#101 - Airbnb for Aircraft: Hangar Investing & Aviation Real Estate with Trenton Ray

[00:00:00] Welcome back to Passive Income Pilots everyone, Tait Duryea and Ryan Gibson here on episode 101. What's up my man? 101 virtual high five. And thanks for listening to episode 100. We've got over a hundred episodes now of Passive Income Pilots. Pretty cool. And no better way to celebrate it than to talk about how to find, invest, build an airplane hangar. Like how does the world of airplane hangars work? You see air hangars all the time. How does it work?

[00:00:26] So yes, if you're looking to get into this space, what's cool is the Facebook forum actually encouraged us and inspired us to make this episode. So if you're not in the Passive Income Pilots Facebook group, join it. There was someone who said, hey, I'm thinking about buying or building an airplane hangar and I have a bunch of questions. How does it work? How long does a lease have to be? Is there certain requirements or restrictions? Who do you got to talk to to go get one permitted? All these things.

[00:00:52] So what we did was we just reached into our network and said, who do we know that knows all about airplane hangar space? And that's what we're going to talk about today. So I'm pretty excited about it. Are you excited about it, Tate? Yeah, I'm super excited. So Trenton Ray is the founder and CEO of hangardirect.com. They are the Airbnb of hangar space. So, you know, another benefit here is if you own a GA airplane, you need some hangar space. You can go on here and find a hanger to put your airplane while you're on a ski trip.

[00:01:22] So this week we did a virtual poll in our Facebook group and we asked how many people think that airplane hangars are well occupied or how many people think that they're kind of vacant. Right. And so we gave you kind of a we think there's vacancy. We think there's like almost no vacancy. Well, guess what? We're going to reveal it on the show today on how well occupied these hangars are. So you've got to keep listening, but we'll get to the answer in the show. And I think the answer is going to really surprise you.

[00:01:50] With that, let's get to the show. Welcome to Passive Income Pilots, where pilots upgrade their money. This is the definitive source for personal finance and investment tactics for aviators. We interview world-renowned experts and share these lessons with the flying community. So if you're ready for practical knowledge and insights, let's roll. Trenton, thanks for joining us. Thanks for having me.

[00:02:19] And I'm excited about having this conversation. I am a GA nut, as is Ryan. And what you're doing in the hangar space is really cool. So can you maybe give us a little bit about your background, your flying background first, and then how you got into the hangar space? Yeah, totally. So I'm the unicorn of Central Texas, I guess. I'm born and raised in Austin. I've been kind of stuck here.

[00:02:43] I got in aviation when I was 18. It was kind of something I had no idea was going to happen. Divine intervention, I call it, because I try to drop out of college. When you go to a small university, though, they really need your dough. So of course, they tried every which way to keep my federal grant there. So about three hours later, I was actually on a discovery flight. And I had no idea that that was even a thing that was offered.

[00:03:08] So here we are. Fast forward. I stayed over the summers and winter breaks, did all my training just because it was so much cheaper. And walk into my third year, actually, my summer semester or spring semester, and they're like, hey, you can graduate early. And I was like, where do I sign? So my first job was in a, well, I was actually flight instructing at the time. So while I'm playing baseball in college, I'm flight instructing because I was out of my mind.

[00:03:36] I graduate and then I'm basically at CAE in a Citation Ultra Sim, just like sitting there trying to figure out what the hell is going on. And long story short, I just, I found myself in corporate and I bumped around a few parts, you know, 135, part 91, you know, flew a Falcon 900, 2000, G200. I mean, flew all the antique Cush stuff that you could think about. Went to the airlines and kind of did a 180 and said, I'll go back to corporate.

[00:04:04] You know, was that a mistake that I made? We'll see. You know, I enjoy my life here in corporate, but, you know, my friends do bug me about missing the bus. But anyway, flash forward to, you know, the lovely winter snowstorms up north. Here I am as a contract pilot, just got out of a job trying to search for another one. And it's, man, it's a tale of all this time. Like there you are and there's a snowstorm and you are somewhere in the middle of the country.

[00:04:30] You have, you know, never been there before and you need a hanger and it's a Sunday night. What are you going to do? And it's the unfortunate task of, for me, hopping on ForeFlight, screwing down to like every FBO, maintenance shop, whatever, just calling, just saying, hey, I've got this plane. It's like 60 feet. Do you have room? And it's either, no, I'll get back to you or whatever.

