0:00:02 > 0:00:04In difficult market conditions,
0:00:04 > 0:00:07it's harder to make short-term profit out of property.
0:00:07 > 0:00:14But if you buy at the right price and in the right location, it is still possible to make some money.
0:00:14 > 0:00:19But you really must do your homework, so let us be your guide on Homes Under The Hammer.
0:00:44 > 0:00:50No matter how experienced you are, you can still come a cropper buying property at auction.
0:00:50 > 0:00:54Make sure you do your research and can afford to make a few mistakes.
0:00:54 > 0:01:00So were today's buyers well-prepared or did the auction properties spring a few surprises?
0:01:01 > 0:01:06'Will this house in Stoke-on-Trent tick all the boxes?'
0:01:06 > 0:01:08Tick!
0:01:08 > 0:01:09VG.
0:01:10 > 0:01:16'There's a flat in Morden that needs somebody who can climb these stairs and cross the road.'
0:01:16 > 0:01:20Whoever buys this place is going to be a risk-taker.
0:01:22 > 0:01:26'And this place in Kent was up for sale, but there was a catch.'
0:01:28 > 0:01:31You can't buy this one, but you can buy this one.
0:01:31 > 0:01:37'All these properties have been sold at auction and we'll find out who bought them and what they paid
0:01:37 > 0:01:40- 'when they went under the hammer.' - Your lot, sir.
0:01:47 > 0:01:50This is Bentilee in Stoke.
0:01:50 > 0:01:55Primarily, it's a large housing estate. Very large, in fact.
0:01:55 > 0:02:004,500 properties approximately and all very similar to the one I'm here to see.
0:02:00 > 0:02:07This is it, two-bedroom, semi-detached at a guide price of 49,000 quid. Let's look inside.
0:02:08 > 0:02:12You do get a worrying sense of deja vu around every corner
0:02:12 > 0:02:17with 4,500 identikit houses.
0:02:17 > 0:02:19# If everybody looked the same... #
0:02:19 > 0:02:25But the properties themselves are solid-looking and the area has had much-needed investment.
0:02:25 > 0:02:31That makes the guide price of £49,000 even more appealing.
0:02:32 > 0:02:35OK, not an ideal entrance layout -
0:02:35 > 0:02:41through the front door and straight into a big wall, but you've got stairs up to the bedrooms,
0:02:41 > 0:02:45then through into the front living room, not in bad condition.
0:02:45 > 0:02:49It needs a bit of modernisation in terms of the paintwork and fireplace,
0:02:49 > 0:02:53but it doesn't smell damp, it looks reasonably well looked after.
0:02:53 > 0:02:57Double glazing, which is always a bonus. Yeah, not bad.
0:02:57 > 0:02:59It's not bad at all.
0:02:59 > 0:03:03Just off the living room, you'll find a utility area
0:03:03 > 0:03:06with plenty of storage and space for a washing machine.
0:03:07 > 0:03:10Through into the kitchen and a lovely surprise.
0:03:10 > 0:03:15A nice-sized space, recently refurbished, so you've got pleasant work surfaces,
0:03:15 > 0:03:18modern units, white and clean.
0:03:18 > 0:03:23And as with many houses of this age, very practical things like the pantry there,
0:03:23 > 0:03:26so all in all, we are loving this property.
0:03:26 > 0:03:31In fact, I'd go so far as to say... Tick! VG.
0:03:34 > 0:03:38# Very good, very good, very good Very, very, very, very good... #
0:03:38 > 0:03:43Very good indeed. In fact, this doesn't feel like an auction property at all.
0:03:43 > 0:03:50The garden is beautifully tended and there's the fruit of the person who really took care of their home.
0:03:50 > 0:03:54Top marks all round! I wonder if a trip upstairs will prove as fruitful?
0:03:54 > 0:03:58So, upstairs, an eminently sensible layout.
0:03:58 > 0:04:02You've got a bathroom and a separate loo. I like that.
0:04:02 > 0:04:08Rear bedroom there and through to the front of the property where you have a ginormous front bedroom.
0:04:08 > 0:04:13Other properties on this estate have converted this into two rooms.
0:04:13 > 0:04:17That is a very sensible idea. You've got two windows.
0:04:17 > 0:04:20All you need to do is put a stud partition wall in here
0:04:20 > 0:04:27and then, going back out here, there is this thing here, which is the hot water tank in there.
0:04:27 > 0:04:33Get rid of this, bring the entrance door into the bedroom there, put a combination boiler in its place
0:04:33 > 0:04:37and you've got a very simple solution - three bedrooms,
0:04:37 > 0:04:43which, I've found out from a local estate agent, would add £50 a month to the rent or 600 quid a year.
0:04:43 > 0:04:50It won't cost you more than 600 quid to do that, so it's repaid for in one year. That is a good investment.
0:04:50 > 0:04:56Phew, and breathe, but seriously, I can relax now that I've found an easy way
0:04:56 > 0:05:00to add value to this place because that's what developing is all about.
0:05:00 > 0:05:04Put that third bedroom in and you've made it worth more and broadened your market,
0:05:04 > 0:05:08but being a developer also means doing your research
0:05:08 > 0:05:10and you never know what secrets you might unearth
0:05:10 > 0:05:12with a bit of digging!
0:05:12 > 0:05:18OK, time for your Open University home study course in Property Renovation,
0:05:18 > 0:05:20Module 4 - Red Ash.
0:05:20 > 0:05:25This is particularly important if you're thinking of buying a property built in the 1940s or 1950s
0:05:25 > 0:05:28in industrial areas like Stoke-on-Trent
0:05:28 > 0:05:31because red ash was the remains when they burnt coal
0:05:31 > 0:05:35in power stations, factories and coal mines.
0:05:35 > 0:05:41It was used as an infill underneath concrete in times when building materials were quite scarce.
0:05:41 > 0:05:45Fine in theory, apart from the fact that red ash, when it gets wet,
0:05:45 > 0:05:49has a chemical reaction which causes the concrete to bubble.
0:05:49 > 0:05:54That can be very expensive to replace - £8,000 to £10,000 for a house like this,
0:05:54 > 0:05:57so you've got to check the floor.
0:05:57 > 0:06:02That looks like new concrete and it's been replaced, so that is great news.
0:06:02 > 0:06:09It's saved you all that money, so it's a big tick in the box for this house. Here endeth the lesson.
0:06:09 > 0:06:13So, with room to increase the value and improve,
0:06:13 > 0:06:16and with no nasty mining deposits lurking,
0:06:16 > 0:06:19it's a promising house in my opinion
0:06:19 > 0:06:21and well worth taking on.
0:06:21 > 0:06:23I asked a local estate agent for his thoughts.
0:06:25 > 0:06:28In this particular area, you can get a lot for your money
0:06:28 > 0:06:33because the prices of semi-detached properties are similar
0:06:33 > 0:06:36to the prices of small terraced properties in other areas.
0:06:40 > 0:06:43This property is in reasonable condition already.
0:06:43 > 0:06:49There isn't a great deal that needs to be done before somebody could move in or let the property.
0:06:49 > 0:06:53I think the best way to increase the value of the property
0:06:53 > 0:06:56would be to split the largest bedroom into two.
0:06:56 > 0:06:59And more bedrooms means more money.
0:07:01 > 0:07:06I would estimate the property today to be worth in the region of £65,000.
0:07:06 > 0:07:12After gas central heating is installed in the property, also the additional third bedroom,
0:07:12 > 0:07:14we would be closer to £70,000.
0:07:14 > 0:07:18How much could it rent for if it had three bedrooms?
0:07:19 > 0:07:24I would estimate the rental income to be in the region of £450 per month.
