Industry Tips for Starting a Horse Flipping Business

[Darkrider]

Hello everyone,
I’ve been researching the idea of starting my own project horse and flipping them for a “profit”. I say that very loosely because I understand all the risk may come with that, one is not being able to produce a profit, especially in the beginning.

I mainly want to work with OTTBs as I’ve worked with a couple off the track but under a trainer, but if the market is for another breed/discipline I would be flexible. I live just east of Orlando so Ocala breeders would be close by. The problem is that I’m in college at the moment and even though I would love to spend all my money training horses, it’s not feasible nor realistic. I consider myself an intermediate rider (have shown in A circuit, as well as intercollegiate shows) that being said I’ve had little to no experience training horses but I would have access to people who can help me. I also don’t own a barn, but I’ve looked into boarding and found 500 to 700 full board stables in my area.

I’m here to gain more insight on what it takes to start something like this, so if you could lay down things like; costs, how to look for the right horse, what sells, a good turn around rate/ days and any miscellaneous things that someone like me would encounter in a start-up business like this one.

[JustTheTicket]

I don’t want to be discouraging, but if you’re an intermediate rider with little to no experience restarting a horse and no barn of your own, your potential profits are going to all go into paying a trainer and board, not to mention the fact that you’re still in college and it’s going to be hard to juggle a start up business with school, unless you just have one project horse at a time. Also, do you have start up funds? Will you be able to get the horse to a show or two to make it more appealing to buyers? Will you be able to afford board and other arrangements for a horse who doesn’t sell or ends up coming up lame?

[Jax]

I do not mean this in a rude way but: don’t.

People can make it work but you do not have the skills, time, or finances (from what you’ve said). There are tons of threads on here about people who are making it in the business with plenty of specific details that will give you perspective.

If you want to get an OTTB horse for yourself who you envision training up with the help of an experienced trainer, and hopefully selling down the line for more than you paid? Absolutely.
Horse flipping business? No.

[Horsegirl_s_Mom]

One thing you could do is sketch out a business plan: How much do you think it would cost to acquire the OTTB? How long would you need to keep it to increase its value? How much would you pay in board bills, training bills, vet bills, show bills, tack expenses etc. while it was in your custody? How much would you likely be able to sell it for?

Maybe if you explain your proposed (tentative) plan, more experienced posters can tell you whether they think your assumptions are realistic.

[poltroon]

In your situation it’s possibly realistic to flip a horse for more than you bought it for. It’s probably not realistic to actually make a profit after your expenses, especially not while you’re also in college.

There was a good article in COTH a bit ago about someone who flips as a business. She’s got an extremely good eye, outstanding connections on the track and in the show world, a set of people who ride for her to make sure the horses are all in work, and spreads the risk across many animals at a time. She also has them for a very short time - like 90 days. I don’t recall who it was.

The suggestion to make a business plan is a good one, and further, it would be very important to keep excellent records of your expenses and income. In addition to training the horses and putting in that time, you also need a marketing plan to actually sell them when they are going well. Finally, you have to consider the reality that some percentage of the horses you buy won’t sell, or will lose money before you sell them, and have a plan for how that will turn out OK in the end for you financially.

[GraceLikeRain]

1. Be honest to a fault - one failure to disclose and your reputation can be done.

2. Keep boarding costs low - You may net $1,000 on a horse but if you pay for 2 months of board at $500 you’ve made nothing

3. Have a great eye - If you can’t evaluate soundness and get a gut feel off of a jog video you’re going to miss out on the best deals. If you buy your flip from someone who already bought it off the track, you’re net is going to be less than someone who can get them dirt cheap off a video

4. Know pedigrees - You don’t ride the pedigree but with OTTBs the good flippers know what lines work well in their program and tend to produce good performance horses.

5. Have a phenomenal team - You need to have a farrier, vet, body worker, etc. that you trust to work through issues and speak the harsh truth when needed

6. Network, Network, Network - If two people have an equally nice prospect, the bigger name is going to get the purchase. You need to know and be known. Help out others and expect nothing in return. It takes time and effort to build trust and relationships.