[00:04:53] And it truly can damper, you know, a trip, especially when you're sitting there, you know, trying to figure out, okay, are we going to get this plane to a hanger or not? Or, hey, sometimes, you know, we got to hop in and move it because there's no, there's no hanger space. So moral of the story is I have this, this buddy of mine, he's in software and we all have those friends. We bounce ideas off, you know, off each other. I called him and I was panicking.

[00:05:20] You know, I had just finally found a hanger and I asked him a simple question. I said, why can't there be like an Airbnb for hangers? Why can't you just simply with one click, just book a hanger? And it would be a crucial and essential, you know, part of any corporate pilot's flight plan. And so we did a lot of market research. We, you know, we called everybody, called the FBOs.

[00:05:45] Hey, if we gave you a platform to optimize your space, would you take part in it? And the majority of the people said yes. And so we've developed this, this hanger sharing platform where we started at the bottom of General Aviation. And we said, hey, even if you have a corner of your hanger that's open and you think you can list it to somebody, surely somebody out there will pay you.

[00:06:08] And we give them the entire right of refusal to list whatever price they want, you know, whatever terms, whatever the cancellation fee is. We truly just, we built the platform to put the hanger owner in control and they, they drive the bus. I can't believe this wasn't a thing before. Like my mind is, is blowing, right? I mean, this is amazing that, that you rolled up your sleeves and did this because it's so obvious now that I'm hearing it.

[00:06:37] It's not just that situation. I mean, I could think of, you know, shoot, like South Florida. I used to work for a guy based out of Miami. And we all know the, you know, the Sunday or the midday showers in Miami. I mean, you have no idea what you're going to run into. So it becomes a stress point that I think a lot of times we try to just like brush off into the side of our mind because, you know, the chances of like you needing a hanger there last minute, you know, doesn't happen a lot.

[00:07:06] But, but in some cases, you know, you might be rushed. You might not look at a forecast, you know, you might, okay, we're going to be here for three days. Let's, you know, hurry up, get to the hanger and get to New York, whatever. Then you're sitting there all, you know, here comes a hailstorm. And it's a, it's an issue that doesn't need to be present, but it's, it's just, I don't know, it's a systemic issue that we're ultimately trying to put a, you know, we'll never fully be able to change what is going on.

[00:07:33] But, you know, we're, we're hoping to at least provide some sort of a bandaid. You know, it's interesting. First of all, when did this start? And this was back in June of 2022. We, we fully launched the platform December of 2023. Trent, do you have any idea what the national vacancy rate is? Because I, I'm sure like, I know exactly what the multifamily vacancy rate is on a national scale. It's 5.3% currently. Ryan, I'm sure you can tell us what the storage vacancy rate is. What is it? About 4%.

[00:08:03] There we go. So now hangers, I'm sure is much more disjointed, right? There's, there's an old guy that owns one that just leaves it empty because he doesn't, you know, he doesn't think about it. And there isn't really a platform except for now for him to list it for rent. So I'm sure the data is just not there in terms of, of vacancy rates, but would you be able to guess? I would generally say probably over 15%. And that's a ton. That's a ton.

[00:08:32] If you think about it, think about it in the way of the amount of people that inherit these hangers that aren't pilots that don't have a plane to put in there that leave them empty. That's crazy because for vacancy to be that high, like 15% vacancy rate is huge. If you had an apartment complex with 15% vacancy, you'd be bleeding money or close to it. You know, Ryan, if you have a storage facility, that's only 85% occupied, you're not a happy guy. Not super happy depending on the pricing.

[00:08:59] But yeah, I mean, it's a little bit different in storage, but you know, that, that's kind of how I thought about it. And that's why I asked the supply demand question because it was like, I know there's an undersupply to the demand, but it sounds like hanger direct is providing that connection that makes it even more pronounced because you're basically saying, Hey, you know, there, there's availability of hanger space. Now that it's easier to find, it probably consumes more occupancy, right? Right.

[00:09:23] I mean, did you, have you guys noticed like a trend of like, okay, ever since we launched, you know, occupancy, you know, maybe the vacancy was 20%. Now it's 15% or percent at this point. It's coming down. And we were trying to look at it more from an optimization, an optimization rate perspective. So take for instance, this gentleman here in Georgetown, he had a 50 by 50 hanger. He had one guy in it, but he had a bunch of stuff. It was just, it was littered with crap. And I told him, I was like, Hey man, I'll help you get a bike.

