We made a very good living doing this for many years until I developed very severe arthritis and degenerative joint disease. We are still trying to figure out what to do since I can barely ride at all any more.
Young prospects will not make you a dime. They will all lose money because of the reasons Boots gave. You cannot keep them long enough to get enough done with them. We have had such a good market for our breeding program that we could sell them, but training and selling ordinary young horses is a lost cause.
Your best market will be in 'flunk-outs'! Reining, cutting and even pleasure horse trainers have customers that pay big bucks for very well bred prospects. Three to six months into training they find that many (sometimes half or more) are not going to be good enough to be competitive. The honest trainers will tell the owners and these horses are sold for a lot less than the training in them without even considering the original purchase price. I have bought cutting bred horses with 6 months of training for around $2500.00. Some of these horses sold for $10,000.00 or more as yearlings. Some had been spurred and yanked around and it took a lot of re-training, but they had papers to kill for and conformation and still had more ability than junk prospects --- if they are sound. Flunk-out reiners are by far the best deal if you can find them.
Anytime anyone buys a flunk-out, you want to have access to that horse's Vet records. I would not touch one if the trainer and/or owner did not authorize me to contact their Vet and see what had been done with this horse by the Vet. Some of these horses make great mounted shooting horses, team sorting horses and the bigger ones make roping horses. If you join a local group of shooters or penners, you can sell every really broke horse you ride at a practice session. The same is true if you can team rope.
The next best prospects for trail horses and recreational riding horses are 5 - 8 year old spoiled horses or horses that people have turned out and lost interest in. Once you have the training in these horses straightened out, they are old enough for recreational riders to buy. These people WILL NOT buy young horses.
The market is good (and was even through the recession) for, what we call, 'Dummy-proof' horses. These are horses that any Dummy can get on and ride off. We figured out a long time ago that the people that can ride anything, do not have any money. The people with all of the money to buy anything they want to ride, cannot ride very well or at all. These people will not buy young horses, but they have all of the money.
If you do not want unhappy customers, insist that they come and ride 2 or 3 times, free of charge, under your supervision. Explain to them that horses only ride as good as they are ridden. Explain that horses are not mind readers and if they do not know how to ask properly and do not know how to release pressure placed on the horse, they will go downhill very quickly. Try to teach them to 'push' instead of 'pulling harder'. If you do not do this, most of the people that will pay a good price for a saddle horse will quickly mess it up and will tell everyone that it is your fault.