0:00:03 > 0:00:06Despite the credit crunch people still want a slice of the property action.
0:00:06 > 0:00:09If you want to the plunge, auctions are a great place to start.
0:00:09 > 0:00:13It can be fraught, it can be fantastic, whatever happens it's fun
0:00:13 > 0:00:15when you buy your property under the hammer.
0:00:41 > 0:00:45Now, some properties are very popular at auction, others go unsold.
0:00:45 > 0:00:48So the auction room can be a very difficult place to conquer.
0:00:48 > 0:00:51Let's take a look at what inspired the buyers on today's show.
0:00:51 > 0:00:56This terraced house in Derby has all you need for a good investment.
0:00:56 > 0:01:01It's not in bad condition and, of course, it's so close to the city centre you can't go wrong.
0:01:02 > 0:01:06There's a property in Kent with Titanic proportions.
0:01:06 > 0:01:09This is just the tip of the iceberg.
0:01:09 > 0:01:11Let's get upstairs and see the real opportunities.
0:01:12 > 0:01:17And in rural Devon, this cute cottage has plenty
0:01:17 > 0:01:21to charm everyone, but what we don't like is this wall here.
0:01:24 > 0:01:28All these properties are being sold at auction and we find out who bought them
0:01:28 > 0:01:32- and what they paid for them when they went under the hammer. - Sir, well done.
0:01:37 > 0:01:41I'm in Derby, a city of many facets. It's a former Victorian
0:01:41 > 0:01:44industrial centre with the smallest cathedral in Britain.
0:01:44 > 0:01:47It also has a busy university, a large
0:01:47 > 0:01:50new shopping centre and commercial developments springing up all over.
0:01:50 > 0:01:54Now I don't know how much that doggie in the window is,
0:01:54 > 0:01:58but I'm hoping we're in line for a property bargain here today.
0:01:58 > 0:02:03There's an interesting fact, 70% of people in Derby own their own homes.
0:02:03 > 0:02:06Great for them, bad news if you're looking to rent somewhere.
0:02:06 > 0:02:09However, doubly good news, if you're looking to buy-to-let,
0:02:09 > 0:02:13and the property I'm here to see could be absolutely ideal for that.
0:02:13 > 0:02:17It's two bedroomed, it's mid-terrace at a guide price of 77,000 quid.
0:02:19 > 0:02:23As Derby has a high demand for rental properties,
0:02:23 > 0:02:29this street, 10 minutes walk from the city centre could be just the ticket. So what's it like inside?
0:02:29 > 0:02:33Well, straight away I'm seeing it's a little tired, in need of sort of a bit of loving care,
0:02:33 > 0:02:37but good high ceilings and also some original features,
0:02:37 > 0:02:39which is always a nice thing to see.
0:02:39 > 0:02:43Through a little, well, sort of, archway there into the rear living room area.
0:02:43 > 0:02:46Again, not a bad size, horrible fireplace, get rid of that,
0:02:46 > 0:02:49put something nicer in its place, but decent enough kitchen.
0:02:49 > 0:02:53All in all, pretty much what you'd expect.
0:03:01 > 0:03:03OK, it's what you'd hope to find, really.
0:03:03 > 0:03:07Nothing too awful, but with enough scope that you could make your mark here.
0:03:09 > 0:03:10Upstairs are two double bedrooms
0:03:10 > 0:03:14with a bathroom at the back, which makes the world of difference.
0:03:17 > 0:03:20There are signs of damp here and there, but that could just be
0:03:20 > 0:03:25condensation after years of furniture being pushed up against the wall.
0:03:25 > 0:03:27So far so good then,
0:03:27 > 0:03:30and this little terrace is hiding a nice little bonus.
0:03:30 > 0:03:34Ladies and gentlemen, please join me back outside.
0:03:34 > 0:03:39Well, the property benefits from its own alleyway leading to the rear.
0:03:39 > 0:03:41Why is that a benefit? It means that you can actually stop using
0:03:41 > 0:03:45the front door and use this rear door as the main access to the property.
0:03:45 > 0:03:49Why does that matter? Well, it means you can rent out that front room as an extra bedroom.
0:03:49 > 0:03:52That could generate you an extra £50 a week in rent.
0:03:52 > 0:03:55So thank goodness for the alleyway.
0:04:03 > 0:04:07Of course, this extra room only really applies to the student market,
0:04:07 > 0:04:12but as there are quite a few students around here, that would certainly be good to bear in mind.
