Sale Horse Advice SHould I try it??Give me your Good & Bad Exp.

[sweetpea]

I will try to keep this simple--

I have someone who I do business with[ not horse stuff] that has seen me progress as a rider and knows my goal is to develop my farm to bring along young prospects and sell.
They like new business ventures and have offered to front the expenses of all involved and then we would split the profit.

There is a horse at the barn I go to that I could develop and get ready for the winter circuit's.
I already take my horse down and would have the time to bring the new horse along.
The new horse has SSSOOOOO much talent,
looks to die for and is I think is 5.
We think at this time equitation, but is scopey to be a jumper.



I have a trainer who I trust and has plenty of merit to. Being this would be my first time with a horse of qualityand $$$$ I would follow my trainers lead of how to bring it along and so forth. By doing this I know I will learn alot but the trainer has soooo many connections that I could never do on my own.

Me I am just the little fish at the bottom that can ride and work hard , so I know I need all the people above .

My hardest problem is telling the little guy in my head to jump in .
Can you help me sort thru??

Just a thought - The business end will be very simple but clear& detailed --- but if you think of something please advise me!!!

[faraway46]

Hey, most of us start as the little fish in the bottom (unless you are filthy rich, a Whitaker or both...hehehe).
I don't see why not jump into it....

I only have four words for you: PUT IT IN WRITING! Whatever your deal is with your sponsor, be honest and more on the pesimistic side because if everything turns out ok they will be more than happy. On the other hand, if you promise the moon and come back with star dust, they might feel things were not presented all that close to reality...Have everything written out and signed, maybe not as much as serving as a contract, but more as nobody forgetting down the road how everything started and what everybody promised...Also, be very concious of Murphy's laws: think of every possibility in this deal: injury, death, economic sways, deadlines, etc. Talk and clear every doubt. If you have a sponsor that is new in the business, it is an honest thing to let them know the good, the bad and the ugly (and we know there is lots of ugly sometimes...)
Good luck!
Viv

[sweetpea]

SHould I think of this as a sponsor???
I call them an investor. I am not getting paid at all with this horse . Just split what we sell it for . As far as in writing I totally agree. Thanks !!

[Tex Mex]

Be well aware of the amateur rules (I'm guessing you are an amateur if you are thinking of showing in the equitation). Not sure how your situation, as it is written here, complies.

[Ibex]

Agreed on PUT EVERYTHING IN WRITING. This could be an amazing opportunity, but someone who isn't a horse person may not realize the extent of the cost. Sit them down and go over all the risks and benefits. Be upfront and clear. If they've sponsored business ventures before, they'll appreciate the clarity.

GOOD LUCK!!!

[sweetpea]

Like in my previous post I am not receiving any money for training or anything . I will still pay everything but it will be deducted from when I sell the horse. Does that sound correct??

[superpony123]

Be well aware of the amateur rules (I'm guessing you are an amateur if you are thinking of showing in the equitation). Not sure how your situation, as it is written here, complies.

I *think* she meant her OWN horses when she says bring along prospects and sell? If that's the case, OP, then you are definitely not breaking any ammy rules. If you are being paid to bring along other peoples horses, then you are a pro. But by the looks of it, you are looking to start your own farm, and you want to buy prospects, train them, and then sell them.

As far as the investor goes--i'd definitely call it an investor, NOT a sponsor. A sponsor (in riding, as far as i see it) is more like if Antares said "use our saddles and pads with our logo embroidered blahblahblah oh and heres some money to pay for your class" -- that would be breaking ammy rules, but youre looking at a business partner, and that is an investor in this case. Not breaking ammy rules.

best of luck to you and your new business :D

[Tex Mex]

So you would pay all the bills on the horse to show it, and the "investor" (who is not currently the owner) will reimburse you when/if the horse sells? But who owns the horse? Sorry if I missed something, not sure how Investor gets involved.

I believe that reimbursement of expenses are allowed but only for some things, so make sure to read the rules. Also, it would be very easy for someone to say you are making commission so make sure that you have the documents to back up everything that you are being reimbursed for. But then...if you are only being reimbursed for what you've already paid (and this is only providing that the horse is sold), then I'm unclear as to why you are doing this in the first place?

[sweetpea]

Definetly an Investor and the prospects would be mine , but if I develop than big whoopy woo I will go Pro---- I don't to skirt around . But that is funny mixed with me being a pro!!!!