0:07:24 > 0:07:30So, all in all, a good, little house and it's great that a lot of the structural work's been done for you.
0:07:30 > 0:07:34You won't make tens of thousands of quid in terms of re-sale value,
0:07:34 > 0:07:40but, especially if you convert that upstairs bedroom into two, this could be a great rental property.
0:07:40 > 0:07:43Let's see who agreed when it went under the hammer.
0:07:47 > 0:07:50Start me at 35. Let's get it going. 35 I'm bid.
0:07:50 > 0:07:54Thank you. At £35,000. 40 can I say now?
0:07:54 > 0:07:5840 I'm bid. Thank you. At £40,000. 45, is it?
0:07:58 > 0:08:02At £40,000. I'll take 1 if it helps? At 40...
0:08:02 > 0:08:0541. 42.
0:08:05 > 0:08:0843. 44.
0:08:08 > 0:08:10New bidder, £45,000.
0:08:10 > 0:08:1346, is it? 46. 47.
0:08:13 > 0:08:1648. 49. 50, is it?
0:08:16 > 0:08:20At 49,000. Seated left at £49,000.
0:08:20 > 0:08:23Are we all done at...?
0:08:23 > 0:08:26New bidder, £50,000. 51.
0:08:28 > 0:08:3152, sir? 52. 53.
0:08:31 > 0:08:34At 53,000. Another one, is it?
0:08:34 > 0:08:3654. 55.
0:08:36 > 0:08:38Another one, sir?
0:08:40 > 0:08:43At 55,000. Shaking his head. At 55, the bid's there.
0:08:43 > 0:08:46At £55,000 then. Are we all done?
0:08:46 > 0:08:49At 55 then for the first time.
0:08:49 > 0:08:52At 55 for the second time.
0:08:52 > 0:08:56Third and final time... He's back in, 56.
0:08:56 > 0:08:5857, sir?
0:08:58 > 0:09:0056 and a half.
0:09:00 > 0:09:0357, sir...? No?
0:09:03 > 0:09:0956 and a half, still with you in the third row. At £56,500 then first time...
0:09:09 > 0:09:11At 56-5 second time.
0:09:11 > 0:09:14Third and final time at 56-5...
0:09:14 > 0:09:18BANGS GAVEL It's your lot, sir. Well done.
0:09:18 > 0:09:23'That successful bid of £56,500 came from Mark.
0:09:23 > 0:09:27'He came to meet me along with his girlfriend Dot
0:09:27 > 0:09:30'who's now officially in charge of decor and tea-making.'
0:09:34 > 0:09:38# I've a smile on my face... #
0:09:40 > 0:09:45'This is Mark's first development and it's a good one to cut his teeth on.'
0:09:45 > 0:09:48- Mark, very good to meet you. - And you.
0:09:48 > 0:09:51Congratulations. Nice little house. Why did you want to buy it?
0:09:51 > 0:09:57It's my first venture into it, so I thought I'd buy something that was quite straightforward to do.
0:09:57 > 0:10:00- What do you do at the moment? - I've had 12 months off from work.
0:10:00 > 0:10:04I've been in double glazing all my life and I fancied a change,
0:10:04 > 0:10:08so I've been buying and trying to sell number plates. I haven't been very successful.
0:10:08 > 0:10:11- Number plates? - Private plates, car plates.
0:10:11 > 0:10:16- What's the most expensive number plate you managed to sell?- None yet.
0:10:16 > 0:10:21- Right, a really bad business! - Really bad business, yes! Terrible.
0:10:21 > 0:10:24So I've gone into this to see if I can make a few pounds.
0:10:24 > 0:10:29Let's hope property developing is more of a licence to print money.
0:10:29 > 0:10:32"JAMES BOND" THEME MUSIC
0:10:32 > 0:10:36'If he's going to have a licence to make a killing in this business,
0:10:36 > 0:10:42'then Mark needs to drive this development harder or soon he'll hit the skids.
0:10:42 > 0:10:46'It seems this year has been more of a licence to chill,
0:10:46 > 0:10:49'but now it's time he started to make some money.'
0:10:51 > 0:10:53So what are you going to do to it?
0:10:53 > 0:11:00Right, in the lounge first of all, I'm going to re-decorate, take the carpets up,
0:11:00 > 0:11:03maybe do something with the fireplace.
0:11:03 > 0:11:07The kitchen's fine, the bathroom's fine.
0:11:07 > 0:11:13- It's two bedrooms, so I'm going to convert that into three bedrooms. - The big bedroom at the front?- Yeah.
0:11:13 > 0:11:19Take the boiler out upstairs, put full central heating in, tidy the outside up.
0:11:19 > 0:11:25- Also have some new interior doors. - What budget have you got for doing the work?- Round about five.- OK.
0:11:25 > 0:11:30'Assuming Mark means 5,000 and not a fiver, then that should cover it
0:11:30 > 0:11:33'as there's not a huge amount to be done here.
0:11:33 > 0:11:39'He has the advantage of an NVQ in painting and decorating, which he got five years ago
0:11:39 > 0:11:44'and will finally be putting to good use. He hopes to do it all in six weeks.'
0:11:44 > 0:11:50- A year ago, you went into business buying number plates and trying to re-sell them.- Yes.
0:11:50 > 0:11:53- It didn't go very well. - No, I've still got them all.
0:11:53 > 0:11:56- Sold none.- Not one. - And how many did you buy?
0:11:56 > 0:11:59Approximately 24. Yes.
0:11:59 > 0:12:02What did you learn from that?
0:12:02 > 0:12:07I rushed into that. I just went and bought them. This one, I have done my homework.
0:12:07 > 0:12:12I know the roof's sound. I know the floors and the damp-proof's been done.
0:12:12 > 0:12:16It's a very sound house and there's no mineshafts around the area.
0:12:16 > 0:12:22- You won't end up with 24 properties in a few years' time that you haven't sold?- Hopefully not!
0:12:24 > 0:12:30Well, let's hope that this venture is more successful for Mark than his last.
0:12:30 > 0:12:35It will be difficult for him to make too many mistakes here, but you never know.
0:12:35 > 0:12:37Find out how he gets on later.
0:12:44 > 0:12:51I'm in Morden today which is another of those places outside London which is said to be between addresses.
0:12:51 > 0:12:56It's postcode is Surrey, yet it's considered to be part of Greater London.
0:12:56 > 0:13:02Either way, you're within 20 minutes of the M25 and ten miles away from central London.
0:13:02 > 0:13:08Sounds like a great place to commute, but it's far enough out to hopefully bag a property bargain.
0:13:08 > 0:13:11# Set my sights on London town... #
0:13:11 > 0:13:17It's also on the Northern Line of the London Underground with Morden Station only a short walk away.
0:13:18 > 0:13:22The property I'm here to see today is purpose-built.
0:13:22 > 0:13:26It's a 1930s first-floor flat on this shopping parade in Morden.
0:13:26 > 0:13:31It looks pretty small from the outside. It had a guide price of £40,000-plus.
0:13:31 > 0:13:37That sounds on the low side for London, doesn't it? There must be more to this story.
0:13:37 > 0:13:42But to find out, I'll have to get round the back of these terraces to the flat's entrance.
0:13:45 > 0:13:49Before I even enter the flat, there are some issues that worry me.
0:13:49 > 0:13:53To get to the back of the building, you have to go down a dark alley,
0:13:53 > 0:13:57then the entrance is up a metal staircase which is also a fire escape.
0:13:57 > 0:14:00This access will not appeal to everyone.
