Episode 36 Homes Under the Hammer

-There's a huge variety of properties at an auction.

-And Lucy and I look at all manner of cottages,

bungalows, houses, plots of land, commercial premises...

Why not buy your next home under the hammer?

Buying an investment property often means developing new skills before you can make a profit.

Learning to put up wallpaper, managing tradesmen and sticking to budgets are just three things.

Here are the properties that need some attention on today's show.

Nestling in East Lothian, this bungalow's caught my eye.

It's a big property. I'm liking what I'm seeing.

Near Twickenham rugby stadium, this conversion won't be cheap!

Whoever takes this on will need a stash of cash to make it beautiful.

And you'd need more than an auction hammer for this Stoke property.

That is brick and there's no way you'll be moving that.

All of these properties went to auction and we'll find out who bought them and what they paid

when they went under the hammer.

Welcome to beautiful Scotland. East Lothian, to be precise.

I'm just outside Garvald in the Lammermuir Hills. It's absolutely glorious.

26 miles from Edinburgh, so I reckon it's commuter district.

Let's take a look at the property.

The place I'm here to see is guided at £150,000.

The property is called Castle Moffat. Now I've done a lot of houses on this show,

but never a castle before.

How terribly exciting.

I don't know about "castle". Looks more like a bungalow to me.

'My wait for battlements and turrets goes on.

'It's a three-bedroom bungalow in a rural setting

'that looks in need of some exterior maintenance.

'So lower the drawbridge - I'm coming in!'

At least there's no moat to negotiate! But what's it like?

Nice, big entrance. Loo and cloakroom there.

Through to the main corridor.

A living room/lounge. We'll explore that in a minute.

Corridor down to the bedrooms, then through to the kitchen.

It's obviously tired and dated, but intrinsically it's a big property

and I'm liking what I'm seeing.

'To go with the three bedrooms there's a family bathroom that's more than big enough.

'I'd just change the suite. The second loo is fine as it is.

'Love the lounge. The dining room's got a hatch - keep it or lose it?'

So dining room there, through to the living room.

It's great there's a real fire, but the key to this property is out of the window.

Absolutely fantastic. Shame there's these industrial buildings,

but look to the distance - what a fantastic view!

'That's probably the main selling point here - that great view.

'It's just a shame that there are several other buildings that are rather industrial.

'They give a clue about what the bungalow was previously used for.'

The bungalow was owned by the surrounding business and was used as their offices,

so it's currently got business use. No problem - move your stuff in and you can start living in it.

Well, sadly not. You'll have to apply for planning permission to change use to residential.

And, as we know, that takes time and you won't necessarily get it.

'So the first drawback. Not ideal.

'Time to see if the auctioneer who sold it can tell me more.

'It was guided at 150 grand.

'I know it used to belong to the engineering works next door, which has undergone refurbishment,

-'but why did this property go to auction?'

-The property was used as a site office

during that process of refurbishment and then was declared redundant.

I don't think it's a big problem.

All that needs to be done is for the inside to be turned round so the front is on the other side.

'Well, that's relatively easily solved. What are the main options?'

I think, potentially, you could use the property for holiday lets.

It's a very popular tourist area.

You might get people interested to come out here,

but it's a limited market, so that's only for the summer period.

'Let's talk money. Once renovated, how much income could it generate,

'not as a holiday let, but as a home for someone?'

We believe new owners might be able to let this out at a rental level of £500-£600 per calendar month.

'Once the bungalow's been fully refurbished, how much could it be worth if sold?'

Once renovated, depending on what you're going to do with it,

it's probably going to be about £150,000-£160,000.

It really depends on how much you spend on it.

'Maybe all this bungalow needs is a comprehensive makeover.

'But outside I suspect the roof and gutters could do with some money spent on them.'

You certainly can't knock the location. It's stunning, but there are the industrial buildings.

And there is the issue of getting the change of use to residential.

But it's a lot of property for the money. Let's see who went for it.

A detached, single-storey bungalow. Reasonable condition, but it does need some care and attention.

Where are we going to start? 100 anywhere? 80 to get us started?

70 to get me started?

Thank you, sir. £70,000, sitting down on my right.

75 anywhere?

75. 80?

85? 90.

95. 100. 105? He's shaking his head.

100. With the gentleman in the stripy shirt. £100,000.

105 anywhere? At the back. 105, standing against the wall. 110, sir?

Take two and a half. 107,500.

110, sir? Thank you, sir. 110.

112 and a half? No.

110 standing against the back wall. Are we all done? 112. Thank you, sir.

114? 114. Thank you, sir. 116? 116.

118? 118.

120? 120.

122? He's shaking his head.

At £120,000. I'll sell at 120.