7. Good riders - If you get in a nice horse that is quirky or challenging you need to have someone with a far deeper skillset than an intermediate rider with no training background. That person likely is not free. Sending your sale horse to a trainer or even bringing them in for some corrective rides can erase your profit.

8. The Heartbreakers - Prospect puts his leg through a fence and needs 4 months of stall rest. Super fancy guy reveals a concerning OCD during the PPE and no one will touch him. She looks like she should be the perfect sport horse but there’s some lingering lameness you can’t get to the bottom of without a MRI. Handling those situations can be expensive, time-consuming, and ultimately boils down to ethics. Do you let the chronic lame one go on craigslist and turn a blind eye to what happens? Do you put the MRI on a credit card to get answers knowing she could still come out without answers?

9. A Deep Toolbox - Horses can arrive with ulcers, not knowing how to tie, have the most impossible back to fit, etc. They are horses. You need to know the signs of common issues and the most effective way to address them. You need to know how to work through basic ground issues that present safety concerns. You need to know how to fit saddles, choose bits, etc. and how to quickly determine if something isn’t working.

My recommendation, buy a horse that you would like as a personal horse. Do an extensive vetting. Enjoy the horse. If you sell the horse for more than you paid, roll that into the purchase of the next horse. The average person will not make a profit flipping one horse at a time in a boarding situation. However, you could in theory net a bit more from each sale and eventually have a nice sum to purchase a more expensive horse. Don’t buy a horse you wouldn’t want to keep because it may do something day 1 that permanently dings resale potential.

[outside_leg]

As others have said, what you’ve described is unlikely to turn a profit. It’s also not really a business. It’s a project. Selling a horse for more than its purchase price is a good goal and potentially attainable depending on how you pursue it. But horse flipping businesses operate mostly by volume or by dealing in horses with higher potential values than OTTBs or by having their own property/years of experience/operating on tight time schedules.

OTTBs also have lower resale values than other breeds. They can be slow to move. Look at how many ISO ads state “no TBs.” So also be realistic about that. Make sure you can afford to hang onto this horse indefinitely should you not be able to flip it quickly. Good luck!

[Bogie]

I second the person who said write a business plan. When you start to see how quickly your expenses add up, especially if you pay for board, you’ll see how hard it is to make money. In that scenario, you need to find a diamond in the rough and flip it in a matter of months. Sure, it happens. But not often. The people I know who make money at it have very low costs, a terrific eye, and usually sources at the track who steer them toward the nicest horses.

My first OTTB was free. Nicely bred 3 year old gelding who never raced. I knew he had some stifle issues but the vets thought he would grow out of it and he was a big, pretty boy out of Dixieland Band. He didn’t. I learned a TON about restarting an OTTB and then I essentially gave him away because he would not stand up to hard work.

A few years later, bought a very pretty OTTB mare. Good price, sound, good brain. She got injured about 48 hours after she arrived at my barn. She recovered but had some scarring. So her training was delayed, and even though my board was super cheap (co-op barn), she still ate hay and grain, needed shoes, had routine vet care, etc. Again, I learned a ton from having her and I sold her about about a year later. Oh yes, she was a terrible jumper. Had absolutely no talent and hung her knees. Not the kind of horse you would jump xc, which was what I wanted to do. She was fancy and a nice mover so I sold her to a lady who mostly rode dressage. Got most of my money back.

I started several horses for CANTER as fosters. I kept the one I liked the best and I could have made money on him but he has a forever home with me.

[lenapesadie]

Paying board at $500 -$700 a month does not sound like the start of a profitable flipping business.

I have made money flipping racehorses though! You must have two things. The absolute best contact for horses and a free lease on 40 acres of good grass.

[Momateur]

You sound like me many years ago :). Here’s what I learned…

You can’t make money this way. BUT, you can defray the costs of your riding career…which is, in itself, a beautiful thing.

P.S. Always insure the horses. Ask me how I know.

[js]

Be sure to do right by the horses you are selling and the buyers you are selling them too.

