How much money do you have? It’s a serious question, actually, particularly since (not to be rude) it doesn’t seem like you have the knowledge base to understand the basics of investment horses, importing, and the market. Which is fine, you can learn those things, but that could come at a cost, which is why I ask how much money you have.
If money isn’t a concern and you don’t need the profits to live on, here’s what you need to know:
Investments are unreliable. Investments in the horse world are incredibly unreliable. Don’t invest what you can’t live without. You must consider all aspects of the investment and that you could potentially lose all of it. That risk concept defines how much you are willing to invest.
Your profit is maximized by investing the least amount of money possible, improving the horse greatly for the least amount of money possible, and selling the horse at an exponentially greater price than you purchased it for. Unfortunately, that is a textbook ideal situation and rarely works, but let’s look at each element.
Buying Low. You have to factor in import costs when considering buying low in Europe. Is that $10k steal of a deal 4 year old gelding still a steal when factoring in another $10k in import and transportation costs? Now you have $22k invested in purchase, commission and import of your 4 year old.
Let’s say you hang onto it for a year. Training & board are let’s say $1200 a month (which could be low or high depending on the program you’re in). That’s $14,400, with a total investment of $36,400. Now you could be tempted to skip including this in the investment scenario because you’d be boarding/training anyway, but still - it’s a factor into the horse’s cost.
Now how much you show the horse and how well it does will significantly impact it’s value, and this is where you don’t have a crystal ball. Does the easy as pie 4 year old you bought stay easy as pie in an different environment and program with new expectations and new strength built? They rarely do, but some can, and those will make you lots of money. Does the 4 year old need two years in the ring to really be saleable? Let’s say you show it once a month for 1 years with a pro ride + your ride…at $2k a show (again, that could be on the low end depending on your trainer’s program) that’s another $24k a year. So after keeping him for 1 years, you’d be at 60,400.
Let’s say he’s saleable now. Is he worth at least $75k as a 5 year old? That’s only your break even point, after a 20% commission to your trainer)?
What if you had to keep him two years? That’s another year of boarding, training and showing.
This is an oversimplified example and leaves out incidental costs like insurance, veterinary and farriery costs, tack, etc. and also assumes he doesn’t get hurt.
You can see it’s impossible to really determine how much you’ll make because so much is variable. It really depends on how easy the horse is, how quickly you can improve him enough to sell him for a profit, how much you have to campaign him to improve his value, and how saleable he ends up being.
Which is why I started with the question of how much money you have. Most people who make money off investment horses do so over a long period of time over many, many horses, some of which they’ve taken losses on and some of which they’ve made more than they should’ve.
I know PNWJumper has personal experience in doing this and hopefully weigh in, but I know she keeps the horses at home and does all the riding, training and showing herself, which drastically changes the profit dynamic.
My recommendation would be do start investing in some horse in the states first. Try to find the diamond in the rough. Try to make a few grand off a horse before you try to make a ton. Even do this as a second horse, and don’t limit yourself to the big fancy ones. Find the pony who with two months on him could make a perfect children’s hunter pony that you can make a few grand off. Invest that into an Appendix that’ll make the perfect 2’6 local hunter that you can make $7k off of. Flip a few, get the feel for it, make sure you like it and can do it before risking a significant investment. Then again, that’s coming from someone who has limited resources, so if you’re blessed with a chunk of change to play with, hey, go for it! Just know that there really isn’t a magic formula to determine what you could make.
It really all depends on what you bought it for, how long you hold it, what you put into it, and how much you can sell it for. And since all of those are variable and undeterminable, you need to be comfortable with your risk of loss should things go south.
Good luck!
ETA - if you’re not really considering things like boarding, training, vet/farrier/showing costs because you’d be doing that anyway with a horse you’d be keeping, you aren’t really looking at this as an investment opportunity. Investments are calculated on sales - all costs associated = profit. If you’re just looking to import, keep for a while, and sell (hopefully for more than you paid for it) and not factor in all costs, you’re not really looking at investments, just at having sale horses instead of a horse you want to keep for several years. Which is fine! But it’s not the same way of thinking as when you’re truly trying to invest and make money off of show horses.
