Introduction and question

[VBobby]

I’m a struggling real estate professional and recently a class a otr driver. I’ve been reading through this board soaking up what I can about expediting. I liked the challenges of having a real estate business and really like truck driving but not being a company driver. I’m intrigued by expedite driving having both elements. Even the struggling part.

I have a lot of questions but here is one.

I could have a much better chance of success if I sold one of my properties and used the proceeds to pay for a truck and start up costs. In my business, a property is an appreciating asset. I think of things like trucks as depreciating assets. I know the truck earns money but it also depreciates. How do you preserve the investment in your truck as it depreciates in value?

By the way, I appreciate the civility of this board and the knowledge and humor that is here.
Bob

 

[moose]

. How do you preserve the investment in your truck as it depreciates in value?
Bob

Welcome Bob ,

you don't .
the truck is a money making tool and a lifestyle ,
most of us can care less of the value of the vehicle.
if we run a good solid business , then by the time an upgrade is needed - we have already run the wheels of the truck and its have no value.
we are outfitting our truck to the best we can ,to better serve our costumers.
and keep up with maintenance ,so it will last longer ,at a lower costs,so we can make money .



Moose.
NYC

 

[nightcreacher]

A Doctor raises horses on his farm,its a side business that in fact is really his hobby.The loss he takes from this farm is his tax shelter,and that lowers his income taxes,this pays for his hobby.The truck, to an owner operator is his tax shelter.
Why layout $100000 cash for your truck?You'd be better off just putting a 20% down payment,with the 3 year depreciation and interest on the note,the truck each year is a complete write off,and for the first three years you wont have much in the way of repairs.If you pay cash fo this truck,the only write off you have is the depreciation,and you dont have the balance of the $100000 doing anything for you,as this balance could be in another investment.If you have drivers in this truck,trade it every three years,you will have much less headaches wandeing when its going to breakdown and drivers quitting

 

[VBobby]

That’s brilliant Nightcreature. I guess that’s standard operating procedure for wise O/O’s. Another piece of the puzzle is in place. Thanks.
That makes me think of another way to invest the $100K. My real estate entity could set up a note to loan the money to my separate trucking business. While one entity is depreciating and writing off interest on the liability of the truck, the other is receiving the interest as earnings. In other words, do what you said but my real estate entity would be the bank.

 

[nightcreacher]

Very good great idea,just make sure you get with the right company,and in expedite a team truck will be more profitable.even though the economy sucks right now,right company you can still survive.

 

[moose]

You can buy my truck ,
and I'll drive for you ...




Moose.

 

[nightcreacher]

This may not be the best time to become an owner opperator.As you know all companies having trouble staying busy.The expedite carriers usually have a maximum years of 5 years,but will extend this to 10 after you sign on.Regular truck load carries dont usually have an age requirement.
There are some carriers you can lease purchase,but you dont want to get involved with any of them.In my experience also,even though the payment might be higher,you better off with a rather new truck than one is older,as to breakdowns,although I once had an accountant that only wanted me to buy used trucks as more write offs,but I also found much more down time.

 

[VBobby]

This may not be the best time to become an owner opperator.As you know all companies having trouble staying busy.

I'm sure.
I only just started this investigation. I’m not going to go down and fall in love with a truck and buy it. I would try to start out with a fleet owner and spend a full year learning and experiencing the business cycle. While I recognize the seriousness of the economic situation I don’t see it as the end of the world. I got out of the Army in 1976 and everyone thought I was crazy. It was a similar time then but I made it fine.

The expedite carriers usually have a maximum years of 5 years,but will extend this to 10 after you sign on.Regular truck load carries dont usually have an age requirement.

I assume you are talking about the age of the equipment?

There are some carriers you can lease purchase,but you dont want to get involved with any of them.

I wouldn't 'owe my soul to the company store'

In my experience also,even though the payment might be higher,you better off with a rather new truck than one is older,as to breakdowns,although I once had an accountant that only wanted me to buy used trucks as more write offs,but I also found much more down time.

That seems logical. I’m sure there are a lot of different opinions about that. That’s one of the things I would have to research a lot more. It may be more valid in the near future with a 'green’ bunch running the government. They may offer incentives to early adopters of the new technology on the horizon.
Thanks for the friendly advice. I do appreciate it.

Bob