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Explain Investment Horses to Me....

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  • Explain Investment Horses to Me....

    What exactly is an investment horse? I know a few people who have them but I don't really understand how or why. Anyone care to elaborate?!

  • #2
    There's really no such thing.

    The idea is that when the horse sells, the owner will make money. Either it's a horse purchased young or inexpensively, has miles put onto it, and is sold for a profit.

    However, after boarding, training, and showing to get to that point, most folks don't make much in the way of profit. And if the horse somehow gets hurt or sick, you're pretty much SOL.
    ---
    They're small hearts.

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    • #3
      The theory is that you buy an unbroke or green youngster, put in the training, and sell for a profit in a relatively short period of time (3 months-3 years?). Some people buy thoroughbreds off the track, do the first few months of retraining and then resell for a few thousand more than they paid. Others buy a 20-30k well bred, perfectly conformed youngster in the hopes that it will live up to its pedigree, and sell once its going in the pre-greens or ready to go as a 3'6" horse for a child or amateur for double+ what they paid. Obviously there are lots of reasons why your investment horse might not pan out, or might not even be sellable at all - so its pretty risky.

      Comment


      • #4
        If you assume that board, vet, farrier and some training are "fixed costs" in your monthly budget, then buying a horse cheap and selling it for more than you paid makes you a "profit". This is considered an "investment horse". Example: I bought a horse as a youngster (2) for 3k, sold him at 5 for 13k. TECHNICALLY I "made" 10k. Realistically, if you count my "investment" in his OCD surgery...I'm sure I lost close to 10k overall, maybe closer to 20. Oy. That's a depressing reality!
        Can you stress-fracture your brain?

        Comment


        • #5
          Horses are a gamble but what has worked for me in terms of actually creating a profit is to buy a cheap horse that fits my basic horse shopping criteria- 16+ h, gelding, sound, no vices, some bling if possible and a good personality. Put a lot of mileage on it as quickly as possible and resell. Don't try to make a killing and don't hold onto the horse for to long. The longer you keep it the more the bills add up.
          http://www.benchmarksporthorses.com/

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          • Original Poster

            #6
            Oh, ok. That's a pretty risky investment IMO!

            Comment


            • #7
              Another type of investment horse would be to...

              Go to an area that isn't exactly horse heaven (midwest and a little farther west, but not to CA) buy a horse that's cleaning up locally, but the owners don't know much or don't have the finances to take the horse to bigger shows, major markets, etc. Show the horse a little, and sell for a decent profit, the horse was already trained, just not in a good market area.
              " iCOTH " window/bumper stickers. Wood Routed Stall and Farm Signs
              http://www.bluemooncustomsigns.com

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              • #8
                Well, an investment horse, in terms of what it means in the H/J world, is a horse that an outside party invests money in by purchasing and/or paying all expenses for a horse. Usually an investment horse is hand-picked by a rider that the investor deals with or in some cases, the investor simply brings the rider a horse they own/bred to evaluate for the purposes of mutual profit when the horse is later sold. The horse is established through competition and then sold off at some point to recoup expenses for the investor and costs for rider/trainer/whatever or in rare cases the horse is financed through investments to compete internationally and usually doesn't recoup anything for the investor other than whatever prize money is agreed upon in the contract and social points in whatever little social circles in the equestrian socialite community that they are a part of. It's quite like what goes on in the horse racing industry and what some people have described here isn't quite the same thing when you get down to the specifics of who is paying for what and how much money is usually involved when the term "investment horse" is thrown around. What they are talking about here is more along the lines of regular horse business for profit and not "investment horses" which are a key component of the businesses of high-level riders like McLain Ward and his contemporaries.
                Thus do we growl that our big toes have, at this moment, been thrown up from below!

                Comment


                • #9
                  I think it is a myth. Like trying to flip a house nowadays...
                  Sailing the high seas but secretly wishing to be on the back of a horse.

                  Comment


                  • #10
                    I guess I have a different perspective on an "investment horse". To me, I feel like board, vet, and farrier bills are pretty much fixed costs. Meaning I will be paying them on a horse anyway, in order to ride the way I would like to, so why not buy something green and NICE, put the miles on it, sell it, then buy something NICER. To me, the end goal in the "investment" is to have immediate funds available to buy something even nicer than you had in the first place- the goal would be to always have a nice horse, and hopefully, progress up the ladder in quality.

                    Of course, all of this plan would hinge on having a *lot* of professional guidance along the way. Additionally, I think this kind of arrangement needs to be stringently planned- ie, down to the exact show schedule for the entire duration of ownership. Too many people attempting this end up without a serious plan, and they're lucky to break even in the end.
                    Here today, gone tomorrow...

                    Comment


                    • #11
                      Let us all cross our fingers and hope my new horse proves to be a worthy "investment" horse. Most likely won't make any more money then we spend in training, board, showing, etc. But the big tangible check with all the $$$ in one place at the end makes it seem like you get something in return
                      There is something about the outside of a horse that is good for the
                      inside of a man.

                      -Sir Winston Churchill

                      Comment


                      • #12
                        PONY is right. The investment horse is an illusion, like the Yeti, Bigfoot or the Loch Ness monster. Everyone has heard of them but no one has actually seen one.

