Has anyone thought about purchasing some used rail cars and putting them into revenue service? We currently own some real estate that we rent out and I have often thought it might be worthwhile to invest in some rail cars, fix them up and put them out in Railroad Land. Anyone know what kind of revenue a single car might earn in a year? I have know idea. Is this a crazy idea?
Not completely crazy, but difficult, and risky.
I would think you would need more then just a few cars to actualy turn any profit.
JC
A great many people have done this successfully. However, in my opinion, you begin and end the ‘feasibility’ of the idea with the statement “I have no idea”.
If you do not understand the mechanics of how railcars are circulated and loaded, or the specific finance involved, you have no business getting into it. (And if you do, it wouldn’t be long before you had no business of any profitable kind whatsoever…)
I don’t mean to be insulting, but it isn’t a game for amateurs, and it isn’t something to be casually undertaken with a few war-weary cars. You can certainly learn some things on these forums, and even more through e-mail correspondence with a select few of the people who post on here (I won’t dob anybody explicitly, but you may already have recognized some of them) – but I would STRONGLY advise that you’re not ready to take up the idea right now…
Thanks Guys. You are right Overmod. If you do not know about any business you should stay clear of it until you do. It is just something I have thought about. I doubt I would ever venture out in that direction. More curious to see what other folks thought of the idea
Oh Ya! No insult taken
Thanks Tooley
Rail car??? Is that a caboose, gondola car, flat car, reefer, dining car, sleeper car, dome car, flanger, box car etc etc etc. just what kind of rail car are you talking about?? revenue service–you mean rolling around your rented out land? Where is railroad land? do you mean to buy a bunch of old passenger and sleeper cars, fix them up and use them like a motel on your property?
Rail car leasing is a very complex and capital intensive business. It is nothing whatever like investing in real property for lease. Back in the 70s there was a quirk in the car rules that created a short window of opportunity to invest in boxcars which many individuals took advantage of, and not a few lost a lot of money. The rules have come a long way since then. Even if you buy cars and offer them for lease there is no guarantee that anyone will use them, for many reasons. The uninitiated are best to steer clear. This is not a place to park your real estate gains now that the building market is softening…
LC
In the upper corner of some rail cars there is message that says “This car is subject to a security agreement on file with the Security and Exchage Commision” etc. What this means is that the company whose reporting marks are on the side of the car does not own it outright. These are large companies and many cars have these marks. If it does not make sense for them to purcase them outright and they have use for these cars all the time. It would be finacial suicide for you to by them with no loads for them to haul. Besides the fact that you have to pay someone to store them on there tracks when not in use. This would be a very expensive hobby.[2c] As always ENJOY
First of all there is not to many used cars on the market and what is out there
is getting up there in price.
It can work out very well for you and you can lose money on this also.
It takes time to find the right group of cars for the right customer.
This is not a get rich quick deal it takes time.You could be looking at 5 to 7 years
before you see some real money.
When I stared out cars were cheap and lots to chose from.Now its a whole
different game,everyone wants cars but try to find any at a good price.
Yes you need deep pockets to get things going.
Gotta have some seriously deep pockets to compete.
The largest car leasing company is GE Capital…they have over 150,000 cars in service. I have a customer which has over 60,000 cars in their lease fleet. The cash flow on the cars is great, but you must put some serious cash into the operation in the form of initial investment into cars, car repair shops, and administrative staff, including sales.
When things go well, it can be good, when a recession arrives you see lots of empty cars parked on sidings. Perhaps your best bet is to own stock in a company such as Trinity Industries which builds and also leases cars.
ed
Ed -
Good points. Another way to make money from rail cars is to own a short line with significant originating traffic so you can use your cars on the originating shipments in dedicated service.
LC
Thanks Guys You Talked me out of this notion. I’ll stick to real estate & the Trains in the basement.
Tom
Based on the above thread, that is probably a really fine plan. [^]
Tooley,
What this country really needs right now is railcar components. Ever think about rebuilding key components from older railcars and selling them to the railcar manufacturers?
Other than that, I think LC made a good point about first owning a shortline and then building a railcar fleet for the shortline.
Sounds Like A Good Idea. But again I don’t know much about it so I think I’ll leave it to some of you young guys out there to try.
However, I have been successful selling parts for model trains on eBay. Think I will stick to the 1 to 87 scale (HO) stuff.
Guess I was Dreaming. Most likely It would turn into another nightmare.
Oh YA!!! This real estate thing. Trust me it is not as easy as Carlton Sheets says it is.
Dealing with the city inspectors, the social services & Tenants. We have a few good ones. But most are a pain where you don’t need it.
G’day, Y’all,
I know a guy with 34 miles of railcars. And a shortline. He pays a company in California to do all the day to day stuff involved in this business and his wife is still busy all day at the computer taking care of some things.
In 1966 I saw a (I think) Barron’s magazine which said buying a car was a good thing to do for your kids. At that time, new cars brought $20 a day while older cars went for as little as $3. Does anyone know what they are bringing today?
Jock Ellis
Cumming, GA US of A
Georgia Association of Railroad Passengers