It's cheap at that. I'll take 1.

121. 122?

122. 123. 124?

No, he's shaking his head. 123 at the back.

At £123,000. Going once.

Twice. You've definitely done? Third and final time. £123,000.

-The gentleman standing at the back.

-'That successful bid of £123,000

'came from friends Gerry and Ian.

'I met them back at the bungalow to find out their plans.'

-Gerry, Ian, congratulations.

-Thank you.

-Well done.

-Nice location.

-Yes, it's good.

Tell me why you wanted it.

Well, to be honest, it wasn't our first pick at the auction.

We had another property in mind, but we got outbid for it.

-This one came up, so we thought we'd go for it.

-We'd viewed quite a few, so we had a sort of list.

-Had you been round this one?

-Not inside, but outside.

-Right.

-How come not inside?

-We never came up at the viewing time. But we knew what we were getting.

-Given that you weren't sure you'd buy it, did you read the legal pack?

-No.

-Have you read it now?

The solicitor has!

-Is there any problem?

-No.

-No.

-You got away with it?

-Yeah. Just.

'Gerry and Ian were lucky, but it could have been different.

'Please, would be buyers, always read the legal pack first. It's too large an investment

'to enter into blind'

-So tell me about you two.

-We've worked together for 10 years.

-What do you do?

-Both joiners.

We're sick doing houses up for everybody else.

-What made you make the decision to do this now?

-I've always been a saver

and the money I've had in the bank is no' doing anything,

so we thought with house prices dropping, now would be the time. It's a wise investment.

-So why this property?

-Well, just cos it's great to do up.

We've got the resources, it's been quiet at work, so we can spend some time in here.

-Hopefully make some money on it.

-So that's the plan?

-Do it up and sell it.

We want to do it to a high standard. It's no' just a lick of paint job.

We've got to spend some money on it.

-What about the house appealed? The view?

-The location and view.

And I was very surprised when we got inside at how big it was.

-So tell me what you're going to do.

-We'll put a gas burner stove here.

In the kitchen, we hope to knock down the wall and make a kitchen diner.

And hopefully patio doors, depending on planning permission. And maybe some ensuite bathrooms.

'I think that's a great idea. Adding ensuites will help sell the property.

'The kitchen's a good size, but you could use the space in the utility room more efficiently.

'Those serving hatches aren't to everyone's taste.

'It could be time to open it up to one large kitchen/diner.'

-How much is it going to cost? Budget?

-£40,000.

-40?!

-Budgeted 40.

-Is that including your own time?

-That's budgeted for our time.

-Uh-huh.

-That sounds quite a healthy budget.

-Well, the thing is, it's got to be a new central heating system.

-And we want to take some trees down.

-We've got a budget for that.

-That can be expensive.

-Yes.

-We're no' sure.

We spoke to a couple of people who can do it, but no prices.

The neighbours had their trees taken down.

'Although the neighbouring property removed the trees, there could be a major issue here.

'It could require specialists and, potentially, planning permission.'

-This has currently got planning for business use.

-Yes, uh-huh.

-What will you do about that?

We've already got in touch with the council. We're applying for planning to turn it back to residential.

-Think they might say no?

-Don't think so.

-It was residential before it was an office.

-So what about the timescale?

-We reckon three months.

-How much of the work will you do?

-I'll do most of it. Gerry will be in Edinburgh on our other work.

-How much will you do on your own?

-Just the joinery. We'll get trades for everything else.

-What about the garden?

-I'll do it.

-He's a dab hand in the garden.

It is lovely up here, but I bet it gets very cold in the winter.

-Yeah.

-We are quite high up. The neighbours were snowed in for four days last year.

-Wow! And you're going to be here with no central heating.

-Yeah.

-In a bare house.

-Yeah.

-In the middle of winter doing it up.

-I'll be all right.

-You're tough up in Scotland.

-Oh, aye. You have to be.

Working on building sites, it's hard.

-Listen, good luck. Congratulations. I'll post you some snow shoes!

-Thanks very much!

'Whatever the weather, I hope these two don't slip up on this, their first property.'

Gerry and Ian clearly delighted to have got this place, but they didn't read the legal pack.

As it is, the major issues are the trees, how much they'll cost,

and will they get planning permission? On top of that,

will Ian need a toboggan to get in to work? You can find out later.

We're just west of London today in Richmond upon Thames, Twickenham to be precise.

Although it's known for rugby,

what you might not have heard is that in the 18th century it was also famous for gunpowder.

So will the property today be as explosively exciting or just a flash in the pan?

Ah, tranquil swans and boating on the river.

It would be quite easy to while away an afternoon here,

but I need to snap out of it and head off to see the property.

