JS 55: Private Rail Cars with Michael Margrave From the Travel Channel’s ‘Tricked Up Trains’July 29th, 2013 by Jason | Comments Off on JS 55: Private Rail Cars with Michael Margrave From the Travel Channel’s ‘Tricked Up Trains’
Michael Margrave has a serious hobby that conjures up images of Atlas Shrugged and a seemingly lost form of long distance transportation in America. Michael owns a private rail car and travels frequently with an association of fellow rail car owners called AAPRCO. This group was featured on The Travel Channel’s “Tricked Up Trains” Program on Sunday, March 3rd. Michael’s railcar has been hooked to the Union Pacific and Canadian Pacific for Cross Continental Rail trips to places untraveled by the automobile.
ANNOUNCER: Welcome to the JetSetter Show, where we explore lifestyle-friendly destinations worldwide. Enjoy and learn from a variety of experts on topics ranging from upscale travel at wholesale prices, to retiring overseas, to global real estate and business opportunities, to tax havens and expatriate opportunities. You’ll get great ideas on unique cultures, causes, and cruise vacations. Whether you’re wealthy or just want to live a wealthy lifestyle, the JetSetter Show is for you. Here’s your host, Jason Hartman.
JASON HARTMAN: Welcome to the JetSetter Show! This is Jason Hartman, your host, where we explore lifestyle-friendly destinations worldwide. I think you’ll enjoy the interview we have for you today, and we will be back with that, in less than 60 seconds, here on the JetSetter Show.
ANNOUNCER: What’s great about the shows you’ll find on www.jasonhartman.com is that, if you want to learn how to finance your next big real estate deal, there’s a show for that! If you want to learn more about food storage, and the best way to keep those onions from smelling up everything else, there’s a show for that! If you honestly want to know more about business ethics, there’s a show for that! And if you just want to get away from it all, and need to know something about world travel, there’s even a sure for that! Yep, there’s a show for just about anything. Only from www.jasonhartman.com. Or type in Jason Hartman in the iTunes store.
JASON HARTMAN: It’s my pleasure to welcome Michael Margrave to the show! He is an attorney in Scottsdale, Arizona, and I had him on my Holistic Survival Show previously, talking about gun trusts, and I found out that he has a very interesting hobby, a very unique form of travel, and that is: ownership of your own railcar. The romance and nostalgia of railroads is pretty interesting to myself and a lot of other people, and today we’re gonna talk to him about owning your own railcar, and what it’s all about! Pretty interesting. Michael, welcome. How are you?
MICHAEL MARGRAVE: I’m doing very well, Jason. Good to talk to you again.
JASON HARTMAN: Well, likewise. So, first of all, how did you become interested in owning your own railcar?
MICHAEL MARGRAVE: Well, I’ve always like trains as a kid growing up, and kind of a latent interest for many years. And oh, probably in the early 90s, I came across this group that I’m now a member of, that members restore and operate these old railroad cars, anywhere from 100 years old, up down to maybe 50 something. So, probably about 1998 I struck a deal with one of the railroads, they had some excess cars, and I acquired my car back then, and it took me four years to get it up to speed, and so about 2002, took my first trip in my car called Promontory Point.
JASON HARTMAN: That’s great. Great name. So, what did you do? Hook it on to an Amtrak train?
MICHAEL MARGRAVE: Well here’s—once you get it ready to go, there’s two ways to travel with these cars. One is, you’re absolutely correct. Probably the most common is to hook on to a regular Amtrak train, at certain points, and to be dropped off at certain points. Or the second way is if you have enough cars together, you can do what’s called a special train, which is in fact a trip we have coming up next week, and so, that—you need a certain number of cars to support that.
JASON HARTMAN: How many do you need, to get your own special train?
MICHAEL MARGRAVE: Well, you probably need at least eight or nine cars to support the cost of doing a special train.
JASON HARTMAN: Wow. Wow. It’s just amazing. So, I’ve just got so many questions here for you. First of all, you know, and I know this is on everyone’s mind, as they’re hearing you talk about this—so, these cars are, you said, 50 to 100 years old?
MICHAEL MARGRAVE: Yes they are.
JASON HARTMAN: And how much do they cost?
MICHAEL MARGRAVE: Well, you can—this is one of those questions that’s difficult to answer. Because you could start with a rundown, beat up car, and get it for $10,000, or you could get one at the far other end of the spectrum that’s completely finished, and has the best of everything on it, and that could be in the, you know, the mid to upper six figures.
JASON HARTMAN: Wow.
MICHAEL MARGRAVE: So, you don’t have to go that high; there are many ways to do it. But that’s the range of, to get into the hobby.
