Episode 2 Best of Homes Under the Hammer

Hello and welcome to Best Of Homes Under The Hammer.

Today, we're taking the chance to have another look

at two of our more interesting auction stories.

Join us as we reveal a couple of auction greats.

In East London, this massive building had been a sewing workshop. Was its future all stitched up?

And, in Morecambe, just a stroll from the beach,

this property solved a problem for someone with cash burning a hole in his pocket.

We think these are two of the most interesting auction purchases from the early days.

Here's what happened when they went under the hammer.

In the 1970s and '80s, Shoreditch in East London was down at heel,

but the early '90s saw an influx of artists looking for cheap studio space.

Trendy bars and restaurants soon followed and the area started

to attract those who rejected the glitz of London's West End.

Over the last few years,

Shoreditch really has become the place to be seen,

with its lively atmosphere and creative buzz.

The area is no longer up-and-coming, but it's arrived with style.

And there are great communication links.

It's very close to Liverpool Street station and lots of tubes go straight into central London.

Here on Sclater Street, you can really benefit from the transport links.

You've got the cool, funky bars, and you're literally just moments

away from the curry mecca that is Brick Lane.

Now on first glance this building, well, it looks promising.

It's a substantial four-storey end-of-terrace property

that's run down on the outside and I don't like the graffiti on the door.

But what's it like inside?

This is a huge property.

On the ground floor is an open-plan warehouse, stuffed with clutter,

and below that, a basement storage area of 64 square metres.

At the rear, adjoining this courtyard,

is what used to be a sewing factory and it looks as though everyone's just suddenly downed tools and left.

Above this there's a self-contained three-roomed flat, but that's not all.

Back in the main building there are another three flats of approximately 70 square metres.

So it all just goes on and on.

So what have we got up here? Looks like the walls have just been painted.

Bedroom to the front of the building.

Got some exposed brickwork and it looks like this wall's just been skimmed as well.

White bathroom suite to the front.

A good-sized double bedroom to the back here.

A lovely feature window, and a beam.

Separate toilet, that's always good news.

And a single bedroom facing the back with a lovely sort of factory-style window.

I love all the windows in this building, they're really unusual.

This room's really light and airy.

I'm getting a sort of New York loft vibe in this building.

I love all these old features. I can really see a City worker renting a pad like this. But look at this.

You can't get more urban than that.

This is an area that's really taken off so this property is just begging to be developed.

All this space for a guide price of just £750,000 to £800,000.

It seems like a bargain, but is it?

Whoever buys this needs to have vision.

It's a real mish-mash of rooms and spaces.

Now I would recommend talking to as many experts as possible about the building.

Whoever takes this on will have to have an experienced workforce behind them.

It's certainly a job for the boys. Let's go to auction.

You can see it's packed here.

Lot 33 now.

93-95 Sclater Street, Shoreditch.

Big old chunk of property in E1.

Not far from our Spitalfields office.

Who's going to start me off at 1 million?

1 million I have.

1,050,000? 1,010,000.

1,020,000?

Oh, 1,020,000 at the back. Sorry, didn't see you there. 1,030,000?

1,030,000. 1,040,000. 1,050,000?

1,050,000. 1,060,000? 1,050,000 I have, gentleman at the front row.

1,050,000 I have. 1,060,000 anywhere?

1,050,000 I have. 1,055,000?

1,055,000. 1,060,000?

1,060,000. 1,065,000?

1,060,000 I have. 1,065,000?

1,061,000? 1,061,000.

1,062,000? 63? 64?

65?

66?

67? 68. 69. 70.

1,070,000. One? Two?

73? 74?

75. 76?

77?

78. 1,078,000. 1,080,000. 1,081,000.

1,082,000. 1,083,000. 1,084,000.

1,085,000. 86. 87.

88. 89.

90.

91. 92.

93. 94.

95. 96. 97.

98. 99.

100,000.

Shall we say 105?

What are we on now? Three paracetamol!

11, we're on.

111? It's a good job I stuck my teeth in this morning, isn't it?

111 we're given. 112?

112. 113? 114?

Yes, 114.

You're not bidding anything now? 115?

116?

No? 116?

£1,116,000, going once,

twice.

Sold.

And the millionaire who just paid over a million for this is John.