0:14:00 > 0:14:05# I come closer to reaching the top
0:14:05 > 0:14:12# Every step must be placed so that I don't fall off... #
0:14:16 > 0:14:21Well, I have to admit it's quite an effort getting into the flat.
0:14:21 > 0:14:24But once inside, it's in quite good condition.
0:14:24 > 0:14:31A shower room here with nice tiles on the walls. Interesting floor covering. I'll come back to that.
0:14:31 > 0:14:35And a fairly decent-sized kitchen. I wouldn't exactly call it fitted.
0:14:35 > 0:14:39I'd probably change a few bits and pieces around here -
0:14:39 > 0:14:44install a new cooker and maybe a new sink, but it's a really good size.
0:14:44 > 0:14:49All I can say is, the floor here, same as the bathroom, a little bit racy perhaps?
0:14:49 > 0:14:54Let's hope this flat is on the road to success! I'm going to have a look around.
0:14:54 > 0:14:57"FORMULA ONE" THEME MUSIC
0:14:59 > 0:15:03But you're on the road to nowhere if you're after a bath.
0:15:03 > 0:15:07There's only a shower room, although there are three bedrooms.
0:15:07 > 0:15:13So it's all looking rosy, but there is a very big problem with this flat.
0:15:13 > 0:15:17Apparently, there's only 21 years left on the lease of this property,
0:15:17 > 0:15:23which makes it pretty much un-mortgageable and therefore only suitable for a cash buyer.
0:15:23 > 0:15:29Not so unusual for auction properties, but to work out how much it will cost to extend the lease
0:15:29 > 0:15:34is dependent on a conversation between the new owner and the owner of the freehold.
0:15:34 > 0:15:40Plus, that discussion can only take place after the property has been in possession for two years.
0:15:40 > 0:15:47It's not impossible, but it's going to cost, so whoever buys this place is going to be a risk-taker.
0:15:47 > 0:15:53On the face of it, this flat seems in presentable condition with only cosmetic work needed.
0:15:53 > 0:15:56You could be laughing all the way to the bank.
0:15:57 > 0:16:02To find out more, let's hear what an estate agent thinks of the place.
0:16:05 > 0:16:07It's got a very, very good location
0:16:07 > 0:16:09right in the centre of town.
0:16:09 > 0:16:13I don't think I've ever seen one quite as close to everything,
0:16:13 > 0:16:16but there will be a certain negativity from some buyers
0:16:16 > 0:16:18in relation to the access.
0:16:18 > 0:16:25It is a very good size and for a property that's gone into auction, the condition is pretty good.
0:16:25 > 0:16:31It's a good rental prospect because of its location, but what sort of income could it achieve?
0:16:31 > 0:16:36Once it's renovated and depending on the quality of the work that they do,
0:16:36 > 0:16:40I would expect it would go something around 8 to 850 a calendar month.
0:16:40 > 0:16:46With a guide price of £40,000, what about re-sale, bearing in mind that short lease?
0:16:46 > 0:16:53If the lease wasn't addressed, but it was just renovated, the property would sell for around £85,000.
0:16:53 > 0:16:56If the lease was renewed and the renovation was completed,
0:16:56 > 0:17:00you could have a value of around £105,000 to £110,000.
0:17:00 > 0:17:04Well, for a small property, it's not without its issues.
0:17:04 > 0:17:09The access to the flat - it's not ideal, that metal staircase,
0:17:09 > 0:17:12and the lease situation will be a bit of a tricky one.
0:17:12 > 0:17:18On the plus side, it won't need too much work inside to get it up to a good rental property standard
0:17:18 > 0:17:22with public transport for central London right on your doorstep.
0:17:22 > 0:17:26Let's see who saw the potential of this property at the auction.
0:17:30 > 0:17:32Lot 46 is...
0:17:32 > 0:17:36It's a four-room, purpose-built flat.
0:17:36 > 0:17:39Do I have 30,000 anywhere? 30 at the back.
0:17:39 > 0:17:4235. 40.
0:17:42 > 0:17:4445. 50.
0:17:45 > 0:17:4855. 60.
0:17:49 > 0:17:5165. 66.
0:17:51 > 0:17:5267?
0:17:52 > 0:17:56- 66,500.- 66,500, why not?
0:17:56 > 0:17:5767.
0:17:59 > 0:18:0167 and a half? Yeah?
0:18:01 > 0:18:0567 and a half. 68. 68 and a half.
0:18:05 > 0:18:0769.
0:18:08 > 0:18:1269 and a half. 70?
0:18:12 > 0:18:16How could you value it at 500? 70,000, one more crack, yeah?
0:18:16 > 0:18:1870, yeah? 70.
0:18:18 > 0:18:2070,000 first time,
0:18:20 > 0:18:24second time, third and last time. Are you all done?
0:18:24 > 0:18:28Sold, 70, well bought. You just got there. It paid off.
0:18:30 > 0:18:34'So, for £70,000, 30,000 over the guide price,
0:18:34 > 0:18:39'father and son Bob and Chris have bought this as a project to work on together.'
0:18:39 > 0:18:43# Come on, come on, let's work together... #
0:18:43 > 0:18:50'I went to meet them to find out why they chose this flat and paid 30 grand above the guide price.'
0:18:51 > 0:18:53Guys, congratulations.
0:18:53 > 0:18:59- Now, Bob, you were at the auction. - Yeah.- Chris, you weren't at the auction.- No.
0:18:59 > 0:19:02Who saw the flat and got the ball rolling?
0:19:02 > 0:19:05I saw the flat initially and said to my dad
0:19:05 > 0:19:09that it seemed a good property to purchase.
0:19:09 > 0:19:12And he took my word for it.
0:19:12 > 0:19:15- He talked you into buying this flat or bidding for it?- He did.
0:19:15 > 0:19:19We'd agreed a price beforehand that was our maximum.
0:19:19 > 0:19:25It sailed merrily past that and I just kept sticking my hand up, nodding my head, whatever I did.
0:19:25 > 0:19:29- What was your top limit on this flat?- 60,000.
0:19:29 > 0:19:33So you went ten grand over the price you agreed?
0:19:33 > 0:19:39- Yeah.- Why was that?- I was determined to buy it.- Just because you wanted to buy something?- Yeah.
0:19:39 > 0:19:44We're just starting this. It's a new career for us. I'm retiring in April.
0:19:44 > 0:19:47This is going to be our career going forward,
0:19:47 > 0:19:51so I've sort of promised my son that this is what we'd do.
0:19:51 > 0:19:57I just thought if I go home with nothing, he'll think it's just pie-in-the-sky talk,
0:19:57 > 0:19:59but if I go home with something...
0:19:59 > 0:20:04I'm just glad the other person stopped when they did. I would have just carried on.
0:20:04 > 0:20:08'Although Bob paid over the odds, it might not be a problem
0:20:08 > 0:20:12'if they can make a good return on renting it out.
0:20:12 > 0:20:16'What could be a problem is that issue with the lease.'
0:20:16 > 0:20:22Something that worries me is you have a fairly low lease here - 20 to 21 years on this property?
0:20:22 > 0:20:28It's just coming down to 20 years, yeah. Trying to do the maths, I think it works out OK.
0:20:28 > 0:20:32If what we've been told we can rent it for, if we can get that,
0:20:32 > 0:20:39even if we depreciated the property fully over the 20 years, we'd still get a decent return on our money,
0:20:39 > 0:20:45especially compared to what you're getting in the high street just now, so I'm quite happy with that.
0:20:45 > 0:20:51We're not really looking to sell this. It was what I would call an apprentice piece.
0:20:51 > 0:20:56It's our first property and we're using this to learn what we can.
0:20:56 > 0:21:00'They seem to be fitting into their new roles as property developers.