Two minutes from the train station and here's today's auction lot.

It's a three-bedroom mid-terrace. It had a guide price of £350,000.

Now that is really cheap for this leafy suburb.

Well, now I can see why it's so modestly priced.

'Modestly priced, that is, in a road where nearby houses have sold for £482,000-£600,000.

'This looks like the classic house of horrors where problems lurk.

'It really does have a grim appearance - the windows are boarded and rotten.

'With these cracks, it's not very promising.'

I'm not going to be put off by those three padlocks and all the boards up outside.

What I love about this terraced house is you've got a really wide, welcoming entranceway.

There's enough room here for a table, put a big mirror up.

There's a lovely lounge, a great size, ceiling height.

A second reception room towards the back of the property.

It's all feeling rather empty and cold, though.

And all the under stairs cupboards have been taken away, there's no kitchen,

a great big crack in the floor and, before you know it, you're in the back garden,

which does need a little bit of work. But that is what I call open-plan living.

'But you've got to think positive. At a guide price of £350,000, there was a lot of house on offer.

'The two living rooms have original windows and fireplaces,

'plus some original floorboards that look to be in good nick.

'The kitchen's been torn to shreds, but at least there are no units to rip out.

'But I fear it'll be a big job.

'Upstairs, things are just as bad.

'The auction catalogue said it had three bedrooms. Well, these two are a good size

'and have original features.

'Although the bathroom's been left, it's a temporary stay of execution. It needs to be ripped out as well.'

Well, this is the third bedroom at the front of the property and the most impressive.

You've got three lovely sash windows. I like it. One thing's for sure, though,

whoever takes this on will need a stash of cash to make it a beautiful home.

'The original design of the house had the back extending out

'and up here on the first floor, right at the end,

'this third bedroom has an odd feature - a bay window looking out to the back. Very unusual.'

I'm always looking to add value to houses. The quickest way is to extend or create extra bedrooms.

You only need to look next door up there at the neighbours

to see how they benefit from extra space.

A precedent has been set, so that is good news for whoever buys this.

'Time to find out what information a local estate agent can give me about this place

'that went to auction at a guide price of £350,000.

'Is there any point in extending or possibly converting it into two self-contained apartments?'

You could potentially extend. Going into the loft is an option.

The garden, with the size that it is, is probably best left as a three-bed.

You could split it into two flats.

The ground floor - one bedroom and garden - would be £250,000.

The top floor, two-bedroom without garden,

would probably be in the region of £300,000, but you've then got two sales to worry about.

I think it works better as a house.

'Let's talk figures now. How much could a buyer make if they kept it as a family home,

'but gave it a tip-top renovation?'

You're probably looking to put it on at high fives.

Good quality renovations go well in this area. Put it around that level and try for, say, 550.

'This is a huge renovation project for someone to take on,

'but as it's near the river and central London, Twickenham is high on many house hunters' lists.'

This property is a bit of a wreck, but it's got great potential.

For somebody with time and money, it's ideal. You could have a lovely three or four-bedroomed house.

So who was brave enough to take on this challenge? Let's see who bought it under the hammer.

The next property is a mid-terraced property.

Three rooms upstairs.

350 anywhere?

340? Not going any lower than 340.

340? Yeah? 340.

345? 345.

345. 350?

350. 355?

360.

365. 370.

370. 375.

380? 380? What's that - half or five? 385?

385. 38...6? 387?

Struggling. Another place. 387.

388. 389.

390. 391?

392.

393. 394?

393, with you. 394?

393.

First time. Second time. Th... 394. Another spot.

395. 396.

397.

398.

399. 400. 400 sitting down.

401 anywhere?

400. First time. Second time. Third and last time.

Are you all done? Sold - 400.

'That winning bid of £400,000 was made by husband and wife John and Colette.

'For over 15 years they've run their own maintenance firm, which they sold in 2008.

'They live in the Wirral, but have bought this house in Twickenham.

'I met them to hear about their plans.'

John and Colette, congratulations. You paid 400 grand at auction.

-We did!

-Yes, we did.

-Happy with the price?

-Yes.

-We're very happy. We'd have gone up to £450,000.

-So you're 50 grand in!

-Yes, already.

-Ready to spend!

-Had you researched this property? Had you viewed it?

-No.

I hadn't viewed it at all. John did the research.

Yeah, I...I looked at it. I looked at it and thought...

-Wait. You looked at it where?

-On the internet. I did everything on the internet, priced it.

Everything was done on the internet.

I didn't have time to get down here and view it from the Wirral.

We charged down here, into the auction and got on with it.

'Incredibly, they'd only seen it on the internet. Although they sensibly obtained the legal pack,

'John's solicitor didn't have time to read it before the auction.