0:04:12 > 0:04:16As well as the alley at the back, there's a rather lovely garden.
0:04:16 > 0:04:22It is overgrown, but knocks the traditional yard into a cocked hat.
0:04:23 > 0:04:27There's also the old outside loo that could go to make way for useful
0:04:27 > 0:04:32storage and what would probably have been the coal store in days gone by.
0:04:33 > 0:04:34And talking of the past,
0:04:34 > 0:04:38you know what, I don't think this street will have changed much over,
0:04:38 > 0:04:44well, 100 years or so since these houses were built and there's proof of that here, look.
0:04:44 > 0:04:48A bit of graffiti carved in 1917, maybe by the kids who lived
0:04:48 > 0:04:53in this house, probably in between playing marbles out on the pavement while mum polished the step.
0:04:53 > 0:04:55You do get that flavour here.
0:04:55 > 0:05:00And you know what, the houses were practical then and they're practical now.
0:05:00 > 0:05:03The living conditions have improved a lot.
0:05:03 > 0:05:08Now you're more likely to find students and young couples starting their adult lives here
0:05:08 > 0:05:10rather than entire families crammed into two bedrooms.
0:05:10 > 0:05:17In essence these two-up-two-downs do work and make for solid investments.
0:05:17 > 0:05:20I asked the auctioneer who sold the place for his thoughts.
0:05:20 > 0:05:23They're typical terraced house streets around here but they do
0:05:23 > 0:05:25appeal to first time buyers,
0:05:25 > 0:05:28but there's also quite a bit of rented accommodation too.
0:05:28 > 0:05:32This house is very typical for a property that has been rented out
0:05:32 > 0:05:35for some years. It's a bit tired, needs a bit of TLC,
0:05:35 > 0:05:39it's not structurally in disrepair and there's nothing major here.
0:05:39 > 0:05:42A lot of it is cosmetic, superficial work,
0:05:42 > 0:05:45but it just wants a bit of hard work doing to it.
0:05:47 > 0:05:53The guide price for this property was £77,000. Is it worth that?
0:05:53 > 0:05:56This would be a good investment property, whether you bought it
0:05:56 > 0:05:58to rent it out or you bought it to come and live in it.
0:05:58 > 0:06:02If this was a student house, and it has been in its past,
0:06:02 > 0:06:06it would accommodate three students, two in the bedrooms upstairs and one in the front room downstairs,
0:06:06 > 0:06:12using the back door as the entry, and they would pay something in the order of £52, £53 a week.
0:06:12 > 0:06:15So you're talking about an income of about £8,000 a year.
0:06:15 > 0:06:17So a promising little earner.
0:06:17 > 0:06:20What about its resale value?
0:06:20 > 0:06:24As it stands now, its value would be around £85,000.
0:06:24 > 0:06:28Brought up to a good standard where you don't need to do anything else to it at all
0:06:28 > 0:06:34you'd probably get it to £100,000 without too much difficulty and could even be a bit over that.
0:06:34 > 0:06:39Well, the house really does have everything you could want from a good investment.
0:06:39 > 0:06:41It's not in bad condition, it's got broad appeal
0:06:41 > 0:06:45and, of course, it's so close to the city centre you can't go wrong.
0:06:45 > 0:06:49Let's see whose head was turned when this went under the hammer.
0:06:49 > 0:06:53Lot number three today is a traditional two double-bedroomed terraced house.
0:06:53 > 0:06:57How much must I say for this one? Start me on this where you will, £80,000.
0:06:57 > 0:07:0080,000? 78?
0:07:00 > 0:07:0378? 75 to start me?
0:07:03 > 0:07:0475 I have, thank you.
0:07:04 > 0:07:08At £75,000. At £75,000.
0:07:08 > 0:07:1176 somewhere else? 76 is bid. 77.
0:07:11 > 0:07:15At 77,000, 78, 79.
0:07:15 > 0:07:21At 79. 80,000? £80,000. 81, at 81.
0:07:21 > 0:07:2981, 82, 82, 83. 83,000. 84?
0:07:29 > 0:07:34I'll take the half. The bid is 83,000, it's in the market, we're going to sell.
0:07:34 > 0:07:37At 83,500 quickly?
0:07:37 > 0:07:41For the first time, second time, third and last chance.