                        We've all heard of some super EQ horse selling for a fortune but what no one realizes (or thinks of) is that the seller spent more than the sales price in board and lessons at XXXXX (insert BNT barn name here) plus entries and show related expenses for 3+ years while child climbed the Big EQ ranks on said Giraf-a-WB-a-saurus. They may have paid $30k for the beast and sold him for $300k but trust me they probably LOST money.
                        F O.B
                        Resident racing historian ~~~ Re-riders Clique
                        Founder of the Mighty Thoroughbred Clique

                        Comment


                        • #13
                          Originally posted by indygirl2560 View Post
                          Oh, ok. That's a pretty risky investment IMO!
                          Yes, it is! But have you seen the performance of the stock market lately?

                          I bought an 'investment horse' in January. Basically, it's like taking your money and being able to pet it every day and feed it treats.
                          ~ Citizens for a Kinder, Gentler COTH...our mantra: Be nice. ~

                          Comment


                          • #14
                            Basically, it's like taking your money and being able to pet it every day and feed it treats.[/QUOTE]

                            LOVE this Snaffle!
                            Can you stress-fracture your brain?

                            Comment


                            • #15
                              We have a few investment horses. My trainer buys fancy horses from Europe an flips them when they are here in the US. Generally she is able to sell them quickly (we're talking months not years) but this is not always the case. We had one investment horse that didn't sell for a year. When you factor in board/training/vet/shoes you are not making a ton, though it happened once at my barn...

                              We had a gelding clear quarantine while we my stable was at a show. My trainer had the horse delivered to the show directly from quarantine. Once at the show, there were a bunch of people interested in him. The people who had bought him paid about $35K for him and the importing. They sold him for 80K two days later. All they ended up pay for was a horse show stall for a week. But remember, this is the exception, not the rule.

                              Comment

                              • Original Poster

                                #16
                                Originally posted by snaffle635 View Post
                                Yes, it is! But have you seen the performance of the stock market lately?

                                I bought an 'investment horse' in January. Basically, it's like taking your money and being able to pet it every day and feed it treats.
                                hahaha

                                Comment


                                • #17
                                  Investment horse sounds like an oxymoron to me... it reminds me of an old real estate joke.... at the beginning of a deal the investors sit down with an experienced real estate developer. The group agrees that the investors will provide the money and the real estate developer will provide the expertise. The deal is made. At the end of the deal, the real estate developer has the money and the investors have the experience.

                                  any investment is a risk - look at the market these days - an investment horse is just a higher risk

                                  Comment


                                  • #18
                                    i agree with the above:
                                    investment horse = oxy moron... most of the time

                                    most cases i think it's tough to turn a profit as a non-pro owner or investor. i think trainers are most able to reap the benefits, because they have the resources to buy cheap and put the training and mileage into them, and then resell them. obviously they also have to recoup basic care costs, but they are doing the training themselves, and the sale will essentially "pay" them for their efforts. for an amateur purchaser/investor, they also have to pay board/training, which cuts into the final resale price, and those expenses add up fast.

                                    that said, people wouldn't do it, unless it worked sometimes. i think the best investments are ponies for lease, as they tend to last forever, have long careers. if you get a good one that will reliably pack a kid and is fancy, it's worth its weight in gold, and then some, since it will bring in a nice lease every year for maybe 10 years.
                                    Bigeq.com First in Hunter/Jumper Sales Online

                                    Comment


                                    • #19
                                      Originally posted by HyperCat View Post
                                      We have a few investment horses. My trainer buys fancy horses from Europe an flips them when they are here in the US. Generally she is able to sell them quickly (we're talking months not years) but this is not always the case. We had one investment horse that didn't sell for a year. When you factor in board/training/vet/shoes you are not making a ton, though it happened once at my barn...

                                      We had a gelding clear quarantine while we my stable was at a show. My trainer had the horse delivered to the show directly from quarantine. Once at the show, there were a bunch of people interested in him. The people who had bought him paid about $35K for him and the importing. They sold him for 80K two days later. All they ended up pay for was a horse show stall for a week. But remember, this is the exception, not the rule.
                                      I've also seen this. Some "fresh off the plane" European horses who were flops at jumpers (i.e. worth little in the European market) were imported. Within a matter of weeks/months they were retrained/tuned up (usually just smoothing out lead changes) for hunters/equitation, and immediately marked much higher and rapidly sold. This, however, was a few years ago when the Euro to the dollar exchange rate was very good and the American buying market was extremely hot. I also have heard that European breeders and dealers are becoming savvy to what makes a good hunter/eq horse and are beginning to price those prospects higher. If I were getting into horse investments, it would likely be this route- flipping low end European jumpers which already have show experience in Europe into mid-to-high range hunter/eq horses for the US market, but I don't know how conducive the current conditions are for doing this.
                                      Bigeq.com First in Hunter/Jumper Sales Online

                                      Comment


                                      • #20
                                        The problem is the cost of overhead (training rides, boarding, showing and vet care) is prohibitive. Unless you're a trainer or have your own property, a low-priced "flip" (i.e. buying a OTTB for $2,000 and then selling for $15,000) just does not really make economic sense as an investment. With luck, you would break even and at least be subsidizing your hobby.

                                        Mileage may vary depending on local factors such as cost of board, showing costs, the local market. By way of an example, where I live in S. Florida, everyone says the market for low to mid-priced horses is weak, so mid priced TBs intended for the local show circuit are not big sellers. Buying an OTTB and trying to make it into a local hunter would make a lot more sense in GA, for example, where costs of board and "overhead" are less and there are more mid-range buyers who compete locally and would want to purchase such a horse.
                                        Love my "Slo-TTB"

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