JASON HARTMAN: Right, right. So, it really sounds like—I mean, you know, a lot of people are probably thinking, as they’re listening, they’re comparing this to a recreational vehicle. And this is an RV. It’s a form of an RV. Quite a bit different than what most people would think. And as such, you know, you can buy a beat up old RV for $10,000, and you can easily spend 6, $700,000 on one—well, not easily. But you can spend up to about a million five on a gorgeous motor coach, 45-foot type thing. So then, the next question is, expenses and maintenance of a railcar—I would assume the maintenance probably isn’t too bad, but I don’t know; they’re older. It doesn’t have an engine. But, what does it cost to have your car hooked up to a train?
MICHAEL MARGRAVE: Well, just to backtrack on your one comments there, most cars have a air conditioning system, they have a diesel generator, they’re also able to use power from the train itself. And so, there are some pretty good internal components. And you know, sometimes when something goes bad, you can spend a lot of time trying to find a replacement part. Anyhow, to—if you go on Amtrak, there are a variety of charges they assess. And so, if you’re doing a solo trip, I’ll call it—your car, and you’re going from Los Angeles to Chicago, for example, they would have a mileage charge of, say, about $2.10 a mile. And then they have various parking, and switching charges, and so forth. So—
JASON HARTMAN: Say that again, that price? How much?
MICHAEL MARGRAVE: About $2.10 a mile. And—
JASON HARTMAN: That’s fairly expensive then, huh?
MICHAEL MARGRAVE: Yeah. And so, the general idea is, people, when they do trips, they try to have friends, or people they know to join in, and participate in the trip, and help spread the cost around, so that it’s not a prohibitive type of thing.
JASON HARTMAN: Yeah, yeah. Well that’s a good point. So, what are the dimensions of a car? Are they all the same?
MICHAEL MARGRAVE: Well, you could say, as a general rule, you could use something like 83 feet long by almost 10 feet wide. And in the—you have various types of cars that we have in our organization, which is the American Association of Private Railroad Car Owners.
JASON HARTMAN: There’s an association for everything.
MICHAEL MARGRAVE: Yeah, there is, there is. You’re not kidding.
JASON HARTMAN: I gotta ask you, Michael—do you know how many members this association has?
MICHAEL MARGRAVE: Well, we have—and not all of them own cars. But we have about 500 members. We have a good number of associate members who like to partake in trips, and they are interested in it, but they may not have their own car. And but, within our group, we’ve got about 85 cars that are mechanically qualified to run on Amtrak trains. And so, getting back to your question, there’s various types of cars. Some are all sleepers, some are a combination of a sleeper car and has lounge facilities—
JASON HARTMAN: That seems like what you’d want. Just like an RV, you know, you want both.
MICHAEL MARGRAVE: Yeah. And like my car, for example, it has an open platform at the rear end, it has a lounge area, it has three bedrooms, a dining room, and a kitchen, and then another little bedroom off the kitchen.
JASON HARTMAN: This is a true land yacht. I mean, it’s 83 feet long! So it’s about twice the length of a big RV! Wow!
MICHAEL MARGRAVE: Yeah. It’s—yeah. And each car can handle varying amounts of people, depending on how the car is laid out. So, some have more room in the lounge and the dining room and less for bedrooms, and some have more bedrooms and less of the other. So, it’s—you see a wide variety of cars.
JASON HARTMAN: Sure you do, sure you do. Well, it’s got an open area at the back, so are you able to be the caboose on the train? I mean, if you have this open area, you wouldn’t want another car attached right behind you, I assume.
MICHAEL MARGRAVE: That is true. And so, for this trip we have coming up, this special, next week, is going to be a special from Omaha, Nebraska to Cheyenne, Wyoming, and then back down to Kansas City. Since I had a big hand in putting the trip together, my car is going to be on the back of the train.
JASON HARTMAN: You got the premier spot then, right?
MICHAEL MARGRAVE: Yes I do. I have the premier spot on this particular train.
JASON HARTMAN: Alright. And so, just that cost again. About two dollars a mile, you said?
MICHAEL MARGRAVE: A little over that. And then, of course, if you’re parking somewhere, you’ll have a parking charge, and that varies a bit.
JASON HARTMAN: That’s what I was going to ask you. Storage, things like that.
MICHAEL MARGRAVE: Yeah. If you’re switched around, and so forth, there are many little charges that all add up. But they itemize those pretty well, and that’s on the individual car move. If you do a special train, it’s generally they say, Amtrak will get with the appropriate freight railroad, and they’ll determine the cost, and they’ll say, here’s what you’re gonna pay per mile, and that’s why the more cars you have, the merrier. And so that goes—that’s computed on a different basis.
