Episode 41 Homes Under the Hammer

There are two things every property investor needs.

Cash to get started and some vision to see it through.

If you're lucky enough to have both of these, then you could

kick-start your dreams by going to the auction and buying your house under the hammer.

Property auctions happen all year round, up and down the country.

Yes, if you fancy yourself as a developer, you can always go along and see how it all works.

So let's take a look at and see who went and bought at the auctions today.

In Derbyshire, first impressions aren't always what they're cracked up to be.

Well, all in all it was fine until I saw that.

In Gravesend, Kent, we catch up with what looked like

a perfect development site when I first saw it in 2007.

I could quite comfortably fit a house on this plot.

And have I found a real show stopper in Staffordshire?

Ladies and gentlemen, I present to you the kitchen.

All these properties have been sold at auction

and we'll find out who bought them and what they paid for them when they went under the hammer.

It's your lot, so well done.

It might not be full of chocolate-box houses,

but with Thorntons being one of the main employers in the area,

Belper in Derbyshire has a wide selection of properties to choose from.

The property I'm here to see sounds very appealing, three bedrooms,

had a guide price of £69,000, which for Belper I think is pretty good.

However...

the first thing that I am noticing, access is a bit of a problem.

To get to the house you have to walk down this bit of a narrow pathway

which means that not only getting here, but when you come to do

things like building work - could be a bit of an issue.

Now it is described as a semi-detached.

But to my mind, that's not a semi-detached,

that's a double-fronted end of terrace.

Whatever. Let's find out what's in store behind the door.

It's obvious from the off that this property is a bit of a curate's egg.

Good that it is set back from the road with a porch and decent frontage,

but less good that there's no off-street parking

and finding somewhere to park round here might be a bit tricky.

Also its position means that shopping and, initially, building materials

will need to be carried a long way.

Whether or not you like that specific porch, having one of some description is a good thing,

otherwise it is straight into the lounge with all the cold that that would bring.

In terms of the lounge itself, well, it is sort of open-plan.

Not a bad sized space, although I'm getting a sense straightaway that the house is a little bit tired.

That bit there, over this side here, there's a gas fire, the stairs up to the bedrooms.

For a small house actually, it has a nice open feel,

created by this obviously knocked-through area here

which is nice to see and then through into

the kitchen straightaway, I don't like the look of that.

Look at that.

Nasty bit of rot going on there, but in terms of space again, it is not bad.

One thing it does lack is kitchen units, so you'd certainly want to do something there.

At the moment you've got this lovely old cooker...

CRASHING AND RATTLING

..and a sink!

Refurbishment required.

All in all, not bad.

But it is certainly going to cost a fair bit. To start with,

there's no central heating and that's left it feeling damp.

That may have damaged the floorboards and skirting.

Also the windows will need to be replaced

and electrics certainly need upgrading.

Then you've got to put in a new kitchen, so already I can see this is a considerable project.

Well, coming upstairs the place seems to deteriorate quite a lot.

I mean...

for once woodchip paper that won't take too much to strip it off.

What have we got? Three bedrooms which is good news.

One bedroom there and an upstairs loo which is a really good plus point.

Slight negative on the second bedroom is that you get access to it through

this bedroom here. But it's a good size, so all in all...

Well, all in all it WAS fine until I saw that.

That's not good. Look at that crack.

It goes up through there and it goes all the way along there.

And, oh my word...

Look what's happening on this window!

It's at a slope

and my guess is that the whole of this corner of the building

is sinking.

I need to investigate.

I was getting a good vibe from this property, but that has now turned to a bad feeling.

Along with more signs of damp, I'm beginning to think this place has some serious problems.

Maybe a closer look outside will give me more clues.

OK, let's see what we can find.

Yes, that's not good.

That is the other side of that wall with the huge crack on

You can see the bricks are a little bit higgledy-piggledy.

They've got some new pointing in there.

There obviously has been an issue.

My guess is it is slightly historic, but I also think it might be

on the move still and I reckon the reason is the outside loo there.

You can probably hear, it's dripping. You can see the water coming out.

That's probably been doing that for a good few months, maybe years.

That will be making the ground around here completely sodden.

That's not good for the foundations.

So it's probably adding to existing problems that were here.

Again, that means the news is good and bad.

Good in the sense that if it is water leakage, it can be stopped,

but bad in that you have no idea how much damage has already been done

without extensive exploratory work.

So I'm not sure about this house and I'd suggest that it's not one for the unwary.

Could someone do all this necessary work

and still make a decent return?

What does a local estate agent think?

I like the layout upstairs.

The bedrooms are all a good size.

The bathroom's fine.

It looks like there may be a few structural issues.

There is no central heating, so there's some work to be done.

At a guess I would say you're looking at £20,000 to £30,000

to get this house that was guided at £69,000 back on its feet.

So what could be the potential profit here?

Once the property's renovated I would expect to achieve £130,000.

Should there be parking, maybe another £10,000 or £15,000 to add to that.

For rental purposes I would imagine that you could achieve £500 per calendar month.

So it may be worth the time and effort, but I'm still wary of those unknowns.

It wouldn't take that much to see this turn from a profit-making venture into a loss.

