Safe Or Scam, in collaboration with a business recovery and insolvency practitioner firm, and a respected UK law firm, has informed investors in Carlauren Group properties of an action designed to protect, preserve and potentially recover their investments.
Carlauren Group has sold individual rooms which it describes as “care studios” in more than 20 properties. The company has raised more than £80 million from ordinary investors with the promise of guaranteed rental levels. Three months ago the rental payments stopped.
Carlauren Group is controlled by one man – Sean Murray.
Even if all the properties were sold investors would not recover their money. The typical Carlauren model was to buy a property for 1X and then sell individual bedrooms to investors for a total of 4X. So a property which cost £1m would have the bedrooms sold off for £4m. It is a shocking model with only one aim in mind.
To make matters worse, Carlauren would then mortgage the communal areas in which they have retained ownership in order to raise more money.
Lenders are not stupid. They would have secured themselves in first position. In many cases, if not all, the refurbishment of properties was carried out by a building company owned by Sean Murray. We suspect that Sean Murray is now a very rich man.
One might have expected that these mortgages on the communal areas would have resulted in the money being used for the property. One would have been wrong. The charges often show that whilst the mortgages were secured against one property, the “borrower” was another entirely separate Carlauren company. In other words, the value in one property was being mortgaged to purchase another property for which Carlauren could then sell off those rooms at grossly inflated prices. It was a regular conveyor belt of properties each generating 4X the purchase value every time by selling overpriced rooms. This is all very indicative of a Ponzi Scheme.
Interesting that there is one “go-to” lender in all of this.
It is impossible that investors will recover their full investment from the sale of the property portfolio. The best outcome for investors is to place the portfolio into administration so that it can be properly managed by professionals whilst a full investigation is undertaken into Sean Murray, his management team and the sales network.
We expect this to result in legal claims against the parties involved. Any investor who considers buying a room in any large property, whether that be a care home or a hotel, needs to stop and reconsider. These are terrible investments which we can almost guarantee will end in failure.
Safe Or Scam is involved in investigating other hotel and care operators.
To read our previous blog entry on Carlauren Group please click HERE.
To read our later blog on Carlauren Group please click HERE.