0:07:41 > 0:07:44Sold at 83,000. Thank you.
0:07:44 > 0:07:48That successful bid came from Kim and her father, Dean.
0:07:48 > 0:07:51Marketing assistant, Kim,
0:07:51 > 0:07:57bought the house for £83,000 with her boyfriend, Dom, who installs cash registers.
0:07:57 > 0:08:01They're first time buyers and hope to move in as soon as possible.
0:08:01 > 0:08:04I met them back at their purchase to find out their plans.
0:08:10 > 0:08:14- Dominic, Kim, congratulations. Lovely to meet you both.- Thank you.
0:08:14 > 0:08:16Tell me why you wanted to buy this place.
0:08:16 > 0:08:21Well, we've been looking around for about six months now and nothing really
0:08:21 > 0:08:25meets our specification and then we thought, we saw this and thought this was perfect really, didn't we?
0:08:25 > 0:08:28Yeah. We've been living in this area for about a year, so.
0:08:28 > 0:08:33- Oh, OK, so you've bought it for yourselves to live in then?- Yes.- Oh, great.- After we've done the work.
0:08:33 > 0:08:35- Is this the first house you've bought together?- Yes.
0:08:35 > 0:08:43- Both first time buyers, yeah.- How is for first time buyers at the moment? - It's quite difficult, isn't it?
0:08:43 > 0:08:48Yeah. We've been lucky because my dad's an estate agent, so we've had a lot of help and advice
0:08:48 > 0:08:52from him along the way, but I can see it's quite difficult to sort
0:08:52 > 0:08:56- everything out and get the mortgage together and stuff like that.- Yeah. Get enough money to buy, really.
0:08:56 > 0:08:59Right. So tell me about you two then, how long have you been together?
0:08:59 > 0:09:03We've been together about two and a half years now, I'd say.
0:09:03 > 0:09:06We moved in about a year ago. I thought we'd sort of
0:09:06 > 0:09:09test the waters a bit and just sort of rent for a while.
0:09:09 > 0:09:14- See if we could live with each other, stand each other. - THEY LAUGH
0:09:14 > 0:09:17We thought we'd take the plunge and look to buying.
0:09:17 > 0:09:24Obviously we both wanted different things and things like that, but I think we've done well here.
0:09:24 > 0:09:29Compromise is the name of the game when it comes to living together.
0:09:29 > 0:09:33The first compromise they've already reached is about how they keep
0:09:33 > 0:09:36football crazy Dom up to date with the beautiful game.
0:09:36 > 0:09:40- So you're going to have a separate room with the telly in it then?- Well, we're putting a TV on that wall.
0:09:40 > 0:09:46- We have planned, yeah, we're going to do that in this one.- And in that one as well.- Two tellies downstairs.
0:09:46 > 0:09:49- THEY LAUGH You can watch the footie in the other room.- Yeah, on the big TV.
0:09:53 > 0:10:00But aside from the pressing issues of the Premiership, their goal is to do some structural changes here.
0:10:00 > 0:10:04We're going to knock this wall out so we've got an open plan kitchen diner.
0:10:04 > 0:10:06- Right. - New kitchen in as well actually.
0:10:06 > 0:10:09- And then just decoration really isn't it?- Yeah, cosmetics.
0:10:09 > 0:10:14How are you going to take that wall out, because that's a fairly major supporting wall that, isn't it?
0:10:14 > 0:10:16- Well, I'm not, the builders can do that.- OK then.
0:10:16 > 0:10:19That's an exterior wall of the house.
0:10:19 > 0:10:26- Well, I think he's taking it to sort of there and then just putting in a supporting RSJ.- Right.
0:10:26 > 0:10:32Outside we're obviously got the outhouses, which we're hoping to use as a bit of a utility space.
0:10:32 > 0:10:36- What kind of feel are you going for in the house?- Clean, modern, really.
0:10:36 > 0:10:39Just keeping everything neutral, nothing too...
0:10:39 > 0:10:43Yeah, keep it sort of looking as spacious as we can, really.
0:10:43 > 0:10:45Yeah, lots of light.
0:10:45 > 0:10:46What sort of budget have you got?
0:10:46 > 0:10:49Kim?
0:10:49 > 0:10:54Around 8,000 we think at the moment, and I've been told that obviously
0:10:54 > 0:10:57we're probably going to go over that a bit.