[00:09:53] We can move the stuff out. And two weeks later, we've got two 182s and a bonanza in there. So we've taken, you know, that optimization rate, you know, up to 300%. So ultimately what we're trying to do is carve out this, Hey, you have space. You can list it and somebody, you know, somebody will use it. They need it. You know, there's a, and it's not like we're reinventing the wheel by any means. I mean, I look at, I was scrolling on Instagram and I saw this app called like neighborhood

[00:10:22] and you could list your garage space and I could come in and pay for it and I could park my bike there. So there's truly like a medium for just about anything. Us going in here and optimizing the same thing as a garage, but you know, it's just the metal shed with poor walls. That's what we're excited for. Just real quick, you mentioned there was a guy in Georgetown that you help clean out and get the two 182s in there or whatever.

[00:10:50] It sounds like Hangar Direct is super kind of involved more so than like Airbnb would be involved. And what I mean by that is like, if I list my house on Airbnb, like I'm managing the whole thing, right? Like you're, you're providing me a listing site, but I'm managing it. Are you saying that you also kind of facilitate sort of the whole thing, like kind of cleaning up the space and optimizing it and things like that? A hundred percent. Well, in this case, it helps. I'm here in Austin.

[00:11:16] We are though getting geared up, prepared to, you know, have some form of travel involved where we do offer that. It's awesome for everybody in the sense of we have to vet everyone. So of course, you know, the hangar owners, they want to call us and talk to us on the phone and make sure that we're real people before they list their hangar on our website. Right. And so it helps out that I'm a professional pilot and I fly for a living. So, you know, I can sit there, talk to talk, walk to walk. And there you go. It's a half an hour phone call. Yeah. And same thing with the pilots.

[00:11:46] You know, they, we get tons of leads every single day. Hey, I'm looking for space in Fort Lauderdale. Hey, I'm looking for space in Everett, Washington. Like it's, it hits all four, four corners of the map. So it's, we want it to be as white glove as necessary. You know, the goal of it is we want the hangar owner to be able to do everything. However, we're fully, you know, prepared and we do focus a lot on that side of the coin

[00:12:13] and sometimes just moving somebody in or taking stuff out of a hangar. Yeah. Yeah. You mentioned the idea generation came from a snowstorm in the middle of the country. You know, the tale as old as time and kind of the last minute nature of that. How much of your bookings are last minute versus, Hey, I need a hangar for my plane long term. If I was a hangar owner, do I want to be in the short term game or do I want to be in the long term game? What's more lucrative financially or is it a mix of both?

[00:12:42] It's a mix of both. Um, I think it comes down to the mindset. So in the long run, the short term will provide you more profit. And I'll give you an example. Uh, one of my mechanic there on a field, he's got, he's got a spot for actually, uh, probably about a two 10, nothing bigger. Put another one of you two in there. He was paying like 50 bucks for two weeks. You know, he got a check for a thousand bucks. He was like, okay, like that, you know, bring me another one. So that's one use case.

[00:13:09] I would say it's 20% of it short term right now, which is shopping. Cause when we launched short term was what the public wanted. When we did all of our research, what do you think about short term? What do you think about longterm? Everybody was like, Oh, short term, come on. Well, we launched a short term and then everybody's like, well, where's Walt, you know, long term. We're like, all right, come on. So interesting. But 80% of it has been longterm.

[00:13:34] And if these, these experiences that I have, that's what I'll label it as is I'll get referred or they'll get referred to me. It's a five minute phone call. Do you have space? I'm like, yeah, I might actually, let me, you know, let me call and talk to Edward or whoever. And I call and call back. Yeah, I think I can get you in actually. They're like, really? Like I've been waiting two and a half years. And I'm like, yeah, well, you want to do it tonight?

[00:14:00] Like, you know, so it's, it's, and then they move in and then they're like, so that's it. I'm like, yeah, can I, can I go now? So it's, it's, they're awesome experiences because I've seen these people that have just been so, I mean, they've, they've been going through it. There's a ton of people out there that are going through it that have owned planes that need space, can't get it. And we're just, no, there is no solution. And so, you know.

[00:14:28] So this is passive income pilots, right? We're always looking for an investment opportunity. I've always been really interested in hanger investing because I've been sort of acutely aware of the supply demand equation. I just think it's a, it's a business that makes sense, but I haven't run the numbers. You have been looking at this stuff for the last few years now, as you've been building this company, can you give us a bead on like, is it a good investment? Should, should a pilot consider instead of maybe going and buying a duplex and renting

[00:14:57] it out to two families? Should they go buy a hanger and throw it on hanger direct? A hundred percent. And does it vary by market? Like what's the, what's the cap rate? What's the, do these things cashflow? A hundred percent. We, that was a big part of our mission early on. And what we would probably call phase two of hanger direct and the development side, because we do want to bridge over with the people that have already approached us saying, Hey, what are the numbers here? How many pilots have signed up in, in South Florida?