'So they paid £400,000 for a house they'd not seen or checked out for legal issues.'

-What did you think when you first walked through the door?

-It's big.

-Not, "Oh, my God! Look at it"?

-Well, I kind of already thought it wouldn't look at its best,

so not really. I wanted to see the size, the layout, what we could do.

-I couldn't believe it went for £400,000.

-Do you still feel you got the ultimate bargain?

-Yeah, I do.

-We've walked around and seen where it is, the location.

-We got a bargain here. Unbelievable.

'John and Colette's plan is to buy three properties of similar size each year.

'As they were investing so much, they decided an area near London would be good for the first.'

We looked at it and thought, whatever needs doing on it, for the price we bought it for,

even if you spent, in your wildest dreams, £100,000, making £500,000,

you can't lose because these are going for six,

six plus. We've looked at everything and we thought, "OK. Give it a go."

I don't see any way you could lose at all.

So what's the future for this house? Keeping it as one dwelling?

What I'm going to do is first check with local estate agents.

Some of the areas have got flats in. We could make a big family house.

I'll bring an architect in and get some plans done.

Once I've done the plans, I'll decide what we're going to do.

'As they ran a maintenance company for over 15 years,

'they have useful contacts and some renovation experience themselves.

'Whatever they decide to do, John will project manage it,

'and bring some guys from the Wirral to do the renovation.'

How long will it take you?

Well, I would reckon about six months.

How much do you think you'll spend?

If we spent 50, great. 70 at the most.

That's to do everything - windows, plastering obviously,

new kitchen, bathroom, electrics, plumbing.

Guys, good luck with this! I hope you're still smiling next year!

-Me, too!

-Well done.

-Thank you.

-Thanks.

'There's a lot of hard graft necessary to turn this ugly duckling into a beautiful swan.'

John and Colette have taken on a big project.

They've got to project manage it from the Wirral and have to choose between conversion to flats

or keeping it as one house. And with John wanting it all done as soon as possible,

they'll have to decide soon. Find out later in the programme what happens here in Twickenham.

Coming up: don't let the state of this Stoke property fool you.

Sort it out and it's a perfect rental opportunity.

We return to Twickenham where John has surprised everyone, including himself.

As project manager, I must be pretty well organised!

But first, back in East Lothian, have this duo got the property bug?

Definitely. When this one sells, we'll be in for another one.

'We return now to Garvald in East Lothian where, earlier in the programme,

'business partners Gerry and Ian paid £123,000 for this bungalow.

'They're both joiners by trade, but decided on property developing as a sideline.

'This property had been used as an office for this engineering works.

'The plan was to apply for residential use, refurbish it and then sell it on.

'Well, four months later, we met up again

'with Gerry and Ian to see what progress they'd made.

'First, they've moved access to the property from what was the rear.

'It's created a more pleasing entrance and means the back now looks over the engineering works.

'Inside, the bungalow looks fabulous with bright, neutral decor.

'In the living room, the office-style strip lighting and that fireplace have gone,

'replaced with modern downlighters and this stylish stove.

'The refurbishment continues in the bedrooms and bathroom.

'But it's the impressive kitchen conversion that really hits you.'

This is the kitchen. We've enlarged it by taking the wall down that separated the kitchen

from the dining room. There was a hatch in it. Not a very good set up.

So what we've done is enlarge the kitchen to form a dining area

and we've also got a utility room.

'Gerry and Ian are more used to bespoke timber constructions,

'but they fitted the kitchen themselves and it looks pretty good.

'How much did they spend on this part?'

Probably about £5,000.

But we think it's worth it because it was a really old kitchen. It had to be renewed completely.

We've also put in French doors to the rear of the building, which is south-facing.

It gets the sun all day and with the patio we'll build this will be a great room.

'Yes, and a great place to enjoy the views when the weather's brighter.

'The good news is that they did get a change of use from commercial to residential.

'It's taken four months, but in spite of the weather and other work, they've achieved a lot here.'

We've done a lot in a short space of time, but we've a lot more to do.

We came in, stripped everything out and put a new kitchen in, new bathroom, ensuites,

new floors, doors

'They'd hope to remove a lot of the trees at the back.

'The local authority insisted they remained, apart from one,

'though they were allowed to cut back the overgrown trees.

'But they'd barely started when the weather changed.'

We were in it a month and the snow came. That put us off for a while, so we've not done anything outside.

The worst moment was digging ourselves into the driveway.

-Martin was right about the snow shoes.

-We should have got some!

He was right, aye, but we've been all right.

'Well, that's a first - owners having to dig their way in to a property to start work.

'But all that hard work has been worth it, especially dividing the bathroom in two,

'which added an extra feature.'