Well, access, layout and the potential subsidence issues aside,

this is a really lovely house.

I really like the location, so close to the centre of Belper,

and it's quite private with this garden.

I'm sure for £69,000 somebody really fancied when it went under the hammer.

Lot number 11. It's a double-fronted

three-bedroomed semi-detached house.

Who's got £70,000? 70, I have.

£70,000 is the opening bid.

£71,000 in the centre. 72 is bid.

73, 74, 75, 76,

77, 78,

79, 80,000.

£80,000. 500 help you?

At £80,000 at the back of the room.

The bids are yours.

We're selling... 81, 82,

82,000, 83 somewhere else?

At £82,000 then, all done with it?

83,

84, 85, 86,

87, 88.

88, 89.

At £89,000, £500, no? £89,500.

Treat you the same, 90,000, you've come to buy it.

90,000. £90,000 for Brookside.

Finish and done. Once, twice, third time and a half...

£90,500, not sold until the hammer is down. 91.

Is that it this time?

£91,000, are you sure?

Sold at £91,000, thank you.

So for £91,000 - over £20,000 above the guide price - the new owners

of the Belper terraced house are husband and wife Paul and Alison.

They joined me there, along with their baby daughter.

-Paul, Alison, lovely to meet you both. Who is this?

-This is Bridie.

-Hello Bridie. How old is she?

-She's five-and-a-half months old.

-Look at those eyes.

-Yes, she is loving this.

-Wow.

So why have you bought the house?

Well, we've done up our own chapel, we bought a chapel at auction, about four-and-a-half years ago

and we really enjoyed doing it up. We're not quite finished yet.

And we've been talking about starting to do up properties ourselves,

-as a small business and this is our first one.

-Right, so what kind of experience do you have?

I'm a builder. I've been building for probably about 15 years.

I'm quite used to doing properties up - from structural

to refurbishment and everything so this, I think this is an easy one.

-Oh, really?

-Yeah.

-What about you Alison, what do you do?

-Stupid question really!

-Well, at the moment I'm quite busy with Bridie,

but I work at Quad, which is a new art centre down in Derby.

-I'm on maternity leave at the moment and I'll be going back in the New Year sometime.

-Right.

So this was a really good timing for us, whilst I was still on maternity leave

so I can do quite a lot of the project management before I go back to work hopefully.

Paul and Alison live not far from this house.

Paul hopes to fit the work on this one around other jobs.

Alison, maybe optimistically, plans to help out,

while Bridie, no doubt, shouts instructions from her pram.

-So why this house then?

-We felt it was a lovely property.

It's got loads of character. It's original features.

It's the right size. A really nice location as well. It just felt right.

As soon as we saw it we kind of felt it was the right one for us.

A quick turn around as well, I think we can do on this, which is important.

From a builder's point of view, what do you think of it?

Initially, obviously you look at the property, it has been knocked around a little bit in its time.

Obviously, there are some quite big cracks in the back, just normal structural things.

Normal structural things?

-Well.

-How about abnormal structural things?

-Every house has cracks.

-Not like that!

He told me not to worry about it.

We've done a lot of structural work in the business.

I'm used to propping buildings up or taking bits away.

So I'm not overly worried about that. I think

we can sort that out quite easily.

Bridie disagrees. She's going, "Dad, it might be more trouble than you think."

But having seen what they had to do with that chapel conversion,

I can see why the cracks here might not faze Paul.

At worst some underpinning might be needed, or they could

remove that corner and start again, but that's just the beginning of it.

Obviously upstairs there's three bedrooms,

but one you have to go through to access the other bedroom.

So we're going to look at the layout upstairs

and make a hallway so you can access all three bedrooms.

The bathroom needs to be made... There's not a lot of change in the bathroom basically.

Downstairs, we are still not too sure whether to convert it

into a kitchen/diner, to reinstate this wall here.

We need to look at the finances of that really.

Roughly how long do you think it's going to take to get it sorted?

We're saying between six and eight weeks, that's the ideal.

-I thought we said 12 weeks.

-Huh?

-12 weeks.

-Oh 12 weeks then!

I thought it was the other way round.

-You should be pushing.

-12 weeks!

OK, we're going to do 12 weeks.

And cost?

We've got a budget of £22,000. That's all in.

I think it is about time Bridie went off and had a bit of milk.

I think so. I think it's time for bed.

And you need to get on with your building.

-Six weeks.

-Exactly. Lovely to meet you both

and take care and good luck with it. Nice to meet you, sunbeam!

-Good little girl.

-Next time she'll be quieter.

I don't care. That's fine!

-Good luck with it.

-Thank you.

# Baby, baby don't cry

# Baby, baby don't cry... #

Well, with Paul's experience

and baby Bridie's help, maybe this will be child's play.

However, for most people I think that crack would scare them senseless.

Are they going to discover it's worse than they imagine?

You can find out how Alison and family get on later in the show.

Back in 2007, Gravesend in Kent was all revved up for

a property boom and all kinds of properties were up for auction.

This is Alexandra Road and the auction catalogue tells me

the lot that I've come to see is situated in a nice residential area.

It's got possible development potential and the guide price £50 to £55,000.

So what's the catch?

It is a lovely pair of garages!