[00:15:26] We do get those leads a lot. And that's because it's, it's lucrative. It's very lucrative. Like I said, the hardest part of it comes down to the time and the investment with, I guess, having somebody inside that you can talk to, communicate with, and honestly be on good terms with, uh, cause a lot of these city and local folks don't like airports. Now, one thing that we've bumped into is we've relieved the city in some instances of this

[00:15:55] issue where they're dealing with, you know, people just beating their door down and we're like, Hey, we can slip in. We can provide a little bit of help, you know, maybe it's temporary. Doesn't matter. So to answer your question, yes. You know, if you run the numbers, you know, concrete, for instance, here is expensive, but it's, it's fairly cheap to build a hanger. Right. And a lot of times the investment comes in with, you know, bringing like an engineering crew and doing all that research.

[00:16:23] Um, but if you're a part of a firm, which, you know, a lot of these folks who are approaching us are, they have that internally. So there's obviously two avenues here because on your site, there are also hangers for sale, which is really interesting. Uh, there's the buying and existing, and there's also building new, the building new, I guess either way, you don't actually own the land, right? It's a, it's a land lease. So how does that work?

[00:16:50] So essentially what happens is the city gives you, so you, first of all, it's city or county, right? Either one. They're typically 20, 25 and 50 years. I've heard of some hundred year leases. It's pretty rare. I know there was a guy in Utah on a forum the other day saying he got a 70 or 75 year lease, which is pretty extraordinary. But essentially that means you can do whatever you want.

[00:17:15] Um, but at the end of your term, you know, the study is going to stick their hand out and say, Hey, you know, we want our hanger bag. So there are a ton of things that you need to be super worried about. There's clauses, you know, you got resale considerations, which come down to like your non-renewal risk, which has become an issue at some airports. These, like a lot of these officials are coming in just like basically saying, Hey, you can't not renew because they want to get rid of, you know, they have people beating down the

[00:17:44] door to get rid of the airport. So yeah, yeah. There's a, there's a ton of lobbying going on. Um, we've tried to make AOPA aware of it, just getting them on our side, like with what we're going, going through, I guess, but essentially that, and then making sure, you know, there is like transfer of lease. What happens at the end of a lease? If the airport's not going anywhere, do you have to pay the city for another 25 years? So you have to buy the lease back.

[00:18:11] And it, what they do is they have a ton. So they get, leave the lease stuff and you have lease re-escalation stuff that really has a factor here. So I always tell people, if you want to build a hanger, take your, like, look at the, what the lease re-escalation is. It's typically, you know, one to 3%, like every five years. So, you know, ahead of time, what the price is going to be to renew that lease in 26 years or whatever it is that at the end of that.

[00:18:40] So you have visibility as an investor as to, okay, in 26 years, I'm going to owe this much to renew this lease. Or, you know, the residents around the airport have, have organized with pitchforks and torches and I'm just going to lose my investment if the airport shuts down. Right. Yes. No. And the golden thing I wrote down here, the golden thing is the lease continuity clause. You have to have the lease continuity clause. And this is a new thing that's coming out.

[00:19:06] As far as building a hanger, I think if you have a lead on, you know, all your material, concrete's expensive. You know, it's like $150 a yard. Probably almost $200 here in Austin. But it can be done for anywhere between $100 and $150 a square foot. You can build a really nice hanger. It depends on what you need for fires, correction systems. I mean, that's just, that's a territorial thing. But yeah, it's, and people are starting to slowly catch on.

[00:19:32] A lot of airports are finally putting in developments, but some of those developments, I mean, the amount of time that they had put in, it was, you know, one to two years. Right. So if, if I build a hanger and I get this 20 year, 30 year, 50 year lease, and then I decide to sell my hanger after 10 years to another, another hanger owner, does my lease convey what the new owner, any issues there? That you would, you would essentially just transfer your lease over to the new owner.

[00:20:03] Going back to that clause of being able to continue and transfer the lease. Otherwise, then the city is going to be sitting there saying, Hey, we want our hanger back, which, you know, points into the direction of the folks who inherited or own hangers and don't have planes or got rid of their planes, but don't want to get rid of their hangers because, you know, they can't sell it or they can't get rid of it. What about use? Cause I know that like at, I think it was Auburn airport.