[Jealoushe]

Go spend your time and money becoming a better rider and learning how to train before doing this. This business plan at this point and time with your experience is a bad idea for you and the Thoroughbreds you plan on “flipping”. Rarely can money be made by experienced trainers, having to board while trianing to resell.

What happens if you buy one that turns out to have major issues and can’t be ridden?

First step at this time is to listen to the Major League Eventing podcast special on OTTBs. See how much you understand of what the lady talks about, she has a successful business buying and reselling OTTBs called Benchmark Sport Horses. Check out her FB and read all she goes through while navigating this exact business model. Not exactly easy money for a very experienced person with a good eye.

https://www.stitcher.com/podcast/major-league-eventing-podcast/e/60495172

[CPL713]

Hi!

I second all of this advice, especially to spend your money becoming a better rider and learning how to train. The people who are best at this have deep connections on the track and have lots of experience with restarting OTTBs - their mental and physical needs coming off the track and learning a new job are different.

There is an excellent post on FB that gives a LOT of good info and is a great reality check for all of us OTTB people out there. She talks about some of your questions RE what it takes to manage a horse right off the track, so I hope it is helpful. https://www.facebook.com/43695535714…9346502909302/

[hopashore1]

You’ve gotten lots of great advice here. I will suggest one more–find someone nearby already restarting OTTBs (probably an eventer, of which there are plenty in Ocala) and ask if they need a working student. Shadow them every chance you get–with the vet, to the track, pay attention to what tools they bring out for each of the different horses. Get some experience learning how to train. Have frank discussions about costs, and network with the eventing crowd in the area because they have a lot of the knowledge you seek, and if you do decide to go down this path will be a great resources for selling horses later on.

[Redlei44]

I concur with everyone saying that your expenses (and risk) are simply going to be too high at this point - you have to assume that you’ll be paying ~at least~ $1000/mo for board, training (for you and horse), and misc. monthly care expenses. I was casually window shopping a few months back and a 10 yo TB, cute, made 3’ amateur hunter with plenty of show miles was advertised for $10k-ish. It took way more than $10k to make up that horse and a WB with that resume would easily sell for quadruple that or more assuming it vets. I usually see TB flips from the established, experienced OTTB sport horse restarters in the $2k - $5k range. The market is just really time-limited if you’re trying to make any profit.

If you like green bean OTTBs, you have good training help, and you want to bring one along for the experience of it, go for it! Just don’t plan on making money on it.

[WildGooseChase]

I tried flipping a few horses and I was in almost the exact same situation. I LOST over $3000 doing it. The horses wouldn’t sell and I went into debt vetting them, boarding them, and training them.

Bottom line, unless $3000 is pocket change for you, I would wait until you have a barn of your own, and your expenses are LOW to keep a horse there.

[Libby2563]

I agree with the other comments that you are unlikely to make a profit. If it helps to see it all written out, I bought a project pony (13.2 hh TB/Welsh cross) in July 2018 and sold her in July 2019 (kept her a bit longer than planned because I was having fun, but also to put a show record on her). I tracked every single expense related to the pony in an Excel document.

Keep in mind that I keep my horses at home and she was a small, easy keeper so my “board” costs for her were extremely minimal–not at all what you would experience with a typical OTTB and/or a boarding situation. I didn’t factor in my time/labor or any general property-related expenses since she was an “add-on” to my existing herd. She was also barefoot until shortly before I sold her.

Here is a summary of my expenses:

Pony purchase: $1,600
One year of “board”: $598 (yes, you read that right…less than $50/month for grain, hay, and bedding)
Trims/shoeing: $740
Vet/dentist/meds: $2,439 (about $1,000 routine and $1,500 to resolve a specific issue)
Equipment (saddle fitting, pony-sized girth, fly mask, blankets, etc): $690 but I sold some of it with her for $320, so net of $370

So right there you have $4,500 and again, that is with the BARE MINIMUM of board-type expenses plus a barefoot horse and no terrible luck (injuries, etc). Factoring in only the above expenses, I pretty much broke even when I sold her after a year.

