happy just to start out
100, 200, 300, $500,000.
Like I can help you, like I'mthere for you, right?
And so you're kind of doing thesame thing.
You're pulling back the curtainand I think that's you know,
(28:20):
and add to this if you like,zach.
But I think the biggest thingyou have to worry about, you
know, is just this idea that youknow you own an asset.
That asset can be damaged, itcan be manipulated, it can be
whatever.
It's a mobile asset, it'sflying up in the air and like
you could lose all your money.
But we're talking, you know, atthis point, you know under 200
(28:41):
grand, which in the grand schemeof things is not a ton, and
you're insuring it and theflight school that you're given
it to is insuring it.
So you know, I think that'skind of your biggest risk.
You kind of have this risk ofyou're putting people in your
asset, you know, and so you'retrusting that the operator is
going to keep those individualssafe.
So you know, that's somethingyou might want to be aware of
(29:03):
because, god forbid, somethinghappens and there's someone
injured.
I mean that might weigh on yourconscience.
That's the thing withdropshipping.
You know, if someone doesn'tget their package, it's not like
they died, you know.
So that's something to considerI'm just trying to think of.
You know horror stories that wecan kind of say like this is
why you wouldn't want to do it.
Maybe you don't have the time,maybe you don't have.
(29:23):
You know, it's because you gotto go searching for stuff, right
, zach?
I mean, that's part of the partof the course is like, how do
you find these assets?
It's not like they can just,you know, be delivered to you
and you got to have the incomeor the money to do it, because
you're buying an asset or getaccess to, like you said,
private equity and be kind of abroker situation.
Are there any other horrorstories or disclaimers you want
(29:45):
to just kind of toss out there?
Speaker 2 (29:47):
Yeah, absolutely so.
There's definitely some riskinvolved, just like any other
business that somebody wouldwant to start.
Just like what you're saying,you have damage to the aircraft.
Unfortunately, if somebody isto get injured or hurt and yet
that definitely would weigh onmy conscious 100%.
I mean, the number one thingthat we want to do is provide
(30:08):
for the future of aviation andmake more pilots, not take any
away from this world.
So, yes, that's a major, majorthing and I appreciate you
bringing that up.
So the insurance is make sureyou're 100% covered.
On that, you protect yourselfand then you're also protecting
everybody else.
So if anything is to happen,that everybody gets, you know
(30:28):
what they're entitled to andnobody's out there left to hang,
because that's not what anybodywants to be about and that's
not anybody wants their day one.
As far as that you know.
You go into other risks.
You have defaults like, say,you're leasing your plane to
somebody and starting out yeah,they were a great guy just like
renting an apartment to somebodyor renting a house to somebody.
Speaker 1 (30:49):
True, yeah, and you know.
Speaker 2 (30:52):
Then they stop paying you or say there's a weather,
say a hurricane comes throughand nobody's flying at all and
there's nothing anybody could doto help that.
But you still have in yourminimums.
You know you have this plane.
You have to be able to be ableto deal with these things.
So one way I've been able tonegate that and think God, I
(31:13):
have not been in that situation,either an accident or a default
.
But it's just keeping clear,concise communication and
setting expectations for peopleand making sure everybody's on
the same page.
So whenever I'm doing my leases, the default would probably be
the number one thing I would saywould be a major risk, and
(31:35):
that's just knowing who you'redealing with, having the right
expectations right from thefront and having it set up in
your lease that everybody knowswhat's on the same page, who's
responsible for what when thepayments actually do.
Hmm not paid and not waiting onyour money.
So when you're doing it, Iwould say that would be probably
the a major, major risk there.
(31:56):
Other than that, I have notcame across any.
This thing has been a blessingfor me.
I've been very, very fortunate.
I've been doing it now forthree, going on four years, and
I have not come into Anything.
Really that has drawn me back.
Thank, thankfully, knock onwood with that, but we always
prepare, you know.
(32:16):
Prepare for the worst and hopefor the best, you know.
So, yeah, that's kind of whatI've been doing with it all, and
just keeping good communicationwith my leases as well, not
just forgetting about them,making sure everybody's happy
and that you're in the loop oneverything, and that way you can
stay ahead of all and reallynegate any risk that can come
rise for sure, for sure.
Speaker 1 (32:35):
Well, that's awesome and well, yeah, no, I Really
appreciate you coming on Today.
So how can people get to thecourse?
What's like?
What's the place that theyshould go?
Just Search for it on teachableor what?
Speaker 2 (32:47):
Yeah, so it's on.
Teachable is a profitable plainleasing passive income and
aviation.
You can find me at aviation 8on Instagram.
Also.
Zach Purvis on Facebook and Ihave links in my bio is on there
as well.
