Care Home Properties

Buying a care home in joint venture

From: £75,000
Fully operational Care Home
CQC rating - GOOD
7-year track record of profitability
Proven management team
50pct bank loan in place
Indicative 8% yield in year 1
5-year targeted return per annum of 15%

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Buying a care home business

The experienced team are targeting properties in the southwest of England and the Midlands. Details of the specific home will be released to qualifying investors.

Fully operational care homes with at least 35 rooms or scope to increase to that level. Most rooms must be ensuite to stay in line with the current trend and increase the chances of a future sale.

A seven-track record of profitability and a CQC rating of ‘Good’.

Positive customer reviews and a low staff turnover are encouraging signs that the staff and service users are happy.

Providing residential personal care or nursing care where the weekly rate is paid is sustainable, given the inflationary cost of wages and energy. Areas where there is a shortage of supply and growing demand.

This home is presently achieving a 50/50 split between privately paying and local government-supported fees.

Purchasing the property within a company structure by way of share purchase to reduce the stamp duty being paid. Retaining the current staff and having a six-month handover period with the outgoing business owner.

The purchase will be made in a joint venture with other investors. This type of investment is only suitable for HNW or self-certified sophisticated investors.

Bank finance has been secured for five years, which is the minimum holding period that any investor should consider. The exit plan is by way of sale or refinancing in year five. The expert team have their objectives aligned with investors and signed personal guarantees for the bank finance.

The home is being purchased at a 26% per cent operating profit margin which is a good place to start. Operational improvements have been identified, and the team aim to increase care provision and the average weekly fees.

Business profits can go up or down. There is a risk that the capital invested could decline.

A five year targeted IRR of 15% could be achieved upon disposal by increasing operating profit by 7% per annum.

To explore the opportunity in more detail, register your interest today.

Key Figures

Starting Price

Net Yield

Q3 2023
Completion Date

Investment Details

This type of investment is only suitable for experienced investors who are certified as high net worth or sophisticated investors. If you are in either category, then you will not be able to participate.

Non-listed shares are challenging to sell. The proposed exit is by way of the business sale at the end of year 5. If the targeted increase in annual income is achieved, the value of the business increases.

Debt finance has been secured for a five-year period. The directors of the company will be taking personal guarantees as their show of commitment. Investors have no personal guarantees; only their initial capital invested is at risk.

The demand for care home beds is outstripping supply year-on-year as the result of an ageing UK population. The areas being targeted need to be more supplied at present. The Quality Care Commission regulates operational care home businesses. Like any business, they do not come without risks; as a shareholder, one would benefit from the upside and share in the business losses.

The Numbers

Ground Rent:0

Number of Units:1

Service Charge:0

Prices:£75,000 - £250,000

Leasehold:No, Freehold.

• Fully operational care home • In good condition • Historic £43,500 p/a spent on maintenance • 35+ rooms • All ensuite • Kitchen • Spacious communal lounge • Well-kept garden • Energy Performance Certificate C • Web images are illustrative only.

  • Self-certify as High Net Worth or sophisticated investor
  • One invests between £75,000 and £250,000
  • Nine-week due diligence process
  • Report on title, valuations and accounting due diligence are provided
  • Complete acquisition

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