[00:20:28] I was talking to some friends when I was flying down there, GA stuff that there's a requirement for use of the hanger to be related to aviation, something that FAA mandates or something. What, what's that all about? Yeah. And it's pretty, it is pretty sad. So that, that is because the folks who don't have aircraft, they park their vehicles, they use them as storage units. It's, it's at every airport. I mean, 10 or 15 hangers that I've been at to help people move into, you know, a good

[00:20:58] 75% of them have been vacant. And I would say 5% of those have been empty without anything in it. It's also, it's kind of like the wilderness out there with everybody needing space. And so a lot of, a lot of folks are honestly scared to even just put the word out because they know that a bunch of people are going to be beating down the door and then, Hey, why'd you give it to Larry? When I was asking you, you know, give it to me. And so, Hey, like if you don't want to deal with it, give it to us. And like, we'll figure it out for you.

[00:21:26] Plus we'll probably get you paid more than what you would offer your buddy. Right. That's a good point. What do you guys get paid as a hanger owner? What would I be paying hanger direct or do you get it from the, uh, from the person who's getting the lease? Right. No, it, it all comes from the renter. So back to developing it for the hanger owner, you can't get, so you can't develop a platform to get in and charge people. Right. So there's, it truly is a free thing. You can go on there, jump to pay like any kind of promotional stuff.

[00:21:54] You know, there's no subscriptions and that's the same for the hanger owner. They list their stuff. It's free. And somebody comes in, wants to rent it and they pay for the transaction fees. Right. Just like, just like Airbnb, VRBO. I mean, any kind of transactional platform out there that operate like that is essentially how we do. So we do all the point of sale stuff. It's all built on stride. Love credit card fees. Yeah. And do you guys help the, with the lease too? Like the lease agreement?

[00:22:23] We're, we're working into that. We're actually working into more of like a lease management system. We'll provide a way to, Hey, if you want to upload like a Google doc and this could be like a, some form of lease agreement, go for it. It, we do have language where it's, you know, it indemnifies us where it's like, Hey, you are taking this. Just please know that you're currently running a month to month until you want to cancel. So we, for right now, just have nightly and monthly. We're rolling out yearly coming up.

[00:22:52] Um, just for, you know, those folks that want that, that security, right. Back to nightly versus monthly. Some people, you know, it also involves work, right. On the nightly stuff, sometimes you have to run out there. So it kind of just boils down to, you know, what you got for labor. What about insurance? And I'm, I'm curious, I keep coming back to this as, as an investor and thinking, all right, you know, I'm, I'm cruising on your site, right. As we speak.

[00:23:19] And there's some hangers for sale for 300, $400,000. And I'm thinking, okay, well, like, how do I run the numbers on this? What can I get a loan? Have you had experience with, with buyers of these things or sellers of these things? And, and like, do they have to be purchased cash or can you go to a bank and say, Hey, I want to take, you put 20% down on a hanger. Yeah. There are some banks out there that'll give you like a construction loan or more of like a hard money loan. I think the last one I heard of the guy was paying 13%.

[00:23:48] A lot of these, a lot of these folks do pay for a majority of it in cash and you can build a really, really nice hanger with half a million dollars. And if you think about most of the people that are building a, you know, half a million dollar hanger for their plane, probably have a really nice plane, but it's very simple. You would think it's not. So, you know, it's technically a commercial property. So you're going to have property insurance, you know, you have to, and then it's nothing more than just a GNL.

[00:24:15] And if you look at any kind of aviation hanger insurance, the magic thing here is called hanger keepers liability. And it's a new thing that's rolling out. It's been, it's been out for like the last decade, but you know, you'll see it in a contract and you'll look at it and you'll be like, what is that? And so that essentially means that, you know, it's, Hey, Steve can park in Bill's hanger because, you know, Bill has hanger keepers liability and Steve has hanger keepers

[00:24:41] liability, which is nothing more than sometimes 45 bucks a month. It really is, is nothing. It just kind of opens the door to, Hey, somebody else can come in here. And that, that is to alleviate from these insurance companies wanting you to put additionally insured down and, you know, reaching out to a company, Hey, can I get November one, two, three, four on the, on the policy? You know, we're looking at like what 72 hours.

[00:25:09] Well, sometimes these people don't have 72 hours. And so hanger keepers is one of those things. It just kind of, it, it adds the fluff. And if you have an aircraft with a note, you have to have insurance, right? A lot of these, we haven't ran into them yet. They're out there. The Cowboys that ride around, you know, with no note, no insurance, self-assured love it. But generally speaking, I would say like over 95% of aircraft out there, fine. Have insurance of some form. Do you guys have a collective and are you selling your own insurance through hanger direct?