Anybody that's interested feelfree to reach out.
Send me a DM, instagram,facebook.
Either way, I'm more than happyto talk to anybody letting me I
(33:07):
know more information about it.
I'm happy to jump on a callwith anybody to talk to about it
to dance me pushes they mayhave.
The ultimate goal is to Allowthe lowest barrier of entry into
this course right now, beforemy cost goes up as I'm actively
building it.
I want to get as much people inthere as possible.
Have everybody learned this?
So we can really provide forthe future of aviation and get
better planes for these pilotsand Make money in the process
(33:30):
doing it?
Speaker 1 (33:31):
That's awesome.
Okay, cool.
Well, zach, thank you so muchfor joining us today.
I really appreciate all yourinsight and we look forward to
your future success, followingit and Connecting with us in a
couple of a couple of months inthe future.
Speaker 2 (33:42):
Yes sir.
Thank you so much, Tom you.
So you're telling me that I can buy an aircraft.
I can take it as a taxwrite-off, maybe use it to learn
how to fly in or for personaluse.
It's very similar to Airbnbarbitrage and you can show me
how to do this in two minutes.
Speaker 2 (00:14):
Yes, sir, 100% sure can.
Speaker 1 (00:16):
Sorry for the interruption.
I just had the opportunity tospeak with Jason Zilberbrand
over at VREF and they arelaunching their brand new VREF
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(00:59):
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Thank you so much for youreffort for sponsoring this video
.
Hello everybody and welcome.
My name is Tom Lelio.
I'm your ultimate jet guide andtoday we're pulling back the
(01:22):
curtain on private aviation whenit comes to aircraft leasing.
How this can be a benefit foryou and for other people as well
.
We have brought in the man, themyth, the legend, Zach Purvis
of Aviation.
Abe Zach, thank you so much forbeing here today.
Speaker 2 (01:36):
Hey, tom, thanks for having me on.
So yes, you can absolutely.
Speaker 1 (01:40):
I did not mean to cut you off on that, on that intro
man.
Speaker 2 (01:45):
Go ahead.
Yeah, so you can absolutelylearn passive income.
And aviation is exactly likeyou said, just like real
arbitrage, more like acommercial real estate.
So you buy an airplane, youfind an operator to match that
airplane to and lease it back tothem at an hourly rate.
You set up your lease exact waywhere you'll have monthly
(02:08):
minimums.
You have a guaranteed monthlyincome that you're getting off
that and you can structure thatits way to make sure that you're
profitable on that.
There's a big demand for it.
I'm getting calls almost everysingle day from operators trying
to find planes to match fortheir leases or for their flight
schools.
The training out there is inthe form of the planes is really
(02:30):
obsolete.
Most planes are these like Istarted in 1965, cessna 150,
avionics are out of date, notgoing, and you know they need
these planes to have the qualityof training for the aircraft.
You know to charge for whatthey're charging to fly these
things.
So, whenever you buy an airplaneyou can find an operator.
Match it to lease it back at anhourly rate.
(02:52):
You're getting passive incomeout that get huge tax incentives
off of it.
There's an appreciationschedule you can have.
You can also write off the themain is the fuel, the oil, the
insurance, so on, and most ofthat you can get the operator to
actually cover.
It is truly by the airplane.
Match it to an operator, sitback and start collecting income
(03:14):
and write off the asset base.
Speaker 1 (03:16):
Gotcha.
Okay, very cool, very cool.
So let's talk about, like, whatwas this journey like for you?
What got you into this?
Was this because you were justlooking for another investment
vehicle, another business, ordid you have a personal stake in
buying an airplane that youknow you're like?
Okay, well, if I'm going tohave to buy an airplane anyway,
I might as well look into andsee if there's a business
(03:38):
opportunity here as well.
Speaker 2 (03:40):
Well, it was actually all situational so I was just
getting my own private policylicense.
I just had an interest in it.
I always wanted to learn how tofly an airplane.
So I went to my local flightschool.
Actually a new guy that ownedthe school so I had a connection
there got in with them, startedflying and ran into exactly the
(04:00):
plane situation In an old 1965,cessna 150, radios weren't up
to date so I couldn't do mycross country time in it.
There was an all records allover the place, you know, and
then they only had that oneplane and a ton of students.
So every time that plane wasgrounded for maintenance I was
getting pushed back on thebacklog, other students were
getting pushed back on theschedule and you're just more
(04:23):
time than between flying.
You're spending more money.
You know they do say you fly asmuch as you possibly can
because it's not like riding abike.
You know it's a very skill thatyou lose.
Right.
So you know, solid demand wasthere.
I just went straight to the guythat owned it.
(04:44):
I was like, listen man.
