Episode 46 Homes Under the Hammer

Hello. If you're buying property, you want to buy at the right price.

So how do you know what the market is doing?

Is it going up or is it going down?

One way you can find out is to take a trip down to your local auction house.

Well, auctions are really exciting and it's very easy to be tempted

to buy, but to guarantee success, you need to do your homework first.

So let's find out what properties created interest on today's show.

In Chatham, Kent, I find that outside appearances can be deceptive.

Wow! Do you know what?

This house is like a TARDIS.

Is it time to ring the changes at this house in Devon?

-HE RINGS THE BELL

-Oh, love that.

And we revisit a London property we first saw in 2008, when it was just waiting to be developed.

This is a renovation project on a large, mammoth scale.

All these properties have been sold at auction and we find out who bought them and what they paid

for them when they went under the hammer.

I'm in Chatham, Kent,

once one of the busiest naval dockyards in the country.

The HMS Victory, Nelson's flagship at the Battle of Trafalgar, was launched from here in the 18th century.

So what was up for auction in historic Chatham, you may wonder?

Well, it was this two-bedroomed, mid-terrace property in a largely residential area.

My first impressions, well, small, a bit shabby and in need of a good paint job.

But I know from experience never to judge a book by its cover.

And the guide price, 55,000 to 65,000.

In the auction catalogue, the property's described as

having two bedrooms, a kitchen and three reception rooms.

How can that many rooms squeeze into such a small house? Let's find out.

# Can't judge a book by looking at the cover, come on... #

Step inside and you're straight into the living room.

Now from the outside, it looks like your standard terrace, two up, two down.

And move out of the living room and you come to this

steep flight of stairs and a really long corridor.

We've got a big old cupboard here and then there's the bathroom

and the toilet, where you'd expect the kitchen to be, at the back of the property.

Straightaway, I'm thinking layout issues here, but where is that kitchen?

Do you think they'd have put it upstairs on the first floor?

The dark and dingy stairway leads to the bedrooms.

Both desperately need sprucing up, but they are well proportioned.

But still, I can't find a kitchen.

Now I've walked around, I've looked at all the windows in this property and a lot of them are rotting.

They need replacing, and for the security-conscious

amongst us, these panes, look, literally slide straight out.

Now you may think double glazing is relatively expensive, but the long-term benefits can

extend way beyond simply recouping your investment in cost savings. It helps to keep your house warm.

The extra insulation provided by double glazing means you can

you can turn the heating down, saving you money, and for the more environmentally-conscious,

reducing your CO2 emissions. Fantastic.

However, of course, the cost of double glazing an entire house could shatter a developer's budget.

The property has a great garden space, which,

with lots of work and a little money, could be a major selling point.

I've explored the ground floor and the first floor.

Now, it's down to the basement, and hopefully, the kitchen!

Wow! Do you know what? This house is like a TARDIS.

There's three rooms down here on the lower ground floor.

You've got a sort of junk room in there where there's no window and lots of old rubbish piled up.

A reception room, and there's the kitchen!

I've found it. It's bolted on to the back of the property.

You've certainly got a lot of square footage here.

You would never think this house is this big, hidden away on three levels.

Clearly, it needs a lot of work in here.

Completely redecorating, and there's something that does worry me now.

I think somebody's already been investigating this,

but look, the carpet's been moved,

lots of old, dusty old wood everywhere,

and if you lift up this floorboard, signs of severe rotting joists.

That with would worry me and it could end up being a costly job.

The guide price for this house was 55,000 to 65,000.

I asked a local estate agent for her opinion on it.

The property is in, erm...

a state of disrepair and it is going to need a fair amount of work.

Again, it does have problems with damp and timber

infestations, so they really do need to be checked out seriously.

What could the resale value be?

Once this property's renovated, then I think in this market,

we'd be looking at around about £105,000 to £110,000.

-And rental returns?

-Generally, we're looking at about £550 per month or £575 per calendar month.

So this is higgledy-piggledy house.

It does have character, but it really needs the internal layout to be changed, the lower ground floor needs

to have the kitchen opened up to get some more light in there, but I do

think it's unusual and there is a lot of square footage here for the money.

Let's see what happened when it went under the hammer.

55, 65, cheap value for this. Where do you want to start me?

£55,000 to start me?

Be brave. 55, I'm obliged.

55, I've got. Now 58.

58, I want. And 60, and 60 and two.

62, 62,000, five, 65. 65, I've got.

And eight, it's against you. 68, at 68. At 68, and 70.

It's 70 I've got. And two, 72,000.

72, 72. And five, and five.

75. £72,000, I've got.

I'll take one if it helps you, 73.

74. You won't get another chance for this one, 74,000, and five. 75,000.

And 76 now.

76. 76, I've got and seven.

And seven.

77, at the back, just the one bidder, though.

Be brave. Go on, 78,000.

