I have been offered an opportunity to purchase a short line railroad. From the financial paperwork and shipper information I have received, the railroad would be profitable and has three connections, two to Class Ones. It easily surpasses the 100 car per mile threshold ( Blanchard Standard ). Track is better than Class Two. I’m looking for principals or someone who can lead me to principals to work out a financial package. Any assistance would be appreciated. Thanks in advance!!!!
So in my view you should partner with someone else that has done this in the same state. If this is Texas do a search on the Secretary of States website and see if you can find another privately operated shortline and ask the owner of the business if you can ask them questions directly or refer you to someone they dealt with.
You might also want to contact one or two operating railfan museum type operations as well. The operating museums could probably coach you in how to apply for state grants for ROW improvement.
Calling PT Barnum!
txhighballerI have been offered an opportunity to purchase a short line railroad
First: if it's "profitable", why is it being sold? Check answers carefully using your BS detector on anything that seems like an excuse. Then
Second: do actual 'due diligence' -- look carefully at all the details of operation. Talk to the people, walk the track, look over the equipment. Take some of your shippers, or prospectives, to lunch and quietly find out what's actually important and unimportant about the service.
Third, put together a DETAILED plan on what it will take to acquire and then run and grow the business, for the first five years you own it. Anyone wanting to 'work out a financial package' will want to know that you're financially competent, understand railroad operations and shipper 'management', and are going to supply them with adequate return on capital with a minimum of risk.Until you can substantiate those details completely and fairly compellingly, don't look for anyone to take your word for it.
I strongly advise that you be SURE to arrange enough to get you to sustainable profitable operation (with enough business-interruption insurance in place to cover natural disasters, derailments and the like) as there is no vulture like a lender who you try to come to with hat in hand because you didn't have quite enough.
Your due diligence should include a baseline environmental assesment, especially at oil/chemical un/loading areas and engine facilities and any wreck sites.
My question is if you have operated a short line railroad in the past and possess that management skill. Do you have a team already built to take on such an enterprise? It really takes a very competent team with the skillset in all facets of railroading. If you are looking for capital/financing then these entities will want to see what experise you possess. You will need a well thought out business plan which shows growth and profitablilty. How much due dilligence have you performed? Hope that helps.
Without knowing any details, I would suggest that you partner with an established shortline operator (like G&W or Watco).. they have the expertise and financial wherewithal to make it happen and the ability to ascertain the true potential and pitfalls. Of course, if you're an industry insider with a net worth in the hundreds of millions you might be able to go it alone..
There are a number of key factors to consider any investment in a shortline railway. Due diligence is a key when you you at the existing quality of the rail assets acquired, the existing and future carloads and the like. I do have access to low cost capital for line acquisition, upgrading, motive power and rolling stock purchases/leases and the like. However, it is predicated on a solid business plan, great management and a commitment from exisiting and potential shippers to use the service.
PETER SWIRE There are a number of key factors to consider any investment in a shortline railway. Due diligence is a key when you you at the existing quality of the rail assets acquired, the existing and future carloads and the like. I do have access to low cost capital for line acquisition, upgrading, motive power and rolling stock purchases/leases and the like. However, it is predicated on a solid business plan, great management and a commitment from exisiting and potential shippers to use the service.
If you are still here, PM me and I will give you my personal e mail....
txhighballerThat should not be a problem. I will drop you a PM and we can have a conversation....
So no other entity has stepped up to take over this short-line in the past 4 years? Clearly, it seems no one was banging down the doors to get in.Well, best of luck, maybe you can view the East Terminal Railroad series on YouTube and...not quite do what Brian did.
Remember that it is a railroad. I've witnessed far too many fails because you have money and operating bubbas that ignore the importance of track/bridge/signal. Fail to keep up with maintaining the roadway and your shiny toys have nowhere to go. Hire track people with no experience and the FRA will come along and shut you down, mostly because your ignorance is gonna kill somebody.
mudchicken Fail to keep up with maintaining the roadway and your shiny toys have nowhere to go.
Nah, it's more fun being a social media/vtuber star.
I've seen an operation or 2 pretty much die because more time was spent on facebook posts than on things like fixing the track.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
chutton01 So no other entity has stepped up to take over this short-line in the past 4 years? Clearly, it seems no one was banging down the doors to get in.Well, best of luck, maybe you can view the East Terminal Railroad series on YouTube and...not quite do what Brian did.
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