Racing Ventures Frequently Asked Questions
1.) What is the difference between a Bradley Thoroughbred’s Co-Ownership Venture and other Racing Syndicates?
- In most syndicates the horses purchased are marked up from their original purchase price. The standard mark up is 100%, if the horse costs $50,000 the horse will be sold to the syndicate members on a basis of $100,000. With BT Ventures the co-owners pay the cost of the purchase price of the horse plus a 5% commission. If we purchase a horse for $50,000 your 10% share will cost you $5,000 plus 5%. Instead of management fees BT Ventures receives 5% of the horses earning and a percentage of the profit in the event the venture is profitable.
- As a general rule horse racing syndicates run under the name of the syndicate management, for example, Winning Racing Stable. With BT Ventures the owners with the largest ownership percentage will be named in the program and racing form.
- The syndicate manager usually makes every decision. With BT Racing Ventures co-owners are considered active partners and are involved in decision making.
2.) How does owning racehorses in a Co-Ownership affect my taxes?
You may be able to treat this venture as a business instead of a hobby, enabling you to deduct your expenses including vet bills, monthly training bills, and the expense of going to see your horse race. Racehorses are depreciated over 3 years. These tax implications should be reviewed with your accountant.
3.) How do you treat this venture as a business instead of a hobby?
- Keep accurate business files and financial records
- Keep emails, pedigrees, race records in a file.
- It’s best to have a separate bank account for your horse business.
4.) What are the benefits of Bradley Thoroughbreds Co-Ownership vs. owning your own horse?
- If you are new to the game of thoroughbred racing the venture is an excellent vehicle to learn about the sport of horse racing.
- The investment is usually spread over 3 to 4 horses which gives the co-owner more potential action at the racetrack as well as spreading the risk.
- Co-Owners have the opportunity of working with knowledgeable and experienced people in the racing industry. Peter Bradley has been in the industry for over 30 years. He has purchased 7 Grade 1 winners and numerous other stakes winners. His management and working relationship with BT trainers enhances the possibilities of greater success on the track.
5.) Does my initial investment of $25,000 cover monthly fees and training bills?
No it does not. The training fees will be divided among investors based on the percentage invested. The cost of maintaining and training a horse is approximately $5,000 per month. Therefore an average monthly bill for a 10% interest in one horse would be $500. Depending on how many horses the particular venture purchases will indicate how much you will be charged. Upon request BT Ventures will send you a more detailed list of average monthly fees.
6.) Is each horse insured?
Yes each horse is insured through Limestone Equine Insurance Agency. Each owner is charged for their portion of the insurance fees. The standard mortality rate for a racehorse is 4.5% per year. Insurance costs are included in the analysis.