0:10:57 > 0:10:59Why did you defer to Kim when I asked about the budget?
0:10:59 > 0:11:04- Because she's the one with the purse strings, really. - SHE LAUGHS
0:11:04 > 0:11:09I think I'll probably spend about 12, 15 if I could, getting all gadgets and stuff but...
0:11:09 > 0:11:11I think Kim's going to have to keep an eye on Dom.
0:11:11 > 0:11:16He's already bagged the big TV, what next?
0:11:19 > 0:11:23They don't plan to do much upstairs apart from renewing the bathroom.
0:11:23 > 0:11:27That could be quite doable on their budget, but what about their timescale?
0:11:27 > 0:11:32Well, we've got to be out of our rented property in three weeks time
0:11:32 > 0:11:37- so we're hoping to have it liveable in three weeks.- Three weeks?!- Yeah.
0:11:37 > 0:11:41What, 21 days?! THEY LAUGH
0:11:41 > 0:11:45- Yeah.- We are aware that is probably, well we are hoping it's going to happen but
0:11:45 > 0:11:47we know that there's a bit of work to do.
0:11:47 > 0:11:50Hopefully in three weeks time we've got the kitchen and bathroom done
0:11:50 > 0:11:54and then obviously we can just do the rest ourselves when we've got time really.
0:11:54 > 0:11:56So both of you have full time jobs, so I you're going to
0:11:56 > 0:12:01- do all of this in 21 days of evenings and weekends.- Basically, yeah.
0:12:01 > 0:12:04We'll have to rope in quite a few friends I think.
0:12:04 > 0:12:08- We're hoping for a lot of help aren't we?- Yeah. We'll need it.
0:12:08 > 0:12:12Well, listen, good luck and we'll give you a month or so and see how you've got on.
0:12:12 > 0:12:14Thank you.
0:12:16 > 0:12:22So, three weeks to knock down a supporting wall, install an RSJ, fit a new kitchen,
0:12:22 > 0:12:27fit a new bathroom, completely redecorate and sort the house out, with full time jobs.
0:12:27 > 0:12:35Now there is a challenge. Will they manage it and will Dominic manage to nick a bit of money for some gadgets?
0:12:35 > 0:12:37You can find out later in the show.
0:12:39 > 0:12:41I'm in Sittingbourne, Kent.
0:12:41 > 0:12:46Until a few years ago, this was home to the Sittingbourne paper mill,
0:12:46 > 0:12:48once the largest producer of paper and newsprint in the world.
0:12:48 > 0:12:53But the question is, will today's auction lot be a licence to print money?
0:12:56 > 0:13:01I'm right on Sittingbourne High Street and it's a rather substantial property we've got to explore.
0:13:01 > 0:13:08In fact, it's all this. Now, it's numbers 15, 17 and 19,
0:13:08 > 0:13:11which includes the freehold of the shop of 15 and 17,
0:13:11 > 0:13:13but not the ownership.
0:13:13 > 0:13:17But with everything above the commercial units included and number
0:13:17 > 0:13:2219 thrown into the mix, well it's a substantial amount to explore,
0:13:22 > 0:13:29and all for a guide of £140,000 to £150,000, I'd better get my skates on.
0:13:29 > 0:13:32The main space we're interested in are
0:13:32 > 0:13:36the offices above the two shops and the small shop unit on the corner.
0:13:36 > 0:13:39All this was formerly the home of a local newspaper.
0:13:39 > 0:13:43So time to get inside and see if I can root out the story.
0:13:51 > 0:13:56Now the entrance is through number 19, formerly the reception to the newspaper offices.
0:13:56 > 0:14:00Now this little space has to remain as commercial or retail premises,
0:14:00 > 0:14:04I know the council will not budge on that. But it is pretty small.
0:14:04 > 0:14:07Maybe you could apply for change of use for a coffee bar,
0:14:07 > 0:14:11a little deli maybe, but this, this is just the tip of the iceberg.
0:14:11 > 0:14:15Let's get upstairs and find the real opportunities.
0:14:15 > 0:14:20So up here are where the offices were based for the local newspaper.
0:14:20 > 0:14:23You can see you've got the editor's office through there.
0:14:23 > 0:14:26It really does have that sort of commercial feel to it.
0:14:26 > 0:14:30You've got lots of false ceiling tiles, strip lighting,
0:14:30 > 0:14:33woodchip wall paper everywhere, but it is a warren of rooms.
