FAQs
Click on questions below to view the answers to frequently asked questions.Q.1 The Cost Factor?
As you can imagine, thoroughbred horse investments are clearly a speculative matter. They can be highly lucrative if you find the next FUNNY CIDE, SMARTY JONES or SECRETARIAT. They also can be costly when a horse's expenses consistently exceed its income earned. At Bona Venture Stables each horse is set up as an individual limited liability corporation or LLC to manage the costs and the risks in the most affordable means possible while providing investors with an enjoyable and fun experience. Hopefully, the annual earnings will offset annual costs, but each investor may also have the potential of realizing income tax benefits from the investment. The thoroughbred asset will be depreciated in an accelerated manner. The costs associated with investing, offset by any earnings, may offer each investor income tax benefits. Investors are encouraged to speak with a tax advisor to determine if the investment will be classified as an active or passive investment and what actual tax treatment is available. For additional information about the potential tax benefits and costs associated with ownership, we recommend you go to the Thoroughbred Owners and Breeders Association web site at: www.toba.org or www.thegreatestgame.com.
Q.2 Is it Worth It?
Turning a profit shouldn't be the only consideration in investing in thoroughbred horses. Participating in an individual thoroughbred horse LLC actually affords you the opportunity to become part owner in a professional sports enterprise. You can become a licensed owner and experience the excitement of standing in the paddock on race day, while hundreds of people look in awe at your horse as it is saddled and prepared to race. The heart pounding excitement of watching your sports franchise explode at the top of the stretch and carry your favorite racing colors across the finish line - a winner - has been described as one of the most exciting and exhilarating experiences many have incurred. Owners also frequently attend the races, entertain friends and participate in early morning workouts at the race track and tour the private stables to view the horses first hand.
Q.3 What Will it Cost?
Bona Venture Stables typically offers 9 full investment shares (1/2 shares may also be purchased) in a young thoroughbred horse that we purchase either at the (end of April sale) 2 year-old thoroughbred sale in Ocala, Florida or at the Saratoga New York-bred yearling sales in August. Management always purchases a minimum of one full share itself. Here is an example of an offering for a horse syndicated at a full share price of $8,000:
- 20% (2 shares) ownership at $16,000
- 10% (1 share) ownership at $8,000
- 5% (1/2 share) ownership at $4,000
Q.4 What's Included?
What is included in the initial investment payment? Well, the actual auction price, sales tax and related fees for the purchase of the thoroughbred at sales. Any commission fee for the bloodstock agent/trainer advising and assisting in reviewing potential horses for purchase; veterinarian inspections of horses for potential purchase; transportation horse fees from the sale to our training facility and any other normal transit costs; multiple months of training until the initial period expires; veterinarian and related horse care through the initial period; first-year horse mortality insurance; the legal processing and miscellaneous fees. Each horse is a separate legal entity and runs under the stable name and racing colors of Bona Venture Stables. If the acquired thoroughbred horse is not named, all owners will have an equal opportunity to participate in the naming of the horse. Bona Venture Stables horses spend the summer/fall stabled at Monmouth Park, Delaware Park or Belmont Park and Saratoga Race Course. Our winter/spring locations are Tampa Bay Downs in Florida or Belmont Park (racing at Aqueduct Race Track) in New York. Once the initial investment period expires investors are billed quarterly for their share of expenses, minus purse earnings. The monthly flat rate cost at Tampa Bay Downs and Delaware Park is $2,600 or $260 ($780 per quarter) for a 10% ownership. The monthly flat rate at NYRA tracks is $3,600 or $360 per month ($1,080 per quarter). These rates include all normal costs (training, racing, feed, blacksmith, administrative, etc.) and veterinarian charges up to $250 per month. Additional veterinarian costs and shipping/travel and annual mortality insurance are billed at cost. Racing purses in New York are significantly higher than those offered at either Delaware Park or Tampa Bay Downs. Earnings from the horse purse winnings, which may offset the quarterly expenses, are credited to each account quarterly and distributed proportionately at the end of each racing meet.
Q.5 Can I Make Money?
Yes and no. Here are some examples of recent thoroughbred purchases. In April, 2004 we acquired a then 2 year-old filly - Undeniable Queen at the Ocala sales. She ran over 30 times and earned over $150,000, with a third place finished in a $250,000 stakes (black type) race. Her earnings always exceeded the investors original purchase price and annual maintenance costs. She was eventually claimed away from us, but the ownership turned a reasonable profit. We also purchased a 2 year-old gelding - Spirit of Life in a private sale in the same year. He also ran over 30 times and recorded two wins, three seconds and three third place finishes while earning only about $38,000 in purse money. His earnings surpassed his initial investment costs but failed to cover all of his annual fees and costs. He was ultimately sold and the investors declared a loss. Another example is a horse purchased in 2004 as a 2 year-old colt - Saint Bonaventure. He has run nearly 50 times, with about 40% “in-the-money” finishes, including three wins. His earnings exceed $100,000 and he basically covers his original purchase price and annual costs. The final example is First of Ten, a 3 year-old NY bred. He has run 4 times earning $37,000 with a win and two 2nd place finishes. His earnings have already surpassed his initial investment and monthly maintenance costs. None of these costs/earnings include the annual tax benefits each has provided.
Q.6 How Can I Be Involved?
Well the first step is to contact Bona Venture Stables and ask for additional information on current investment opportunities. You can contact us by e-mailing Dan Collins, manager, at dfcollins@bonaventurestables.com or calling him at 607-368-1012.