If you can see through the oil cans and dirty rags,

garages can make valuable assets, both for parking cars or storage.

But with these two garages and surrounding land,

there's a more intriguing story.

You can really see that this is the last available piece of land to develop.

Houses have just sprung up all around these two garages here,

and I think the council would look favourably on developers planning to build here.

You can only improve the look of this road and,

with houses going for £130,000 each,

your bank balance could look just as attractive.

But there is one thing stopping this idea getting into top gear.

The fact that the garages don't come with any planning permission.

So whoever buys them will have to chance their luck with the local planning office.

It is risky, but with risk can come reward.

Now this site measures 7.5 metres by 24.8.

It is sizeable and my guess is you could quite comfortably fit

a house on this plot,

or if you really want to cash in, how about two?

House prices in the area range from £130-£180,000

for a three-bed and £190-£200,000 for a four-bed.

So even with build costs, this lot, that was guided at just £50-£55,000,

was sure to get property developers' pulses racing.

With 25,000 new houses and flats being built over the next few years in and around this area of Kent,

things look very good indeed for this plot.

Let's just see who feels the same way as we head to auction.

Lot 64 is the garages and yard

at Alexander Road in Gravesend. Start me at 45,

I'm not going less than that. 45,

I'm obliged, I'm under way. £45,000 I'm bid. 45 I've got.

Now 50. £50,000 I've got. And 55 now.

£55,000. At £50,000 I'm bid and 55 I'm looking for,

I'll take 52 if it helps.

52 I've got.

55 I'm looking for.

-Are we all done at 52,000?

-54.

54 I've got. 55, it's against you both at the back.

55 I'm looking for. 55. I'll take another bid if it helps.

Even if it's a half, 54-and-a-half I've got.

55 it's against him. 55 I want.

55 I'm looking for.

Is he going to bid?

55 I've got. Another half to you. Again you've made it once, do you want to make it again, 55-and-a-half?

At £55,000 I've got and 55-and-a-half I'm looking for.

Are we all done at £55,000?

Because I'm going to sell it.

55-and-a-half in the room again.

56 gets it. 56, against you at back.

56 and 57. And 58,

we're going to get going on it now. £58,000.

Go on, one more he says!

58, I've got on the phone. 59 if you like. Make it 60, £60,000.

In the room, we're going to sell it. 60,000 I'm looking for.

60 I've got, make it 61. 61 and 62.

62, 62, 62. You don't want it?

61 then I've got. 62 at the back if you like.

It's in the room. We're going to sell it for £61,000 if you're all done. For the first time at £61,000.

Second time at £61,000 if you're sure you're all done.

Third and final time.

It's yours, sir, for £61,000, well done.

The winning bidder is Steve, a local builder, and this is his first property development venture.

He remembers the garages from his childhood and thinks they used to house an old ice-cream van.

But flights of nostalgia aside, things have got serious for Steve.

He's raised the money for buying the garages by re-mortgaging the house he shares with his partner.

Steve, did you enjoy the auction process?

It was a bit nerve-racking. I started bidding towards the end

and luckily enough it went just over the asking price, which was really good news.

-£61,000?

-61.

-Were you prepared?

-We was prepared to go higher than that. I don't know if I should tell you how much.

-I want to know!

-70.

-You were going to go to 70 for a pair of old garages?!

I know. 70 we thought was realistic, but yeah, luckily enough I got them for 61 in the end. Really pleased.

What are you going to do here with these old garages?

The plan is two semi-detached cottages. That's Plan A.

Or if failing that, a detached property, possibly four bedrooms.

It definitely lends itself to some sort of dwelling.

I mean, these totally look out of place in the road.

Exactly. I think it is the last plot to be developed in the area

and we've picked it up.

So, yeah, really fortunate.

So what's your knowledge of building property?

I've been in the building game really all my life.

I started off when I was a kid, labouring on sites and stuff and just that's what I've done over the years.

So I picked it up as I went along sort of thing.

For how many years have you been building?

I'm going to show my age now - about 25 years.

I just thought it is about time I sort of done something for myself now,

you know, I want to earn the money out of it and so here we are.

How well do you know this area and this site in particular?

I know the area fairly well. I was born in Gravesend.

You must have driven past these garages for many years.

-Yes.

-Did you ever think, "They are going to be mine one day, I'm going to have two big houses there."

No, I just thought, "What a dive."

HE LAUGHS

A dive? I suppose it is a bit.

The garden is never going to win a Gravesend In Bloom competition,

but I'm sure the neighbours

will be glad something is finally being done about the space.

Still I'm a bit worried about some of Steve's plans,

because he seems to be underestimating

how long planning applications take.

Hanging around for services, stuff like that, planning permission et cetera, all takes time.

Yeah, we've taken that into account and hopefully sort of start building

in two months, possibly ten weeks' time.

'Two months? He'll be lucky!

'Is his budget more realistic?'

-So you've spent 60 on your actual plot here.

-Yeah.

-What's your budget for the build?

If Plan A goes ahead, i.e. the two cottages,

probably about 100,000 for the whole build.

The single dwelling, possibly 70 to 80, around that figure.

Both of these options will give him a decent profit.