79, that was nicely done.

Two. I think that's 79. Is it 79?

Yes?

Yes, 79 I've got. 80 now. At 80.

At £79,000, then, sitting down on the left-hand side. 80, I want.

Are we all done at £79,000?

Sale for the first time at 79.

Second time at 79.

Third and final time, I'm sure you're all done.

It's yours at £79,000, and your card number, please.

It was Richard who sneaked in there with that final bid of 79,000.

He plans to renovate this property with his son, trainee plasterer, Mark.

Wow, Richard what an exciting auction that was. Loads of bidders.

You came in right at the end there.

-I did.

-With that cheeky little bid.

-Happy with what you paid for this?

-I am. £79,000.

-I mean, that's a good price, isn't it?

-Yeah, my maximum was 80.

-Ooh, do you know what? You really did leave it right till the end...

-I know.

Threw up your bid and then somebody else came in and then you got it on the next one!

I know, but I was thinking about another property I was going

to go for, but I went for this one anyway. It was good. It was good.

So what was it about this property that you liked so much?

Because for me, when you walk in through the front door, you cannot believe the size of the place.

-That's right. It is...

-To think there is a floor up there, a floor down there.

You just don't expect that, do you?

It's kind of quirky, isn't it, with the bathroom at the back there. I thought that was kind of nice.

I like a big bathroom, I think the trend nowadays is

for large bathrooms, and I'm not going to move it.

It's going to stay exactly where it is.

Richard grew up in Kent and joined the Royal Navy in the early '70s.

He eventually ended up working in IT before embarking on his career as a property developer.

He wants to use the renovation of this house to help his son, Mark,

get more experience and learn other trades.

So how many years of experience of renovating and decorating and pulling walls down have you had?

-Five years.

-Five years? That's not a huge amount of experience, really?

No, well, I was an IT consultant before I went into this game,

but this is far more rewarding, believe me.

SHE LAUGHS So who is going to do all the work?

I mean there is a fair bit of work here.

Come on, there is a lot of work to do. It's in a pretty bad state.

Well, I shall get my son to come in and do some of the

stripping the wallpaper and doing the plastering and skirting boards and stuff like that.

I'll do the laminate flooring, this is just basic stuff.

I've got to put central heating in here for a start.

-You do all this work?!

-I do everything.

-Can you really take all this on?

I've done it for years. I've always had the policy of,

if somebody else can come in and do something, why can't I?

I can do it as well. I'm very practical.

I'm extremely practical.

He's going to need to be practical here with those rotting floors and possible issues with damp.

Richard obviously thrives on challenge.

He's not scared by the current condition, more excited by the property's potential.

So what sort of budget have you got to do the work here?

Well, I've done a preliminary, I reckon about £8,500 to do most

of the work, because obviously I do it myself so it costs a lot less.

So how long do you think this project will take you?

Well, I think between three to four months.

-So are you going to be spending every waking hour in this house putting it right?

-Yeah, if I have to.

-What does your wife and your son think of all this?

-They support me.

-They support me.

-They're happy to lose you to property?

It was my wife who said, "You need a project."

She was just trying to get you out of the house! Come on.

No, no, she wasn't, I don't believe it!

-So you've certainly got a project on your hands.

-I have.

-It's going to be really exciting finding out how well you do.

-Yes.

-Good luck with this project.

-Yes, thank you.

-And we'll catch up with you soon. Thank you very much, Richard.

-All right, thank you.

You've got to give it to him, Richard is extremely optimistic.

His enthusiasm is infectious, but I'm worried with a three month time scale and the fact that he's

going to do all the work himself, I think he may have bitten off a little more than he can chew.

Find out what happens later on in the programme.

Today, I'm in Plymouth on the South Devon Coast.

This harbour city has a rich maritime history

and it's popular with students studying at the local university.

I'm here to see a three-bedroomed, mid-terrace, character property that's in a really well established

residential area. You've got local amenities nearby and the city centre isn't too far away.

Now, given that similar properties around here sell for well over

£100,000, the fact that this had a guide price of just £80,000 makes it definitely worth a look.

The house is in a Victorian terrace,

which seems to be pretty well maintained.

It boasts some beautiful architectural features,

including ornate arches and decorative stone work.

Let's hope there's more like that behind the front door.

So what's it like inside?

-What's that?

-RINGS THE BELL

Oh, I love that.

An old original bell.

Fantastic. I wonder how many more original features there will be? That's a good start as well.

This frosted glass.

Very typical of the period that this property was built.

Sadly, the front room looks like some of the original features had been covered up, but maybe

hiding behind that fireplace there's something a bit more appealing.

Rear sitting room there and, down this corridor, we've got stairs up to the bedrooms,

and under stair cupboard, the rear door is there and through

to the rear of the property where you've got the kitchen.

Now clearly this is in a right old state. Total refurbishment required.