[00:25:38] No, we do not. We're working on it. That's another thing we want to work with AOPA on is offering something like some form of insurance. If you don't have it, you know, this is a community platform. So going through AOPA and trying to provide the best route possible for that, you know, insurance, as we know, is a sticky game. I want nothing to do with selling insurance. You know, if we can offer something through, you know, a very vetted group like, you know, AOPA, that's our goal. That's great.

[00:26:06] So what inspired this podcast was we had some folks in the passive income pilots forum ask a bunch of questions. And one of the things that they asked was, you know, does the city airport typically take care of the ramp and the taxiway and kind of the maintenance? And maybe, maybe we speak to kind of how that works to ensure maybe there's some kind of an easement or some kind of an agreement that you're always going to have a, an apron that's going to get you to your hangar or your taxiway or runway. What, what kind of obligations are there on in the policy?

[00:26:37] Yeah. Most of the time, any taxiways, you know, that's, that's on the county or the city. There's easement, you know, there's through the fence stuff. If you, you wouldn't like, we can get super nitty gritty and some of it's way over my, my pay grade. But I do know it's, it's a rather a pain to like, let's say you wanted to build a taxiway to this, you know, new set of, or this hangar. Well, in reality, you're going to want to build this taxiway to this, you know, couple

[00:27:07] of rows of hangar because you're going to, you know, you're going to need the funding from people renting your hangar to pay for the maintenance on taxiway. So it comes down to how fast you want it done. If you want it done fast, you're probably gonna be covering the bill, right? If you want it done slowly going through the city, you know, it's, it's painful. Yeah. I've built neighborhoods where, you know, I build the roads and then I have to dedicate the road and I can either maintain the old roads myself or I can make them public roads.

[00:27:34] And then I, there's actually a tax credit and I get, is it, is it kind of work like that way? I mean, can you kind of dedicate the taxiway back to the airport and then if they just take it on and it's their problem? Yeah. I, it just, it all comes down to like the permitting timeline. You know, there's like the easement, the easement regulations stuff. And hopefully we don't have to get into very much. Like I said, it's, it's super muddy just in the sense of, you know, you, you read, you

[00:28:01] read what the regs say and then, all right, you act on it. And then you find out that there's another reg that you didn't read. And it sounds like aviation. Yeah. I know it. We're not happy till you're unhappy. Right. Yep. But a lot of the, I don't know. I I'm trying to think like here in Georgetown, there's one side of the runway that has just been underdeveloped for forever.

[00:28:27] And I was asking, um, cutter the FBO and I was like, why does nobody go out there and develop it? And the answer that gave me was, well, what do you think? And so that's, it's, uh, yeah. I mean, it, it, even for these businesses like these FBOs, I mean, it still is Dave and Goliath because it's not so much that you are working with people that don't want to work with you. It's you're working with people who have no idea what they're doing. Unfortunately. Yeah. Any tax credits on building these?

[00:28:57] Yes. As far as what that is, I'm not sure. But as you know, if you build a hanger and you give it to the city, right? Yes. You do get tax credits, um, which is technically what you're doing, right? You it's your hanger. You built it with your own dough, but you have to give it up in 50 years. So of course there's tax credits. Uh, I'm not exactly sure what it is. That's interesting. So yeah, I mean, you, you, you're getting the 50 year lease or whatever, but at the end

[00:29:25] of the day, the building is going to be the cities at the end. So right. It would be kind of in your best interest maybe to donate it back if it's, you know, going to give you a tax credit, I guess. I mean, that seems like a, who's usually, I mean, you mentioned city council, but who is usually the overlord of these airports? Where are you going? If I want to build a hanger, who am I going to first? Like pick a random airport, who am I, who am I looking up and then going to that guy or gal and talking to you'll typically start with the mayor.

[00:29:55] Oh, really? That's a good start. Yeah. You got to get there first. You know, I'm not really trying to make this confusing top of conversation, but you might have to go to the appraisal district because I've, you know, back to the tax credit thing and I'm going to jump here, but one of the major issues right now is people having to pay property tax on this hanger, on this land that they don't own. That is a huge issue right now.