We've decided to chop the bathroom in half. It was really big.

We've still got a family bathroom and a nice ensuite shower.

'Gerry reckons the kitchen cost around £5,000, but what's been the total bill?

'After paying £123,000 at auction, they set a budget of around £40,000, but how much have they spent?'

-Roughly, we've spent about £35,000.

-But we've still got outside to do, the landscaping

and the turfing to do. That'll take us up to where we imagined we'd be.

'Time to see how much two local property experts think it could achieve when put up for sale.'

I think it's amazing. I really like the log burner, the kitchen

and splitting the bathroom to create an ensuite.

It has an awful lot going for it, not least of which is its location.

It's blissfully rural, yet just half an hour from Edinburgh.

Nice bright rooms, new lighting, a nice canvas for a family to decorate in the way they want.

And the kitchen will be really nice.

I particularly like the bathroom. They've split it into two parts.

They've fitted it out extremely well.

What they've very successfully done, which is important,

is to turn the back on the operational works, with the exception of the views, which are stunning.

'What about that all-important valuation?

'Gerry and Ian paid £123,000 at auction and estimate a spend of around £40,000,

'so they'll have £163,000 invested here.'

We would expect to achieve something in the order of £250,000,

or possibly more if there was some competition.

We're probably looking at somewhere around £200,000 for resale figures.

'Even on that low valuation of £200,000, that's a gross profit of £37,000

'before the usual deductions.'

-Great. Magic.

-That's excellent.

-Really good, yeah.

-I'm surprised. Delighted.

-Delighted, good.

Really good. Makes it worthwhile.

'So their hard work and snow shovelling has paid dividends on this, their second project.

'They're looking to sell ASAP so what's next? On to Property Three?'

Yeah, definitely do it again. As soon as this one sells.

-'Will they head back to the auction to buy under the hammer again?'

-Certainly.

I think it's an ideal way to get property.

If you can get it cheaper, I think it's the way to go.

Very glad that we've done it. I'd do it all over again.

I'm in Hanley, widely regarded as the capital of the town's making up Stoke-on-Trent.

Now this area has definitely gone through hard times in recent history.

All the industries in which it excelled have gone into decline. Steelworks, gone. Mining, gone.

So with the motto of the town being, "United, strength is stronger,"

is this place on the up?

'I think the answer's yes, but it's a slow process.

'It's not immediately apparent when there are almost more broken windows than undamaged panes,

'but the signs are promising that investment is giving hope.'

You may expect property prices to be fairly reasonable,

but how is this for cheap?

A two-bedroom mid-terrace at a guide price of just £36,000.

That's a place to live for the price of a decent car.

Wow. Is it fit for inhabitants?

Enter with trepidation... What can that money really buy you?

You know what? Doesn't smell damp. Doesn't look too bad. I've seen worse.

Front room here.

Old fireplace, but that's trifling.

Good sized ceilings.

Through this little corridor to the rear sitting room area.

These are the stairs to the bedrooms and, judging by that noise, that is brick. No moving that.

Another fireplace in here. Lots of light coming in.

Through to the kitchen. I haven't found anything wrong yet.

'Not much wrong with the bathroom, either, but it's in an extension.

'As with many terraced properties, you have to go through the kitchen to reach it. Not ideal.

'The kitchen is serviceable, though it looks like they started some work, then left it.'

So, upstairs, two bedrooms. Fairly standard layout.

What's strange is it seems to be partially renovated.

You've got new carpet, recently-painted walls, but work to be done removing the old tiles.

But not bad-sized rooms. You could improve it even more by taking out these cupboards.

I keep coming back to that guide price. It's a great house for the money!

'The back bedroom also appears to be OK and overlooks the back yard.

'The front of the house doesn't seem in desperate need of attention.

'The windows are all intact and don't forget that guide price of only £36,000. Wow!

'At the rear, very little of the backyard remains

'as the kitchen and bathroom extensions left their footprint,

'but with all this the options here are interesting.'

So is this place going to make you any money?

Well, let's talk it through. You buy it at £36,000, do it up, sell it on for maybe £50,000.

But why would you sell it on? Just do it up and hold it.

Rent it out and take the money.

I think that is the strategy that I'd adopt.

'I reckon the figures should stack up here.

'If you were to achieve, say, £350 per month rental income,

'that's an 8% yield on the guide price of £36,000 - a bit more than the banks pay.

'To get some advice,

'I asked a local property expert to take a look at this place and give me his opinion.'

The immediate area is mainly properties owned by landlords and investors.

With mainly landlord properties, it limits the appeal to owner-occupiers.

It's in very basic condition.

