The initial investment includes purchase of your percentage of the racehorse plus actual expenses since the beginning of the year plus estimated expenses for the current quarter. Documentation will include a written contract with all terms and conditions outlined.
Quarterly expenses for training a racehorse at the track are estimated at $6,675. ($223/mo for a 10% share) for a horse stabled at Emerald Downs. Expenses at Golden Gate Fields would be about 20% higher. Expenses include:
Trainer Daily Rate $55/Day $ 4,950. 100% of a horse quarterly.
Farrier $75/Month $ 225.
Veterinarian $400/Month variable $ 1,200.
Transportation $100/Month variable $ 300.
Additional expenses may include any race nomination and entry fees. Your expenses are proportional to your percentage investment. Estimated expenses are billed to you quarterly at cost with the prior quarter’s actual expenses reconciled.
Return on Investment
Purse monies earned after any jockey and trainer take are returned to you within 14 days of the race. Z Thoroughbred Racing LLC retains 5% of all purse earnings for administrative expenses. So, for example, a winning racehorse at Golden Gate Fields will earn 60% of say, a $20,000 purse or $12,000. Trainer and jockey will collect 10% each, with 5% to ZTR LLC. So 75% of a winning horses earnings, ($9,000 in our example), will be distributed to the partners. The win percentage at Emerald Downs is 55% of the purse.
Of course, a winning horse may appreciate in value to add to your return on investment upon sale. Winning a stakes or graded stakes will drastically increase the value of the horse for future earnings or breeding potential. All sale proceeds will be distributed to the partners on a percentage basis; ZTR LLC receives 10% commission on the sale of a profitable racehorse.
Schedule K1 for your investment in the partnership will be prepared by our tax accountant and provided in March of each year for you.
Z Thoroughbred Racing