I was like, if I just buy youan airplane, can you get rid of
this one and use this one foryour school?
I'll get you a brand new one.
You know, make sure it's it'sup to date, it's good, it won't
be down for maintenance everyother week and and we can, you
know, get this, this license,done for me and everybody else.
And they were like ecstatic theywere.
You said, yes, want to do that.
We've been looking for somebodyto do that.
(05:04):
We need more planes.
We have more students than weknow what to do with and our
planes always down, so we'relosing money.
So, yes, so I startedresearching it, looked into it
myself, found out that you knowAircraft leasing it actually is
a thing.
It's a more prevalent in thecommercial space with, like
airlines mostly Don't even owntheir own planes.
(05:26):
There's air lease capital.
There's a general electricaviation that leases a lot of
planes to American Airlines.
There's a B O C Aviation a lotof the big players out there but
there wasn't a Model or abusiness like that really for
general aviation, and so I sawthere.
Speaker 1 (05:45):
So just to be clear then so when, when a flight
school needs a plane, they'vegot a few, only a few options.
They can buy it themselves,which is going to be a large
capital investment, and mostflight schools just don't have
that lying around, or they canget it from somebody else.
And so in this case, you, youwere coming to them like a, like
(06:07):
an angel, being like, hey, Ineed to buy a plane anyway, but
you know, I want to offset mycost, so I would be willing to.
You know, lease the aircraftback to your, so my company will
lease the aircraft back to yourcompany.
Y'all use it, y'all take careof it, and then you pay me a
Lease amount that will offset my, my overall cost.
(06:29):
And those are the two main waysthat most flight schools Get
their aircraft.
But there's not a lot of peoplebanging on their door right now
.
That's like, yeah, I've got ahundred, two hundred, three
hundred grand to just give you,to give you a mobile asset that
you know who knows what you'regonna do with that.
I mean, you're gonna put a lotof wear and tear on it Because
(06:49):
you're constantly flying it.
You've got inexperienced pilotspiloting this thing.
I mean, there's a lot of riskthat goes into.
We can talk about that later.
But those are the two ways thatthat, that that flight schools
get their aircraft right, andyou're just kind of stepping
into one of those exactly.
Gotcha and so now okay.
So yeah, tell us kind of alittle bit more about how that
(07:10):
works.
Obviously, you said it's kindof already set up on the
commercial side and now you kindof want to.
You know, part of your businessmodel is sharing with people
how to do this on the generalaviation side.
Obviously, it has been done inthe past.
I mean, if you're in theaviation circle you probably
know somebody who does it, butit's very hard to find
information on this stuff.
So I know we're going a lot ofdifferent directions.
(07:30):
So once you just tell us howdoes it, how does it work, what
does it look like, what are the,what are some of the risks that
people need to be aware of ifthey choose this route to go,
you know for that, for theaircraft right.
Speaker 2 (07:41):
So there are people out there that will lease their
own Aircraft to kind of likeoffset their costs.
Like if you're getting your ownpilot's license or even you're
all the way to instrumentcommercial, you should could buy
an airplane, lease it back to aflight school and Just you pay
for what you use, basically, andwhatever they make money off of
will offset your cost.
And a lot of people would dothat break even or or just lower
(08:04):
their cost on that.
Now, that's a good option to do, is not bad at all.
But a lot of people that dothat they own a plane, they
bought that plane for themselves, and Lot of a lot of pilots out
there look at the plane as asthey're bait.
You know I mean like they're.
You're mostly involved andattached to that aircraft.
(08:24):
So being a trainer plane yes, astudent, you know has a hard
landing.
You know side loads the plane,you know Anything you could
think of.
You know what I mean.
You know those things can'tarrive.
You know even getting into theplane you're messing up the
interior, anything like that.
You know those problems canarise and if you look at that
plane like it is your baby it's,you're gonna have a whole lot
(08:47):
of heartache for the entirething, but at the end of the day
, if you look at it like it is amoney-making asset and you're
doing this as a business, thatis how this was really gonna
benefit Anybody that wants toget into it.
Because the way you set up yourlease, the the flights will.
You lease your plane to.
They have interest in thataircraft and to keeping it nice
(09:08):
and keeping it up and you canput that into your lease well to
to ensure that it's it's heldto a good quality.
Because if they, if Somebody,messes up the plane say they
side loaded, say you know thetire goes flat, they wear the
brakes out or what have youright the flight school has to
take responsibility and get thatplane back up and running again
(09:29):
and Able 100% to make sure thatthey're able to keep flying and
keep producing income.
It's not on the owner, it's onthe operator.
So I set that up in my leasesthat way strategically.
Same like in commercial realestate.