I love to ride first of all and I ride any smart sane horse available so I can develop talent and experience for ZILCH. I have a normal job to pay for my addiction.
Would I like to support my habit by selling horses--- Yes that is my goal.
I have someone willing to loan me the money to get started. Then as I make some here and there on selling them then maybe I can afford to by them myself!! Hopefully. And again I will not get paid to RIDE , Show , Groom or sing to the horse-- HAha that would be fatal for the horse!!!

[faraway46]

SHould I think of this as a sponsor???
I call them an investor. I am not getting paid at all with this horse . Just split what we sell it for . As far as in writing I totally agree. Thanks !!

Oops! Sorry! I understood this person would pay for ALL expenses the horse had: board, show fees, vet, blablabla..when you said they would front all the expenses involved. Didn't seem you were paying the bill. In my world, if someone pays for my horsey bills, to me it's the holy grail...call him investor, sponsor or sugar daddy! ;).
That said, if the horse is yours or don't need to buy him and you will pay for the bills, then why do you need an investor?

[Claire_T52z]

If you have the horse, have the trainer who is willing to help and have the time. Then do it! you won't lose your amm status, if you are one. It will be a great experience for you. If I were you I would find out everything about this horse, I am lead to believe you are unsure because you said *think is 5*. and write EVERYTHING in a diary/journal type thing. Say how rides went, what you were/are working on, money, how much you paid for what. Any lameness issues, big or small. Muscle development, diet, supplements. When he is first introduced to things, how he reacts to it all. EVERYTHING! make sure you include dates, and times if need be.

Along with this I would have a finical journal that I'd write everything in so that it's easier to find if you need to.

If you keep everything organized and know that things may take longer than you expected you'll be great!

Have fun and good luck!!

[Monarch]

I am a little confussed with the venture, maybe you could clarify? Because I could see a possible problem with you future amature classification as I undestand the rule.
IF your investor is purchasing the whole horse and then for your part you pay the bills. When you sell the horse if by chance for proffit and your split is more than what your bills for the horse where, it could look as if you took a commission or got paid for your riding him because the horse was not owned by you but your investor. Givin this senario you would at that point be considered a Pro.
IF you put up half the purchase price ( or even a piece of it) and your investor the other half and you split expenses (or you pay for all) and then at the time you split profit (if any) then your amature status would stay in place.
You need to buy (cash) a piece of the horse but not by putting in the riding and earning a piece of the horse. I hope this makes sense?
I wish you luck in your endevor .
M

[JA]

Heather Hargett is all I can say.... As I have read your post you would be making a profit on a horse you do not own which is a clear violation of the amateur rules. The reason I say look up Heather Hargett is she suspended for life for showing horses registered under her name which were not purchased by her but by an investor for a return profit.

You absolutely CANNOT do what you are wanting to do! USEF has sent others down for doing just that.

[sweetpea]

What would be the difference between me getting a loanfrom the bank. That is basically what I am doing. They will give me X of dollars for me to bring along the horse and then I sell it. Cause I am by no means a pro-- I never have been paid for a ride or for teaching or training a horse.
Am I understanding this right , I cannot sell horses or am I confused? Do I need to have the funds paid to me to purchase the horse the same as a bank would??

[JA]

As an amateur you absolutely cannot sell horses you did not pay for with your own money. If a person buys a horse for you with the sole intention of it being sold for a profit you are a pro. Sure you can get a loan from a bank but you can not get an investor or sponsor. Brianne Goutal turned pro because she had a sponsor which is a clear violation of the amateur rules. Amateurs may buy and sell horses they pay for with their own money but not horses whether purchased for them by someone who is not a family member. The amateur rule is VERY clear about this!

What you are proposing is a clear violation of the rules

[sweetpea]

The comparison to Heather is far from anything I am trying to do. I am NOT A PAID AGENT . ANd I will figure a way to keep this clean on the USEF side of things , I am just a backyard pup needing funds , so if I need to keep as I loan than I understand. I HATE shamateurs or someone thinking I am trying to dance like one!!! Thanks for clarifying.

[Janet]

Quite apart from the amateur issues-

Even with a horse "with SOOO much talent" there is a VERY GOOD CHANCE that there won't be any profit. Just continuing expenses on a horse you can't sell. What happens then?

[JA]

Yes you will need a loan from a bank. You cannot split the profit with anyone but a family member because by doing so it makes you a pro. Amateurs must fully own their sale horses, no co-ownership is allowed when the horses sole purpose is to be sold for a profit. That's just the way it is.