0:14:33 > 0:14:38You've got a big kitchen area through there, an office, an even bigger office through there,
0:14:38 > 0:14:42but what I do like about this place is look at this flooring.
0:14:42 > 0:14:46You've got some gorgeous original parquet floor tiles here and I do
0:14:46 > 0:14:50happen to know they run right the way through this floor. And looking around, do you know what?
0:14:50 > 0:14:54These offices are just ready to go.
0:14:54 > 0:14:58But there's one thing I'd like to do. They're a bit dirty, give them a dust.
0:14:59 > 0:15:01This floor seems in pretty good nick.
0:15:01 > 0:15:08You can easily imagine a line of journalists in here, typing frantically to meet their deadlines.
0:15:10 > 0:15:14But for part three of our tour I'd like you to walk with me
0:15:14 > 0:15:20through this rather uninviting walkway to somewhere with even more space.
0:15:20 > 0:15:23You know it just gets bigger and bigger!
0:15:23 > 0:15:28You've actually got a further 800 square feet of office space and an attic up there.
0:15:28 > 0:15:35Now, all of this commercial space has wonderful light, open feel to it with these massive windows.
0:15:35 > 0:15:38Now, it could be a pleasant place to work.
0:15:38 > 0:15:45I think you'd probably get around £14,000 to £20,000 rent for this per annum which isn't bad, but I can't
0:15:45 > 0:15:49help feel these former newspaper offices are hiding a bigger story.
0:15:49 > 0:15:55My sources tell me the exclusive is to be found round the back.
0:15:55 > 0:16:00Oh, and there's a news flash. As if the floor upon floor of square footage wasn't enough,
0:16:00 > 0:16:05one of the real bonuses of this property is what lurks outside.
0:16:06 > 0:16:10The property comes with a large car park and this space is the
0:16:10 > 0:16:13key to the building and the real development potential.
0:16:13 > 0:16:18Now I know the local authority are really trying to regenerate the area and bring people back into
0:16:18 > 0:16:23the centre of town and they may look favourably on a residential development.
0:16:23 > 0:16:29Now the space is clearly there for four, maybe five, units and what about extending up?
0:16:29 > 0:16:32A roof extension, well I think it would give you even more square
0:16:32 > 0:16:35footage and I don't think it would be too out of place on the road.
0:16:35 > 0:16:38Now you may well get planning without parking,
0:16:38 > 0:16:41but I think you'd limit your market and restrict the values.
0:16:41 > 0:16:46So it all hangs on this square of tarmac. Amazing.
0:16:46 > 0:16:49This building comes with 16 parking lots,
0:16:49 > 0:16:53that's more than enough for four or five flats and, more importantly,
0:16:53 > 0:16:56plenty to keep the planners happy.
0:16:56 > 0:16:59Plus it gives the place options. You may be hard pressed to make money
0:16:59 > 0:17:03out of this as commercial offices, but as a residential space,
0:17:03 > 0:17:06it could be really good news financially.
0:17:06 > 0:17:09What does a local estate agent think?
0:17:09 > 0:17:13A very difficult property to envisage a new use for,
0:17:13 > 0:17:16other than conversion perhaps to residential.
0:17:16 > 0:17:19There's very little demand for offices of this sort of nature
0:17:19 > 0:17:20in High Street locations nowadays.
0:17:20 > 0:17:26Could flats generate sufficient returns to make them worth considering?
0:17:26 > 0:17:32If you were able to convert this into flats, one bedroom units, probably for rental about £500
0:17:32 > 0:17:37a month, perhaps £75,000, £85,000, two bedroom units at the moment
0:17:37 > 0:17:41perhaps £550, £600 a month, perhaps £85,000 to £95,000.
0:17:41 > 0:17:48If you were granted permission to convert this to four or five flats you could get over £400,000.
0:17:48 > 0:17:54Not bad for a building that was guided at 140 to 150,000.
0:17:54 > 0:17:59This is a lot of property for the money, but you'd still have to be careful with your cash.
0:17:59 > 0:18:04As commercial premises, these are never going to net you big bucks and if you converted them
0:18:04 > 0:18:08into flats, well there's money to be made but also plenty of hoops to jump through.
0:18:08 > 0:18:11Let's see if these old newspaper offices
0:18:11 > 0:18:13made headlines at the auction.
