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View Full Version : What would you pay to own a piece of the farm?



MissRosie
Jun. 21, 2012, 10:55 PM
My husband and I are contemplating gathering investors to invest in a local luxury horse farm that has been for sale for forever and a half. It's 64 stalls, individual and group grass turn out, multiple tack rooms, wash stalls, grooming stalls, heated indoor area, jump field, Olympic sized dressage ring and a club house.
There would be very horse experienced management, onsite vet tech and trainers as well as a lesson program.
Its a good property however is in a bit of disrepair and in the middle of a mild flood plane.

We'd want to sell the stalls like condos and so everybody would own their stall however still be governed by a common set of rules (like condos owners and the condo association) we'd also hold off on selling several of the stalls so we can use them for boarding and personal use.

The property would hold events, a lesson program and be very community oriented.
We live in a pretty darn wealthy area as well as a pretty darn horsey area.

So, my question is; How much would you pay for a stall? Not how much CAN you but how much would you?
Keep in kind the property in nearly 2 million.

Laurierace
Jun. 21, 2012, 11:02 PM
I wouldn't get involved with that on a dare. Sorry. I either want to own the whole thing so I can boot out the crazy people that will inevitably sneak in under the radar or none of it so I can leave when the crazy people outweigh the benefits.

MissRosie
Jun. 21, 2012, 11:07 PM
There would be extremely strict rules as well as tight barn management. If the rules are broken the governing body would be given the option to buy the stall at a very low price. We write it into the contract that you can lose your ownership rights if you screw up. Trust me, we've covered that base.

walknsound
Jun. 21, 2012, 11:11 PM
Too much like regular boarding, which I hated. Rather invest in my own place, which I did. I would do a lot of researching how much interest you would get in that. Let us know what happens, interesting concept.

oldpony66
Jun. 21, 2012, 11:14 PM
So it would be like a HOA? For me? not a dime. I got involved with a HOA in an 'equestrian' property and almost immediately wanted out, but it took six years to GET out. This sounds even worse from my perspective, so if I sell my horse I still have this stall that I have to sell? Who controls who buys it, you or the 'owner'?

Simkie
Jun. 21, 2012, 11:19 PM
What is the advantage of buying a stall versus just being a boarder?

fine*and*dandy
Jun. 21, 2012, 11:22 PM
I would never want to be locked into a barn where I have no say over the barn manager, trainers, obnoxious boarders, etc. It sounds like a horrible idea. People who board want the option of leaving if things go bad.

SMF11
Jun. 21, 2012, 11:39 PM
I think usually ownership = control, and in this case the stallowner really doesn't have any control.

I throw this idea out there in case it helps you get the deal done: conservation easements. If you can use the tax break (or have investors who can) you could put conservation easements on the property so it can no longer be developed, and you get a large tax benefit. Might be worth looking into.

I'd be very cautious about investing in a large boarding facility -- it would be a very high risk investment. Have you "run the numbers"? Are you/your husband going to be doing a lot of the work? If you have to hire everything, that usually does not correlate with making money.

Good luck, though, it sounds like a beautiful facility.

SAcres
Jun. 21, 2012, 11:56 PM
IMO it sounds like you want people to board at the place, but instead of paying a monthly fee, you want them to contribute a larger, one time, lump sum so you can buy the place. Sounds like you want to set yourself up for a disaster...

Simkie
Jun. 21, 2012, 11:58 PM
It's got to be a lump sum + some sort of monthly fee, right? To cover feed and labor and upkeep?

And what about LIABILITY? If the barn gets sued, ALL of the "owners" are at risk?

What would happen if YOU wanted to sell, and some of your owners don't?

rustbreeches
Jun. 22, 2012, 12:59 AM
I really think you need to read all the crazy boarder or I hate my BO threads on here. Then rethink this. You can't cover all evantualities in a contract because horse people constantly think up whole new levels of crazy. If it is such a great horsey area, buy it and have a boarding operation, host events, whatever, but then everone has the magic get out of jail free 30 day clause

msj
Jun. 22, 2012, 08:23 AM
I agree with everything the others have said but being on a 'mild flood plane' certainly would have ruined it for me completely! :eek:

oldpony66
Jun. 22, 2012, 08:43 AM
You can't cover all evantualities in a contract because horse people constantly think up whole new levels of crazy.

:lol::lol::lol:

Exactly.

Shadowfax701
Jun. 22, 2012, 09:05 AM
We have two such arrangements in my area. One is older and stalls are regularly advertised around 25k. I think they go between 15 - 25k depending on their location, size and the need to sell etc. The other is brand spanking new and a beautiful facility. I recall the new facility is 30k per stall? (I could be low on that figure).

Both have monthly fees and both are in prime areas with expensive board. I think at both monthly fees are in the $700 range (if you were just a boarder with no stall ownership it would cost about $1000 per month).