And what you are proposing is exactly what Heather Hargett started off doing. She did move on to bigger rule violations and crimes.

[sweetpea]

We have discussed what if -- time frame and
granted not everything works in the time frame you hope for. We are hoping for a year or less. BUT that is why with the trainer I have while she is no miracle worker , knows a good horse when she sees it. So we have talked about what happens if I come back fromn the winter circuits and it has not sold.

But Janet your the guru of all details of USEF -- Am I handling this correctly??

[Janet]

WRT the amateur question, I am confused by several points.

1. Who currently owns the horse?
You?
Your trainer?
A client of your trainer?

2. Who is going to buy the horse?
You?
This investor?
You buying one share, the investor buying the other share?
Or is it staying with the current owner?

3. Who is going to be listed as the owner (with USEF)?

4.Who is going to pay the expenses (as they acrue)
You?
This investor?
You pay one share, the investor pays the other share?

5. How much of the proceeds are you going to get IF the horse sells for a profit?

6 What if it doesn't sell, or sells without any profit?

[sweetpea]

Trainer owns the horse right now--
When I put all my ducks in a row I will have a loan to buy the horse and the expenses.
NO loan for time or training , nor are these considered expenses.
Expenses paid from loan until horse sells.

[Sparky]

And don't forget that the trainer will want a commission if and when a sale takes place--so count on at least 15-20% of the sale price going to them.

[buschkn]

Ouch! When did trainers start commanding a 20% commission? I have always heard 10-15%.

OK, as I understand it, here is what I am gathering and my take on your situation... I am an ammy who owns, rides, and sells her own horses so I am always interested to be sure there is no potential violation for myself. But at this point I have never co-owned anything other than my first jumper who my dad paid for "one leg". :)

Lets say you buy a $30K horse.

IF you get a personal loan from the bank and the horse breaks its leg and dies on day 2, you still owe the bank $30K plus interest. They don't care what it was for or what happened to it.

Is that the scenario with this "investor"? Then that is a personal loan and not an issue as I can tell. Nobody knows where you get your money from and if you are paying him back and have a written agreement so be it.

However, the way you say it, it sounds as if the investor is accepting that risk on the horse, and will make money when and IF it sells. If it dies or gets hurt or otherwise turns out to be a useless nag, he is SOL.

NOW- this can still work I believe, where you get your nice horse to ride and show, but still remain an ammy. IF he owns the horse, and you pay ALL expenses and document the crap out of every single penny you pay out of your pocket, when the horse sells, you can ONLY get back EXACTLY what you have put in, not a penny more.

IF you get money on the top then it can be viewed as one of two ways you are violating the amateur rule:
1- You receive a commission on the sale
2- You are a part owner by virtue of the fact that you put in the time and training, he put in the front money. In this situation, you are effectively being paid to ride and TRAIN and therefore are a pro.

As to WHY anyone would do this (the scenario that is not in violation of the rules), as someone asked...

-You get to ride and show a nice horse you otherwise couldn't afford to buy.
-You get the extra show mileage, saddle time, and general experience that comes from bringing along a really talented horse.
-You can get an idea if this is something you actually want to do professionally, without having to put all your eggs in one basket and go whole hog all at once. Do you enjoy it or do you not like the pressure of riding someone else's horse (money) and trying to make them happy with your results, etc. Is it better than working your day job and just riding your own (which is what I chose), or does it become stressful and not fun anymore?

My main concern here would be someone who could potentially take on something like this, under the guise of innocence, showing it as an amateur etc. for a 6mos-year, then at the time of the sale changing to pro status to get the commission or whatever. Though I suppose technically that isn't illegal, it is certainly a little shady, at best.

Not saying that is YOUR plan, just saying that is something that could happen that would sour it in other people's eyes.

Good luck with whatever you decide. Personally, I think it sounds like a great opportunity and you should go for it. Good luck with whatever you do!

[Tex Mex]

Ah ha! A new way around the ammy rules! Just have the person who is buying the horse and paying for training say it's a "loan" to you, record the horse with USEF under your name, and then you two can split the profit when it's sold, just pretending it's reimbursement (when in reality, you were already paid with a "loan"). Good luck with that. And hey, as your previous post states, if you get caught and have to go pro, oh well.

[sweetpea]

As to WHY anyone would do this (the scenario that is not in violation of the rules), as someone asked...

