Frequently Asked Questions:
How do I get involved?
Call or e-mail us with your interest in racehorse ownership. We will ask you to fill out a questionaire and we will contact you to talk in detail about your interest in race horse ownership. If you would like to participate, we will send you an agreement to review. From there, we can finalize the agreement and you will become an owner.
What is the formal relationship an owner has with Randon Bros.?
Each horse will be set up as a separate LLC(limited liability company). This is a common entity for co-ownership of horses. You will own a percentage of the LLC with other owners. We strongly recommend you obtain your own legal review of all documents and tax advice as it relates to horse ownership.
How much does it cost to own a horse?
In addition to the purchase price of the horse, there are monthly costs. This includes includes, but is not limited to, training, vet bills, shoeing, equipment rental, and racing costs such as shipping, drivers share of purse earnings, paddock fees, etc. The monthly cost for a horse in training ranges from $1800 a month to $2,500. Please note that these are estimates and the actual costs can vary depending on who trains the horse, number of vet bills, etc. Each owner is responsible for their pro-rata share of these costs. For example, if you own 10% of a horse with a $2,500 monthly bill, your 10% share of expenses would be $250.
How will I be billed?
We will bill owners in advance on a quarterly basis.
We will also have a special program for owners purchasing into a yearling, where the purchase price will include all normal and customary monthly costs and stakes payments through May of the horse’s two year old year. This will not include any extraordinary items such as surgery if necessary. This will greatly simplify the billing process and allow for more time to enjoy the horses.
How much can a horse make in earnings?
This can vary greatly. Horses earn the following amount of the purse assigned to each race based on their order of finish. The first place horse gets 50% of the purse; second – 25%; third 12%; fourth 8% and fifth 5%. So for example, if our horse is entered in a race with a $15,000 purse and it wins, the LLC collects $7,500. A successful overnight race horse can make anywhere from $30,000 to $75,000 or more in a year. A good stakes horse can make six figures if it does well, although it is very competitive.
Will I make money?
There is no guarantee for any owner that a horse will make money. The opportunities provided by co-ownership groups such as ours limits an investor’s risk by allowing them to purchase only a portion of a horse, and by allowing the opportunity to diversify one’s holdings by owning a percentage of several horses rather than putting “all of one’s eggs in the same basket.” Our concept allows for minimizing risk, increasing ownership diversity and thus maximizing the enjoyment of being involved in the sport.
What type of horses will you have available?
We plan on offering several types. We will focus on potential young stakes racing horses and also high quality overnight (conditioned and claiming) horses. We may also offer broodmares to be bred and have their offspring sold. We will work to meet the needs and interests of our owners.
They will be sold by individual horse, or we may on occasion offer packages where you can purchase a piece of several prospects held together in one LLC.
How will I be kept up to date on the status of my horse?
Once we have an established relationship, we will communicate primarily by e-mail and through the website. We will regularly keep owners up to date on what is going on. Our owners will always know what is happening. We will also be available by phone for questions.
Do owners have input into decisions regarding the horse?
Generally, the managing directors make all decisions. There may be occasion, such as sale of a horse, where they will seek input of the partners. This will be determined by the terms of the operating agreement.
Can I contact the trainers directly?
This is the responsibility of the managing directors of Randon Bros., Inc. With many potential partners, this would be too cumbersome for trainers to directly be in contact with all co-owners of the LLC. Again, we will be diligent in keeping owners informed, and will be available for questions. We will organize times and events for all owners to meet and mingle with trainers.
Can I visit my horses?
Yes. We will be coordinating owner's days at our farms. Also, if you are going to the track to watch your horse race, you do have paddock privileges with your owners license to see the horse. Please let us know if you are going to visit the paddock so we can let staff know.
How will I know when my horse is racing?
We will let you know. Also, we will show you how to check for entries on the internet and even a neat free service that will automatically notify you when your horse is entered.
Where do your horses race?
Our horses primarily race in the lucrative Ontario and Chicago circuits. We also will race the traditional grand circuit sites and possibly expand to other jurisdictions depending on the quality of horses and determinations made by the trainers.
Are there other perks with ownership?
Yes. With a license you get admission free and paddock visiting privileges at race tracks across the country.
How are partnerships concluded?
Stakes horses will typically be sold after their stakes career unless there appears to be a strong opportunity to continue racing into their 4 year old year. Claiming or overnight race horse partnerships will be concluded after sold, claimed or a decision has been made that the horse’s career is over. These decisions will be made by the managing directors of the LLC.
What if I would like to get out of the partnership?
There is no secondary market for interests in our LLC's. You would need to find a new buyer to sell your interests to, and this would need to be approved by the other LLC owners subject to the terms of the legal agreements. We may make special provisions in case of an unforeseen emergency.
How is Randon Bros. Inc. compensated?
We will receive a management fee of up to 10% on all horses sold to an LLC and 5% of any net profits of each LLC (calculated as all earnings of the horse plus the sales price of the horse upon conclusion of the partnership less all costs incurred during the life of the partnership and the initial purchase price of the horse). This is usually equivalent to a 5% fee of all purse earnings made, as charged by some racing partnership groups. Our method puts emphasis on making money for each partnership.
Do you carry Insurance on the horses?
No. You can purchase both mortality insurance and major medical based on your percentage interest separately if you wish. We can help facilitate this. |
