Very interesting:

[www.empirerailcar.com]

"The management team at Empire Railcar Corporation (ERC) has owned and operated railroad tank cars for more than 60 years and has enjoyed very good success along the way. What we offer investors is fairly simple. Investors purchase a railroad tank car (with ERC’s assistance) from one of the various sources within the railroad industry, and ERC manages the car.

"Currently, a new railroad tank car costs approximately $114,000.00, has a 50 year operational lifespan, and earns approximately $700.00 per month on a typical lease agreement. ERC manages every aspect of operating the tank car including leasing it, monitoring its movements, having necessary repairs performed and paying taxes owed to the different states the tank car(s) traveled in. ERC’s management fee is 20% of the gross earnings. The money earned from the tank cars is distributed to the investors on a quarterly basis in which a typical tank car should earn approximately $2,100.00 per quarter. A new tank car would have approximately 5% of its gross earnings in repairs and taxes. ERC’s management fee for the quarter would be $420.00 and repairs and taxes would be about $105.00. This would leave the investor with a net profit of $1575.00 for the quarter. Thus, the investor should make approximately $6,300.00 per tank car per year in earnings. This figure will vary according to the age of the tank car and the repairs performed during that year.

"In addition to the above earnings, the IRS currently allows accelerated depreciation, straight line depreciation of ten years, and 100% depreciation over seven years that specifically includes railroad tank cars. One other method of choice the IRS allows is to expense up to $102,000.00 immediately. In the upper tax bracket the current formula for actual dollars and cents savings is $114,000.00 X .40, which is $45,600.00. Depreciation has reduced the actual cost of the tank car to $68,400.00.

"When factoring in depreciation, the tank car should return to the investor their capital investment in approximately nine to ten years and the investor should collect a return of about 8-10% annually for the remaining operational years of the car. If you are NOT factoring in depreciation and are looking for a straight cash-to-cash return, you should receive a return of approximately 5-7% annually for the life of the tank car. "