FAQ’S – Saddleback Stables
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What exactly does Saddleback Stables Thoroughbreds do?
Saddleback Stables Thoroughbreds operates its thoroughbred business like a professional sports franchise. We are a Limited Liability Corporation (LLC) that races and breeds thoroughbreds while offering partnership opportunities to investors who want in on the exciting action of horse racing. Potential partners have the ability to own a portion of the racing, breeding and sales stock. Similar to other boutique business models, Saddleback Stables focuses on customer service, frequent communication and attention to detail. We also employ respected trainers who manage a small barn so that individual care and attention is not compromised.
How do thoroughbred partnerships (syndicates) work?
A horse racing partnership (syndicate) works like most professional sports franchises. Normally there are a few partners with various levels of investment in a sports team. Each partner owns a certain amount of shares or percentage of that franchise.
First, we gather a group of like minded individuals that have the same passion, who want to take part in game day preparation, and want to experience the adrenalin rush of winning a race. At Saddleback Stables, we take some of the risk away in this business by creating partnerships (syndicates) so you are not the sole investor responsible for the initial and ongoing expenses. Each investor would own a certain amount of shares in the partnership and would be responsible for pro rata share of potential income and ongoing expenses.
Where do Saddleback Stables equine athletes race and how often?
Our stables stand on the Moore Family Farm in Lebanon, IL where we have boarded, foaled and raised thoroughbreds. We race at different tracks around the country and we use these questions to determine the best options for each horse and the partnership:
- Where was the horse bred and foaled?
- What is the athletic ability of the horse?
- What is the purse size?
- What type of a race gives our athlete the best opportunity for success?
In the past, our horses have raced in Arkansas, Delaware, Florida, Illinois, Indiana, Kentucky, Louisiana, Maryland and Pennsylvania.
Typically, a horse may race 6 to 12 times annually. It really depends on each athlete’s soundness and durability.
How do you earn money with racing partnerships (syndicates)?
There are two ways to earn revenue with horse racing partnerships. The most obvious is by finishing in the top five in a race. Each partner would earn the percentage of the purse according to the number of shares owned. Secondly, you can earn income if a horse gets claimed or sold. Each owner would receive profits from claims or sales based on pro rata share and after all expenses are paid within the syndicate.
How much of the purse do we win on a race and what fees do we pay when our horse wins?
Below is a sample purse breakdown for a $25,000 race and a sample revenue distribution.
Who makes the day-to-day business decisions concerning the horse in your partnership?
The Saddleback Stables Managing Partner will make decisions concerning trainers, acquisitions, breeding and racing options. Communication and transparency is key and informed decisions are made with the health and welfare of the horse being paramount.
As an owner, what can be my involvement level and what are my benefits?
Owners may choose their individual level of involvement. Partners may participate from a distance or be actively involved in race day activities, witness training sessions, meet your horses’ connections and even schedule farm visits.
Every partner shares the same benefits, amenities and behind-the-scene action such as:
- Full access to the stable area and paddock
- Chance to meet or talk to the trainer(s)
- Opportunity to meet jockeys
- Access to take a group picture in the Winner’s Circle after a winning race
- Race day preferred seating for you, your family and guests at the track
- Chance to spend time with other owners at the races, sales and events throughout the year
- Opportunity to schedule tours of Saddleback Stables to visit broodmares, foals, yearlings and racing prospects
Why do you set up each syndicate as a Limited Liability Corporation (LLC)?
Each partnership is set up as an LLC to protect partners from personal liability against any business judgments while offering many tax advantages.
What are the tax benefits of owning a racehorse?
Each partnership is a legal business entity and is treated as such. This enables you to deduct your expenses including vet bills, monthly training bills and expenses incurred while traveling to watch your horse train or race. Recent changes to the tax code have greatly increased the tax benefit for thoroughbred ownership. In the first quarter on each calendar year, you will receive a K-1 statement for your tax return. Please review all of the tax benefits with an accountant or tax advisor.
Why does a partnership include multiple horses instead of just one?
You may invest in one or multiple horses, investing in multiple horses helps spread the risk and diversifies your investment. We hope all horses remain sound but, in reality, the rigors of training and racing are demanding. If one of your horses needs time off for rest or recovery, others are there to continue the season. Multiple horse ownership also gives you the ability to enjoy more frequent “game day” experiences with the equine athletes in your syndicate.
What is the initial investment to become a Saddleback Stables Thoroughbreds partner?
It depends on how many shares you want to own in your equine franchise. Each share is equal to 4% ownership of that particular partnership. If you or a group of your friends decide to invest in one share (4%) in a partnership, the initial investment typically ranges from $2,500 – $5,000 per horse. Our minimum investment is one share per partnership.
Approximately, what would be the monthly dues of owning a racehorse?
It normally takes $40,000-$60,000 annually to properly maintain one horse that regularly trains and races. The benefit of a partnership is the ability to share expenses with other owners.
Your horse racing franchise works similar to a country club membership where you pay an initial membership fee and monthly dues which cover various services (food, golf, spa, etc.). The difference between the two memberships is that you can potentially earn income in horse racing while feeling the thrills and joy of taking a picture in the Winner’s Circle with family and friends.
In the horse racing industry, you first invest in a certain amount of shares upfront. Then you are responsible for pro rata share of the monthly maintenance costs for the partnership. Estimated ongoing expenses that occur when owning your own horse racing franchise follows:
|Training Fees||$65-$85 per day||$1,900-$2,600|
|Veterinarian Fees||$300-$800 per month||$300-$800|
|Mortality Insurance||$2,000-$5,000 per year||$167-$417|
|Transportation||$2,000-$4,000 per year||$167-$333|
|Blacksmith Fees||$150-$200 per month||$150-$200|
|Operating/Administration Fees||$450 per month||$450|
For example, if you or a group of friends purchase one share (4% investment) in a partnership, you would be responsible for approximately $120-$200 each month. You will receive a quarterly invoice statement detailing all revenue and expenses for that period.
Please keep in mind that your partnership may incur other unexpected expenses. If a horse requires surgery, each owner would be responsible for their cost pro rata share of the partnership. This is very unlikely, but equine athletes can get sick or hurt.
When does a partnership terminate?
A partnership dissolves when horses in your franchise are sold or retired. After all expenses are paid, any money remaining in your partnership will be distributed based on your pro rata share.
Does Saddleback Stables have a referral program for current partners?
Absolutely, the program is called the Saddleback Referral Opportunity. When partners introduce their family or friends to Saddleback Stables, that partner will receive a referral fee every time their family or friends invest in our partnerships. The referral fee is credited to the partner’s account which is used toward a future partnership or monthly training fees for the following year. The Saddleback Referral Opportunity program pays a 5% referral fee to that partner’s account for all lifetime investments of new partners.
For example, if you refer us to a couple of your friends and they invest a total of $30,000 in partnerships in one year, the Saddleback Referral Opportunity program will credit the referring partner’s account $1,500 to be used in the following year for a new partnership, monthly training fees or a combination of both.