If you had a strip mall withwith three different offices in
it and like a barber shop, adollar general and a grocery
store, and I wanted to open up abarber shop in there and the
(09:53):
plumbing started leaking in theback, I don't call the landlord
and say, hey, the plumbingmessed up.
I need to come over here, fixit's in my best this is the
business to make sure that it isstill up and going.
So you hire your owncontractors come out there, fix,
fix your asset that you'remaking money with to keep it
going.
So it's kind of the same modelwith that but with aviation.
So you do this as far as youknow, if the Unfortunate knock
(10:17):
on wood, if there's an accidentwith the plane or any other
incident like that Something wedon't ever want to think about,
but it is real life it couldhappen.
But we have process proceduresin place for that to make sure
that if it was to happen, you're100% covered, your assets
covered in your liability.
Speaker 1 (10:35):
Do you have any?
Do you have any trouble gettinginsurance for an aircraft
that's gonna be, you know, usedin this capacity, or do you just
go on the the schools insurance?
Speaker 2 (10:47):
Correct.
Yeah, so I don't get theinsurance on the planes that I
have, strictly because of cost.
Because if you get insurance onMultiple, if you have one and
you're just starting out, it'sprobably not a bad idea,
especially if you're already apilot and you have hours and you
can get a decent insurance rateon there.
But what the way I do it?
Because I don't want to haveany lot liability as far as
(11:09):
insurance on the planes, I haveit in my leases that the
operators all the flight schoolsor clubs or other vacation
programs I'll listen to havetheir own insurances on there
and I make sure they havecertain mandates.
You know, per plane Wholevalues in different liability
coverage.
Just make sure if anything wasto happen with both protected.
Speaker 1 (11:27):
Got you Okay.
Well, what I want to do is Iwant to hear a little bit more
about the, the figures.
You know, what is an airplanecost?
What are the operating costs,what's the hangar cost, the
fixed cost and we'll go intothat in a second and and, and
you know, is it possible forsomeone to actually generate?
Well, what, what the incomelooks like, and maybe is there a
(11:51):
profit, not a profit, or is theprofit just in?
You know the taxes.
So let's talk about figures,but before we do that, I want a
quick cut to a quick commercialbreak.
So one.
Speaker 2 (11:59):
Thank you so much for watching.
Speaker 1 (12:00):
If you haven't already, go to circle a dot a
jet life arrow, calm and checkout our online community for
aspiring brokers and currentbrokers.
Here You'll find discussions,all thing Aviations based things
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You can also check out our freetraining as well as more
(12:21):
resources that are available tohelp you to become a better A
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That's circle dot, jet lifearrow, comm to begin your
journey within the brokercommunity, absolutely free, you
All right.
So that's pretty cool.
I'm really liking the streamingsoftware stuff going on here
Pretty fancy, but yeah so.
(12:43):
So, zach, tell us a little bitabout, like the, the, the fact,
the numbers, the numbers behindthis game that we're playing, so
we kind of get more of aconcrete idea of what we're,
what we're walking into.
Speaker 2 (12:54):
Absolutely so.
I'll just use my.
The very first plane I got, forexample, it was a 2022 Pipistro
Alpha trainer.
So I had that plane, boughtbrand new.
It was built and finished inItaly, then shipped over here
and then finally got it overhere to me.
That plane cost a total of$150,000.
That was the total purchaseprice, everything all included.
(13:15):
Out the door.
I had to pay for theimportation and then the the
taxes getting it here, but otherthan that, that was really all
of my upfront costs.
That's all I came out of pocketwas a total of $50,000 for the
very first one, and I will saygetting that first plane was the
hardest financial thing I everhad to do.
I called probably a hundreddifferent banks.
I went to every funding sourceyou could possibly think of and
(13:40):
that's what made me learn thereare a lot of other ways to get
funding for these planes andsizes banks there's a ton, and I
found almost every single oneof them.
Speaker 1 (13:49):
So can you elaborate on that?
Are you talking about privateloans, or are you talking about
specific banks that you need togo to, or can you elaborate a
little bit on that?
Yes, unless it's in the courseand they have to they have to
pay for that information.
That's fine too.
Speaker 2 (14:02):
Yes, yeah, it's all in the course as well, but, yes,
there is a bunch of differentways.
So you have private investors,there's government loans,
there's SBAs, if you're aveteran like Sure Okay, yeah.
Fun of veteran resources outthere as well.
And then there, if you findanybody that just wants to get
in on it with you, you can findprivate investors that you can
(14:23):
get.
Hard money loans are out there.
That's what I did for my veryfirst one.
It was a hard money loan to getthe plane here because no bank
wanted to touch it until it wasactually on American soil
because I was having an impactGotcha.
So finding financing for it wasa huge, huge challenge.