Not a bad space and not a bad start.

The front room is a good size and, if sympathetically restored

with a period fireplace, could be beautiful.

The rear sitting room is a bit tight, but could be used to relocate

a kitchen or bathroom or as an extra bedroom.

Plenty of original features just still present and I think there's

a really stunning home here not so far beneath the surface.

So at the back of the property a little sort of storage area, courtyard here, somewhere to store

your bikes or coal and something really useful at the back, a little workshop.

Now that's actually right underneath the upstairs loo so

an obvious thing to do as far as I'm concerned would be maybe extend the kitchen into this area, maybe make

this a downstairs loo where you've got the pipe work for the sewage. Definitely worth doing.

Shouldn't be too much trouble and I think you'd add a lot of value and space to the property.

So further scope for improvements.

An extra few feet could be added to the kitchen by knocking through here

or a downstairs toilet could be put in.

That would be better than this outside one which has had its day.

# I'm old-fashioned

# I love the moonlight... #

So up the stairs and very typical of these kind of houses,

especially in the Plymouth area, you've got a mezzanine floor.

More bedrooms that way, but this bedroom here, oh dear, that's not good, is it? That looks like...

Ah, yes...

OK. A bit of plaster work required,

a bit more than there was before. Sorry about that!

But anyway, bedroom here, it's nice you've got an original fire, but here is a big problem.

This is the bathroom of the house. The bathroom and the loo,

you have to access through one of the bedrooms, that's not ideal.

So what I'm thinking is, how could you relocate this?

That downstairs sitting room is an option,

allowing this back bedroom to be knocked through and enlarged.

So, really good sized double bedroom.

Well, almost a triple bedroom at front there. Good to see.

Great if you'll let this place out. Another good sized bedroom there

and then a bit of a surprise, some stairs up to...

Actually up to the roof.

That's a bit strange.

Apparently this stairway to heaven led up to an old roof terrace that

has now been covered over as it was deemed unsafe, but wouldn't it be great

to reinstate it, particularly since there's so little outside space here?

Maybe a project for a later date.

But how does the house stack up at present?

What does a local property expert think?

The property is pretty versatile so you could split it into two flats,

maybe two one-bedroomed flats, obviously subject to requisite consents.

Mainly a lot of people would be looking at the university letting

opportunity by room-by-room letting and on top of that, of course, you could turn it into a family home.

Well a few options there.

How much could the house earn on the rental market?

If looking to rent the rooms to the university student, you could fetch £60 per week, per room.

If the property was a family home and you rented that out,

it could fetch somewhere in the region of £550 per calendar month.

What if the property is sold on after renovation?

Flats along here at the moment tend to be fetching

somewhere in the region of £75,000 to £80,000 for a one bedroom unit.

And as a single three-bed family home?

Depending on what sort of standard the buyer puts it to,

if it's good standard, it should fetch in the region of £140,000.

So a lot of property for that £80,000 guide price

and lots of options with this one too.

Rent it out as individual rooms.

Rent out the house as a whole or maybe convert to flats.

A good one to go for.

Let's see who bought it when it went under the hammer.

A good renting machine

or just a project, a modest one, to do up and flog on.

A guide price 80, 80 straight in.

80, I've got. At 80, at 80.

81, 81, 81.

82, 83 at the back left, 84, you couldn't be further apart, you chaps.

83, 84 or not? 84.

85? 85.

86. 86,500 to help him along.

87? 87. Shake of the head.

87 we have, at 87.

Madam, 87,500, 87,500.

88, at 88. 88,500.

88... Sorry?

90, I've got. At 90, thank you.

90, at 90, half?

A little nod. Smile, please.

90,500, that's better and the same, 90,500,

91, 91,500, 91,500, 91,500,

92, at 92, 92,500.

93, 93,500?

93,500. 94, at 94,500. 95.

And...go on, 95,500? 95,500.

96, 96,500.

96,500, young lady has it.

At 96,500, at 96,500 once. You're in.

96,500 once and twice. At 96,500.

Here we go, it'll be sold, make no mistake at 96,500.

It's your home, madam. 96,500. Well done. Hard luck, fellas.

With their bid of £96,500,

husband and wife Andrew and Wendy were the successful bidders.

Wendy is a sailing instructor, while Andrew is a consultant heating engineer.

They bought this as a buy-to-let investment to add to their portfolio.

They joined me back at the house with the youngest of their two daughters, Alicia.

Wendy, Andy, good to meet you.

-Thank you very much.

-Tell me why you wanted to buy the house.

Well, it's got a lot of potential.

You just need to look around it and you'll see quite readily,

it's nice big rooms, upstairs can be split quite easily,

but it needs a bit of work so hopefully a bit of investment, a bit of return.

What's the plan with it then?

Well, initially we were probably just going to do the minimum to get it re-let,

maybe split the front bedroom into two, get an extra bedroom down here

and then in the longer term maybe split it into two flats.

