Rail Merchants International

Buyers Guide

1999 AAPRCO Presentation

A GUIDE TO BUYING A PRIVATE RAILROAD CAR:
A PRAGMATIC APPROACH

The following is the outline of a presentation given by our staff at the 22nd annual American Association of Private Railroad Car Owners (AAPRCO) Convention in Tampa, Florida.

The links below will guide you through basic questions and considerations involved in the process of purchasing a private car. For further information or a private consultation, please contact David Thebodo at (641) 472-2020 or email us at caboose@railmerchants.net.

Don't forget that available cars for sale or lease may be viewed in our Private Varnish section.

Is Owning a Private Car Right for You?

Taking the usage into consideration can aid in determining the type and condition of car that is right for you and your needs.

• Lifestyle and Family
       - Personal Use - Inheritance and Estate Planning considerations
• Client Entertaining and Business Use
• Charter or Leasing
• Combination of the above

Finding the Right Car

Types of cars:
There are many different cars available depending on your specific needs.

• Business Car, Office Car, Platform Car
• Sleeper
• Dome Car
• Specialty Cars
       (e.g.: Diner, Lounge, Power Cars)

Who Can Help?

Buying a private railcar is a major purchase that requires specialized knowledge to ensure your best interests are taken into consideration.

• Someone knowledgeable about rail cars
• Someone knowledgeable about operations
• Someone knowledgeable about mechanical considerations
• Someone who is trustworthy
• Someone who will work for you

Get Professional Help

Put someone with a proven track record within the industry in your corner.

• Make a commitment
• Make an agreement
       Someone who is trustworthy
• This is a collaboration

Car Condition

There are several options to consider based on your proposed usage.

• Buy a Finished Car
• Build or Rebuild a car to your specifications
• Purchase a "Turn-Key" Operation which includes:
       - Car
       - Client List
       - Marketing Materials
       - Trained Crew
       - Goodwill and Reputation
       - Sellers Guidance and Counsel

Due Diligence

Locating a professional with a solid understanding of both the mechanical and financial factors involved in private car operation is essential.

Mechanical Considerations

• Amtrak Compatible
• Up-Grades
• Inspection Cycle
• Hiring an Inspector

Financial Considerations

• Asking Price
• Liens and Encumbrances
• Operational Considerations:
       - Amtrak Fees
       - Crews and Supplies
       - Maintenance
       - Cushion
• Projected Revenues
       (if leasing or chartering)

Striking a Deal - Negotiating

A professional can aid in ensuring that negotiations proceed smoothly and to the satisfaction of both parties.

• Fairness
• Offer Terms and Considerations
       (and Counter-Offer)
• Timing of Steps
• Controlled Closing
• Signing of Papers
• Disbursement of Funds

Taking Delivery

After the deal has been closed, you must take into account the logistics of transporting your private car.

• As Is Where Is
• Can it move?
• Who makes arrangements?
• Controlled Closing
• Riders
• Home Shop

Go For It!

Join the ranks of private car owners experiencing the almost forgotten pleasure of luxurious rail travel while perserving a great American heritage. Our staff wishes you the best of luck in reaching your goal and is available to assist you in any way we can.

To view private railcars that are currently available for purchase, stop by our Private Varnish section.

For further information or a personal consultation, contact David Thebodo at
(641) 472-2020 or email us at caboose@railmerchants.net.