He's a serious developer with about 450 apartments in the City.

I met up with him, not at his new purchase, but at one of his ongoing developments.

And yes, we arrived in style.

Now I can't believe this. I knew you were a developer but I didn't realise to this extent.

Yes, I mean obviously this is like an interesting development.

It was empty for about 20 years and we purchased it with planning permission.

It's 135 apartments.

What did it used to be used as?

It used to be used as a hostel.

How much does something like this cost you?

Approximately, with the interest and so forth, about £20 million.

Well, that's a lot of money, John.

It is but it will be worth 40, 45 when it's finished.

Well, we're talking millions of pounds here.

But back at Sclater Street, I wanted to know how John first got his feet on the property ladder.

How did it start for you?

In the beginning, I was a diamond mounter.

I had a job in Hatton Garden.

Then I got into property at the age of about 19 years old.

So have you built up your vast portfolio over the years?

Yes, it's taken some time but I've been at it for about 20 years, really.

John plans seven units here.

There will be four high-end loft-style apartments

plus three artists' studios and he's budgeted 125,000 for the refurb.

Let's talk about this property.

I love it. It's so interesting, but what are you going to do with it?

You're going to basically have the trendy-type, New York-type apartments

where you've got wooden floors, exposed brickwork.

The kitchens will be done in wood, all the fitted appliances will be there.

All the walls will probably be white.

The beams will probably get varnished, to give it that trendy, fashionable artists' studio feeling.

Are you quite excited about this project or is this just small fry for you?

Every project really is exciting because you're creating something from nothing.

Obviously the bigger schemes I find a lot more interesting but it's the same formula, but

you're simply dealing with different money amounts and different ratios.

So exactly in how long can we come back through those doors and get that wow factor?

I'll see you in about six weeks.

-Really?

-Yeah.

-You believe you can get all this done in six weeks?

Absolutely. We've done this many times, so it's not an issue.

John certainly knows what he's taken on here.

He's brought in his architect to go over the plans and we'll be back

to see those New York-style loft apartments and those artists' studios later in the show.

I say, this old-fashioned beach resort looks jolly spiffing today.

Get out your bucket-and-spade, Johnny, and kiss-me-quick!

Morecambe Bay, how beautiful is that?

Especially on a day like today.

Morecambe itself is famous for its fantastic sunset,

wonderful seafood and incredible views.

But a few years ago, the Lonely Planet guide gave it a bit of a scathing review

Since then, the promenade's been rejuvenated and the town itself has undergone a £50 million facelift.

Lot 142 is just round the corner.

The big question is, is that in good condition or does that need cosmetic surgery as well?

Claremont Crescent is situated in the west end of Morecambe.

The auction catalogue says that number 26 Claremont Crescent

currently comprises six one-bedroom flats.

They were built in the early 1900s, so bound to be showing some signs of ageing.

Let's see what work needs to be done.

This property is really large and I wasn't expecting it

to be in very good condition because the guide price was a low 240,000.

The house is very much being billed as an investment property.

In fact, two of the flats have already been let out for £6,500 a year. That's a very good start.

This is an average flat.

Good size bedroom...

living room area, toilet just that way with a shower in it.

It is furnished, well, sort of furnished, but one thing

you must be careful of - make sure that this is up to fire regulations. That's a legal requirement.

If it's not, it has to go in the skip.

Over here, you think this is a cupboard

but no, it's a kitchen.

Small but practical. All in all, good size flats that would suit a couple or one person very well.

The six flats are all about the same size.

Like the others, the upstairs flat has a double bedroom.

And a large living room as well as a dining area.

So this is the largest of the six flats in the building.

The kitchen is small and functional and the bathroom - it's just a shower room, really.

The property backs on to an alley and it also has extensive grounds

to the side which is currently used for parking.

Basically, all the six flats are functional and compact.

There isn't a lot of period charm left in the property, but if you want

to make an income from letting you'd have nothing to do in this property, just sit back and take the rent.

There's a fantastic opportunity for someone with the cash to buy this house

and make a good income for themselves.

Let's see what it makes under the hammer.

The auction's being held in Derby, miles away from Morecambe,

so who would want to buy this property at this auction?

Lot 142 is an investment opportunity.

Start me on this at 185.

185?

180? 180, 175?