The windows possibly need replacing, but there is central heating. Kitchen and bathroom are workable.

Many landlords would look to let it.

'What kind of rental income could be earned here?'

There would be demand for this on the rental market.

I would anticipate income in the region of £350 per calendar month.

'In terms of market value, was the guide price of £36,000 a fair reflection of prices here?

'And how much could it be worth after renovation?'

In its current condition, I would anticipate this property to be worth in the region of £35,000-£40,000.

Ceiling price, once done to a good standard, would be in the region of £55,000.

'There's clearly work to do, but the rental income sounds very encouraging.'

Well, it's a decent enough little house. Not a load of options,

but for that guide price, it's a perfect little rental opportunity.

Let's see who fancied it.

Lot 56. Mid-terraced house, gas central heating.

30 to start me?

25, can I say? Get it going.

25 I'm bid. Thank you. At £25,000.

30, can I say now? 30. Thank you. At £30,000.

35, is it? I'll take one if it helps. The bid's at 30. 31.

32. 33.

At £33,000 for Lot 56.

At £33,000. Are we all done? £34,000. 35, is it?

At 34. 34 and a half.

35? 35?

A half? At £35,000.

Seated left at 35.

At 35. I'm selling it at 35. Are we all done?

At £35,000, first time.

At 35, second time.

Third and final time at £35,000.

-It's yours, sir, well done.

-'The successful bidder at £35,000

'was Steve, who was at the auction with his son, Paul.

'19-year-old Paul trained as a motor mechanic, but now hopes to develop property with his dad.

'Steve, an IT project manager, owns seven other properties.

'I met Paul back at the house to ask him about their plans.'

-Paul, good to meet you.

-Hello.

-Congratulations. A good price!

It is, yeah. Could be good profit.

Tell me why you wanted the place.

Well, basically, we just started off trying to find somewhere to start off

so I could help him do up the houses, basically.

What have you been doing so far?

This is the first property I'm going to be working on,

so we'll get this done, then there's one round the corner.

-What have you been doing previously?

-Working in warehouses, agency work.

So your dad has been doing this?

-Yeah. He's not really got the time.

-So you've been drafted in to do the labour.

-I have!

How will it work between you?

He's still got a full-time job, so I'll be up here in the week, doing it with my dad's mate.

We should be able to get it done.

-How will it work financially?

-We've not really discussed that yet. He's paying me a weekly rate.

-I'm not sure what it'll be.

-You're very trusting! He won't rip you off.

-Hopefully not!

'I'm sure he won't. This first joint development project for Steve and Paul seems ideal.

'Steve's provided the funding, but he's busy with his IT work.

'This will give Paul experience of renovation.

-'It should be a win-win. What attracted Paul's dad to this house?

-He hasn't been to see it yet.'

-He hasn't seen it?

-No, I came and viewed it for him

and it's just the project we were looking for. We went to the auction.

-On your say so.

-Yeah.

-Fantastic.

-So tell me what you're going to do.

-Carpet it throughout, chimney needs repointing,

new flooring throughout the kitchen and bathroom, the roof needs redoing.

And a new bathroom fitted. All the electrics.

The gas piping needs reconnecting.

'Paul's dad paid £35,000 for this place.

'The surveyor's report has indicated a lot of issues that need attention, but Paul's keen to learn new skills.

'Is that why he recommended the property?'

-Any idea how much it will cost?

-Well, we've got a budget of about £8,000-£9,000.

So we should do it with that.

-Hopefully.

-And have you got the purse strings?

-Have you got the chequebook?

-No, my dad's got that. He wouldn't let me loose with it.

-You'll oversee the project.

-Yeah.

-Looking forward to that?

-I am.

-Will you have anyone to help you?

-Yeah, my girlfriend.

She'll be up a few times a week helping me out.

'I'm sure all helping hands will be gratefully accepted

'to refurbish this place Paul's dad bought.

'Paul's girlfriend's one-year-old son might even lend a hand,

'but Paul had better keep a watchful eye on his young helper

'or he could find interesting finger marks on his new walls.'

-And then, if this goes well, what happens?

-We've got another property round the corner to start.

We'll put the deposit down on another one and keep going.

-And you'll work with your dad?

-Yeah, that's the plan.

-Well, congratulations. Good luck. We'll see how you get on.

-Thanks.

So a good project for Paul to cut his teeth as a developer on.

But will they make any money and will Paul be paid the going rate?

Find out later in the show.

We're dying to find out what happened to those investors.

-Are they tearing their hair out? Or cool as cucumbers?

-Let's find out.

'Time now to return to Twickenham where, earlier in the programme,

'John and Colette paid £400,000 for this dilapidated mid-terrace.

'They live in the Wirral and John had only seen the house on the internet before the auction.