Trixie
Jun. 22, 2012, 09:18 AM
Sounds like a complete and total nightmare - you couldn't pay me to go near it.

tangledweb
Jun. 22, 2012, 09:59 AM
I can't say I'm seeking that kind of arrangement, but if I was somewhat interested, the things that I'd need to see would be:

* Board in that area is very expensive and existing facilities are consistently full
* If I was not using my stall it could be rented out by the management company and net me a reasonable return on my initial investment.
* The corporate structure made it so that if/when the business folds I'd get most of my investment back from the sale of the land.

cutter99
Jun. 22, 2012, 11:54 AM
I cannot see any positives to the situation. Like others have said, you couldn't pay me to do it!

ReSomething
Jun. 22, 2012, 12:20 PM
I can't say I'm seeking that kind of arrangement, but if I was somewhat interested, the things that I'd need to see would be:

* Board in that area is very expensive and existing facilities are consistently full
* If I was not using my stall it could be rented out by the management company and net me a reasonable return on my initial investment.
* The corporate structure made it so that if/when the business folds I'd get most of my investment back from the sale of the land.


This. It'd have to meet all the same criteria as a house you buy for investment, good location, easy to rent, etc. and I still doubt I would buy into it.

Trevelyan96
Jun. 22, 2012, 12:58 PM
I wouldn't get involved with that on a dare. Sorry. I either want to own the whole thing so I can boot out the crazy people that will inevitably sneak in under the radar or none of it so I can leave when the crazy people outweigh the benefits.

^^^ This. It would only take one crazy to create a legal, emotional, and safety nightmare for everyone involved. And being in a flood plain is just plain terrifying.

2ndyrgal
Jun. 22, 2012, 01:29 PM
My husband suggested that several years ago.

I asked him where we'd find people that gullible.

pj
Jun. 22, 2012, 10:45 PM
The whole idea sounds like a nightmare to me.

She's Pure Gold
Jun. 23, 2012, 08:06 AM
I don't see how the benefit of this would be any better than boarding- and as others have said, it would probably be worse because it sounds like it would be tricky to get rid of the stall should you need to for any reason. And 64 stalls? Presumably, at least 50 owners (maybe some have multiple)...I don't think I've ever seen 5 or 10 horse people agree on various topics, I cannot imagine finding 50+ people to agree to a common set of rules and horse care when they all have a stake in it!! :lol: At least with boarding there's usually only 1 or 2 rule makers and if you don't like them, you don't have to board there.

I agree with the others- not a chance I would get involved in a situation like that, no matter the price or amenities.

Chall
Jun. 23, 2012, 08:56 AM
My mind goes to forget the horse part, it's essentially a coop. As in real estate apartment building, with a board of directors, shares in apartments, financial loss if some apartments go empty, possibility of a bubble, bankruptcy and lawsuits. Add the fun of personalities. Substitute stall for apartments in the above. Mix well. Heat at high temperature.

Then add in the horse craziness part.

steelerino
Jun. 23, 2012, 03:46 PM
They tried something like this not far from me..... http://www.equusboyntonbeach.com/index.html

I believe its just a regular boarding facility now but when it started it was buy a million dollar home for you and a "condo" for your horse :cool:

halo
Jun. 23, 2012, 04:14 PM
Sounds like buying a condo in Florida. Up front costs, monthly upkeep, when you want out, theres nary a buyer to be found. You'd have to practically give it away.

All Ive seen is what advantage it is to you. Whats in it for the sucker,...er.....buyer who'd want to buy a stall?

BeeHoney
Jun. 23, 2012, 04:25 PM
I have seen groups of multiple buyers buy horse facilities which they then ran as a business offering boarding and training to non-owner clients. Because boarding is such a poor moneymaker, the main investment is generally (always) the land/property. This model is viable in areas where land is expected to appreciate in value or is planned to be subdivided and developed eventually.

The model you suggest with individual horse owners buying individual "stall" shares in a large property does not sound workable to me, it sounds like a disaster.

IronwoodFarm
Jun. 24, 2012, 08:05 AM
Having initially bought my farm with a partner, it was not 2 years before we bought her minority share out. It ended our frienship, which had been in existence for many years prior.

So my advice to the OP is either buy it yourself or pass. If you need other investors to swing it, then pass. The idea of having multiple partners in a horse boarding business is a really bad one.

Lucassb
Jun. 24, 2012, 02:49 PM
I cannot see a single advantage to an arrangement like that.

Condo groups work because the management does not (have to) do anything about the care and feeding of the residents. You can paint the walls whatever color you want, have the furniture you like, etc.

A barn that is run by 50+ "owners" - where one can lose their "investment" anytime they fall foul of whatever rules the management comes up with, is a recipe for disaster.