So I found one private person,wealthy individual, had an
(14:44):
interest in aviation.
He believed in what I was doingand he upfront gave me the
money super high interest rate.
But as soon as that plane gotthere plane got there 30 days
after.
I took that note with him paidPipistrel off cash plane,
received it in my hangar in ashipping container and as soon
as it was there my loan camethrough that day, paid him off
(15:06):
and then I just had my regularloan with the bank that I was
financing.
Speaker 1 (15:10):
Nice yeah, and what kind of aircraft was that again?
Speaker 2 (15:14):
That was the Pipistrel Alpha trainer.
It was the 2022 Alpha trainer.
Speaker 1 (15:17):
Are they not in production anymore?
Speaker 2 (15:19):
No, they're still in production.
They have like a.
They're actually just signed onwith a Mesa Airlines right now.
So Mesa Airlines is the airlineout of Mesa, Arizona, and
they're training all of theircadets out of Inverness, Florida
, at Wright Rudder.
They bought about 30 of thoseplanes that they're having all
of their commercial pilots buildtheir 1500 hours on.
Speaker 1 (15:38):
Okay, so this is what we're talking about, right.
Speaker 2 (15:40):
Yep, that's it right there.
Just the same picture that's onthe profile of the course with
that car on there as well.
Speaker 1 (15:47):
Gosh, it's like a, it's like a 152, but like from
2022.
Speaker 2 (15:52):
Basically, it's my favorite plane that I fly.
That's the one I fly myselfregularly every week.
Where do they run?
That's a $150,000 plane.
Speaker 1 (16:03):
Okay.
Speaker 2 (16:05):
Well, in 2022,.
I think they've raised theprices a little bit since then.
How fast do they?
Go, so that plane will cruiseat about 120.
Speaker 1 (16:14):
That's faster than a 172.
That's awesome.
Speaker 2 (16:17):
At four gallons an hour.
Speaker 1 (16:19):
At four gallons an hour, that's a great training
aircraft.
Okay, and is this the kind ofaircraft that you recommend
people are targeting?
Speaker 2 (16:26):
Yeah.
So I specialize in light sportaircraft just because you can
get newer planes, Yep Way betteravionics at a way less fuel
burden.
The maintenance on them is farless as well, because all the
light sports that I use they'reall Rotax 912s.
So whenever you get into likethat, TBO times because you have
(16:46):
to look into your costs as wellso 2000 hours for TBO on the
Rotax 912, you can get a brandnew Rotax 912.
Cost is right around the low20,000 mark and then you sell
your poor for 10.
So you're basically getting abrand new motor for right around
the 10 to 12, $13,000 mark andthen you have in your leases.
(17:07):
Well, every flight school alsohas a maintenance bay.
They're taking care of theirmaintenance.
So you have their maintenance.
Guys take care of the TBOwhenever it comes time to that.
So you're getting maintenance,basically the cost when you're
paying for course.
Speaker 1 (17:20):
Okay.
So I mean, are these lightsport aircraft useful for flight
schools that may have trainersthat or, I'm sorry, students
that want to go all the way upinto flying you know commercial
in the 737s?
Can they use these trainers ordo they require, like a
certified?
You know light sport, but Iforget what you would call it,
(17:41):
like a 172 or a 150.
Speaker 2 (17:44):
Right.
So the way light sports work,you can actually go with zero
never being able to fly a planeto being a commercial pilot in
any in one in that plane or theother two light sports that I
had, as long as they're TAA.
So all three of my planes areTA aircraft, so technically
advanced.
So you can do your privateinstrument commercial.
(18:06):
The only caveat to that is youcan't go into actual IMC and a
light sport aircraft but you cando your IFR training in a light
sport aircraft.
There's no regulation in youractual instrument training
saying that you have to actuallydo IMC, so you can do all of
your training under the hood.
It is equipped, it has the VOR,it has all the equipment to do
(18:26):
your instrument commercial.
Speaker 1 (18:30):
Right.
So from the investor standpoint, these light sport aircraft
that you're dealing with, youknow, around 150, maybe up to
what 200,000, if that.
Speaker 2 (18:42):
Right around.
Well, that would be if you wentto the 200,000 mark that you're
getting.
You're getting a lot of playingfor that money, especially in
the the light sport of rain.
Okay you can get a very, very,very well equipped aircraft that
will make you money and takeyou anywhere you needed to go in
, and I would say between underthe $200,000.
Speaker 1 (19:01):
Sure, okay, so, okay.
So for the investors, theydon't have to worry that they're
buying a light sport and that'sgoing to somehow hamstring them
in who they can, you know,offset or lease this aircraft to
.
So let's talk about morenumbers.