[00:30:23] And oh my gosh, it is a bad issue here. In fact, I won't name names, but some, somebody out there, he took it for, for the team, for community and he went and he sued the city of Georgetown because he was like, why do I have to pay property tax on something that I don't even own? And I have to give back to you. And the city ultimately won. And that is, and so if you look at stories like that, it's going to discourage people

[00:30:53] to, to try and go and do something good. I mean, the, the, all there was, I'm sure there was another side of the coin here, right? I'm sure there's, can we pay like that? They claim goes to maintenance and this, that, and the other. And it doesn't. And so the argument there was, Hey, we don't, we're paying property tax on something that we don't even own. Like, can we pay it forward to maybe an upkeep fund or so? Yeah. Yeah. That's interesting.

[00:31:20] I mean, I guess at the end of the day, somebody's paying the property taxes, whether you're a tenant or a landlord, you know, you've got to pay those goods and services. So, but labeling it more appropriately might be the best, the best way to do it. Like you said, you know, like a use fund or something. I'm curious to know, you know, Ryan and I, like I said, are GA nuts. We've had owners of flight schools on here and talked about, you know, buying airplanes and putting them in lease back pools. But I have a selfish question.

[00:31:50] And that is what happens with all these airplanes that just sit around and only get used for 30 to 60 days out of the year. And is there any marketplace for, for going and playing with some pretty fun toys? I mean, we're all, the listeners of this podcast are highly experienced pilots that have, you know, very healthy aviation backgrounds. We're not the typical flying club, you know, members who are going to go gear up a 182 on a weekend. It's like, you know, these are, these are professional pilots.

[00:32:20] If somebody wanted to get into a TBM or a, or even a phenom or, or, or something more reasonable, like a, you know, a twin Cessna or something like that. What does that market look like? Is there any sort of market? And I'm sure, I'm sure it's relationship-based, but there's, is there any matchmaking service? So this is a great question and an absolutely loaded one. So, yes, if, think of a plane, like an old car, if it sits, it's going to break.

[00:32:48] I look at, like, for instance, pro parts. One of the jets is on pro parts. And if you obviously look at it like any other plane, the more you fly it, the cheaper it gets. And that's this weird, I don't know, it's a weird aura where, you know, okay, so you're telling me that I'm going to pay more money if my plane flies 60 hours versus if I flew 120 hours and, you know, in theory, yes, but some people either can't afford to do that, don't want to do that. We all want to hold on to our dream of owning our own jet, right?

[00:33:18] Nobody wants to squash those. So I've run into an instance, for example, where I have a group where they own a jet and it flies 60 hours and that's it. And it's kind of a waste. There's no, you know, not really optimizing it. And so I went and found a group of people and I said, hey, I've got this jet. They actually just sold their plane. It was a CJ. This was a CJ. They had their own pilot.

[00:33:46] And I was like, hey, I've got this plane. It's owned by an older group. They fly 60 hours maybe. And it's, you know, spotless. Like, I would just love for somebody to fly on it. And they're like, great, let's buy 50 hours. So called up the lawyer, you know, got them the lease. They were going to Vegas for some convention. So you take 50 hours. The lease rate at that time, I think, was $2,000.

[00:34:14] And so 50 times 2,000, that was wired directly into, you know, their bank account. And so what we're essentially creating here is a legal way for folks to take money from them not flying, right? We're paying them for their plane sitting, essentially. And they can then take that and use that as operating capital. It's a super white glove niche industry. It's a lot of guys out there.

[00:34:42] For instance, I deal with a lot of folks who kind of get kicked around by the charter companies. You know, planes break, this, that, and the other. Hey, I got this last minute thing. And a lot of them already have pilots, which makes, you know, my life easier just trying to manage the whole ordeal. But as for the TBM goes, I mean, that's a great aircraft. Yeah, that's my dream airplane someday. But I want to know, can I go play with one, you know, for less money than waiting for 20 years until I can afford one?

[00:35:10] And as far as I know, it would, if you want to go play around with one, you'd have to go buy in. Like, for me, it would be, let's see here, 15 hours, right? So you have to purchase 15 block hours on a TBM before I'll even, you know, pick up the phone to call. And what's the hourly rate on an airplane like that? If you had the relationship with that person, you know, you got the training, you obviously, like, paid for that. Tate, stop.

[00:35:37] This episode just made pilots $100,000 poorer. Like, what you're about to say, Trenton, just stop. Everybody's going to be calling Trenton, being like, all right, I'm in 15 hours, you know? No, it's awesome. Now, there's a right way and a wrong way to do it. I, for whatever reason, have worked for entities all throughout my part of anyone life. I've seen, dryly seen, like, I know how sketchy people get with it.