0:21:00 > 0:21:03'Bob currently works as a pensions manager.
0:21:03 > 0:21:09'As the money man on this project, he'll leave the manual work to his son who's in the building trade.'
0:21:09 > 0:21:15How good are you at building? Have you had any experience in doing this before? Why are you laughing?
0:21:15 > 0:21:17I've had a few moments.
0:21:17 > 0:21:20I specialise in roofing.
0:21:20 > 0:21:26But in the internal side, no, I haven't. I've only got my own property to go by.
0:21:26 > 0:21:31As my dad's laughing, it's not the best. There's jobs started, but not finished.
0:21:31 > 0:21:36Forgive me for being silly, so why have you decided to team up then, you two?
0:21:36 > 0:21:42It's like that cottage on the front of the box of chocolates that looks so nice.
0:21:42 > 0:21:47To sort of go into your old age as father and son in business,
0:21:47 > 0:21:49it's just got a romantic edge to it.
0:21:49 > 0:21:55But we play... On the Saturday, we play football. Chris is the captain and I'm the manager.
0:21:55 > 0:21:59And we row like cat and dog there, so there'll be no difference.
0:21:59 > 0:22:03It will be nice just to see him do some work.
0:22:05 > 0:22:11'Although it's only cosmetic, there's quite a bit to do before this place starts earning money.'
0:22:11 > 0:22:15What sort of budget are you looking to spend here?
0:22:15 > 0:22:22Bearing in mind that I've already gone £10,000 above our budget, we're looking to claw some back.
0:22:22 > 0:22:27Our total outlay, we really don't want to go above 75,000,
0:22:27 > 0:22:32so that would leave us just over 4,000 to spend on the refurb.
0:22:32 > 0:22:37- How long will it take you to get this place up to scratch? - About six to eight weeks.
0:22:37 > 0:22:42'Sounds reasonable, so why does Chris look so uncomfortable?'
0:22:42 > 0:22:48I'm slightly worried because before you asked the question, we were talking about four to six weeks.
0:22:48 > 0:22:53All of a sudden, he's told you six to eight, so we seem to have an extension already.
0:22:53 > 0:22:57Do you think you'll have fun working together?
0:22:57 > 0:23:01- Hopefully, hopefully.- Yeah, I think it'll be fun.- We'll give it a go.
0:23:01 > 0:23:06- There'll be ups and downs. - We're used to that. - Yeah, we're used to that.
0:23:07 > 0:23:11Bob, in his own words, has taken this on as an apprentice project.
0:23:11 > 0:23:15He's admitted paying too much at the auction for this flat,
0:23:15 > 0:23:19which means poor Chris has less to spend on the renovations.
0:23:19 > 0:23:23Will they extend the lease and whose timescale is more realistic?
0:23:23 > 0:23:26Find out what they do later in the programme.
0:23:28 > 0:23:34'Coming up, this place in Kent impressed me from the outside, but inside...'
0:23:34 > 0:23:38The kitchen, frankly, is rubbish.
0:23:38 > 0:23:43'Bob, the cashpoint king, learns the downside of property development.'
0:23:43 > 0:23:48Put in the number, get out cash, hand it to Chris. That's my role.
0:23:50 > 0:23:54'But first, it doesn't just rain, it pours at this house in Stoke.'
0:23:54 > 0:23:57When the walls have come down, a lot of the plaster's dropped off.
0:24:02 > 0:24:05'This is Bentilee in Stoke,
0:24:05 > 0:24:10'a 1950s housing estate with 4,500 properties,
0:24:10 > 0:24:12'making it one of the largest in Europe.
0:24:12 > 0:24:17'This property was bought at auction for £56,500 by Mark
0:24:17 > 0:24:21'and his girlfriend Dot who planned to do it up.'
0:24:22 > 0:24:29'Mark has an NVQ in painting and decorating and used to work for a double glazing firm,
0:24:29 > 0:24:34'but he took a year out and started a business trying to sell car number plates.'
0:24:34 > 0:24:39- What was the most expensive number plate you managed to sell?- None yet.
0:24:39 > 0:24:42- A really bad business. - Really bad business, yes.
0:24:44 > 0:24:50'Those figures don't add up particularly well. Let's hope he has better luck with this house.
0:24:50 > 0:24:56'It didn't need much work, just a bit of tidying, and it looks like he's done a really good job.
0:24:56 > 0:25:03'One major job was the central heating system and judging by those radiators, that's been done.
0:25:03 > 0:25:08'It appears the property development is going OK, but what about the number plate business?'
0:25:08 > 0:25:14I've sold three now, which still isn't a great amount, but it's better than nothing.
0:25:15 > 0:25:20'So things are looking up. Talking of which, let's go to the second floor.'
0:25:23 > 0:25:27'The small bedroom is much the same.
0:25:27 > 0:25:31'It's been re-decorated in neutral colours like most of the house.
0:25:31 > 0:25:35'The second bedroom, well, that's now two bedrooms.
0:25:35 > 0:25:39'Hang on. Has he been dabbling with numbers again?'
0:25:39 > 0:25:43Originally, this was one big bedroom, approximately 17 foot by 9 foot.
0:25:43 > 0:25:47We decided to convert it into two bedrooms.
0:25:47 > 0:25:51What was here on the left was a hot-water tank and a header tank,
0:25:51 > 0:25:56so we've removed those and made a hallway into the third bedroom.
0:25:56 > 0:26:03We've put a partition studded wall in here, so you've got a bedroom this side and a bedroom that side.
0:26:03 > 0:26:07The reason we've done that is if we do decide to sell it,
0:26:07 > 0:26:10it's added perhaps £4,000 to £5,000 on the value of selling it,
0:26:10 > 0:26:17if it's rented, approximately £50 to £60 a week on the rental value,
0:26:17 > 0:26:21so, all in all, we thought it was a very good idea to do it.
0:26:21 > 0:26:27'Turning this two-bedroom into a three-bedroom house not only means he can get more for it,
0:26:27 > 0:26:32'it will also appeal to a wider market, including families.
0:26:32 > 0:26:34'There wasn't a lot to do here.
0:26:34 > 0:26:39'The bathroom only needed a coat of paint, which certainly improves it.'
0:26:43 > 0:26:48'Downstairs, the kitchen had already been replaced before Mark bought it,
0:26:48 > 0:26:54'so all he did was give it a coat of paint and install a boiler for the new central heating system.
0:26:54 > 0:26:56'Were there any hiccups?'
0:26:56 > 0:27:00When the walls have come down, a lot of the plaster's dropped off,
0:27:00 > 0:27:02so a lot of it's needed re-plastering upstairs.
0:27:02 > 0:27:07It's had a partial re-wire as well,
0:27:07 > 0:27:09which you can't see.
0:27:09 > 0:27:16Some floorboards - when the central heating was done - were damaged, so a lot of them had to be replaced.
0:27:16 > 0:27:22I've been in the building trade most of my life and in double glazing, so I've found it quite easy
0:27:22 > 0:27:27because I'm a decorator by trade and I'm fairly well organised.
0:27:27 > 0:27:32It's gone like a dream, not many problems at all. I've been very lucky.
0:27:34 > 0:27:39'You can't blame him for lighting that fire. It's a bit parky outside!
0:27:39 > 0:27:46'Meanwhile, all the guttering has been replaced, which is pretty vital in this weather especially.
0:27:46 > 0:27:48'The garden has also been tidied up.'
0:27:52 > 0:27:58'Mark's girlfriend Dot planned to help Mark out with the decorating and refreshments,
0:27:58 > 0:28:00'so how did that go?'
0:28:00 > 0:28:03Dot's a full-time carer, caring for the elderly.