So acquisition costs roughly$150,000, $200,000.
It's four gallons an hour.
What are the rough estimatedirect operating costs for these
(19:23):
light sport aircraft?
And the direct operating costs,just for everybody knows, are
the costs of, you know,operation, like whatever comes
out the tailpipe, so your fueland that sort of thing.
So what are we looking at?
Direct operating cost wise.
Speaker 2 (19:35):
Right.
So you're looking at about, youknow, four gallons an hour that
it burns on there, the rest ofthe oil, hanger, maintenance and
the insurance, everything Ihave nothing to do with.
I put all of that onto myoperators so take care of all
the operational expenses.
So out of that hourly rate thatI get, that is a flat hourly
rate.
There's a couple of differentways that you can do leasebacks
(19:56):
that I've looked up.
The most common one is an 80-20split where the owner gets 80%,
the operator gets the other 20%, but out of your 80% comes out
the insurance, the maintenance,the hanger, the fuel, the oil
and so on and so forth, all youroperational costs.
So some months you could havehigher income, some months you
could have lower income,depending on what the
(20:17):
maintenance was for that month,and so on and so forth.
So I wanted to negate that,just to make it as easy as
possible.
That's my number one thing.
You just want to make super,super simple, so I just did a
flat hourly rate lease.
So I have in my contracts thatthey owe me a minimum of 40
hours a month at a X dollaramount per hour on the plane.
(20:40):
So no matter what, I'mguaranteed that dollar amount
times the 40 hours that the endof the month.
If they go over that, that'sgreat.
It's extra income.
Speaker 1 (20:48):
If they don't fly the plane that month, or they're
down for maintenance or theweather was just bad, so on and
so forth, you're stillguaranteed your 40 hour minimum
and the benefit to the last seeon that and the operator in that
situation is let's just sayit's $100 an hour, is what you
put on there, just for easy math.
They can charge whatever theywant above that, so they're in
(21:12):
charge of their own incomestream.
That's why that might be abenefit to somebody over the 80,
20, because no matter how muchthey charge like yeah, they're
making more, but there's thatsplit, so they're still
incentivized, even though you'regetting your guaranteed 40
hours, because they can justpack on as much as they want.
Speaker 2 (21:32):
Right.
Speaker 1 (21:33):
Gotcha Okay.
So we're looking at theacquisition costs and now we're
looking at the direct operatingcosts.
You're getting your hourly, sowhat does the revenue look like?
Speaker 2 (21:48):
Yeah, so the first plane I got actually bought me
that corn that was in thepicture.
That plane pays for that carmonth after month, every single
month.
The payment on that plane justthe one, for example, the first
one is $750 a month.
That one plane brings me inevery month passively between
$2,000 to $3,000 a month,depending on how much it flies.
(22:09):
Nevertheless that's the absoluteminimum that it always brings
in and it's done very, very well.
So it's paid for my car.
It's paid for itself the planepayment, and then it's helped me
increase my revenue to be ableto get more planes.
So after I got that one, I gotanother two planes within a year
(22:30):
and a half after that.
So that was three planes inless than three years.
Speaker 1 (22:34):
Gotcha, and you're in a frothy market too, so I mean
it's not like there were toomany deals to be had, but I mean
you found them, you sourcedthem and that's a testament to
your work ethic and things thatyou're learning from sources
online like Aircraft BrokerAcademy and hopefully some Jet
Life Arrow stuff, so that'sawesome.
So now you've done it, so whynot show others how to do it?
(22:59):
Because I think it's mutuallybeneficial for the guy who owns
the aircraft, the asset andflight schools.
Because, let's be honest, whenI was learning from my private
pilot license, you're operatingon stuff from the 1900s, you
know, a century ago.
So you know there's a benefitto everybody where, if we have
(23:19):
investors like yourself, youprovide the students with better
equipment to learn on saferequipment, more cost efficient
equipment.
Because I'm just out ofcuriosity, like you know what is
what's like an annual?
Well, you don't have to worryabout the maintenance bill
because the operator has toworry about it.
So the overhaul and everythingis going to be on the operator.
Speaker 2 (23:38):
Right.
Well, the only thing that is onme is, exactly as I said, the
TBO overhaul.
So I have that on a 60-40 splitwith my operators.
So the way I do it, I'll justgo ahead and tell you.
So on the one plane I have, Ido 65 bucks an hour for every
hour it gets leased.
So I take the 65 bucks an hour.
The TBO time is 2000 hours, soover the one engine lifetime is
(23:59):
going to be $130,000.
So if I had to cover the entireengine overhaul and didn't sell
the core at all, it cost mebetween 20 and $25,000.
After it's still the core,between 10 and $15,000.