One problem with building next to long-established houses is that both sets of neighbours

can often be upset by the noise, dust and general disturbance that a building site creates.

But Steve has already begun discussions with the neighbours

to make sure everything goes as smoothly as possible.

They agreed to my plans and I know also he has got some plans

of his own to build a double-storey extension as well.

So we've combined the same architect, to hopefully alleviate some of

these problems and possibly build party wall, et cetera.

So you're all singing from the same hymn sheet and can all work well together?

-Hopefully.

-I'm really excited to sort of see the look of the build.

-I know you've got some light sketches. Can we go and have a look at them?

-Sure, let's have a look.

So this is all quite exciting.

-Yes, it is.

-So what are these?

-Are they just sketches?

-They are just a rough sketch basically of Plan A that I was telling you about.

-The two cottages.

-So this is what it is going to look like from the outside.

-Hopefully.

-So three floors.

-Three storeys there, yeah. This is the plan.

There is the off-road parking there, lounge, diner, stairs to the side as opposed to in the middle.

Good-sized kitchen with doors going out to the garden, which is great.

Patio doors. Patio area and garden.

-Then and we've got the bedrooms.

-That's the first floor.

Proposed two bedrooms there.

-Bathroom, WC, basin.

-OK and you go up to the third floor?

Yeah, hopefully third floor, possibly two bedrooms and some storage area

or en suite, something like that.

Basically this is just a rough sketch that I can take to the local planning authority

and just give them my rough ideas.

Then we'll source the architect to do the detailed plans

and personally, I think that, you know, a good build

starts with good plans, detailed plans and obviously we'll work from those until the job is complete.

Steve is currently planning to try and put a three-storey house

on the garage site.

This might be problematic, because none of the nearby properties go any higher than a second floor.

Still, it's a risk that Steve is prepared to take.

Does this really excite you?

It does, yeah. Yeah, it does.

It excites me and also it is scary in the same vein.

Obviously, if we don't gain planning permission

and if for some reason we can't build, I've paid 60 grand for two garages.

As long as the planning goes through, I think everyone will be happy.

Well, that was in July 2007. When we first returned seven months later, Steve wasn't making much progress.

Since we were last here,

the council have actually refused our planning permission for

the semi-detached properties we was proposing.

But Steve pushed on and after Plan A and Plan B, eventually Plan C WAS approved.

To see how that final development turned out, join us later in the show.

Coming up in Staffordshire, sometimes I believe less is more.

Is it really worth all the effort? I don't think so.

Three years after we first saw those garages in Gravesend, Kent,

we return to see what Steve finally built here.

But first back in Belper, has it all been child's play?

Next one will be so much easier,

because we've learned what the pitfalls are.

We returned to the Derbyshire town of Belper,

where, slightly set back from the road, was a three-bed

cottage which left me with a sinking feeling!

But at £91,000, Paul and Alison,

along with their five-month-old daughter Bridie,

thought it was worth investing in.

Compared with their previous projects, perhaps this wasn't such a daunting task after all.

We have done up our own chapel.

We bought a chapel at auction about 4½ years ago

-and we've really enjoyed doing it up, haven't we?

-Yeah.

Not quite finished yet. And we have been talking about starting to do up properties ourselves

as a small business and this is our first one.

-Right, so what kind of experience do you have?

-I'm a builder.

I've been building for probably about 15 years.

I'm quite used to doing properties up from structural to refurbishment.

-I think this is quite an easy one this.

-Oh, really?

-Yeah.

So five months on, was Paul's confidence well-founded?

Well, outside, at least, there has been some serious

tidying up and rebuilding,

with the lean-to extension removed and a new path laid.

Well, it is a complete makeover, really.

We've done outside and inside, a lot of refurbishment.

Wow! That front reception room does look a whole lot better now.

We've re-plastered right the way through, rewired it, new central heating system.

The new heating system should cure the damp and once it is installed,

prevent the new skirting rotting like the last time.

And now there is actually a proper kitchen, not just a sink!

Decorated and carpeted throughout.

Upstairs the three bedrooms have maintained their character features,

while windows and floors are now level!

Perhaps more importantly they have built a corridor,

so you don't have to pass through one room to get to another.

The inside of the house is finished off with a lovely new bathroom.

And we've created the new access at the back as well, which just means, cos parking

is quite difficult around here, so the other access means there is better parking on Manor Road.

It's the exterior work that's been most demanding and significant here.

So as you can see, it's changed a lot since you were here three months ago.

We've taken the lean-to down and cleared all the gorse that was here.

The big problem we had was the structural side if it, where there seemed to be a lot of cracks.

I wasn't too overly worried about it.

I don't think it was subsidence. There was movement in the corner.

I think the problem was there was a big old cast post which was supporting the corner wall

and I think the whole weight had been pushed into one point,

it's like the stiletto heel effect, a lot of pressure on one point

and took it out and put a simple foundation with a bit of reinforcement in

and it should be good for another 100 years.

Paul might have had his work cut out renovating this house

while also running his building company,

but Alison had her hands full, too.

Yeah, because I've been doing quite a lot of the spec, all the fit-out has been down to me.

So it has been a lot of hours sat at the computer with her at my feet and I'm now back at work.

I can't work the hours that I used to do.