'After selling their maintenance company, they only recently got into property developing.

'They planned to get a team in to restore this place and sell it.

'Well, five months have passed and the former boarded-up house has been transformed.

'John and Colette will show us the fantastic results.

'The kerb appeal has certainly returned with new windows and white paint. Even the bricks are scrubbed.

'Inside, the living room looks superb, with all that light streaming through the windows.

'Solid oak flooring is a feature throughout the ground floor.

'That flooring only stops in the fabulous kitchen, which you'll see later.

'Upstairs, the lavish makeover continues in the bedroom...

'and the wonderful bathroom.

'But taking on a project this big meant starting from scratch.

'That must have been a problem when they live over 200 miles away, so who did what?'

Well, my main input was through the colour schemes and setting out of the kitchen area,

choosing some of the bathroom parts. John did all the work, really.

He came down quite a lot and stayed in London.

At the beginning, I had to manage the project and find contractors.

So we found a good Polish contracting crew. Absolutely brilliant.

They did an amazing job.

I did mainly project management. And it went very smoothly. We had a 16-week deadline to do it.

We done it in 13 weeks.

'Some going! Unlike a new build, where you start from scratch,

'this had years of plumbing, wiring and rotten timbers to rip out before new stuff could go in.

'The kitchen's a perfect example.'

Everything that we've done in here... One of the big changes is the back door used to be here.

We've now took that out and put the back door over here.

The reason for that is so you can get a nice table and chairs in this area.

So it can be a kitchen diner.

The other thing that has changed is we've tiled the floor.

We've put all new lighting in the ceiling.

We've put all new units all round and completely re-tiled it.

'Of course, it still looks out onto the back garden where decking has been laid.

'It will soften up with pot plants, but I'd have left more grass.

'But, like the front, the brickwork has been cleaned, windows replaced and there's a new door.

'Upstairs, they retained the bay window in the back bedroom, but they're new double-glazed units

'and they've replumbed.'

What we did in this room was there was a wall across here.

This was the main master bedroom.

We wanted an ensuite in here. A big area here was the hall,

so we moved the wall further back and took a little from that room, which was the middle bedroom.

That's allowed us to put a huge ensuite in. That's worked very well.

It's made no difference to the house. We still have three bedrooms.

'With three bedrooms, one ensuite and a family bathroom, John decided against the loft conversion.

'So time to talk money. How much has this impressive refurbishment cost, on top of the £400,000 at auction?

'Remember, he and Colette had set a budget of £50,000-£70,000.'

The budget has worked quite within what we thought.

Basically, what we have spent on the actual house, about £70,000,

but also we've got Stamp Duty that was over £15,000

and £5,000 for legal fees, buying, selling, that sort of stuff.

So 490 is where I've got up to now on what we've spent to get the whole house complete.

'Let's get some expert advice from two local estate agents.'

The house is beautiful. It's nice to see that a developer's come in

and really put their stamp on it.

The choice to keep it as a house was the right thing to do.

There's a lack of housing in this area. Family homes are in demand.

Flats would have been a mistake.

I do particularly like the kitchen. They've been very brave with colours

but it does match in with the floor and I think people will walk in and think, "Mm, I like that."

I love the bay. I wasn't sure when he said he'd move the door,

but it's fantastic, and the colours.

'It's lovely to see a dilapidated property brought back to life.

'There could be quite a bit of interest if it was put up for sale, but what about renting it out?'

Rental's very busy round here. It's a great location.

You'd get £1,800 per calendar month.

You'd let it quite easily. Probably looking at £1,700 per calendar month.

-'With the potential to generate that sort of income, might they be persuaded to let it out?'

-No.

The amounts we've invested in it, the rental return wouldn't be enough for what we need to do.

So we're going to put it up for sale straight away.

'Even though the house was in a terrible state,

'don't forget John specifically chose it for the return he wanted.

'He paid £400,000 at auction and he's estimated his costs at £90,000.

'So is it now worth more than £490,000?'

The property could go on the market for sale at £575,000, to achieve anything upwards of £550,000.

I'd put it on the market at £650,000 and look to get very close to.

There's a bit of a difference there and it just shows the area.

We've looked at a house up the road for £800,000.

The 650 would suit us fine. That's what we'll put it up for and I believe we'll get.

'Even if they achieve the middle of those valuations, say £590,000,

'that would represent £100,000 gross profit in 5 months.

'So what's next? Another property around here or back to the Wirral?'

We've already eyed up a place in Fulham so we're going to go and have a look at it on Saturday.

We'll go to the next auction and hopefully get it and get on with the next project.

-Onwards and upwards, I think.

-Yeah.

-If there's any footballers out there...