-But at the moment keep it simple and not going down the student let route?

-Possibly, yeah.

Whatever we do, it's to be on a short hold or short tenancy agreement

so if we get a group of people,

probably professionals rather than students, or a family in here.

We'll wait and see who comes along.

Wendy and Andrew aren't new to this.

They already have two rented properties,

one residential and one commercial so they can draw on that experience.

Talk me through exactly what you'll do to sort this place out then.

I think to start with we need to sort the damp out.

-There's a damp issue.

-And we've got to generally replaster throughout.

Put some... Improve the insulation

because the whole of this extension is only single skin.

That's quite cold and damp.

Put a shower or a bathroom next door, knock through.

And then we've got this antique kitchen here which we'll change.

I think that's about it, isn't it?

Yeah, we don't want to do much more than that because you're going to spend too much to get your return.

So how much are you planning to spend doing what you're going to do?

We've budgeted about £12,000 for the work.

-What's the timescale on this then?

-Two months.

-Right.

Good luck with it and we look forward to seeing how you get on.

-OK. Thanks.

-Thank you.

So, Wendy and Andy setting sail on their latest buy-to-let project.

Will they manage to keep it on an even keel?

Well, as long as they don't go over board on the budget, I think they will.

Find out how they get on later in the show.

Coming up, we revisit a London property we first saw in 2008.

Back then it didn't seem to have much going for it.

So far that's the best thing about this house.

We return to Plymouth to check on the progress of Wendy and Andrew's purchase.

We're really pleased with how it's gone.

We're really pleased with the result that we've got.

But first, has Richard's Chatham refurbishment been one step too far?

It's taken over my entire life.

Chatham in Kent is famous for its Naval dockyard where Nelson's ship The Victory was built in 1760.

It's yours at £79,000.

So for £79,000, Richard bought the two-bed topsy-turvy house with

its bathroom on the ground floor and the kitchen in the basement.

Along with his son, Mark, he was hoping this would continue to

build up his experience in a career that was relatively new to him.

I was an IT consultant before I went into this game,

but this is far more rewarding.

So has this house been a rewarding exercise?

Six months later, we're back with Richard to find out.

Well, the exterior's certainly all the better for new windows and doors.

Inside, that old dingy lounge has now become a more welcoming entrance to the property.

Well, in the lounge there used to be an ugly old gas fire, '60s type

gas fire and a friend of mine had an opportunity for me to buy this.

I had a bit of a problem putting it in because it's quite tall and the

fireplace that was there was a lot smaller and I had dig it out and put a lintel in there to

support it all so as I could get in there, but I'm very, very happy with the end result.

Along with new coving, central heating,

laminate floors and plaster work, this is no longer a gloomy house.

Though Richard has kept the bathroom on this floor,

he's completely transformed it with a new suite and shower unit.

Downstairs, in the basement, the dining room and kitchen have been

completely refurbished and some structural changes made.

Well, the kitchen/dining room was...

a very mousy little place and the kitchen was dreadful.

First of all I decided that, because it was small, I wanted to open it out

and make it into a kitchen/diner because I've done that successfully in other properties,

but one of the problems we had when we knocked

the wall down was that the level of wall through here

didn't match with this and because I wanted to do this with the kitchen surface

as it all had to be flat so it proposed quite a problem

for the plasterer to get it all level and he...

technically, it was quite a difficult job getting that all done and of course,

we had to get rid of all the potential damp that was coming up from the floor.

So it all had to be tanked and it was all made... A wonderful job. A wonderful job.

All that damp and the rotting floor issues have been sorted.

To me this refurbishment was all about lifting the gloom that was

previously here and that's certainly been achieved.

The whole place is much lighter and brighter now.

# Lifted from the shadows

# Lifted... #

With the two bedrooms on the first floor ready to go, the inside of the house is completely finished.

The outside is looking pretty good too, with the garden transformed

from a wild untamed wilderness to a neat, manageable family garden.

Overall you can see there has been a tremendous amount of work done here.

How does Richard feel about the project now?

I'm feeling a bit tired at the moment!

A few long days, very long days.

I haven't been able to do my normal socialising because this has just taken over my entire life.

Clearly this has been a bit of a slog at times for Richard.

There as been a lot of back breaking work, but it wasn't his burden alone.

His son, Mark, also helped out.

He's been absolutely a diamond.

He's been marvellous.

He's learning to be a plasterer, and the guy I had was obviously his employer.

Pretty much every single wall in the house needed levelling off

using hardwall bonding.

Mark has cut his teeth on this house because of the amount of work

that was needed and the range of work that has been done as well.

This has been a good project for me to do a fair bit on my own

and I've definitely improved a lot since I've been doing this.

He's just rendered the wall in the garden as well. He's never done that before.