90 hours a week.

Yeah, that's been contained a little bit, which isn't a problem,

obviously, but I've had the men on board.

I can't do everything myself and the men have done a certain amount towards it.

That was another reason for buying properties, it was a first, but we've now bought another since

with the idea that it means that Paul is a bit freer with his time

and so he can choose how quickly or how slowly to do a piece of work that suits our family as well.

It's not an easy task to do a property renovation when you're both working and have a young family,

but with Paul's skills and contacts, at least they were in control of the workflow here.

So did that also mean they controlled their 20 grand budget?

We reckon we've spent about £33,000,

which is quite a bit more than we initially estimated.

However, we had initially just put a nominal figure of £5,000

for labour, with the notion that Paul wouldn't be paid.

But what we decided actually that was not possible for a family to live

doing that, so what we've done is Paul and his company,

we've just paid the normal rate and so that has pushed the labour costs up.

So the extra £11,000 has all been labour.

Costs may have risen, but as Paul also factored in paying himself

for his own input, that increased budget may not be too serious.

Perhaps it will help them see what the true renovation costs were,

which will be useful when budgeting future projects.

I think the next one will be so much easier, because we've learnt what

the pitfalls are and we've kind of, we've just learned how to work together as well.

As you've said, we've worked a formula for how rooms are done and how they are finished.

The thing is the acid test is selling it.

We'll know if we want to continue doing it if we sell it for the right price.

Alison is right, the key thing for them is to sell the property.

They need the capital from it for their next project.

They paid 91,000 for the house and had a budget of £33,000.

So along with other costs, they have nearly £125,000 tied up here.

What do two local estate agents think?

Obviously there is a lot more work to be done, but what I've seen so far,

it looks like a good finish.

The kitchen looks nice.

The floor in the main room is rather nice as well.

So I think a good job all-round.

The addition to the upstairs of a hallway,

as opposed to coming through the bedrooms,

through another one of the bedrooms is really good.

The lack of parking is a bit of an issue, but the pedestrian access

at the side will make things a lot easier.

It is a big positive that the original features have been kept within the property.

What sort of returns can they hope to see from a house where they have nearly 125 grand invested?

I think if you were to put this property on the market

you could afford to ask £139,950,

but I think realistically you will be looking at £135,000.

I would put a resale figure on this property of £135,000.

If we sell for 135, that's great.

-We would be more than happy, won't we?

-Absolutely, yeah.

Yes, that could see a £10,000 profit, plus Paul's wages

for three months, making this not a bad project to test the waters.

Although it has been hard work,

at least they can start to reap the rewards soon.

In about six hours, I'm jetting off to Italy, I'm snowboarding for a week's holiday.

Yeah, a well deserved week's holiday, because he has been working so hard.

I'm going to be staying at home with Bridie and her big brother Finlay and Murphy the dog.

So it's nappies and dog food for Alison and for Paul,

well, it should be all downhill from here.

In 1910, Stoke-on-Trent was formed by bringing together six small towns.

Despite being only two miles away, Newcastle-under-Lyme was kept separate.

So it may be proud of its identity, but does its property market have as much to be proud of?

This is Brindley Street, a stone's throw from the town centre.

Now I'm used to looking for the worst house on the street,

it is often that one that's up for auction, but in this case, I don't think that's the case. It's here.

It as a two-bedroomed mid-terrace.

The guide price is £70,000 and it looks in pretty good nick from the outside.

So what have we got? That's nice. A really good entrance hall there.

Somewhere to park your bike, hang your coat, very practical and through into the living room.

Now, this is fantastic. Wow!

Somebody has done a great thing.

They've knocked through what was, I imagine, previously two rooms to create one huge great

open-planned living area, which I think really makes this particular

terraced house feel a lot bigger than it seems from the outside.

Coming with the high ceilings it is a great start and also they've taken away

the under stairs cupboard so it gives this really big open-plan feel.

A real surprise when you walk through the door. A superb start.

Although Artex ceilings and walls and dated gas fires don't do this

room any favours, its size and shape means it could be transformed into a very pleasant space.

And now, a bit of a surprise for you.

Ladies and gentlemen, I present to you - the kitchen!

Actually, maybe a bit of an over the top build-up,

but it is perfectly serviceable and actually more than that,

it is a great little kitchen, if you were going to rent this place out,

get in a professional to steam clean it, maybe change the work surfaces,

maybe change the sink, apart from that, leave it as it is, it's great. A real bonus.

The bathroom at the back is less of a bonus.

The suite looks OK, but again, the decor needs a complete re-think.

Also it would be preferable to move it upstairs,

but is that going to be possible?

So at the front of the property, a really good sized bedroom,

but much better than that for me, this little area here,

because it's the same as on the other side, the rear bedroom.

I'm thinking fit a stud partition wall in here

and create an upstairs bathroom. How fantastic is that?

Well, hang on, is it really worth the bother?

Because what you've got here is a potential rental machine.

How much is it going to cost you to do that?

Are you going to generate that much rent

on top of what you might get anyway and is it really worth the effort?

You know what, I don't think so.

So even though I think there is room,

it's all about value for money in property development.

This house is never going to be a family home

as there are not enough bedrooms and practically no garden.