0:28:03 > 0:28:10But she's been here on her days and evenings off, helping me strip the paper, do the painting,
0:28:10 > 0:28:15making cups of tea for the tradesmen and myself, and tidying the garden.
0:28:15 > 0:28:19'All jobs, including refreshments, were done in eight weeks.
0:28:19 > 0:28:23'There wasn't even time to take a holiday.'
0:28:23 > 0:28:27I've been here every day including Christmas Day, Boxing Day,
0:28:27 > 0:28:32New Year's Eve and New Year's Day, so I've been here most of the time.
0:28:32 > 0:28:37'I wonder if Father Christmas found him and gave him any presents!'
0:28:39 > 0:28:46'Mark originally bought the property for £56,500 - £7,500 above the guide price.'
0:28:48 > 0:28:53'He did no major work, so did he keep to his budget?'
0:28:53 > 0:28:57My budget was £5,000 with £500 contingency.
0:28:57 > 0:29:05The budget's just actually gone to about £20 over. It's gone to £5,520.
0:29:05 > 0:29:09The reason it's gone over is I had to have a new fireplace in
0:29:09 > 0:29:14and the building work cost slightly extra, but we did save on carpets.
0:29:17 > 0:29:22'Phew! £20 over. He's certainly getting better with those numbers.
0:29:22 > 0:29:29'We asked a local estate agent whether it was worth Mark going that £20 over budget.'
0:29:29 > 0:29:33The buyers have done everything that's needed. It's clean, fresh.
0:29:33 > 0:29:38The kitchen and bathroom are fine. Central heating has improved it.
0:29:38 > 0:29:40And it's done to a decent standard.
0:29:40 > 0:29:46Splitting one bedroom into two has been a success. We now have three usable bedrooms,
0:29:46 > 0:29:53which adds to the appeal of the property. They haven't gone over the top with expensive fittings,
0:29:53 > 0:29:58but it fulfils the role as a possible rental or resale property.
0:30:00 > 0:30:04'Mark spent around £62,000 in total on this property.'
0:30:05 > 0:30:11'The house is looking great, but is he planning to sell it or rent it out?
0:30:11 > 0:30:14'Let's check the figures.'
0:30:14 > 0:30:19I would put this on the open market in the region of £75,000.
0:30:19 > 0:30:25- That's good. - To be honest, that's what we thought it would be valued at, around that.
0:30:25 > 0:30:29'That's a potential profit of around about £13,000,
0:30:29 > 0:30:32'minus tax and expenses, of course.
0:30:32 > 0:30:38'But how much could they expect if they rented it out?'
0:30:38 > 0:30:43I would expect the property to achieve £425 per calendar month.
0:30:43 > 0:30:45- That's OK as well.- That's fine.
0:30:47 > 0:30:52'£425 a month would see a healthy yield of over 8%.
0:30:52 > 0:30:57'So, decision time - rent or sell?'
0:30:57 > 0:31:02- We think, at this stage, which we planned from day one, is renting it.- Yeah.
0:31:02 > 0:31:06So that's the line we're going to go down, yeah. Renting it.
0:31:06 > 0:31:10'Renting does sound like a great option here.
0:31:10 > 0:31:16'Since filming, Mark has lined up tenants who will pay £425 a month -
0:31:16 > 0:31:18'exactly what was estimated.
0:31:18 > 0:31:22'But before we leave this happy tale, a little birdie tells me that renovating the house
0:31:22 > 0:31:27'wasn't the only thing Mark did on Christmas Day.'
0:31:27 > 0:31:31- It was a special day. We got engaged. - Yeah, we did.
0:31:31 > 0:31:36- We got engaged.- Yeah, we did. - So that was a really special day for us.
0:31:38 > 0:31:44'Aww! One plus one equals two. At last he gets his numbers right.'
0:31:48 > 0:31:52'If the buyer of our next property was after bags of potential,
0:31:52 > 0:31:56'I reckon they were bang on track with this one.'
0:31:59 > 0:32:04Well, just half an hour outside London and yet with a Kent address,
0:32:04 > 0:32:09Bexleyheath is a thriving town. Close to the M25, the A2.
0:32:09 > 0:32:15It's also well known as a very safe place to live so, not surprisingly, it's very popular.
0:32:15 > 0:32:21The property I'm here to see sounds like a perfect investment opportunity. It's an end of terrace
0:32:21 > 0:32:26divided into two flats. It had a guide price of 95,000 quid.
0:32:26 > 0:32:29And from the outside it looks rather lovely.
0:32:29 > 0:32:33Maybe these bay windows have got something to reveal inside.
0:32:33 > 0:32:37'Ta-da! OK, so no great surprises,
0:32:37 > 0:32:43'but for around £95,000 in a sought-after area, it doesn't look too bad.
0:32:43 > 0:32:49'It even has the ever-desirable period features, thought they could do with some love and attention.'
0:32:49 > 0:32:54Well, it looks pretty clean and tidy to start off with. That's good news.
0:32:54 > 0:32:59Very simple layout. A long, straight corridor and the bedrooms basically off it.
0:32:59 > 0:33:05Front bedroom, nice bay window. Open fire, that's good to see.
0:33:05 > 0:33:10Again, good size is that. Second bedroom towards the rear. Another fireplace.
0:33:10 > 0:33:15Understairs cupboard. That's useful. Storage space is at a premium.
0:33:15 > 0:33:20Back into this rear living room area. Icky tiles on the ceiling.
0:33:20 > 0:33:26Polystyrene tiles are a fire hazard and have got to come off.
0:33:26 > 0:33:28But it seems like the problems are at the back.
0:33:29 > 0:33:34Cos the kitchen, frankly, is rubbish.
0:33:34 > 0:33:38It needs total reworking. New units required.
0:33:38 > 0:33:42And it's a tiny space. Not a lot of room.
0:33:42 > 0:33:47And it gets worse because this is the only bathroom and loo in the property.
0:33:47 > 0:33:53It's actually a shower room. It's off the kitchen, it's not ideal.
0:33:53 > 0:33:57This whole area is far too small for the flat.
0:33:57 > 0:34:01'That's not the only problem. There's no central heating,
0:34:01 > 0:34:07'the whole place needs rewired and the plumbing looks more than a little archaic.'
0:34:08 > 0:34:13'On top of that, I've uncovered evidence of dry rot. Nasty!
0:34:13 > 0:34:18'This will cost time and money to sort. Onwards and upwards.'
0:34:20 > 0:34:25That's the ground floor flat. Let's take a look at upstairs.
0:34:25 > 0:34:31Well, unfortunately, we can't because it's already occupied and not just by a tenant.
0:34:31 > 0:34:37It's owned by somebody else. The lot that was up for auction was the ground floor flat
0:34:37 > 0:34:42and the freehold of the whole building. That is owned on a leasehold by somebody else.
0:34:42 > 0:34:49The good news is they have to pay you ground rent. However... it's only 50 quid a year.
0:34:49 > 0:34:56'So the new owner won't be able to retire any time soon on that, but speaking of grounds...'
0:34:56 > 0:34:58Well, a real surprise.
0:34:58 > 0:35:03The flat comes with a really huge amount of land.
0:35:03 > 0:35:07It stretches all the way down the side of the building, back here.
0:35:07 > 0:35:12Now maybe this gives us the solution to the problems with the kitchen and bathroom.
0:35:12 > 0:35:18You could build some extension. It would have to be single storey.
0:35:18 > 0:35:21Or it's a fantastic parking space.
0:35:21 > 0:35:26When it's residents only parking, that's a real bonus.