That out of the $130,000 profitis nothing.
Speaker 1 (24:15):
Yeah, so you have to be disciplined that you're
putting that engine reservesaside from your profits.
Speaker 2 (24:22):
Right.
Speaker 1 (24:23):
Yeah, so you just kind of and that's in any kind
of lease kind of a situation,real estate, whatever so, yeah,
so, okay, great, so you're doingthis, so let's kind of go
through this.
Tell us a little about thiscourse that you got going on
here, man.
Speaker 2 (24:36):
Yeah.
So when I started doing it, Ijust it's an untapped market.
And what really led me to startthe course is all of the demand
that I've been getting.
I get calls and DMs onInstagram, facebook, you know,
TikTok, all over the place,social media, everything about
these flight schools that findme and saw what I'm doing and
(24:58):
they want to do the exact samething.
They want to get more planesfor their flight schools because
they can get better quality oftraining, get more pilots, make
more money and just keep thatthing flying more there and get
more variety of aircraft.
If you're going to get a start,a flight school, with one
airplane, you can only do somuch, and then, once in a while,
I mean just.
Speaker 1 (25:19):
I mean just very, very like yeah, you're very
limited.
Speaker 2 (25:24):
Right.
And if you're limited that intothat aspect, what else are you
going to do?
And if you're going to be inany kind of business, a business
is develop the scale.
You want to scale, you want togrow.
And if you can work withsomebody else that can get the
money-making asset for you andyou're only paying for what
you're using, then it's awin-win for everybody.
And I'm all about win-wins.
That's the number one thingI've always learned in sales If
(25:47):
you can help somebody else getto their goal, they'll
ultimately help you get to yourstoo.
So the way I'm seeing all this,I get these operators that are
calling me saying they want theplanes, they want to do it, and
I single-handedly I can't caterto every single one of them and
get every single plane for everyflight to go out there, but I
100% can teach people how to doexactly what I did, because
(26:08):
there was nobody out there toteach me.
I can teach them exactly whatto do how to set up the business
, how to set up the taxstrategies, how to set up the
leases and the business plan anddo exactly what I'm doing and
connect them to the operators sowe can help get these planes to
them because it's really whatthe industry needs.
The pilots deserve it, theflight school is needed and you
can develop a really healthypassive stream of passive income
(26:31):
in this situation and it'sunsaturated.
You go to Facebook, instagram,all the social media, and you'll
see ad after ad after ad afterad for dropshipping and Airbnb's
and Renoir Petrage and all thisother kind of stuff, and
there's nobody I mean, I don'tknow any other person out there
(26:51):
besides myself and you know AirLease Capital.
That's leasing airplanes forpassive income individually, for
themselves, and especially notsomebody that started a business
doing it.
Some people that have their ownindividual plane to do it to
offset their own cost, but notdoing this as a business.
Just make straight passiveincome and help provide for the
(27:12):
future of aviation.
Speaker 1 (27:14):
Yeah, man, I appreciate that and I feel like
in a lot of ways, this isaviation.
Right, people are doing this.
They've been doing it since the1970s and 1980s.
But what I find awesome aboutwhat you're doing is you're
bringing it to the light.
Like I say here, you're pullingback the curtain on private
aviation, on general aviationand how the business works.
(27:36):
So my hat's off to you.
You know a kindred spirits inthat regard.
I mean, just as we kind of wrapup, I would just say two quick
things, obviously.
Number one this is notfinancial advice.
This is not like a get richquick thing.
You know, we're not, you know,advisors.
We just teach what we've doneright.
So even with JetLife Arrow,when I'm training someone how to
be a broker, like I can trainyou how to make half a million
(27:59):
dollars a year, because I'vedone that.
If you want to make a milliondollars a year as a broker, well
, maybe we'll figure that outtogether.
But I think most people wouldeven be happy just to start out
100, 200, 300, $500,000.
Like I can help you, like I'mthere for you, right?
And so you're kind of doing thesame thing.
You're pulling back the curtainand I think that's you know,
(28:20):
and add to this if you like,zach.
But I think the biggest thingyou have to worry about, you
know, is just this idea that youknow you own an asset.
That asset can be damaged, itcan be manipulated, it can be
whatever.
It's a mobile asset, it'sflying up in the air and like
you could lose all your money.
But we're talking, you know, atthis point, you know under 200
(28:41):
grand, which in the grand schemeof things is not a ton, and
you're insuring it and theflight school that you're given
it to is insuring it.
So you know, I think that'skind of your biggest risk.
You kind of have this risk ofyou're putting people in your
asset, you know, and so you'retrusting that the operator is
going to keep those individualssafe.
So you know, that's somethingyou might want to be aware of
(29:03):
because, god forbid, somethinghappens and there's someone
injured.