175? 170,000 for Claremont House.

Six letting units capable of producing 20,000 a year.

170.

160, start me where you will. 160.

Start me at 150. 150,000. Thank you very much, 150.

At £150,000.

At £150,000. 152, 152. At 152,000.

54. 154. 154 is bid. 156. 156.

158. 158. At 158. 160.

160.

62.

164.

166. 166.

168. 170. 171.

172.

And three. 73. 174.

174. 175. It's in the market, ladies and gentlemen.

We're going to sell it at £174,000.

It's a disappointing price. My instructions are to sell.

£174,000 once.

At £174,000 twice.

Third and last time, Claremont House we're selling at 174,000.

Sold for 174, thank you.

No wonder the buyer has a cheesy grin on his face.

He's just picked up the house for almost 70 grand below the guide price at just 174,000 quid.

That's almost unheard of.

What's more, Cal Lakani is a first-time buyer on the auction floor

and he had an interesting take on why it went for such a low price.

-Hi.

-Nice to meet you.

-You, too.

You must be absolutely thrilled to bits.

Yeah. I didn't expect it to go that low at the auction.

So it was a result.

The auction was a long way away from where the property is.

It was in in Derby and here we are in Morecambe.

-Did that affect the price?

-Yeah, that's why I went.

If it had been up here I probably wouldn't have gone because it's too much competition.

If it's in Derby there can't be that many people who know Morecambe, and have studied that property

and then made the effort to come to Derby, so I was hoping there'd be low competition.

Cal had been living in Japan and didn't know Morecambe.

He thought any information he could find out about the area might pay off.

I saw this property advertised on the internet.

I just started looking up Morecambe and the more and more

I studied up on it, the better and better the deal got.

So what do you do in normal life when you're not buying properties at auction?

I used to teach but I've decided it's time for a change so I always wanted to get into property.

I've been thinking about buying a property for six or seven years.

Japan to Morecambe, that's quite a leap!

All the other jobs I had before, I didn't save any money,

but I did save some money from Japan and I've used it for this plus a bit from Dad as well.

So it has to work now otherwise I'm in trouble.

-I'm sure it will. Let's go and have a look at the property anyway.

-OK.

Despite doing his location research, Cal had bought this property

without viewing it and he had a lot of money riding on the project.

I was expecting it to be quite a run-down property.

I was surprised. All of the flats are in pretty good condition.

I've talked to letting agents and they said they can be let as they are. I don't need to do anything,

which was good news as far as I was concerned.

So not much cosmetic surgery needed for Claremont Crescent.

The six flats will remain in place for now.

I think the most I've ever spent before is about £1,000 on a guitar.

So this is suddenly a lot of money and when you're borrowing

your dad's money as well, it's like double the stress.

-You don't want to mess up somebody's nest egg.

-What was the biggest fear?

The money I spent and what if I don't get it let out?

Cal's adamant about keeping Claremont Crescent as flats,

which only leaves the worry of renting them to keep him awake at night.

And no sooner had our first visit ended and he'd put them straight out on to the rental market.

Join us later in the show to find out if Cal's life savings

and his father's nest egg really are as safe as houses.

As you know, we leave a few months before we go back to visit our auction properties again.

Our buyers didn't take long before they were up and at it.

And there was certainly something worth seeing.

We're in Shoreditch in East London, where property tycoon John added to his half-billion pound portfolio

by buying this four-storey building for £1,116,000.

It's just seven weeks later and John's architect Steve

came to show us how the property has been transformed.

Remember this cluttered old warehouse?

Well, just look at it now.

Steve has put in floor-to-ceiling windows which flood it with light, making it airy and spacious.

We've cleared out the partitions, brought back the original floor,

re-plastered everywhere and brought that back into a lovely shop area.

Replaced the lighting, electrics and toilet facilities.

And that dingy basement area below the shop is now a state-of-the-art studio apartment.

When we got down to the basement we had a little bit more problems there because we had damp coming in.

So we've taken up the floors there, replaced all the concrete floors, put new screes down and tanked the area.

We made it into a lovely, usable space.

And Steve has woven his magic on the outside courtyard, too.

The courtyard was a mess.

It's turned into a lovely little area for people to sit out and have a cup of coffee in the afternoon.