So it is all about pitching to the right market,

but what sort of return could there be?

I asked a local estate agent for his views.

This property would rent well.

You would be looking to achieve £440 per calendar month

to £475 per calendar month.

£475 per month is not bad for a house that was guided at 70 grand.

But could it make a good resale investment?

I would value this property today at £78,000, but with money spent

in the right areas you would be looking to achieve £88,000.

So, all in all, a nice enough little property that doesn't really need

a lot of doing to it to bring it completely up to scratch.

I don't think there is a lot of money to be made on a quick resale,

but as a rental return, I think it can deliver very nicely.

Let's see who agreed with me and bought it under the hammer.

Lot number 7, Newcastle-under-Lyme,

two-bedroomed mid-terraced house.

60 to start me on this one?

Thank you. 60 right at the back, back left at £60,000.

65, can I say now?

At £60,000, far left at £60,000.

65, can I say? At £60,000, at 65.

At £65,000. £70,000.

Standing left at 70. £70,000.

The bid is left. No mistake.

I'll take one if it helps.

71, can I say? 71.

72. 73, is it?

No. At 72, then. Are we all done?

73 anywhere else? That's 72 for the first time.

At 72 for the second time.

Third and final time at £72,000 then.

You bought it, sir, well done.

So for £72,000, just a fraction above the guide price,

the new owner of this house in Newcastle-under-Lyme

is local man, Lee. Lee, lovely to meet you.

-And you.

-Congratulations.

-Thank you.

A good house, actually. A solid little place.

Just needs a bit of tidying up and it will be good to go.

Right, so why did you want to buy it?

-I've got a business across the road.

-A business?

I've got a pool club. I'm a professional pool player.

-A professional pool player?

-I'm the England pool captain.

Wow! How successful are the England team?

They're the best team in the world. We won the world title ten times.

Right, are you good at pool then?

On my day, I'm good.

Is there money in it?

-Is there prizes?

-There is, but not as big as snooker and darts.

It's got really big at the minute, so we're competing against those sports, but it is OK.

Brilliant. How did you start?

I lived in Spain with my mum and dad for eight months and I played in the bars over there.

I came back and just got to play for a team and went

from there, qualified for county, got into the England team back in 1988 and I have been in it ever since.

Were you one of these guys who sits on the pool table and all-comers

come in and you keep on beating them and taking their 10ps and 50ps?

You used to put your 20p on the table and just stay on all night

and if you're lucky, you will get a Coke out of them.

Well, Lee has moved on a bit from winning 20p and a free soft drink.

Now, by combining playing pool with running his own pool club

he has managed to turn his hobby into a successful career.

From pool, then, to houses.

How did that happen?

A few years ago I sold my house, I sold my house

and bought another house and redeveloped it, put five houses on it.

Wow! So you bought a house, knocked it down and built five houses in its place?

Put five terraced mews houses on it.

-And how did that go as a financial venture?

-Good.

Good. I was fortunate it was just at the peak of the property game.

So I sold them to one investor and it was a quick out.

With the money from the sale of those properties he bought

his pool club and now this house.

It's perfectly positioned for Lee to keep an eye on both

while the renovation work is done and then when he rents it out.

Well, it has got Artex everywhere, here, there and everywhere - so that has got to come off.

So I will get all that knocked down, re-plastered,

repainted and new carpets, new bathroom, tidy the kitchen up and...

-Not replace the kitchen then?

-Not replace the kitchen.

-Probably just do the work tops and keep the units.

-So how much have you set aside to do the work?

Probably about 13,000. 13,000 to 14,000.

-A healthy budget, as you're not replacing the kitchen.

-Yeah.

But I want to do it right so I can try and get a little bit extra rent.

Lee is used to coming out on top, so he is aiming for

as good a finish as he can here to reap a maximum return.

If playing pool's taught him anything,

it is about attention to detail,

weighing up the options and making the right decision.

So anything else particularly going on in your life at the moment?

Well, not really, I got engaged at the beginning of the year.

Well, that's a "really", not a "not really," isn't it?

Well, it is, I mean the other thing,

-my girlfriend has just got pregnant as well.

-Congratulations.

At this stage she is three months pregnant, so hopefully...

Oh, very exciting. Where did you get engaged?

At the pool club.

It was New Year's Eve.

So we decided to have a party and at the end, I built my courage up and asked her.

-With everyone else around?

-Everybody around.

I got my microphone, I pulled her from behind the bar, she was serving somebody, she didn't expect it.

She always said, "No, no, marriage isn't for me," but I surprised her.

What did everyone do when she said yes?

Most of them were crying, because they didn't expect it

and they were all pleased and she was very pleased.

-Aww, what a great way to start the New Year.

-Yeah.

Well, Lee has potted himself a decent investment with this one

and I bet he can't wait to get the ball rolling on the renovations,

but will he chalk up more success

and will this be the cue for an enhanced property portfolio?

You can find out later in the show.

Well, our intrepid investors have had time to get stuck in.

-But has it been a hard slog, or plain sailing?

-Time to find out.

In the summer of 2007, the economic climate seemed rosy

and the property market was booming.

So to local Gravesend builder, Steve,

it seemed the perfect time to go solo and do a development for himself.