-You get to ride and show a nice horse you otherwise couldn't afford to buy.
-You get the extra show mileage, saddle time, and general experience that comes from bringing along a really talented horse.
-You can get an idea if this is something you actually want to do professionally, without having to put all your eggs in one basket and go whole hog all at once. Do you enjoy it or do you not like the pressure of riding someone else's horse (money) and trying to make them happy with your results, etc. Is it better than working your day job and just riding your own (which is what I chose), or does it become stressful and not fun anymore?

That is exactly my thoughts-

As far as the training - I will have the horse in full training due to distance from the barn - and I will pay a pro down in FL for certain classes.

Thanks for all informative suggestions.

For the accusing replys -- Why would I ask and discuss this subject if I was trying to find a way to cheat? I am sure you were trying to help , I must say it is a negative way to educate someone who is being open. But I still appreciate your efforts.

[Janet]

You keep changing the details. WRT the amateur rules, you need to call the USEF.

But, quite apart from the amateur issue, taking an ownership interest, and paying the expenses, in the anticipation of recouping them when the horse sells (let alone make a profit) is a gamble stacked against you. It is a good way to lose a lot of money you don't have.

[sweetpea]

Janet ,
I see your point, I am adding to the details not necessarily changing them. I realize now that I started this out trying to be simple, and it is not . I contacted USEF and they mentioned to put it in writing. So I will .
I appreciate your thoughts!

[FrenchFrytheEqHorse]

I think anyone and everyone should be leery of taking out a personal loan to finance their horse habit. This is a notoriously poor industry for "investment", unless one has the means to keep a horse at little to no overhead cost...

I would also be extremely cautious accepting financial support from someone unfamiliar with horses. It looks good on paper, sure, but what happens when the horse is "not quite right" for a few weeks, and you have to explain to the non-horsey investor why it can't progress in its training? It's either an uneducated, "only sees it on paper" pocketbook at risk, or an incredibly risky, sizable personal loan- neither one is particularly appealing.

I think it's a terrible idea.

[Tex Mex]

FWIW, I don't think you were trying to find a way to cheat, a lot of people just don't have a clear understanding of the rules. The scenario you most recently posted is very different than what was originally stated, so I wasn't sure if you understood what you were getting into. If you have someone to pay the bills, and you can ride the horse just to get experience and have fun, that's one thing. But if you are expecting to make any money out of the situation, even if it's not until the sale of the horse, that's a violation.

I agree with those who say to make sure the details are spelled out VERY clearly, especially with someone who may not understand the horse business. They need to know that this investment is high risk and they may lose all their money if something goes wrong. If they are ok with that risk, then it may work out just fine.

[findeight]

IMO you are not trying to cheat but, also, IMO, you are going into a grey area in accepting money for riding the horse in the form of a "loan" that you would pay back out of the proceeds of the sale...and would you get to keep anything above that level out of the sale of a horse owned by another?

Fact it is sort of a catch 22 if I understand this correctly, if you do make a bunch of money over and above expenses, I don't believe you can keep it without violating Ammy status. If you don't, you lose alot of money having to pay back the owner for the "loan".

Honestly, I'd get something in writing from the USEF saying you have approval to do this or at least that it is within the rules-if it is within the rules which I am not that clear on. If anybody learns how you have this set up, you might need to produce it to keep from being protested for receiving remuneration in return for riding.

Have to add my 2 cents worth that this is a terrible market and, unless you are working with a BNT (a real one) skilled at marketing (who will want 20%) or this horse is the next Gem Twist? I wouldn't even count on selling it let alone making back expenses for shipping and time on the road in Florida.

It is risky to enter into these things with non horse people and frequently ends in court when the "big" money is in costs, not profit.

[JazCreekInc.]

Has anyone noticed that horses are not selling for anywhere near what they have in the past and many nice horses are not selling at all? It seems irresponsible to make a "non-horsey" person believe that this is an appropriate economic climate to make an investment of that type?

I am just curious if anyone else agrees as I know a number of lovely show horses available at below market prices that are simply not selling!

[YankeeLawyer]

Has anyone noticed that horses are not selling for anywhere near what they have in the past and many nice horses are not selling at all? It seems irresponsible to make a "non-horsey" person believe that this is an appropriate economic climate to make an investment of that type?

I am just curious if anyone else agrees as I know a number of lovely show horses available at below market prices that are simply not selling!

I think it is irresponsible to encourage a non-horsey person to invest in horses at any time - let alone now. There was an article in the NY Times a couple of weeks ago regarding the market for show horses (basically saying that the journeyman type horses were not selling well but the top, top ones still were bringing good prices).