And what used to be that old sewing workshop

has been tailored to perfection with not a stitch dropped.

It's a stylish studio apartment with that all-important eye for detail.

And above it there's a two-bedroom flat.

Back in the front building, John and Steve had created another three top-notch flats.

We basically stripped out all the flats, retained what we can.

Replaced the floors, replaced the kitchens completely, and decorated all the areas.

We've also sandblasted all the beams in the top flat so those have come through very nice and varnished.

I think that gives a bit of life to the building and gives it a bit of heart.

You feel at home rather than in the sterile environments of all the new builds that you go into.

John had originally budgeted 115 grand for all the work.

So was he on target?

It's worked out around 148, to be exact, which is a little bit more but that was my choice.

I didn't have to spend it but it's best that you do to get the final product.

I feel very proud. It's come out very nice in a very good time scale.

As we said, it's all let so therefore we've done a good job.

Not bad at all. But will two local agents agree with that?

The changes that have been made are miraculous both in terms of

the time in which it's been done and the way in which it's been done.

If I was to market the flats I think I'd be looking at

somewhere in the region of 300-320 for the two-bedroom flats

and maybe, for the three-bed, somewhere in the region of 360.

For the studios I would have thought to try and achieve 250.

In my opinion, these commercial units will rent out very quickly.

Between 300 and £350 a week, that shop will let for.

We're looking up towards £300.

Maybe between £250 and £300 per week for the back unit.

John paid £1,116,000 and spent 148 grand on the refurb, making a total spend of 1,264,000.

So if he sold it for 2 million, he'd make a very healthy profit.

He has certainly worked his magic on this building and has got this old sewing workshop sewn up beautifully.

A few months ago, close to the beach in Morecambe,

this large investment property went to auction.

There were six flats in this house,

all compact but in good enough condition to let out and hopefully make a bit of money.

The property was bought at auction by 34-year-old Cal Lakani, a foreign-language teacher.

He paid 174,000, well under the guide price and no-one was more surprised than him.

Three months down the line and his purchase was looking like it might

have paid dividends, even though he hadn't exactly worked hard on the place.

Since I got it I haven't really done anything.

The main thing was deciding on a good agent.

So I spent a while interviewing different letting agents here.

Once I said I was happy with them then I have just left it with them.

So, once Cal had a letting agent on board they took over the renovations and management of the property.

Of course, he had to pay them a fee for their advice and he didn't always agree with what they said.

I wanted to actually do some stuff because...

for me I thought they weren't up to standard but they told me they were lettable as they were

so there wasn't much to be done. One of the rooms needed painting and that's about it really.

They cleaned the carpets and they gave a fresh lick of paint and that was it in one flat.

Now the flats are looking quite clean and tidy and they're ready to be let out.

And Cal already has a new tenant, and he's making himself at home.

I was looking for somewhere round Morecambe or Lancaster

because I'm from Lancaster originally.

I came to view this, took about three to four weeks before everything

was sorted out, then I moved in about two-and-a-half months ago.

There was some furniture in when I moved in.

I had to move some bits in, like my television and table and units but everything else was here.

It's a good enough area, it's quite handy for everything like shops, banks, Post Offices.

Even pubs. It's got everything really right on the doorstep.

You don't have to go too far, even for a local supermarket.

The property also has an enormous backyard area, ideal for parking.

The car park... I spoke to some people here and they said it might be possible to do

some lock-up garages so that's one possibility in the future but at the moment I'm not gonna do anything.

So this property cost Cal just £174,000, which does seem like an amazing bargain but will it be?

Time to find out what two local agents think the six flats are really worth on the open market.

The buyer asked us to manage the property on his behalf.

Our actual aim was to ensure that we got the proper tenants

that would be suitable for the property.

£70 per week is probably the maximum you could charge

for a one-bedroom unit at the moment.

But what would it be worth if Cal decided to sell the whole property?

Current open market value would be in the region of about £250,000.

£250,000. That's an amazing return.

Dad was very happy about how good the deal was but he's told me not to get big-headed,

just keep your feet on the ground and go slowly from now.

I had my first rent cheque last month so that was good.

We hope you enjoyed seeing those properties again,

We've certainly had fun choosing them for you.

-And we'll have lots more for you next time.

-See you then.

-Goodbye.

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