He did a wonderful job of it. So we're very pleased.

# Smooth operator

# Smooth operator... #

But with the whole house needing plastering or rendering to make the old rough walls even and smooth,

Mark's had plenty of opportunities to practise his plastering skills.

His input should have helped keep Richard's costs down.

The original budget was £10,000 with a contingency, but it went a little bit over that.

So I spent about £13,500.

Richard bought the property at auction for £79,000

and spent £13,500 refurbishing it.

Including costs and fees, he will have invested close to £100,000 here.

But was that money well spent? What do two local estate agents think?

When I first visited this property, it really did need a huge amount of work,

but the person that's bought has achieved a great property now.

I personally really like this property.

I like the new bathroom as it has a separate shower as well as a bath

and I do like the open-plan kitchen/diner.

So some pretty positive comments.

Richard intended this to be a rental property so has six months work

and an investment of nearly £100,000 been worth it?

I'd be looking to market at around £110,000 to £115,000.

You could resell this property on for a figure between £95,000 and £115,000.

I've been told £115,000 is about as much I could probably get for this.

That's why I'm renting it for 12 months and then we'll see how it goes.

So rental is key to success for this project as far as Richard is concerned.

I'd be looking at around £600 per calendar month, to get somebody in fairly quickly.

If he had a bit more time on his hands, I'd try £625 per calendar month.

I think you could rent this property out for a figure between £625 and £675 per calendar month.

Because of the amount of time that I have because I'm going on holiday

I'll need to get this buttoned up and tenanted out before I go.

I settle for £600. I've got a tenant coming in for £600.

That's not a bad deal. He's getting the money rolling in straight away.

At £600 a month rental or £7,200 a year, that's a yield of over 7%.

So not bad.

So is he planning more of the same?

I don't know yet. My wife's retiring next year.

We may move away, take up full retirement, but I can't see it somehow.

I think we'll be doing something. I don't know what.

Even if this house does provide a decent pension, I don't think Richard is the retiring kind.

I'm not sure he's totally ready to walk away from property development quite yet.

We're back now to a property we first saw in May 2008.

It was a lovely sunny day in West London,

full of the possibilities of a gorgeous summer ahead,

but the house I was there to see had other ideas!

We're right in the heart of Hammersmith.

Just behind me you've got the High Street.

I'm here to see a three storey end of terrace.

Even I looked at this in the auction catalogue and thought,

"Wow, I'd really like to view that."

All the windows are boarded up behind me. That's because squatters have been here.

They've been a problem in the past. Not a great first impression.

I've got to say, it looked better in the catalogue.

All in all, it looks run-down and tatty,

but you do get all that for £475,000 guide price.

It's not just how the house looks that's a bit of a problem,

directly outside are two huge trees blocking the light

and presenting possible subsidence issues.

And then there's the road. As it's on a raised pavement,

that means there's no off or on street parking here

so when it comes to kerb appeal, well, there isn't any.

Well, after saying all that about it being run-down on the outside,

it's so disappointing inside.

Just wood chip as far as the eye can see.

No beautiful features in this hallway at all.

It's a little bit dark in there so let's put this torch on because there's shutters in here.

Now this is the reception area. It was once a big through room,

you can see it's been blocked up just here.

You can see there's been no gas central heating, it's just storage heaters here,

but ah, wow, this is a beautiful window with the original shutters still intact.

That will look stunning when it's been restored.

Do you know what, so far, that's the best thing about this house!

Also on this floor is an awkward corridor space separating

the living room from this extremely shabby bathroom.

There's no chance of a relaxing soak here.

Already there's a definite feel of neglect about this house.

Well, this is the lower ground floor and it's even more dilapidated down here.

The kitchen, if you can call it that, is back there and this is the reception area.

Now, this is what I'm really worried about.

Can you hear that running water?

Well, it's pouring out right next to the electrics.

That has to be the first thing to get sorted out.

The ceiling in the kitchen has collapsed and there's an overgrown

garden you can't even get into because of security shutters.

So you can't help having a sinking feeling about this place.

# I told you I was trouble

# You know that I'm no good. #

But there must be some positives here.

It has the potential to be a family home, but then lack of parking would be a big drawback.

So convert it into flats.

Square footage counts towards getting a good return on an investment

and this isn't a huge property.

Ah, but don't give up hope.

If you look next door you can see they've already done a large two storey extension to the rear.

The one thing this house, I think, needs is space.

But there's never a guarantee that you could do the same because regulations have changed.

That extension was built a long time ago

and planning round here has really tightened up over the years.

But up on the top floor of this three storey house, there are two bedrooms and even more potential.

Another possibility is going up into the roof.

The house across the road has got a loft extension, but the pitch on this house, well, it's not very high,

and I think you might struggle getting adequate head room up there.

This is one of the upstairs bedrooms, it's a reasonable sized double,

but one big disadvantage with this house is the train track.