0:35:26 > 0:35:31'For a guide price of £95,000 this may not have been a bad investment,
0:35:31 > 0:35:36'as long as there's enough money in the kitty for those renovations.'
0:35:39 > 0:35:42'Will a local estate agent agree?
0:35:42 > 0:35:46'I invited one along to get a second opinion.'
0:35:46 > 0:35:52The property has a lot of potential. Obviously, it does need a fair amount of money spent on it,
0:35:52 > 0:35:54but I think once completed
0:35:54 > 0:35:59it will be an attractive option for young professionals, families,
0:35:59 > 0:36:01and retired couples.
0:36:01 > 0:36:05'Sounds good, so hopefully a healthy return here.'
0:36:05 > 0:36:12This property, on completion of its improvements, will be very competitive and attractive for rent.
0:36:12 > 0:36:17It will rent for in the region of £825-£850 per calendar month.
0:36:17 > 0:36:19'And if resale was on the cards?'
0:36:19 > 0:36:25The property would sell for in the region of £135,000-£145,000.
0:36:25 > 0:36:28So there you go. An interesting one.
0:36:28 > 0:36:32You can't buy this one, but you can buy this one.
0:36:32 > 0:36:38It's a good flat, it needs some work doing to it and bear in mind that £95,000 guide price
0:36:38 > 0:36:42and the fact it's a lovely area. It's a great investment opportunity.
0:36:42 > 0:36:45Let's see it go under the hammer.
0:36:49 > 0:36:56Where are you going to start me on that one? We've got 95 plus. It's got to be worth more.
0:36:56 > 0:37:01Start me where you will. Can I see 95,000? 80? £80,000 bid.
0:37:01 > 0:37:0480,000 I've got. 85,000 do I say?
0:37:04 > 0:37:07At 85. And at 90.
0:37:07 > 0:37:09And 5. 95.
0:37:09 > 0:37:13With you at 95. Seven I'll take, if it will help. 97 at the back.
0:37:13 > 0:37:17Fill it up to 100? 100,000? 98.
0:37:17 > 0:37:1998. 99?
0:37:19 > 0:37:2399,000 is against you. 99 I have. Bid 100. 100,000 if you like.
0:37:23 > 0:37:25101, I'm obliged.
0:37:25 > 0:37:29I've got 102 at the back. 103 now. 104?
0:37:29 > 0:37:33104. A fresh face in the door. 105 sitting down, if you like.
0:37:33 > 0:37:36110. And 11. And 12?
0:37:36 > 0:37:39112? One more.
0:37:39 > 0:37:41112?
0:37:41 > 0:37:44At 111. You've stuck with it, sir. £111,000 I've got.
0:37:44 > 0:37:4912 anywhere else? If not, at £111,000 I will sell for the first time.
0:37:49 > 0:37:52£111,000 for the second...
0:37:52 > 0:37:54112. A fresh face. 13.
0:37:54 > 0:37:58And 14. And 15.
0:37:58 > 0:38:02And 16? At 15, you're still with it. 116 anywhere else?
0:38:02 > 0:38:08At £115,000 for the first time. A hundred... 16.
0:38:08 > 0:38:10And 17. And 18?
0:38:10 > 0:38:13At 18? At 18? 117 I'm bid.
0:38:13 > 0:38:18117, then, bid for the first time. 117 for the second time.
0:38:18 > 0:38:20Third and final time at £117,000.
0:38:20 > 0:38:25You've got it, sir. You were tenacious and it's yours.
0:38:25 > 0:38:30'So for £117,000 the new owner of this property is Lawrence.
0:38:30 > 0:38:35'He and his wife already own two other investment properties which they rent out
0:38:35 > 0:38:41'and they're keen to expand their portfolio. In fact, Lawrence is so serious about this,
0:38:41 > 0:38:46'he's given up his job at the council for property developing,
0:38:46 > 0:38:51'but was it really a shrewd move to pay £22,000 over the guide price?'
0:38:53 > 0:38:59- Tell me why you wanted to buy it. - Well, it's five minutes up the road from me for a start.
0:38:59 > 0:39:03And it's... I nearly bought one along the road here,
0:39:03 > 0:39:06which went for £128,000,
0:39:06 > 0:39:10so getting this for 117 I felt was quite a bargain, really.
0:39:10 > 0:39:16'And not only that. Don't forget the bonus of the freehold of the entire building.'
0:39:17 > 0:39:22I've always had a slight concern about buying leasehold property,
0:39:22 > 0:39:26where you're never quite sure about maintenance charges
0:39:26 > 0:39:30and insurance and things like that.
0:39:31 > 0:39:34So having a freehold does make it a lot easier.
0:39:34 > 0:39:38It's a lot more plain sailing as far as I'm concerned.
0:39:38 > 0:39:42- What are you going to do, if anything?- Create a bathroom.
0:39:42 > 0:39:48The little bathroom that's out there at the moment is hopeless.
0:39:48 > 0:39:50Some people might put up with that,
0:39:50 > 0:39:56but the sort of people I'm looking for wouldn't. They'd want better.
0:39:56 > 0:40:02So my plan is to take a section from the bigger of the two bedrooms
0:40:02 > 0:40:05- and turn that into a bathroom. - Oh, really?
0:40:05 > 0:40:07Then keep the kitchen as it is.
0:40:07 > 0:40:13I might even, because that bathroom is such an awkward space, I might just leave it as it is.
0:40:13 > 0:40:20- Do it up and leave it as a second toilet and shower, which would be a bonus.- Right.
0:40:20 > 0:40:25- How much are you going to spend? - If I can spend £15,000 on the renovation,
0:40:25 > 0:40:28that'll leave me with a good profit.
0:40:28 > 0:40:34'Lawrence is no novice at renovations. He used to own a DIY and building merchants.
0:40:34 > 0:40:38'More recently, he worked for the council doing nightshifts,
0:40:38 > 0:40:40'which he has just given up.'
0:40:40 > 0:40:46# Give it up Baby, give it up... #
0:40:46 > 0:40:53'Lawrence plans to project manage this full-time and do much of the work himself.'
0:40:53 > 0:40:58- What will that enable you to do, giving up your job? - I can finish this quicker.
0:40:58 > 0:41:03I'm not very quick at doing this and I intend to do most of it myself.
0:41:03 > 0:41:07Whereas it would have taken me 4 or 5 months, I hope to do it in 3.
0:41:07 > 0:41:13And that means I can buy something else before the end of the year. So I'll get two in this year.
0:41:13 > 0:41:17- Then hopefully, three the year after that.- Right.
0:41:17 > 0:41:19It's quite good, quite exciting.
0:41:19 > 0:41:23'Lawrence isn't going to waste any time cracking on.'
0:41:23 > 0:41:27# Let's get it started Let's get it started in here
0:41:27 > 0:41:30# Let's get it started... #
0:41:30 > 0:41:35- This afternoon, really.- Really? - I shall start ripping things out.
0:41:35 > 0:41:37- That's the fun bit.- It is.
0:41:37 > 0:41:39And the tiles on the ceiling...
0:41:39 > 0:41:44- Lovely touch(!) Should I get rid of those?- I think you should.
0:41:44 > 0:41:47# Let's get it started
0:41:47 > 0:41:50# Let's get it started in here Let's get it started... #
0:41:50 > 0:41:54All credit to Lawrence. It's never easy to give up a job,
0:41:54 > 0:42:01no matter how excited you are about a new direction in life, but he's picked a great project.
0:42:01 > 0:42:08I am a bit concerned about that kitchen and bathroom. I don't know what he'll do. Find out later.
0:42:11 > 0:42:16Whatever the economic climate, our buyers had budgets to stick to and work to do.