I mean that might weigh on yourconscience.
That's the thing withdropshipping.
You know, if someone doesn'tget their package, it's not like
they died, you know.
So that's something to considerI'm just trying to think of.
You know horror stories that wecan kind of say like this is
why you wouldn't want to do it.
Maybe you don't have the time,maybe you don't have.
(29:23):
You know, it's because you gotto go searching for stuff, right
, zach?
I mean, that's part of the partof the course is like, how do
you find these assets?
It's not like they can just,you know, be delivered to you
and you got to have the incomeor the money to do it, because
you're buying an asset or getaccess to, like you said,
private equity and be kind of abroker situation.
Are there any other horrorstories or disclaimers you want
(29:45):
to just kind of toss out there?
Speaker 2 (29:47):
Yeah, absolutely so.
There's definitely some riskinvolved, just like any other
business that somebody wouldwant to start.
Just like what you're saying,you have damage to the aircraft.
Unfortunately, if somebody isto get injured or hurt and yet
that definitely would weigh onmy conscious 100%.
I mean, the number one thingthat we want to do is provide
(30:08):
for the future of aviation andmake more pilots, not take any
away from this world.
So, yes, that's a major, majorthing and I appreciate you
bringing that up.
So the insurance is make sureyou're 100% covered.
On that, you protect yourselfand then you're also protecting
everybody else.
So if anything is to happen,that everybody gets, you know
(30:28):
what they're entitled to andnobody's out there left to hang,
because that's not what anybodywants to be about and that's
not anybody wants their day one.
As far as that you know.
You go into other risks.
You have defaults like, say,you're leasing your plane to
somebody and starting out yeah,they were a great guy just like
renting an apartment to somebodyor renting a house to somebody.
Speaker 1 (30:49):
True, yeah, and you know.
Speaker 2 (30:52):
Then they stop paying you or say there's a weather,
say a hurricane comes throughand nobody's flying at all and
there's nothing anybody could doto help that.
But you still have in yourminimums.
You know you have this plane.
You have to be able to be ableto deal with these things.
So one way I've been able tonegate that and think God, I
(31:13):
have not been in that situation,either an accident or a default
.
But it's just keeping clear,concise communication and
setting expectations for peopleand making sure everybody's on
the same page.
So whenever I'm doing my leases, the default would probably be
the number one thing I would saywould be a major risk, and
(31:35):
that's just knowing who you'redealing with, having the right
expectations right from thefront and having it set up in
your lease that everybody knowswhat's on the same page, who's
responsible for what when thepayments actually do.
Hmm not paid and not waiting onyour money.
So when you're doing it, Iwould say that would be probably
the a major, major risk there.
(31:56):
Other than that, I have notcame across any.
This thing has been a blessingfor me.
I've been very, very fortunate.
I've been doing it now forthree, going on four years, and
I have not come into Anything.
Really that has drawn me back.
Thank, thankfully, knock onwood with that, but we always
prepare, you know.
(32:16):
Prepare for the worst and hopefor the best, you know.
So, yeah, that's kind of whatI've been doing with it all, and
just keeping good communicationwith my leases as well, not
just forgetting about them,making sure everybody's happy
and that you're in the loop oneverything, and that way you can
stay ahead of all and reallynegate any risk that can come
rise for sure, for sure.
Speaker 1 (32:35):
Well, that's awesome and well, yeah, no, I Really
appreciate you coming on Today.
So how can people get to thecourse?
What's like?
What's the place that theyshould go?
Just Search for it on teachableor what?
Speaker 2 (32:47):
Yeah, so it's on.
Teachable is a profitable plainleasing passive income and
aviation.
You can find me at aviation 8on Instagram.
Also.
Zach Purvis on Facebook and Ihave links in my bio is on there
as well.
Anybody that's interested feelfree to reach out.
Send me a DM, instagram,facebook.
Either way, I'm more than happyto talk to anybody letting me I
(33:07):
know more information about it.
I'm happy to jump on a callwith anybody to talk to about it
to dance me pushes they mayhave.
The ultimate goal is to Allowthe lowest barrier of entry into
this course right now, beforemy cost goes up as I'm actively
building it.
I want to get as much people inthere as possible.
Have everybody learned this?
So we can really provide forthe future of aviation and get
better planes for these pilotsand Make money in the process
(33:30):
doing it?
Speaker 1 (33:31):
That's awesome.
Okay, cool.
Well, zach, thank you so muchfor joining us today.
I really appreciate all yourinsight and we look forward to
your future success, followingit and Connecting with us in a
couple of a couple of months inthe future.
Speaker 2 (33:42):
Yes sir.
Thank you so much, Tom you.
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