It's just there. People say you get used to it, but do you?

A busy and noisy train line could derail any interest shown by

potential buyers before they even step through the door.

It's going to take more than TLC to make this an attractive proposition.

It'll take some tough love.

A rather dilapidated Hammersmith house next to a train line,

but this property definitely has the magic word - potential.

You could knock walls out, open it up, extend it,

subject to planning permission, you could convert it into flats

if you can add space by extending, but whatever you do this is a renovation project

on a large, mammoth scale and a problematic one.

Getting in the builders, lorries, skips, deliveries

all to this property, it's going to be a nightmare.

Who was brave enough to take it on?

Let's find out in the auction room.

Lot 33. Where would you like to start?

475, thank you. 480, 485,

490, 495, 500.

500, 500. 501, 502,

I love your bidding! 510, 515, 520.

Don't you like what I said? I'll get withdrawal symptoms!

523, 525?

525. 530, 535, 530, down here.

531, looking for another £1,000...

531, 530...? Five?

536, 540, 541.

Does anyone want to see if he goes up one or five? 541, 545,

545, 546? 545 down here.

546, new spot.

540...? 550.

550, 555, 560, 565.

570.

575, 580?

576, 576, 580?

580. Have a think.

580, one at the back?

If not, 580, first time, second time.

Third and last time. Are we all done?

Sold 580. Well bid, well done.

That closely fought bidding war was finally won by Deano.

This is his first ever auction purchase

and, along with a builder friend, it will be his second development.

I met him at the house in Hammersmith to find out the plans.

You were so excitable at the auction. I've never seen anything like it!

-Just throwing random numbers at the auctioneer.

-Yes,

I decided that this was the property I was interested in so I really wanted to go for it

and throw the other bidders out and luckily I got it.

-What are your plans for this property, Deano?

-I've got two or three potential plans.

Ideally, I'd like to convert it into three separate residences in terms of flats.

However, if that planning application I'm proposing to

put forward doesn't go ahead, then I'll convert it into one property.

It would make a fantastic abode and one family house potentially

irrespective of the trains coming by every now and again.

The last option that I could do, I guess, is really to get the planning permission or sell it on

-without doing the work because there's a lot of work that's involved.

-Oh yes.

But I'm hoping not to go there.

As he lives locally, Deano did all his homework and had a good look around.

He saw that, despite the decay, there was potential here, but surprisingly, he missed one glaring problem.

No, I didn't really notice the trains. I was looking more

at the property and, well, having spoken to one or two

of the neighbours, they said you get used to that.

-It's London living, it's what you're used to, I suppose.

-Exactly.

To maximise the space, Deano plans to extend both out to the side and at the back and push up into the loft.

Not only will that add to the square footage, but would definitely broaden the property's appeal.

Let's face it, it needs all the help it can get!

I have to say Lucy, I'm a relative novice at this.

My background, very briefly, I'm a qualified accountant.

I took a change in career eight years ago and set up a head-hunting business

and I really only got into the property arena, so to speak, in the last eight to ten months.

I've entered into one other project with my builder friend and this

is the first really big chunky one I'm getting my teeth into myself.

You've spent £580,000 so far.

What's your budget to do the work or to do any kind of work here?

If I get the planning permission approved in terms of three units,

then we're probably looking, with extensions and elevation

at the top of the property, ballpark £150,000.

If I'm going to keep it as one house, I'll still extend ground

floor level or lower ground level, probably still put the elevation in

at the top of the property, so we're looking probably £80,000 is the budget I've got for that.

When we first returned nine months later, the trees had gone, but the renovation was still ongoing.

There was a lot of cosmetic work to be done and, despite the progress,

there had been one big unexpected problem.

We always knew there was a bowed side wall to the property.

We thought we could fix that into the joist,

but when my structural engineer came,

he said, "No, you need to rebuild this."

So that was a fairly major task in itself.

A tough challenge for any developer,

but for novice Deano, this was going to be a mammoth undertaking,

but you can see the impressive finished product and how he got on later in the show.

It's always easy to put things off till tomorrow, but in the property

developing world, time is money and those delays can be expensive.

Have our buyers been busy or have they let the grass grow under their feet?

Knowing your market is crucial in any property developing project

and when this three bed mid-terrace in Plymouth came up for auction,

local Devon couple Wendy and Andrew knew exactly what they wanted to do with it.

What's the plan with it then?

Well, initially we're probably just going to do the minimum to get it re-let.

Maybe split the front bedroom into two.

Get an extra bedroom down here,

and then in the longer term maybe even split it into two flats.

Yes, it's all about rental and maximising the bedroom space.

So, having paid £96,500 at the auction, sailing instructor Wendy

and engineer design consultant Andrew set about the task of getting the most out of their purchase.

Nearly six months later, we're back.

