THE CARE HOME GROUP / CARLAUREN GROUP
The Care Home Group Ltd is part of the Carlauren Group Ltd and offers investors the opportunity to purchase individual bedrooms in care homes. The business model is very similar to that of companies which offer hotel rooms to investors, except for the fact that The Care Home Group Ltd offers investors a choice of income options. In our opinion this is a very high risk investment. If the company operating the care home walks away or goes bust, the investor is left with one room in a large building which would be almost impossible to sell. Any prospective purchaser would have to deal with 30, 40, 50 or more separate room owners, often spread around the world with different expectation levels, and this would inevitably result in a much lower sale price for the home. There is a genuine danger that the empty care home would deteriorate without ongoing maintenance which, in most cases, investors would be expected to finance. What is worse with a care room investment compared to a hotel room investment is that a failure of a care home drastically affects the lives of vulnerable people. In a hotel situation the hotel just declines to take any more bookings. In a care home there will be elderly residents faced with uncertainty and having to move to a new home.
When we see “guaranteed buy-back” schemes it always raises a red flag with us. More often than not the company contracted to buy-back the unit does not have the funds to do so. By the time the buy-back is due the company has found a way out of it or has dissolved and doesn’t exist anymore.
If you or I were to buy a house we would be able to obtain an independent valuation on the property. However, room investments invariably have no independent valuation of the room. How can a valuer assess the value of a care room which is wholly dependent upon the quality and longevity of the care home operator ? When an investor buys a room they are not actually buying a property although it is made to look like that. They are buying into the care home business itself because without the business the room is virtually worthless. It seems to us that too many operators make up the valuation based on what they say they will pay in rental e.g if they promise to pay rental of £10,000 then a room in their eyes is worth £100,000. If they promise to pay £8,000 in rental then the room is worth £80,000 and so on. There is no sense in this approach because if the company goes bust and pays NIL in rental then it suggests that the room is worth nothing, which ultimately is not going to be too far from the truth.
Who owns TCHG and Carlauren Group ? When you strip it down to bare bones it is one man – Sean Murray. Mr Murray also owns a private jet business and has more recently moved into establishing a bizarre cryptocurrency based on his own business. In the future, the families of residents in the care home will have to buy his cryptocurrency and pay for care services using this currency. What on earth is going on ? How long will it be before the rental income paid to investors will have to be paid in Mr Murray’s strange cryptocurrency ? So….. in a nutshell, families will pay genuine cash for a cryptocurrency fabricated by Mr Murray. Does this sound normal to you ? It rings alarm bells with us. We are already involved in exposing dodgy cryptocurrencies and trying to recover investors’ money from those kinds of investments. We will be following this new scheme very closely.
We are inviting investors in Carlauren Group, The Care Home Group and indeed any other care home room investment to contact us with details of their investments. We believe the schemes may breach Financial Conduct Authority regulations and may be unlawful. We are looking into these aspects.
If you would like to read about some of the risks involved in owning rooms within a larger premises please take a look at this BLOG.