[00:36:06] But there's actually a right way to do it. And if you think about it, it makes total sense. So if you have, typically, if you have friends or family members that want to fly, you have a plane, boom. So, like, for instance, I've got this jet. They all golf. Like, all their buddies golf. And they're all attorneys. And they all go to the same places. So I was like, why don't you guys just share the freaking jet, right? Right. How easy is that? So they all bought, I don't know, at least out 120 hours to all of their friends.

[00:36:35] And, you know, I've got this pool of pilots. They text the pilots. And that's the distinct thing is you've got the dry lease, which you have to pay for the lease time only, right? Dry, not wet. Dry. As soon as it's wet, it's a charter. Right. So, boom, you got the dry lease. Then you got your pilots, right? That's your second transaction. That's got to be completely separate. I can't set it up. I actually have my insurance guy send whoever leases the plane to a list of pilots. And they just dial them up.

[00:37:04] And they're all qualified, ready to go. And then the third one is fuel. And that, they purchase it with a credit card. So I'll ask them, hey, what's your credit card? I'll give it to the FBO. Boom. I did that. 120 hours. You know, 120 times three grand. They were, you know, it's not illegal to make money. They're not making money by any means, right? Nobody makes money in aviation if you are a plane. Just get it out of your head. But it might make your ski trip go from 4K an hour to 2K an hour, right?

[00:37:34] Which is a lot more feasible. Validable. Yeah. Especially when you're splitting it with a few people. Again, you know, this show, we don't provide any tax, legal, or investment advice. And certainly today we're playing around with the ideas on how to lose money faster. But, but. And have more fun. Have more fun though. Yeah. This is not passive income pilots. This is going to debt pilots. Yeah. No, this is interesting. So just to recap.

[00:37:59] So you're saying I can go buy in to a jet for 15 hours, somewhere probably around 2000 bucks, get a dry lease. Then every time I go use it, I've got to go find a pilot, which I get a list of. And I don't know, maybe there's a thousand dollars a day. Maybe it's more. And then I just pay for the fuel and then that's it. Yeah. I mean, is there anything else to that? As long as you have the legal document on the plane that says operational control, you

[00:38:27] can, yes, you can do whatever you want. And that is, that is what the FA cares about is operational control. If you have an incident, the first thing they're going to ask when they, when they get out there is, okay, so who has operational control? And if nobody knows, well, okay, this, you know, this should be exciting. It's very black and white. I mean, it's, there's nothing pretty about it. And sometimes when you have multiple leases and multiple people need to go different places

[00:38:53] at the same time, it can get ugly, but it's the same version of an aircraft partnership, but this you can actually get out of, right? Not, you know, a partnership might be more difficult. So, dude, instead of buying a third of a Bonanza, but you know, your buddy's Bonanza or your buddy's TVM, you know, Hey, I'll just want to buy 50 hours from you and I'll go get training at flight safety and I'll fly myself. And that's also a very common occurrence.

[00:39:21] I do have to, I do have to turn that away a lot though, just because that makes our insurance go up quite a bit. So like all of this stuff that we do is all pro flown. You can't have like an owner fund thing. Otherwise your premium goes up by like 30 K. So yeah, I, the, but if you have, you know, everything's on a fleet policy. If you've got the same guys flying the same people on the same planes, it all kind of just it's its own little ecosystem. Makes sense.

[00:39:48] This sounds like pilot direct or airplane direct is the next venture. Yeah. Parent company. Yeah. I have way too much going on. So yeah, no, I, and sometimes I park jets and hangar direct hangers and I'm like, Oh, look at that. That's cool. Well, this has been super interesting. Trenton, how do, how do people find out more potentially participate? I mean, hangardirect.com I'm on Instagram and Facebook trend Ray. I would love, like I talked to everybody. That's all I do.

[00:40:18] My wife loves it. I'm on the phone for eight hours a day. Cause I, I, I need that, that outreach, you know, whether it's an issue or something that they want changed, or if they have general questions we're grown insanely fast. And we also have a roll decks of, of a lot of people who, you know, have the money to build hangars. And, you know, if, if you have interested in it, you know, please reach out to us. Awesome. That'd be great. Love it. Yeah. Well, Trenton, thank you so much for your time today.

[00:40:47] We appreciate your, your wisdom. And, um, again, if you have questions, uh, email them in to ask at passive income pilots.com. We'll bring guys like Trenton on to answer them. Yeah. Or start a chat in the forum, which is what created this podcast. So our listeners are curating the content, whatever, whoever's listening to the show, you know, that has a question, ask it in the Facebook forum and we'll bring on an expert in the industry. So thanks so much, Trenton. Catch you on the next episode. Oh, thank you guys. This was awesome.