0:42:16 > 0:42:23- So did they breeze through the renovations or have to weather a storm or two?- Let's find out.
0:42:24 > 0:42:30'This is Morden in Surrey, approximately 10 miles from central London.
0:42:30 > 0:42:38'Close to the Tube station, this four-room flat, above a commercial unit, sold for £70,000.
0:42:38 > 0:42:42'The entrance is round the back and there's only a 20-year lease.
0:42:42 > 0:42:46'That didn't put Bob and Chris off and this father and son team
0:42:46 > 0:42:49'are used to doing things together.'
0:42:51 > 0:42:57On Saturday we play football. Chris is captain, I'm the manager. We row like cat and dog there.
0:42:57 > 0:42:59There'll be no difference.
0:42:59 > 0:43:05'Overall, the flat was in good condition and just needed some decoration.
0:43:05 > 0:43:11'The team have painted it in crowd-pleasing neutral colours
0:43:11 > 0:43:16'and there's that floor - more of a road to nowhere than the cup final!
0:43:16 > 0:43:19'So do they think they worked well together?'
0:43:21 > 0:43:25- We do make a good team, I think. - I think we do.
0:43:25 > 0:43:29Yeah... It's knowing... It's knowing what your strengths are.
0:43:29 > 0:43:33I have no strengths in the building line at all.
0:43:33 > 0:43:36My background is financial.
0:43:36 > 0:43:39That's what I bring to the party.
0:43:39 > 0:43:43- And Chris brings building expertise. - More hands on.- Yeah.
0:43:43 > 0:43:48# I'll tell you what we're gonna do We'll have a party for two... #
0:43:48 > 0:43:52'As with their roles on the football pitch, the lines are well drawn.
0:43:52 > 0:43:56'Bob is not the builder in this case, but the manager,
0:43:56 > 0:44:02'and his son, Chris, IS the builder. Have they scored a winner here? Let's go to the kitchen,
0:44:02 > 0:44:06'like all good partygoers, and find out.'
0:44:08 > 0:44:12In the kitchen, we've replaced the worktops, put all new cupboards in,
0:44:12 > 0:44:17base units and wall units. We've put in an oven.
0:44:17 > 0:44:23And here we've taken a wall down for the boiler. It really works well.
0:44:23 > 0:44:27'Removing the cupboard walls has made it seem so much more spacious.
0:44:30 > 0:44:36'And, thankfully, that road's been removed from the floor so it's no longer like a child's playroom.'
0:44:37 > 0:44:40'1-0 to Bob and Chris.'
0:44:42 > 0:44:48All the work was done by myself. For the electrics and gas, I got in qualified guys.
0:44:48 > 0:44:55I also had some mates helping me out with the painting at mates' rates, so it kept the cost down.
0:44:55 > 0:45:01My role during the renovation is that I take my plastic card to the cash point
0:45:01 > 0:45:07and put in the number, get out cash, hand it to Chris and that's my role summed up.
0:45:07 > 0:45:12'With Bob's background in finance, he's in charge of the cash card.
0:45:12 > 0:45:16'The reins on the budget must have been pretty tight.'
0:45:16 > 0:45:21Our original budget was just over £4,000. Not much thought went into it
0:45:21 > 0:45:25but we've spent just approximately £5,000.
0:45:25 > 0:45:29'That's an extra 25% on the original budget,
0:45:29 > 0:45:36'but does include a fridge freezer and washing machine, which haven't yet been installed.
0:45:36 > 0:45:42- 'Was there a similar run on the timescale?' - It's taken up to seven weeks,
0:45:42 > 0:45:49but we both had swine flu so that laid us up for a week or we'd have had it done in six.
0:45:49 > 0:45:55'Phew! They certainly stepped up to the mark, despite that swine flu.
0:45:55 > 0:46:01'The flat came with a 20-year lease, which you can only extend at a price after owning it for two years.
0:46:01 > 0:46:06'If you're renting it out, it may not be worth doing.'
0:46:06 > 0:46:14I do think we will be renewing the lease in two years' time, but it will depend how much they ask for.
0:46:14 > 0:46:21'Bob and Chris have already found a tenant to move in who will pay £850 per calendar month.
0:46:21 > 0:46:25'But just to make sure they're shooting in the right direction
0:46:25 > 0:46:29'we invited two local estate agents to take a look.'
0:46:29 > 0:46:33My first impressions of the flat are that it's very spacious
0:46:33 > 0:46:37and it's located conveniently for the Tube.
0:46:37 > 0:46:41The standard of finish in the flat is good. It's not top end,
0:46:41 > 0:46:45but it's good enough for what the property is.
0:46:45 > 0:46:48They've done exactly the right thing.
0:46:48 > 0:46:52They've kept everything they can keep in the bathroom, shower room area
0:46:52 > 0:46:58and they've done most of their work in renovating the kitchen, which was neglected.
0:46:58 > 0:47:02'It looks as though these beginners have done all the right things,
0:47:02 > 0:47:05'but surely it won't all be easy?'
0:47:05 > 0:47:10There is a short lease and that is a big problem when you come to re-sell.
0:47:10 > 0:47:15It will only allow cash buyers really to be interested in it.
0:47:15 > 0:47:19The lease of 20-odd years is a big problem if they were selling.
0:47:19 > 0:47:22It's no problem if they rent.
0:47:22 > 0:47:27'If they did sell it on in its current state, how much could they expect?'
0:47:27 > 0:47:32I would market the property with its current short lease at £110,000.
0:47:32 > 0:47:38A lot of buyers will be very wary of this type of lease age. You can't fix a price.
0:47:38 > 0:47:44We always wanted it as a rental property, so that doesn't really interest us.
0:47:44 > 0:47:49'Ah, they say that now, but what if the lease was longer?'
0:47:49 > 0:47:54If the property had a long lease, I would market it for £160,000.
0:47:54 > 0:47:56If the lease was renewed to an acceptable level,
0:47:56 > 0:48:02you could have an asking price of £160,000-£165,000.
0:48:02 > 0:48:04I think that's very good!
0:48:04 > 0:48:07Em, I'd be ecstatic.
0:48:07 > 0:48:12That actually would put... That might make us think about selling!
0:48:13 > 0:48:19'They bought the flat for £70,000 and spent around £5,000 on the renovation,
0:48:19 > 0:48:23'so those valuations are £85,000-£90,000 over their spend.
0:48:23 > 0:48:25'But don't get too excited.
0:48:25 > 0:48:32'It could cost around £50,000 or even more to extend that lease in two years' time.
0:48:32 > 0:48:38'Bob and Chris have lined up a tenant who will be paying £850 a month.
0:48:38 > 0:48:41'Is that about the right amount?'
0:48:41 > 0:48:45This property would rent for £750 per calendar month.
0:48:45 > 0:48:49If you put this on for renting on the basis of 2/3 bedrooms,
0:48:49 > 0:48:53you would get a good level of interest around £900-£1,000 a month.
0:48:53 > 0:48:58'The latter estimate would mean a handsome yield of 12%-16%.
0:48:58 > 0:49:01'They must be pleased about that.'
0:49:01 > 0:49:06- I think we'd go with the guy who said £1,000 per month. - Yeah! Can you get him back?
0:49:06 > 0:49:12No, we're very happy with the amount of money we're getting off the guy who's moving in.
0:49:12 > 0:49:19Christopher knows the chap. There's got to be a value to that, knowing the person.
0:49:19 > 0:49:25'The team have had quite a good result here, but how have they found working together?'
0:49:25 > 0:49:29I can't say I've enjoyed working because I haven't done much work,
0:49:29 > 0:49:35but I've enjoyed going to the cash machine and giving him money and watching the results.