-We're coming your way!

-We're coming your way, yeah!

'John and Colette certainly look to have scored a winner in Twickenham and they didn't need extra time!'

'We return now to this mid-terrace property in Hanley, Stoke-on-Trent,

'where, earlier in the programme, Steve, a freelance IT project manager, paid £35,000 for it.

'His son, Paul, was going to do a lot of the renovation.

'Although he'd trained as a motor mechanic, he'd now decided to work with his dad,

'developing properties.

'The refurbishment's taken four months. Both Paul and Steve met us to show us the results.

'The new windows and front door are a promising start.

'Inside, in the living room, the big stone fireplace is gone. That rubble must have been a pain!

'The neutral colour scheme continues into the dining room where, again, the fireplace has been removed.

'Beyond the kitchen, at the back, the bathroom's been retiled, but the suite remains.

'It's been Paul's first development and it sounds like he's put in more hours than his dad!'

Since we bought it, I've been here during the week and my dad's been up at weekends.

It's taken four months to get to this stage.

Paul came down just one or two days a week, and I came with my friend John on Saturdays.

But there was more work, so Paul came down all week and we did Saturdays and Sundays.

We've almost finished now and it'll be ready for letting out.

'This has been an invaluable opportunity for Paul to see what it takes

'to renovate a place like this.'

Originally, it was plastic tiles on the walls. Once we removed them, the plasterboard was damp and soggy.

So we took all that off and we had to get a few builders in to see what they thought.

We had a quote to rebuild the extension,

but the prices were too high, so me and my dad's mate John made a new cavity,

put the plasterboard on, plastered it, redone the roof to stop leaks and it turned out OK.

'With eight properties in his portfolio, Paul's dad Steve has picked up new skills on each one

'and he's getting confident.

'He wasn't afraid to remove any obstruction to gain extra valuable space in the kitchen.'

This is where the chimney was before. It came out to about here.

As you can see, it was taking up a lot of space in the kitchen.

So we decided we'd knock it down. It was a little bit scary as all the bricks came tumbling down.

So we put three lintels, concrete lintels, in the ceiling here,

to support the building. It's created a lot more space.

We've now got a long galley kitchen. A lot better than it was before.

'Paul has left the structural stuff to his dad, while he concentrated on the decorating,

'brushing up skills he'll need on other properties.'

I'm going back to college in September to do a part-time painting and decorating course.

I can earn money at the same time.

'How much has the refurbishment cost on top of the 35 grand paid for the property at auction?'

-Our original budget was £8,500.

-And we've actually spent about £7,500,

so we've come under budget.

The only major cost has been the double glazing and the plastering work, really.

I've had a few friends to keep the cost down.

other than that, we did it ourselves. It's been really enjoyable, but hard work.

You're working all week, then Saturdays and Sundays here.

I've got a property round the corner that we need to renovate, so we know what we've let ourselves in for!

-And Paul's got one in Wales to start on next week.

-'No wonder Steve feels tired!

'Anyway, he's left Paul to find out what two local estate agents think

'of this property.'

The standard of finish is quite basic. It could have been done to a slightly higher standard.

There's a lot of natural light coming into the house.

It creates a lot of space. It's been decorated to quite a good standard,

although it could have been to a higher standard.

There's nothing additional structurally that can be improved that would make sense financially.

It just needs finishing off properly to get the top valuation figure.

I'd recommend a rental price of £395 per calendar month.

The likely rental income would be in the region of £350.

That's what I expected, £350. £395 is a bit of a surprise to us.

I'm sure my dad will be quite happy with the results of that.

We've had someone in from across the road interested in renting

and they've had a look round and seemed keen to move in quite quickly.

'It sounds like renting will be no problem. But how much is it worth?

'Steve paid £35,000 on auction day and they've spent £7,500,

'making a £42,500 total outlay.'

I'd recommend a valuation price of £59,950.

I would imagine this property to be placed on the market at £55,000.

'Goodness. Even the lower valuation of £55,000 would mean a minimum gross profit of £12,000

'before the usual deductions.'

Yeah, that's great. My dad was expecting about £50,000, so it's a bit above what we thought.

Our intention will still be to rent for a while and maybe later sell it.

'Paul's worked hard on this, his first project with his dad.

'Is he pleased to have changed his job from working in a warehouse to buying at an auction house?'

Yeah, this is a new career for me.

Joining college in September, so I'll get a trade and go from there.

We've done good as a team. Didn't expect to be as good as we were, but it's been all right.

-Join us for more pleasures and pitfalls of property developing next time.

-We will see you then.

-Goodbye.

-Goodbye.

Subtitles by Subtext for Red Bee Media Ltd - 2010

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