From the outside, there are signs that they've started to turn this house around

with a new paint job definitely making it look less shabby.

Whilst inside...

well, the front reception room,

it's rather a work in progress.

And it seems like they've been on a voyage of discovery.

Well, this fireplace has actually been quite a journey.

We started off with the original gas fire that was in here, ripped that out and then we found another

tiled fireplace which everyone hated so we ripped that one out and then we discovered this one,

So instead of putting one of the old Victorian fireplaces back,

we decided to keep this,

and here you have the original slate which is actually from the kitchen.

The slate tiles were discovered when they completely refurbished the kitchen.

This is now, not only more up-to-date, it has the bonus of a shower room off it,

after they knocked through to the old workshop area previously behind the kitchen.

With the rear reception room prepared for final decoration,

downstairs is well on its way.

So, what about upstairs?

OK, I'm currently standing in the new bedroom which used to be the old bathroom.

The bathroom wall used to be about here where I am now and we've taken that wall down.

Previously you had to go through the bedroom to get into that bathroom so we've moved the bedroom to the back,

put the bathroom off to the side and created a corridor in between

and what used to be the old doorway, we've now created an arch

which, you know, finishes off the detail as best we could.

This is clearly a better layout for rental.

You really don't want the main bathroom only to be accessible through a bedroom,

particularly when you're looking at letting the rooms out individually.

But what you do want is to maximise the number of lettable rooms.

They've done that by splitting the main bedroom in two, making this now a four-bed house.

But remember those odd stairs that went nowhere?

Have they found a clever solution for them yet?

The stairway to heaven, that's still a stairway to heaven, I'm afraid, at the moment.

What we did was, there was a cupboard at the top

and we did investigate actually putting the roof garden back, but building control recommended

that we finish the building work that we're doing, stage one, he calls it.

Get that signed off and then look at doing the roof garden.

That's a job for a later date, but just finishing off what they started here is going to keep them busy.

So who's been responsible for all the work so far?

-It's a mix, isn't it?

-Yeah, it's been a bit of a mix.

The original intention was for me to use this as a fill in between my normal work

because we thought it might be going a bit quiet. As it happens, it's not been as quiet as we thought

so I haven't been able to spend as much time as I'd like to.

I'd quite happily do a lot of the services, but you still have to get

your electrician in to do their bits, the gas man in to do his bit

and I won't do any skimming or plastering

because if that goes wrong, it can look really bad.

So it really was a mixed bag.

Andrew being busy with his full-time job is good for their income,

but having to pull in more tradesmen here will surely have blown their £12,000 budget.

I'd say we've probably spent, by the time we've finished

I think we'll have probably spent about £20,000 on it, perhaps

a bit more if you take into account our salaries as well, we're probably looking at £25,000.

The aim was to rent this property out, but with a £25,000 budget

and a £96,500 purchase price,

this represents an investment of around £121,500 for Wendy and Andrew.

So, is it on course to pay its way?

What do two local estates think?

What's been done so far to the property is very good.

Obviously it's not quite finished yet.

A few detailings and snaggings that would need to be completed but it's

certainly perfect for the current market at the moment when completed.

From what was here previously,

they've really made it a nice, natural flowing family set-up.

The fact the property has many features including

the original fireplace in the property is very good.

We have many buyers that are looking for this style of property because of the size.

What's brilliant as a bonus is that it still retains some of its original features.

There's clearly still work to be done here, but with around £121,500 invested,

can the couple be confident that it's going to be worth the effort?

When the property is completed I'd value the property for offers in the region of £150,000.

When the house is finished and all the Is are dotted and the Ts crossed,

the value would be £140,000 and maybe just a little bit more if they're lucky.

That's the bottom end of what we've been led to believe,

but it's in the same sort of ballpark.

So, yeah, there's still profit in there.

Mmm, there's still some profit in there, yeah.

A profit of between £18,000 and £28,000 isn't too bad, but rental really is the name of the game here.

I'd value the property in the rental market for £650 per calendar month.

The rental value of the house per calendar month is going to be in the region of £575.

That's a bit on the low side of what we've been led to believe.

We've actually had offers from prospective tenants

over £800, so yeah, we'd hope to be getting more than that.

If they got anywhere near £800 a month, that would be a healthy yield of over 7%.

From an investment point of view, this property has come up trumps.

We're really pleased with how it's gone. Really pleased with the result that we've got.

I think another property would be a good idea.

Yeah, we've enjoyed this one. There have been ups and downs,

but overall, it's been great.

Well, there may be a few ups and downs still to go, but judging by what's been

done so far, it looks like this is going in the right direction.

It's back to Hammersmith in West London now,

where earlier we met Deano

who bought this decaying town house for £580,000.

His plan was to renovate it into either three flats or a family home.

For any developer this would be a tough project.

But first timer Deano had wisely given himself a healthy 12 months

to complete the job here, so when we returned the first time,

nine months later in February 2009,

it was no surprise that the work wasn't completed.