0:49:35 > 0:49:39Not enough - that's what you want to say! I've enjoyed the results.
0:49:39 > 0:49:46- It's a good job and the values you've just given us make it even better.- Cheers, Dad.
0:49:56 > 0:50:03'This ground-floor flat in Bexleyheath came complete with the freehold for the entire building.
0:50:03 > 0:50:07'Property developer Lawrence bought it at auction for £117,000,
0:50:07 > 0:50:12'a whopping £22,000 over the guide price.
0:50:12 > 0:50:16'But Lawrence was pleased with his purchase.'
0:50:16 > 0:50:20I nearly bought one along the road which went for £128,000,
0:50:20 > 0:50:24so getting this for 117 I felt was quite a bargain.
0:50:25 > 0:50:30'Having bought and renovated two previous properties, Lawrence took the plunge.'
0:50:32 > 0:50:38'He gave up his job with the local council to concentrate on renovating this flat full-time.
0:50:38 > 0:50:43'He aimed to save money by doing the work and to rent out the property within three months.'
0:50:51 > 0:50:54'He's not quite managed that.'
0:50:57 > 0:51:01Originally, I was looking at three months.
0:51:01 > 0:51:06It was just going to be extreme decorating rather than rebuilding,
0:51:06 > 0:51:08but it's turned into a major rebuild.
0:51:10 > 0:51:15'Lawrence once owned a builders merchants, so knew about renovation,
0:51:15 > 0:51:20'but this turned out to be a bigger challenge than he expected.
0:51:20 > 0:51:22'However, he was determined to sort it all out.'
0:51:25 > 0:51:27The main problem, I think, was
0:51:27 > 0:51:30that once I started to take the floorboards up -
0:51:30 > 0:51:33cos there were obvious damp problems in the front of the house -
0:51:33 > 0:51:35I found all the woodworm.
0:51:35 > 0:51:39I put my foot through the floor in one place, it was so bad.
0:51:39 > 0:51:44That on top of the damp meant I had to take all the floors up,
0:51:44 > 0:51:47the kitchen floor had to be dug up.
0:51:47 > 0:51:49That's taken the extra time.
0:51:49 > 0:51:51'But you can't keep a good man down.'
0:51:51 > 0:51:54# I pick myself up
0:51:54 > 0:51:59# I dust myself off Start all over again... #
0:51:59 > 0:52:04'Having sorted the extensive wood problems, Lawrence had the flat completely rewired,
0:52:04 > 0:52:10'installed a central heating system and there are new drains for a new bathroom.'
0:52:10 > 0:52:13This is the old second bedroom.
0:52:13 > 0:52:19And we wanted to create a new bathroom because the old one was just a shower and a toilet,
0:52:19 > 0:52:25hardly any room in it at all. So what we've done is put a stud wall in here,
0:52:25 > 0:52:30taken four foot off this bedroom, but still leaving a nice size.
0:52:30 > 0:52:35You could get a double bed in there. Then we created this new bathroom
0:52:35 > 0:52:38with a hand basin, toilet here
0:52:38 > 0:52:42and the bath which will have a shower above it.
0:52:42 > 0:52:44Tiled floor, tiled walls.
0:52:44 > 0:52:48It's going to be quite nice. Quite a big improvement.
0:52:48 > 0:52:54- 'And that's not all.' - Originally, the kitchen floor was a foot down from where it is now.
0:52:54 > 0:52:59And it was very, very damp so we had to dig it out anyway.
0:52:59 > 0:53:04We decided to raise the floor up, level with the lounge and dining room.
0:53:04 > 0:53:07That's made it a lot nicer in here.
0:53:07 > 0:53:11We've brought the ceiling down a bit so that can be insulated as well.
0:53:11 > 0:53:14We've got insulation under the floor.
0:53:14 > 0:53:18And, being raised, we can take all the services underneath -
0:53:18 > 0:53:23drains, waste from the sink and the washing machine.
0:53:23 > 0:53:28We're about ready now. Just the finished plastering to be done, tile the floor,
0:53:28 > 0:53:30and put the units in.
0:53:30 > 0:53:35And this bit shouldn't take us much longer now at all.
0:53:35 > 0:53:40'So Lawrence didn't hit his time deadlines, but is he within budget?'
0:53:40 > 0:53:45The original budget was £15,000, but I've kept it down.
0:53:45 > 0:53:51It's going to be about £18,000 in the end. So I think by doing a lot of the work myself,
0:53:51 > 0:53:57with the damp and the woodworm, that's kept it right down.
0:53:57 > 0:53:59'That's pretty good going.
0:53:59 > 0:54:05'He paid £117,000 at auction then spent a further £18,000 on the renovations.
0:54:05 > 0:54:11'So Lawrence's total outlay so far is £135,000.'
0:54:12 > 0:54:14'Was it money well spent?'
0:54:22 > 0:54:25It's a decent-sized property. A lot to be done.
0:54:25 > 0:54:29The layout will work a lot better than the original layout.
0:54:29 > 0:54:33I think the room alterations are very beneficial.
0:54:33 > 0:54:36He's moved the bathroom between the two bedrooms.
0:54:36 > 0:54:40That's very convenient for the bedrooms.
0:54:40 > 0:54:44You have the utility room, a decent-sized kitchen.
0:54:44 > 0:54:51It'll be an attractive bathroom and both bedrooms will be good, double-sized bedrooms.
0:54:51 > 0:54:57'Lawrence bought the flat as an investment and he's keen to rent it out.'
0:54:57 > 0:55:04If it's finished to a good standard, it'll rent out at approximately £825-£850 per calendar month.
0:55:04 > 0:55:09The rental value would be around £800-£850 per calendar month.
0:55:09 > 0:55:15It's about what I expected. I was hoping to put it on for £850 and possibly take £825.
0:55:15 > 0:55:20'I'd be interested in the value of the property'
0:55:20 > 0:55:23because I could be tempted to sell!
0:55:23 > 0:55:28'Well, let's just dangle that carrot.'
0:55:28 > 0:55:35If finished to a high standard, it'll sell in the region of £170,000-£180,000.
0:55:35 > 0:55:38Finished to a good standard,
0:55:38 > 0:55:44I think the resale value would be somewhere around the £175,000-£185,000 mark.
0:55:44 > 0:55:49The resale value was more than I thought and I could possibly be tempted to sell it
0:55:49 > 0:55:52if I got near the 180.
0:55:52 > 0:55:56'If he did bite the bullet and put the flat on the market,
0:55:56 > 0:56:03'Lawrence could be looking at a healthy profit of anything up to £50,000, minus tax and expenses.'
0:56:04 > 0:56:08If I rent this property out, I've got to get a mortgage on it
0:56:08 > 0:56:11to get money to go back to auction.
0:56:11 > 0:56:14And the mortgage market is very difficult at the moment,
0:56:14 > 0:56:20which is why I might consider re-selling it and using the money that way.
0:56:20 > 0:56:22'Well, that's a turnaround,
0:56:22 > 0:56:28'but the key to successful property developing is being open to change.'
0:56:28 > 0:56:31I've certainly learnt a lot. It'll help with the next property.
0:56:31 > 0:56:35I know what to expect much more now.
0:56:35 > 0:56:39But I've quite enjoyed doing it. It's taken longer than I wanted,
0:56:39 > 0:56:46but on the whole it's just nice to create something and see the results at the end.
0:56:48 > 0:56:55- That's it for today.- But we'll be back with more homes under the hammer from around the country.
0:56:55 > 0:56:58- We'll see you then.- Goodbye.
0:57:18 > 0:57:21Subtitles by Red Bee Media Ltd