JASON HARTMAN: Right, right. And, what an interesting and amazing thing. Gosh. So, you’ve got your own diesel generator, you’ve got your own air conditioner—don’t you get power from the train? Don’t they supply power?
MICHAEL MARGRAVE: If you’re on an Amtrak train, yes you do. They have what is called head in power. Which means that there’s a generator in the locomotive that will supply power to the rest of the train. We had a trip last summer where we went from Spokane, Washington up into Canada, and we were strictly with the freight railroad Canadian Pacific for the duration of our trip in Canada. They did not have power in a normal freight locomotive, so we had to provide what’s called a power car, that provided the power for the cars on the train.
JASON HARTMAN: Mhmm. Okay. And so, I was going to ask you, if you’ve taken—if you’ve done any trips in Canada as well. And, it’s just such a bummer that the railroad system is monopolized by Amtrak in the US. How is Amtrak to work with? Are they bureaucratic and difficult, are their prices reasonable or high? I wish there was a free enterprise system in rail travel here.
MICHAEL MARGRAVE: Right. Right. Well, yeah, let me comment on that. I’ve seen actually an improvement here in the last couple of years in our ability to deal with Amtrak on these trips. Since it is not really privately owned, per se, there is a bureaucratic element to it. And so, sometimes it can get a little frustrating. But I think that they—I have to say, they’ve taken steps to improve the delivery of this service. And I think it’s headed in a pretty good direction. Although it’s not beyond running into frustrations from time to time, for sure.
JASON HARTMAN: Seems like it would be a neat idea to kind of rent before you buy, if you will. To kind of try this out and see if one likes it. Is there any market for renting a private railcar and taking a couple of trips and seeing if hey, this is for me, I love it, and I want to get my own car?
MICHAEL MARGRAVE: Oh, sure.
JASON HARTMAN: Does that even exist?
MICHAEL MARGRAVE: Yeah, well no, that’s—in fact, I can think of several people in our group that have taken that approach. And have subsequently acquired cars. I think if anybody is interested, if they wanted to go to our website, which is www.aaprco.com, they will see this subject addressed. And taking a trip is absolutely the best way of determining if it’s of any interest; if you want to devote the time and money to get your own car, and that’s absolutely the best way to go. And then you get a picture of, am I better off getting a car that’s gonna have to be totally refurbished, or do I try to find someone who has already refurbished a car, and is just wanting to, due to age, or illness, or lack of interest, wants to dispose of the car, which obviously happens from time to time as well.
JASON HARTMAN: Sure, sure. I mean, do you have any numbers or ideas as to how many railcars are in private hands out there? I would think this market would be so small, and so specialized.
MICHAEL MARGRAVE: Well, I’d say, and not talking about, you know, any short line railroads, or things of that nature, but just private ownership—there are the cars that are qualified to run on Amtrak, they meet all the safety and mechanical requirements, and are certified to run. That’s a relatively small number in the, you know, low hundreds. There are another group of cars that are able to run, just not on an Amtrak, at the speed of Amtrak. They may be able to run on a short line somewhere, or maybe they just like to have the car as something to enjoy and so forth. Well, there’s gotta be several hundred of cars, if not more, in that particular class. And we have some of those people, members of our group. So—and some of those people get a car that isn’t currently qualified, and then they, like I did, they spend a few years getting it up to speed, where it kind of graduates to that certified class, and then there’s some people that don’t want to do that, but they have a deal with a short line somewhere that they’ll do some trips on that and so forth. And they don’t have to meet all of these high safety requirements.
JASON HARTMAN: Yeah. You know, I would assume, as you talk about certification, and these requirements, I would assume that could become a real bureaucratic hassle, and something you’d have to argue about, and deal with. It doesn’t sound like too much fun.
MICHAEL MARGRAVE: Well, you go through an annual inspection, and a safety inspection, and then every ten years they require that the trucks be removed from underneath the car, so everything there is inspected, and then, every forty years, which I don’t think I’ll have to worry about again, but every forty years, you do a complete rebuild of the trucks, to make sure that there’s no cracks, there’s no damage, and so forth. So, it’s pretty strict. And there’s a little bureaucracy there, but at the end of the day, it’s really good for us, and good for everybody, that we have to maintain these safety standards.
JASON HARTMAN: Most certainly. As long as it’s reasonable and not ridiculous, right? And as long as they’re not picking on you for some reason. Which, bureaucrats tend to pick on people, you know? They love to show that they’re powerful, and you don’t mess with them, right?
