Adventures Of A Horse Crazed Mind just did a post on whether a person can make money on upgrading horses or not. In my usual wind-bag fashion, I exceeded the comment character limitation...by a lot! LOL
But this is an area that I have loads of experience with...enjoyed doing...and if we get the horse property we are looking at bought, Megan and I will return to doing in the near future. I stopped doing it for the last few years mostly because I didn't have the proper facilities, was short of the time it takes...and to be completely honest...I got tired of dealing with goofy assed buyers. One good thing about the crashing economy, a lot of the douche-bags that thought they needed to buy a horse aren't in the market anymore. I think we are returning to a more normal set of people looking to buy prospects or saddle horses and I sure don't mind dealing with those kinds of people. With so many good quality, potential laden horses available on the market...for super cheap prices, I see a future possibility of again taking pride in upgrading horses and giving them the training they need to become productive and enjoyable companions to owners who don't have the time/experience to make a solid horse of their own. Ya know...not all cowboys enjoy breaking and training their own horses either! I know lots of them who simply want a well-broke, using type horse that isn't going to dump their butt in the middle of nowhere.
In the past I've made good money off of horses I've bought for resale. Actually, I've never lost money on a horse if you consider that I usually pay between $300-500 for the horse and resell for $2,000-$3,500 within a year.
There are rules of thumb that apply if you want to do a bit of trading/upgrading.
1)Expenses-these costs are going to apply to any and all horses you purchase-whether it's a horse for your own personal use or one that you know is for resale. I have never figured the ordinary costs of maintaining a horse into whether I consider the sale a profit or not. I could do that because I was already maintaining multiple personal horses and the additional cost of maintaining a sale horse or two is quite minimal. I suppose if I did take the time to add up all of the hours spent, each tube of wormer, paid myself for trimming feet, etc, etc...I'd be in the hole on every horse. But what is any different about that than the money pit my own personal horses are? No-for me it's essentially, I gave $500 for this horse, had him for 9 months and sold him for $3,000. Well, that's $2,500 more than any of my personal horses ever made me so...ta-da...profit! LOL-I know, I have a sick and twisted way of twisting reality.
2)You need facilities where you can maintain multiple horses without the cost of the facilities multiplying per horse. Boarding on a per horse basis is not cost effective-and if that is the only way you can maintain a horse and have facilities to work with them, your expenses are always going to outweigh what you can resell the horse for. To keep expenses down-do as many things yourself as you possibly can-take a hoof trimming class, do your own worming and vaccinations, learn to be your own vet-tech and pre-chiro examiner. And of course, you need to be your own trainer.
3)Haunt your local sales barns. Sometimes local ads are a good place to look, but that usually incures travel/time expenses. Sale barns provide numerous horses to chose from and it's a single trip. Killer market or no killer market...You have to pay attention to what you are bidding on. Get to the sale early. Do what the rest of the "traders" do...walk around with a notebook and a halter or bridle over your shoulder. See a horse you like, get in the pen with them and look them all over, watch how they react. Can you catch them? Do they look like they have saddle marks? Can you pick up their feet? If they are saddled, talk to the owner, ride the horse. Don't try to ride and slide them, just get on and see if they move off of your leg, can they neckrein, do they stop, do they back? It's never very hard to figure out if a horse has been properly rode at some point in their life. A well-trained horse who had a gunsel as an owner will usually actually sigh with relief when a knowledgeable rider, giving the correct cues gets on them and eases them around a bit. Pick your top 5, write down their numbers(and the owners names if possible) and make a few notes to yourself-list the top 5 in the order you would buy them and write how much you think you should give for them on the same page. If there is only one horse there you like...then there is only one horse you bid on in the sale barn. If number 5 comes in before number 4-1-don't bid aggressively. Make a couple of bids, but let him go unless he is so cheap you still have budget money. Spend your budget and LEAVE!!! Go pay for your horse(s) and get out of there.
4)Beware of your emotions!! If you truly want to be able to buy and sell horses for profit...especially if you want to do it ethically...you HAVE...H.A.V.E to be able to curb your emotions. To purchase a horse with the intention of making them a better horse that many people would love to own and be proud of means you have to start with a horse that has the potential to become that horse. Remember, you are buying horses with the intention of making a profit on them. Yes, we are going to take good care of the horses we buy, yes we are going to invest more money and lots and lots of time into turning them into productive citizens...but the bottom line is...to keep doing it it has to be profitable...breakeven is great....profit is even better!
5)Know your target market. If you are geared toward middle class citizens that means that sometimes you will have to turn down purchasing the uber nice, high quality prospect in favor of the adequate, more public appealing one, even if the prices are similar. It all boils down to turn-around time. For resales to be profitable-you need to pay less than a $1000 for the horse and know you can market it for at least $2,500(and that is cheap). Anything you price over $4,000 is going to be on the market longer-unless they are winning at something. Personally, my target range was always $3,000-3,500. And as much as we all like to bitch about it...color sells. A plain bay is going to stand in your lot longer than the palomino. Be careful when purchasing paints though. A strawberry roan paint like Megan's horse will sell all day long. A sorrel and white overo...not so much. A pretty bay like Shooter or Beretta will be snapped up. A washed out sorrel/bay with no interesting markings...is going to have to be winning something before the average person looks twice. Size matters! I once bought a beautifully trained TB gelding. As gentle a horse as you could ever find. He was 16.1H when I bought him for Megan to use for HUS/Jumping. He was too big a moving horse for her, so I started looking to rehome him. He matured at 17H. If he had been 15H I could have sold him in a heartbeat as a trail horse because he was uber quiet, soft and had absolutely no spook. Everyone who tried him loved him...but he was too tall. I did find a good home for him with a girl in Meg's 4-H group-she went on to use him just as I had planned and did well with him. But since it took me the extra year to get him sold, I guess you could say that he was as close as I have ever come to losing money on a horse.
6)You have to get out there and become a public figure-so to speak. That means going to the local auctions on a regular basis(to look or buy, not to sell!), going to gymkhanas, trail rides, horse shows and play-days. Participate in them on your sale horses as much as you possibly can. If you want to market nice, average, all-around horses-you have to show people that is what you have. You have to find the horse's niche and let them shine. People don't have to love me personally to want to buy a horse I am selling. All they need to know is that my word is good and the horse is what I say he is. Selling horses is remarkably more about the sheer number of people you know or meet than anything. Get to know other horse traders, killer buyers, training barns, boarding facilities, 4-H leaders, tack shops, talking "horse" is going to rule your life.
And my own personal criteria...Rule #1 for me
Never buy a horse you would not like to own for yourself. Every single horse I have ever bought has been because it is a horse I would like to personally own. That made my selection a lot narrower when I looked but then it kept me from making emotional purchases too. I've bought sick horses, lame horses and thin horses...but I don't buy really young, really old, infirm or crippled horses. They have to have the potential to become productive members of the equine set in a relatively short amount of time.
The only other bit of advice I have is...love your sale horse!...Don't FALL IN LOVE WITH your sale horse. The whole point is to find someone else who falls in love with them.