? The more I research my opportunities the more confused I become and determined as well This is information taken from a website and I wonder how exact it is.
from West Point Thoroughbreds (this is from 2006) -
What does my initial investment cover?
Your initial investment covers the cost of the horse as well as all training expenses, fees, supplies, and mortality insurance through December 31st, of the horse's two-year-old year. From the time of your investment through the end of the two-year-old year you will not incur any further expenditures. West Point Thoroughbreds sells 10 percent units in each horse. The minimum buy in to a horse is 5 percent.
What does maintenance and training cost per quarter?
Costs for a horse in training at the track break down in the following manner (all figures are approximate):
Trainer - $75 a day, approximately $6-7k per quarter
Vet - $500 a month, approximately $1,500 a quarter
Blacksmith - $130 a month, approximately $300-400 a quarter
Stable Supplies - $100 a month, approximately $300 a quarter
Vanning - $200 a month, approximately $600 a quarter
Medication - $300 a month, approximately $900 a quarter. West Point Thoroughbreds places its horses on gastroguard to prevent and treat stomach ulcers as well as EPM medication.
Management costs - $500 a month, or $1500 a quarter. WHAT EXACTLY IS THIS EXPENSE IF I WOULD BE A SOLE OWNER OR PARTNER?
On average, the cost for a horse in training will be between $11,000-12,000 to cover all training, maintenance, and management costs. However, most horses do not spend the entire year in training.
A cost of approximately $40,000 per horse per year can be assumed.
Besides the initial expenditure and the training and maintenance fees, are there any other costs involved?
The only other fee is for mortality insurance (covered by initial expenditure during two-year-old year), which is charged annually and is 4.9% of the purchase price of the horse (not the syndication price). For example - if a filly is purchased at auction for $130,000 the annual fee for mortality insurance to the partnership would be $6,370. Therefore the annual cost for a person with a 10% stake in the partnership would be $637. If there is a major surgery the partnership is covered up to $1000, the partnership will be responsible for anything additional
Initial Expenditure - $34,000 Training and Maintenance – For each year thereafter approximately $4,400 to $4,800 (if at the track the entire year)
Purses earned at the racetrack are typically distributed as such:
First place receives 60% of the total purse
Second place receives 20% of the total purse
Third place receives 10% of the total purse
Fourth place receives 6% of the total purse
Fifth place receives 4% of the total purse
Per industry standards, trainers receive ten percent (10%) of any purse earnings. Jockeys receive ten percent (10%) of a winning purse, five percent (5%) of purses earned for finishing second or third, and a flat fee of $60 to $100 per mount for finishing off the board
- In my opinion West Point TBs is a "boutique" partnership group that is aiming for high priced horses and owners with deep pockets. All their numbers are high because they use the most expensive trainers and they sell shares based on the idea that everything is high end. To me I can't see paying a trainer $75/day in 2006, very high. Vet bills could be $500 but the horse better have something wrong for it to be that much, for routine vet work that is ridiculous. Blacksmith could be $130 but depends on which blacksmith you use and if the horse needs special shoes, that is a tad high to me. Most trainers don't charge extra for everyday horse supplies like buckets, lead ropes, cooling out blankets, etc. But if he needs a special type of equipment that can't be reused on another horse, such as a special bit or saddle pad, then you might get charged for that. Routine medication/vitamins shouldn't cost $300/month but I don't blame them for estimating high that way if it's less then the owners are pleased. Most partnerships don't charge a management fee, especially if it's just 2 or 3 people going in together on a horse. Most trainers will divide the bills up themselves and bill each owner for their share without any "management fee".
I'd say the cost to have a horse in training should be more like $2500/month or $30,000/year and it could easily be less since your horse may get a break from the track for a couple months here and there, layup at a farm is typically about $25/day, and if your horse is claimed then it will take a while to find a new horse, so you'll have breaks in your bills during that time also.