MICHAEL MARGRAVE: Right.
JASON HARTMAN: I hate to just keep asking about cost, but this is, again, so specialized. What do those annual inspections and every decade inspections cost?
MICHAEL MARGRAVE: Well, annual inspection—I mean, if you get, for example, I just had that done, and there were like, four or five cars together. And so, the inspection—you’re able to spread the costs of getting that qualified inspector out at the cars, and it was for me, it was like, I think it was under $1000 or something, to get that inspection done. So, it really wasn’t—I mean, it could be a bit more if you were in an isolated spot, and had the inspector come out. But it’s not—that one isn’t as bad. The other one, the every ten year job—you know, I’m not sure, I’m just guesstimating, but I’d say I wouldn’t be surprised if that was in the $7500 range, or something like that, by the time you’re all done.
JASON HARTMAN: Yeah, yeah. So, have you ever owned a motor home, by any chance?
MICHAEL MARGRAVE: No, I haven’t.
JASON HARTMAN: Okay. Do you have friends that do? I mean, have you ever thought about the cost comparison on any of these? I’m just kind of wondering how they sort of stack up. Price of fuel, and maintenance—
MICHAEL MARGRAVE: Yeah, I have no clue. I couldn’t really honestly answer that question. I don’t know.
JASON HARTMAN: Very interesting. Very interesting. This is just such an interesting thing. Well, I would assume that logistically this can get sort of complicated. Because, how do you get to your home? I mean, do you take it to—for example, you are in Scottsdale, Arizona. Where do you go to meet your—where is your car now?
MICHAEL MARGRAVE: Well, my car at this moment is probably somewhere between San Antonio and Fort Worth on its way to Chicago. And so, it will be in Chicago tomorrow, I believe, and then I’m going to join up with it on Monday in Chicago, and then we go to Omaha on Tuesday, and then our special leaves Omaha on Wednesday. So, but you’re right, it is a—it’s not easy finding a good point to keep the car. Because there are not that many places available that are easily, in close proximity to me for storage. We have kept it out here for a couple of years. I have kept it, at certain times in New Orleans, and Kansas City, and so forth. So, but the last two years I’ve had it out here in Chandler, Arizona.
JASON HARTMAN: In the world of private jets, they have something they call the deadhead, which is the return flight where the plane is empty, and that’s a very costly thing, because no one’s making any use out of the plane at that point. And do you have a lot of deadheads with your railcar? Where you just say to them, for example, I think you said it was in Omaha, at times. Do you fly out to the car and then start your vacation, or do you say, hey, bring the car over to Chandler, Arizona, and then we’ll jump in?
MICHAEL MARGRAVE: Well, you would have—you probably want to join it wherever you’re storing it, as a normal rule. Unless you’re—the basic trip is gonna be across country, and you know, you don’t have time to ride it all the way, and just use up that much time. So, there are deadhead runs. And I know that some of our members do make space available on these deadhead runs with, you know, they have a reduced level of service, and people can experience it, but it may not be the same level of service that they would get on a normal trip, you know, a scheduled trip.
JASON HARTMAN: Well, so what do you mean level of service? I mean, are the Amtrak people coming into your car and waiting on you?
MICHAEL MARGRAVE: No, no. You would provide that service yourself. In other words, if you—usually, I have seen situations—somebody has a friend that says, hey, I’m a chef, bring me along, and I’ll do the cooking and serve the drinks and do first class meals and so forth, and then if it was true brown bag, you might say hey, we’re gonna have microwave dinners, but the cost is going to be very little to travel across the country on this deadhead move. So, that’s—but people provide—Amtrak does not provide any internal services to the cars. That, each owner would determine what they want to do, with respect to the services inside their own cars.
JASON HARTMAN: And, when you’re on a train, I mean, you’re not in control of where you stop. I mean, you just go on the train schedule, unless it’s your own train—what did you call that?
MICHAEL MARGRAVE: Special.
JASON HARTMAN: A special.
MICHAEL MARGRAVE: We call it a special train, yeah.
JASON HARTMAN: So you’re just making the stops that Amtrak makes, and you can’t get off, because then you’d leave your car.
MICHAEL MARGRAVE: You can only drop the cars at certain points. And obviously it would mess up Amtrak’s schedule if they let you drop off or bring the car on anywhere along the route. So, it’s usually major points that you can do that. Like, say if you were going from Los Angeles to Chicago. Of course, you could go at either Chicago or Los Angeles. Midpoints, probably Albuquerque you could get on and off, and then at Kansas City, you could get on or off. But those would be the only points where the car could be added or taken off the train. And so, then if you have people on board who say, well, I want to get off somewhere along the route, they can get off, but the car’s gonna have to go on until a permitted point of addition or subtraction.
