Your questions answered
Who decides what horses we buy, who will train them, when they race and all that expert stuff?
Steve Zorn is the founder of Castle Village Farm and manages all aspects of acquiring and racing our horses. He is now known throughout the industry as an expert at buying young horses that will out-perform their purchase prices, and also at claiming horses that can then be raced at higher levels. He buys frugally, with an eye towards horses that will have long and successful careers. Several Castle Village Farm horses, including Flippy Diane, Introspect, Angel Dancer, Raf and Ready, Seaside Salute and Diligent Gambler, have earned far more than they cost. Most of our horses are New York-breds, so they can compete in restricted races, which gives them a better chance of being in the money. Also, when New York-breds do compete against open-company horses, they qualify for lucrative New York bonuses. (For more information on our current horses’ earnings, see Our Results.)
Together with Castle Village Farm's trainers, Steve is ultimately responsible for making the tough decisions about when and where to race our horses. He is often at the barns, and he consults with our trainers daily.
Unlike most other managing partners, Steve encourages partners to communicate not only with him, but also with one another. He welcomes suggestions, thoughts, questions and input into his decision-making from all of the partners. As a partner in a Castle Village Farm partnership, you’ll not only receive messages from us about what your horse is doing, but you'll be able to share your thoughts with other partners on this website's message board.
What are the benefits of Castle Village Farm partnership?
As a Castle Village Farm partner, no matter the size of your partnership share, you are welcome in the paddock and the winners’ circle for your horse’s races. You will stay on top of your horse’s progress, and share your own opinions about racing with the other partners.
Partners who own 3% or more of a horse can (and must, if the horse is racing in New York) be licensed as thoroughbred owners. With that licensing comes a badge for backstretch (stable area and training track) access, where you’ll be able to visit our trainers' barns and see your horse on the track during morning workouts. If you are a licensed owner, you’ll also get free parking in the owners’ lot and free clubhouse admission for yourself and your immediate family. If you own less than 3% and do not choose to get an owner’s license, you can still easily make arrangements with us to meet on the backstretch, visit the barns and see your horse work out.
When I join a Castle Village Farm partnership, what exactly am I paying for, and what financial obligations will I have?
The initial partnership capital will cover the actual price of your horse. Your initial capital investment will also cover (a) the expenses we incurred in buying your horse (vet exams, travel expenses to attend a sale, etc.), (b) the costs to us of setting up the partnership and selling interests in it and other up-front expenses, (c) a reasonable percentage, disclosed in the business plan of each new partnership, for Steve’s expertise in choosing your horse, and (d) 3% of the total partnership capital as a contribution to Castle Village Cares, our thoroughbred retirement arm. The total of these up-front expenses will never exceed 20% of the total partnership capital. That's far less than the markup that many other partnerships charge when they syndicate horses.
We also usually try to collect a reserve for training expenses, usually for a three-to-six-month period, as part of your initial investment. That way, you can be sure that, barring unforeseen risks, you won’t be called upon for additional payments for at least that length of time.
After that training reserve has been used up, you will be responsible for your percentage share of ongoing expenses. Typically, these expenses run on the order of $4,500 per month, in total, for a horse in training at the race track in New York. So, if you own 1 percent of a horse, you can expect your share to be on the order of $45 per month. Of course, we hope that the amount of money you actually will have to pay will be less than that. We hope that your horse will be contributing to its own upkeep as well, or even earning a profit. But, again, we have to warn you: while Castle Village Farm horses generally do very well on that score, most race horses do not earn enough to cover their cost and training expenses, and racing is full of unexpected risks, so you should expect some cash calls.
How do I know what my money is being spent for?
We provide detailed monthly financial statements, which show each and every charge for training and boarding the horses, veterinary work, shoeing, van transportation and all the other costs directly related to the care of the horse. In addition, there is a flat monthly charge, stated in each separate partnership agreement, for all of Castle Village Farm’s out-of-pocket overhead, management and partner liaison expenses; this covers actual expenses only. Yet another important way in which Castle Village Farm differs from many other partnerships is that the Managing Partner is not paid a regular monthly fee. Instead, to the extent he gets paid at all, it comes only from your horse’s winnings or from profits on the sale of a horse.
In addition to detailing the partnership expenses, the monthly financial reports will also have details on each start made by a horse: what the purse was, how much the trainer’s and jockey’s share was, and what other deductions the race track might have made from the purse. These reports will generally be distributed by email.
In addition, you will get an IRS form K-1 for each partnership in which you have a share at the end of each year. These are usually ready no later than the end of February, so that you have plenty of time to include them in your personal tax return planning.
We also contribute 3% of each partnership’s initial capital, and 1% of our horses’ purse earnings to Castle Village Cares, a charitable corporation, registered with the New York State Attorney General, that uses the money to ensure a safe retirement for horses.
If my horse earns money, how soon do I get my share?
We distribute money, and bill for expenses, monthly. At the end of each month, if your horse has made money, and there’s enough left to pay the next couple of months' estimated expenses for your horse, then anything above that will be distributed to the partners. If there isn’t enough to pay the expenses for that mopnth, you will be billed for your pro-rata share of what’s needed.
Can I expect to make a profit on my partnership share?
In a word, NO. Despite our expertise.
We have the best possible advice as we make our purchases , and our racing manager Steve Zorn is now known throughout the industry for his excellent eye when it comes to either buying young horses or claiming horses that are already at the track. And, before he buys, he obtains expert pedigree, conformation and veterinary advice.
Nevertheless, there is always a risk in buying thoroughbreds. Roughly one-third of all registered thoroughbreds never even make it to the races, and roughly one-half never win a race. Of those that do race, the average horse racing in New York earns about 75% of what it costs to keep it in training. Race horse ownership is a high-risk undertaking. If you are purchasing a partnership interest primarily because you expect to make a profit, don’t. Most horses lose money, some more or less break even, and a few are very successful. We hope to have only the successful ones, but there are no guarantees.
If, on the other hand, you want to join a partnership because you love horses and racing, and want to be a part of the racing world, sharing in the ups and downs of your horse’s career, at a reasonable cost, then you should consider becoming a Castle Village Farm partner. We can guarantee thrills, satisfaction and even the occasional disappointment; we can’t guarantee profits.
How does Castle Village Farm management make money from the partnerships?
Basically, we don’t make much. That’s how Castle Village Farm can afford to syndicate horses at reasonable prices. The managers or promoters of other racing partnerships make money in three ways:
(1) They can mark up the price of a horse they buy, when they sell it to the partners (e.g., buy a horse for $25,000 at auction and syndicate it for $100,000);
(2) They can charge a regular monthly management fee, regardless of how well, or how badly, the horse does on the race track; and
(3) They can take a percentage of the horse’s winnings.
The managers of many partnerships do ALL of those. Castle Village Farm does ONLY the first and the last. And we don’t do the first very much. Although Steve does take a small fee to compensate him for sharing his expertise with you, it is never more than 5%. And Steve doesn’t charge a management fee at all , certainly not one that gets paid every month even if a horse isn’t winning. At Castle Village Farm, the monthly expense fee is for actual, out-of-pocket expenses only. Once Castle Village Farm’s partners own their horse, the only way we get paid is if the horse runs well. We take just 5 percent of purse earnings from all races, and 10 percent once a horse earns over $100,000. At that point, the horse is usually profitable for the partners as well. In addition, we get 10 percent of any profit made on selling a horse (i.e., if we claim a horse for $25,000 and it’s claimed away for $35,000, the managing partner gets $1,000 from the $10,000 profit; the rest goes to the partners).