So in a spirit of adventure, he bought a pair of garages in the town for £61,000.

They were not to store equipment or tools for his new venture,

but for something a little more ambitious.

The plan is two semi-detached cottages, that's Plan A,

or if failing that, a detached property, possibly four bedrooms.

It definitely lends itself to some sort of dwelling.

-I mean, these totally look out of place in the road.

-Exactly.

I think it is the last plot to be developed in the area and we've picked it up, yeah, really fortunate.

They say fortune favours the brave, and it is a brave man who buys a plot without planning permission

and then has to take on the planning department.

Certainly when we first returned six months later, progress had been slow.

Since you was last here, the council have refused our planning permission

for the semi-detached properties we was proposing.

I think we will more than likely go for

a single dwelling, possibly three- or four-bedroomed property.

There was no guarantee that Steve would get that either.

Now we have returned again nearly three years after first seeing the garages.

Has Steve finally made any headway?

Well, after 18 months waiting for the result

of three planning applications,

it looks like the one single house option finally swung it for him.

However, the design and layout is a little unusual,

due to the planning regulations Steve had to abide by.

This is the kitchen/diner.

The internal garage is to this side.

As you can see the fitted kitchen now

and also we've got a toilet on the ground floor,

but it was a stipulation of the council's

that we had no living accommodation on the ground floor.

It is obviously on the first floor for flood assessment risk.

So, with the house deemed to be on a flood plain,

the living accommodation is slightly upside down

with the kitchen on the ground floor and the sitting room on the first floor.

OK, as you can see, this is the lounge.

Slightly different layout to what we had on the drawings.

The stairs are slightly different.

There was a half landing here,

we changed them for a set of winders

just to gain this little bit of extra space

and I think it has turned out quite a nice size.

Along with this spacious sitting room, this floor also boasts a bathroom and a bedroom.

On the top floor, there are two more bedrooms

to complete Steve's three-bed detached house

which took ten months to build.

I've been here all the time, you know, managing it and working as well.

I tackled the plumbing,

electrics, plastering, you know, the whole thing really.

And it's not quite finished yet.

Some major landscaping is needed in the garden, along with some general tidying,

but with 18 months in planning and ten months to build, costs must have mounted.

Obviously saved money labour-wise by doing a lot of the work ourselves

and I think we come sort of bang smack on about £75,000.

I think the whole build has cost us up to this stage.

Steve paid £61,000 for the garage plot in 2007.

So with his total £75,000 spend, he has nearly £140,000 locked up in these former lock-ups.

But with the downturn in the property market,

he doesn't want to release the capital tied up here just yet.

When it's all completed I think we'll move in,

as a family, for a short while

hopefully until we move on to the next build.

Steve might be planning another build, but he can't move on to that

until he has finished this one and ideally sold it.

Also it needs to fetch a price that Steve is happy with.

So how does his £140,000 investment stack up in the current market?

We asked along two local estate agents to see what they think of Steve's topsy-turvy house.

I like the place. It is a good size.

It's just a shame with the flood regulations

that we've lost the ground floor effectively

and we've got dormers up in the top two bedrooms.

I like the finish of the house. He has done a really good job.

However, the unfortunate thing is the layout of the house.

I think the garage, he had to have it for planning purposes.

It is a useful thing to have, but I wouldn't be surprised

if we didn't come back in a few years' time

and see that converted to a living room.

The only thing I would say that he should have considered is putting an en-suite on the top level.

Clearly the layout isn't ideal for everyone, but it is a smart town house with off-street parking.

It has what will be a decent-sized garden and three bedrooms,

so it could be well suited to the rental market.

I would expect this to let for around about £900 per calendar month.

There is a big rental market in this area.

I would say the property would fetch in the region of £900 to £1,000 per calendar month.

I'm pleased with that, yeah, £950 sounds about right.

Though Steve doesn't initially plan to rent it out,

£950 a month is a potential income of over £11,000 a year.

So not a bad fall-back position.

But what return could he expect from his £140,000 investment if he sold the house?

I would value this property at £195,000 to £199,950.

I would value this property in the region of £200,000 to £215,000.

I think it is on the low side, to be honest, the total valuation.

And you can understand why even values of £215,000 seem low to Steve,

because when we first returned in 2008,

a three-bedroom house was predicted to fetch up to £250,000.

So the potential end value of the house has dropped nearly £15,000 in under two years.

But there is still a profit of maybe £60,000 to £80,000 if he sold now,

and it is clearly enough to encourage him to try again.

It's definitely been worthwhile, yeah, not only for the experience,

but obviously it is a long-term plan

so, you know, yeah, it's been a good goal.

Nearly three years of red tape and hard work

have finally seen both Steve's property developing career

and the house rising and shining

from the ruins of two old garages and a scrappy piece of yard.

Staffordshire may be noted for its pottery, but in Newcastle-under-Lyme it was partly due to

pots of a very different sort that local lad Lee had earned enough to dabble in the property market.

He bought a two-bedroomed terrace house for 72 grand.

I've got a business just across the road.

-A business?

-Yeah, a pool club. I am a professional pool player.

-You're a professional pool player?

-Yeah, I am the England pool captain.

-Wow!