However, I spent about $2,200 on shows, foxhunting, and clinics. Obviously those were fun and educational for me but the shows were really required to justify her sales price, which was a good amount above the $1,600 I had spent on the good-natured but green pony.

I also spent about $2k in dressage and jumping lessons during that time (I was eventing the pony). Again, those were partially for my education and enjoyment, but I would not have created as much value in the pony without them. I could have brought her along fairly well on the flat because I have a strong dressage background (competed Grand Prix dressage on a horse I brought up through the levels with help from my trainer), but I was getting back into jumping after some time off and both the pony and I really benefited from the jumping lessons. It sounds like you will also need some lessons or trainer assistance to bring yours along so make sure to factor that in.

In the end, I decided it was fair to apportion half of the shows, clinics, lessons, etc to the pony’s development costs and half to myself because I was benefiting too. Adding up all the expenses I mentioned above plus half of those costs, I lost about $2,500 on my project pony. I don’t regret it at all because I think $2,500 is a small price to pay for a year of fun with a freakin adorable pony, but it’s certainly not a good business model!

Hope that helps!

I think to make money flipping you need to not be boarding, to be fairly independent in your training, and to have enough volume/turnover to offset the failures. I can check the first box but not the second or third, and it sounds like you can’t check any of them.

[KBC]

@Momateur

You sound like me many years ago :). Here’s what I learned…

You can’t make money this way. BUT, you can defray the costs of your riding career…which is, in itself, a beautiful thing.

P.S. Always insure the horses. Ask me how I know.

This, the horses I have sold, have always ‘made a profit’ in that they sell for more than I bought them, BUT, they are personal horses, so I don’t count expenses!

It has allowed me to, over many many years, upgrade my starting point, but they are all personal rid8mg horses, I just like developing them,

[findeight]

Understand the difference between buying a prospect to flip and developing a prospect to sell at some future point.

I think you want want a project, not a flip…flip means a quick turn around with little investment except for your time, you have to have a cheap place to keep it and you must be experienced enough to train and market it yourself in 6 months or less and 3 months is actually the sweet spot for flipping.

I think you also need to understand who you will sell to, what do your buyers buyers want, it is about what the buyers want, NOT about what you want if you want to deal in horses. Do you know people who are buying RRHs restarted but still green and paying enough to cover expenses plus a small profit? Or would you be selling into a glutted market of unpopular size and breed green horses whose price typically reflects the fact nobody wants to pay a lot for them.

Decades back, I made a little flipping stock type ranch horses in So Tex but was in my 30s, had a partner who had a small barn and we bought only what we knew was broke to ride, going sound, would cleanup quick and accept 90 day’s of polishing up their already installed under saddle skills. We only bought geldings in attractive, popular colors and sizes. Resold for about 50% more then what we paid. Dropped out after a couple of years, Didn’t really like it much, rather have a project horse to develop over more time. And we were lucky with the type horse we were flipping, pretty tough and durable to start with and didn’t need any advanced skills like Jumping a course. Also lucky nothing got hurt, sick or proved unsound, one of those would have wiped out every penny we ever made.

That’s the flip business. Is that what you want to do? Think you would do far better learning more about training and marketing and build you skill set and if you want to go with TBs, develop your eye for a prospect by spending time around those horses and learning.

[Crashing_Boar]

“Flipping” horses (as in sales, not pulling them over backwards!) might profit best from the following:

(1) You inherited enough land to turn out youngsters and lay-ups and quarantine prospects;

(2) You’re hard-hearted enough to understand this business is a revolving door–you can’t “save” them all;

(3) On a damn good day you might actually turn enough profit on one in five to fill up your truck with gas;

(4) Don’t count on even that unless you’re sleeping with the vet, the hay man, the farrier, or preferably all 3. :lol:

Hey, it’s happened–husband might be an “All-Round Horseman!”

Otherwise, it’s the second best way on earth since Roman times to turn a large fortune into a small one. Best way, of course, is trying to BREED for profit.

All things being equal, you’d be better off with a hedge fund . . . it’s up there with garage bands hitting the charts.