JASON HARTMAN: Mhmm. Yeah. Wow. It’s a little complicated, wouldn’t you agree?
MICHAEL MARGRAVE: Oh, this—it is. And especially when you do these special trains. I’ve had help from multiple people, and but I’ve spent countless hours on this trip coming up from Omaha to Cheyenne to Kansas City, and there’s just all sorts of issues you have to deal with, both on the ground, and getting everybody at the Amtrak, and the host freight railroad, satisfied, and that they’re on board, and so forth. So, it’s a lot of work.
JASON HARTMAN: Yeah, yeah. It’s gotta be a labor of love. Well, let’s not just focus on all the business side of it, as we have. And you know, all the difficulties and hassles with it. Because everything’s gotta—you’ve gotta work for everything in life. But, maybe just talk about some of the trips you’ve taken, and how enjoyable they are? The thing I love about the train is, you don’t have to drive. You’ve got scenery. And it’s neat. It’s a neat experience, huh?
MICHAEL MARGRAVE: Well, it really is. And you can stretch out, and you’re not confined to a little seat, and well, just to give—I’ve taken trips all through the Midwest, and up in—the trip last year, for example, we went from Spokane—well, we started in Portland, up the Columbia River, and up to Spokane—
JASON HARTMAN: It’s beautiful up there.
MICHAEL MARGRAVE: It’s beautiful. And then we went to the border in Kingsgate, and we met Canadian Pacific Railroad there, right at the border, after we got through inspection. We were with Canadian Pacific, a great railroad, for about a week, and they took us to Nelson, British Columbia, Trail, Cranbrook, there’s a fantastic railroad museum in Cranbrook, British Columbia. We spent a night right at Summit Lake, Crows Nest, at the Continental Divide in Canada, and I think it was the border between British Columbia and Alberta. And just to spend a night about 50 feet from this lake, with complete serenity, was just something you never forget. And then—
JASON HARTMAN: How did you happen to spend the night there? Did the whole train just stop there?
MICHAEL MARGRAVE: Yeah, so it was a special.
JASON HARTMAN: Okay.
MICHAEL MARGRAVE: And so, we had like ten cars. And so, as part of the routing of the train, generally on these specials, more times than not, you’ll spend the night somewhere, and so you’re not traveling all night. And so, that was just a convenient spot, albeit a beautiful one, to spend the night.
JASON HARTMAN: Very interesting.
MICHAEL MARGRAVE: And then we came around the border again through Alberta, down to the border crossing there at Sawgrass, I think it’s the name. But we got, came around through Glacier Park, in a blizzard in June, and wound up for a couple of days in Whitefish, Montana, which is also a great spot to be. So, that was just the scenery, and just the serenity. I mean, it’s really trips like that are really memorable.
JASON HARTMAN: Yeah, they sure are, they sure are. Well, this has really been interesting. We have certainly peeled back the veil here on something that is so specialized, and just really, really, for lack of a better word, it’s just very swank [LAUGHTER].
MICHAEL MARGRAVE: Well, I’ve had a handy opportunity to do this, because it is good to get our little niche out there known to the people that you know, you could always be surprised how many little different avocations and hobbies and so forth there are, and this is certainly one of them, but it’s an enjoyable one, and we’re always happy to have associate members who just want to sample our group and partake in some trips, and maybe out of those, there’ll be a few people that actually buy cars. To kind of preserve this.
JASON HARTMAN: Yeah, absolutely. I gotta ask you—what is your role in the association? Are you the founder, or just a member?
MICHAEL MARGRAVE: Well, I’m—well, I was a member for quite a number of years. I’ve been on the board of directors for, I don’t know, six years now. I was president for a couple of years, two years ago. And now I’m a vice president legal, for the organization.
JASON HARTMAN: Fantastic. Well, good for you. Give out the website one more time, if you would.
MICHAEL MARGRAVE: Yes. It’s www.aaprco.com.
JASON HARTMAN: Fantastic. Well Michael Margrave, thanks for joining us today.
MICHAEL MARGRAVE: Jason, it’s a pleasure. Always enjoy talking to you.
ANNOUNCER: This show is produced by the Hartman Media Company. All rights reserved. For distribution or publication rights and media interviews, please visit www.HartmanMedia.com, or email [email protected] Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, or business professional for any individualized advice. Opinions of guests are their own, and the host is acting on behalf of Platinum Properties Investor Network, Inc. exclusively.