How successful are the England team?

The best team in the world. We've won the world title ten times.

So Lee might be a hot shot when it comes to pool, but was his break

into the property game going to be as successful?

Well, three months later, we're back.

From outside, it is looking much smarter.

And inside?

Well, it is modern and bright and spot on for the rental market.

In the living room, we decided to replace the old fireplace which was all brick.

Put a bit of boxing in to hide the meters away.

Put a plasma fire on the wall, so it looked modern and contemporary.

Re-plastered, got rid of the old artex, put new coving up.

Re-decoration, new plumbing.

We put a new radiator system in.

Just bright and airy really.

This house was not in a desperate state, but Lee has done really well reinvigorating it.

He used the old kitchen units, but replaced the tiling, work tops and flooring.

And although the bathroom is still downstairs, a new suite and updated tiling have done wonders.

Upstairs, the two re-decorated bedrooms appear more spacious.

In fact, Lee has managed to pull off a clever trick here.

I decided to take a bit off each side of the two rooms

and squeeze a bathroom in.

I didn't think it was possible. There is a wall there which wasn't load-bearing,

so I took the wall down and squeezed a bathroom in there.

That upstairs shower room is fantastic.

So overall, I think he has played a blinder.

Although he can't take all the credit.

Louise, his fiancee, who is now pregnant with their first child, played a vital part as well.

Lee is very busy and spends a lot of time away from home as well,

so the way it is done, he gets people in who he knows he can trust

to do the jobs and then sometimes it is a bit of involvement from me

to chase them up and make sure everything is done and on time.

And through it all, Lee still found time to play pool and win.

On one of his trips away, the England team he captains won the European pool championship.

So he's had success on the tables as well as with the carpets here!

The difference between playing pool and property developing,

you can control more of what is going on the pool table than the property game.

You have to work out what the market is doing and there are a lot of unforeseen things. So I enjoy both.

He doesn't do anything less than 100%.

I trusted him when he decided that he was going to knock our house down

to build five other houses and then we may look at building our own house in the future,

buying a plot of land and building a house for us.

There appears to be no stopping Lee once he is on a roll.

But it isn't just property and pool that will keep him busy soon.

-In the future, this year is going to be a busy year with the baby coming along.

-That will be a big shock.

A good experience for both of us.

Hopefully find a plot of land and build our own house.

And then probably I would see us moving again in the next four or five years as well.

With all those things on Lee's plate, the key aims here were not

only to refurbish the house quickly, but to get it bringing in revenue.

The house is now going to be rented out to my manageress at the club.

She only lives about six miles away, so now she can walk to work which is a good bonus for her.

It's ideal for me, because I can trust the person renting it.

Not only is it perfect because he knows her,

but also because she can get to work at his pool business more easily.

So how does she feel about the arrangement?

Lee came and showed it me.

I think it was probably about two months after he had it

and I took a look around and that was it, I was like, no, I want it, because it's ideal.

It's perfect for me, so in I come.

He knows me and we've been able to talk through what I like and don't like,

and it ends up how I wanted it, which has helped,

because we spoke through every stage of it as it has been done.

So yeah, it has helped a bit.

So a happy tenant and a relatively stress-free renovation,

but how deep into his budget did he have to dig for all of this?

The original budget I looked to spend was £13,000 to £14,000

and that's before I decided to put a bathroom in.

So that cost me £3,000 or £4,000 more and I ended up spending about £18,000

which is about where I thought it would be.

So an £18,000 budget

on top of his £72,000 purchase price,

plus costs and fees will make Lee's total investment around £95,000.

So is Lee still on cue to make a profit here?

They've done a very good refit, spent a lot of time and effort

and refurbished the house throughout.

They have done a very, very good job indeed.

It is everything that it should be. It's re-plastered.

Kitchen is good.

The bathrooms are superb and a very good job.

The second bathroom upstairs is a good selling point.

A lot of purchasers like two separate toilets,

and a secondary bathroom in the morning is useful.

The standard of finish here is very good, with the exception maybe of the kitchen.

They have re-utilised older units.

But they are good quality, so they have just about got away with that one.

For the time being at least, Lee intends to rent this out,

but how much could he pocket if he sold his £95,000 investment?

I would put this property on for £94,950.

Looking at the property today, I would say the value is £85,000.

85 grand is low. I would lose money on it.

95 seems about right. Somewhere in the middle I break even.

OK, so now is not the time to get the maximum return on resale.

But it is rental that's more important to him anyway.

Looking at the property from a rental point of view, I would say

that an achievable rental figure is £450 per calendar month.

This property should rent for £495 per calendar month.

Right, I've got Janine in at £425, so she'll will be happy with that,

and if I get anybody else in, I get a better rent which is good.

It doesn't seem like Lee will rack up a fortune here, but I don't think he is worried.

He has got other things on his mind.

-Obviously the newborn baby.

-Got to be the baby, yeah.

-So something planned and good year hopefully.

-Definitely.

And although this property won't give Lee a big pot of gold,

it goes to show how hard it can be sometimes to come out on top in the property game.

We hope you have enjoyed our three very different stories.

-We'll see you again next time for more Homes Under the Hammer.

-Goodbye.

-Bye.

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