Buying Railcars, then leasing them to railways.

[Anonymous]

QUOTE: Originally posted by Big_Boy_4005

I'm not sure of the numbers, but owning railroad equipment takes big bucks. A single car has to be over 100K, so if you had a few million, you could own a small fleet. I would imagine that it is something like the apartment rental business, and vacancies kill. Time is money. If you win the lottery, buy railroad stock, it's easier. [swg]

Cars can be as cheap as $1,000 in running condition, used. New cars are expensive, but you don't need new cars to get into the business. Don't expect big profits in car leasing though...

Do you think you are ready to compete with the likes of GATX, and others?

It isn't just competition from other leasing companies, but also from the RRs themselves that makes this business difficult. If a RR has a choice of using their car or yours who's do you think they'll load?!?

LC

[eastside]

I once worked for the leasing group of a Wall Street investment bank. We analyzed and put together the financing of such deals.

Yes, it takes a lot of money, but the real question is why a company should lease rather than simply buy equipment. Usually the decision to lease depends on taxes and the financial condition of the firm.

Here are a few of the advantages.
From the lessor’s side:
1. Can take advantage of tax credits that may be unavailable or unusable by the lessee
2. Cost of capital to buy equipment is frequently less for the lessor because they’re usually in better financial condition
3. Can redeploy returned equipment faster than lessee

From the lessee’s side:
1. Doesn’t have to carry equipment on books
2. Doesn’t have to tie up capital in equipment that they may need only temporarily or sporadically
3. Can have a positive effect on earnings per share (eps)

Not surprisingly, many of our clients were transportation companies.

[XG01X]

Check out http://www.sircrail.com and how they got started

[Anonymous]

QUOTE: Originally posted by XG01X

Check out http://www.sircrail.com and how they got started

Thanks for the link, good reading.