But Deano had decided to make it into three one-bedroom flats.

Well, there were three extensions to this development.

One was adding a top level onto the property,

one at the back of the property over the lower two levels,

and then at the side of the property to house the staircase up to the top flat,

but one of the issues the builders had was generally the accessibility

because getting the materials in and out proved to be quite difficult.

And that wasn't all. The side wall was bowing and had to be rebuilt.

All a big headache, and on the inside there was still a lot to be done.

But with the tiling already tiled and the plumbing plumbed,

it was all starting to take shape.

So did the final product turn out exactly as planned?

We returned 16 months later to find out.

Well, I reckon Deano must be very proud of his efforts.

The rear extension has given the ground floor flat an amazing kitchen/lounge area.

That backs out on to a perfect little garden which is ideal for chilling out.

That lower ground floor room has now become a comfortable bedroom.

Although no extension was added to the top floor flat,

taking out the party wall has done wonders for the light and space here.

I think the last time you visited, this room was in the process of being completed.

I think the kitchen units were in place and the coves needed

another lick of paint which was all carried out and you can

see the finished product with the sofas and the space in here, it's been completed really well.

The top floor is split level with a new light staircase pushing up

into the loft, where there's a second bathroom and large bedroom.

This is the bedroom in the top floor flat.

It's actually a new level that was created as part of the plans

when they were submitted to the local council.

I considered making this area into two bedrooms, but it wasn't really big enough to do that

so I stuck with Plan A and I'm very pleased with the way that it's turned out.

It's a really nice bedroom for the top floor flat.

Downstairs, the raised one-bed ground floor flat also has the benefit of the extension,

allowing it to have the same kitchen and lounge area as the lower ground floor flat.

With the bedroom at the front and the bathroom complete, everything is now shipshape.

Even the tenant's cat's happy with the final result.

But Deano did have his doubts about getting there.

There were one or two moments I thought why have I taken on this massive project

when I was quite a novice at the time, but because of the good relationship with the builder

and the fact the plans were in place, it was a great learning curve.

He'd only been doing property development for eight months before he bought this house,

which was only his second project.

Since I completed this project, I've gone on to carry out a few more.

I've developed a few other single units since then and kept the majority of those.

There are one or two that I've developed and sold on,

but this really gave me the footing for understanding what was entailed,

including planning, builders, complications.

# Ain't no stopping us now... #

Well, Deano got the renovation done in his projected time scale

of one year and he didn't waste time getting the place to earn its keep.

I've got a good lettings agency that managed to let out all the flats

almost as soon as they were completed,

so it's a wonderful situation to be in.

Great flats. Tenants that look after the property.

So I'm very, very happy with it.

Those flats are making a rental income of over £3,300 per calendar month,

but out of that will come the fees for the letting agents.

What was his final outlay?

I bought the property for £580,000 at auction and including stamp duty and all the expenses

to complete the property, the overall total that the three flats cost me was £780,000.

But is he getting the best out of his investment?

We asked two local estates to give their opinions on Deano's hard work.

I think he's done a really great job.

They've been finished to a good standard.

The open-plan works really well for the type of people that

would be renting or buying them. He's done a really good job.

The works that have been done, they all look really good.

It's well presented but the thing that he can't take away from it

is where it is and being next to the Tube line so that's always going to be an issue,

but the general kind of finish of it is all very nice.

So how do the numbers stack up?

Remember, Deano's rental income is just over £3,300 per calendar month so what COULD the flats fetch?

The lower ground floor flat you'd be looking at £1,200 per calendar month.

For the raised ground floor flat, you'd be looking at £1,000 per month

and for the top floor flat you'd be looking about £1,300 per calendar month.

That's a possible rental income of £3,500 per calendar month, £200 more than Deano is getting.

I'm happy with those. I probably could get a touch more now

if I remarketed them, but I've got very good tenants.

I'm very happy with them. Yes, I'm pleased with those.

Deano spent a total of £780,000 here, so what could it fetch if he decides to sell?

The lower ground floor garden flat would sell for about £300,000.

The raised ground floor would sell for approximately £275,000

and this top floor flat would sell for about £325,000.

That possible total resale value of £900,000

could give Deano a pre-tax profit of about £120,000.

I think that's pretty good overall.

The way the market has been over the last 12 months or so,

there's been a little bit of an improvement so yes, very pleased.

But I reckon that what Deano should be most pleased about is that

invaluable experience he's now gained in developing properties.

It's been a very interesting project, a very rewarding one ultimately.

I learnt an awful lot on it.

I'm very pleased with the end result and certainly happy overall.

Join us next time when we'll have more properties sold under the hammer.

Yes, who knows what they'll be - flats, houses, bits of land...

You can find out.

-See you soon.

-Goodbye.

-Bye-bye.

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