0:18:16 > 0:18:19Lot 62 then is 15 to 19 High Street in Sittingbourne.
0:18:19 > 0:18:23Where do you want to start me then? Start me at 130? 130.
0:18:23 > 0:18:25I'm on the way at 130, 130 I've got.
0:18:25 > 0:18:30Now 135. At 135. It's with you at 130, 135 at the back. 140.
0:18:30 > 0:18:33140. 145 anywhere?
0:18:33 > 0:18:35145 I've got, waving at me.
0:18:35 > 0:18:41145, 150, I've got. 150, and 5, 155,000?
0:18:41 > 0:18:44The first time then at £150,000.
0:18:44 > 0:18:48Second time at 150,000 if you're sure you're all done, because it's going to be sold.
0:18:48 > 0:18:53Third and final time at £150,000, the gentleman standing right in front of me, you're all done?
0:18:53 > 0:18:57It's yours, sir, for £150,000.
0:18:57 > 0:19:00It was local man Steve who scooped this former
0:19:00 > 0:19:05newspaper office at the top end of the guide price for 150,000.
0:19:05 > 0:19:12He and his business partner Ian joined me there to give us the exclusive on their plans for it.
0:19:12 > 0:19:15- Guys, congratulations.- Thank you. - You paid the upper end
0:19:15 > 0:19:18of the guide price, £150,000, were you pleased with that?
0:19:18 > 0:19:22Very pleased with it. I mean we would have gone up to about 165.
0:19:22 > 0:19:25You have got a lot of building here for that money, I think.
0:19:25 > 0:19:27There is a lot of square footage here, yes.
0:19:27 > 0:19:31It just seems to go on and on. I mean the first time Steve showed me around it just kept going and going.
0:19:31 > 0:19:33You went into another room and it was impressive.
0:19:33 > 0:19:35So what are you going to do with this place?
0:19:35 > 0:19:38Well, what are you going to do with it? HE LAUGHS
0:19:38 > 0:19:41What's your involvement both of you? Because you were at the auction and you weren't.
0:19:41 > 0:19:45- No.- We do quite a bit of development ourselves because I've got my own building firm and
0:19:45 > 0:19:49we've got a development side as well and last year I said to Ian, does he want to come into it?
0:19:49 > 0:19:53And we did a development with Ian and my brother and then this one came up and we
0:19:53 > 0:19:56went through some costings and looked at what we could do here, came up with some
0:19:56 > 0:20:00figures and then Ian said yes, and then I just went with the chequebook to the auction and bought it.
0:20:00 > 0:20:04So Ian, how did you feel when Steve phoned you up and said, I've got it?
0:20:04 > 0:20:09I'm lucky, really, he's one of the few guys I know that I would trust implicitly, so when he says
0:20:09 > 0:20:12it's a good deal and a good buy and it's going to make us money, I believe him.
0:20:12 > 0:20:14So how involved are you with the property world?
0:20:14 > 0:20:16- Oh, um, yeah...- Totally.
0:20:16 > 0:20:20- I kind of gave up building at the Lego level, really, to be honest. - Yeah.
0:20:20 > 0:20:24I basically write him a cheque, he goes and spends it and shows me a place at the end of it.
0:20:24 > 0:20:25What do you do at the moment then?
0:20:25 > 0:20:30I work up in the city. I probably shouldn't say that, we're not too liked at the moment.
0:20:30 > 0:20:33But I'm not a trader, I'm an accountant, but I work for an investment bank.
0:20:33 > 0:20:35So good with the finances.
0:20:35 > 0:20:39I'm OK with finances. I actually trained as accountant just round the corner, just up the road at a local
0:20:39 > 0:20:44accountancy firm, so I know the area pretty well, I grew up in the area, I know what it's like, and when he said
0:20:44 > 0:20:48there's this big place on the High Street it's yeah, it seemed good.
0:20:48 > 0:20:54Well, they seem like the perfect team, a builder and a backer, but with nearly 350 square metres
0:20:54 > 0:21:00this is a big project and not just because of its size.
0:21:00 > 0:21:02So you have all this space up here, corridors, a warren of rooms,
0:21:02 > 0:21:07upstairs, this floor, what are you going to do with all this space?
0:21:07 > 0:21:12Well, the shop downstairs has got to stay as a commercial property so that has to stay as retail,
0:21:12 > 0:21:16but we're going to convert it, or try if we can get through planning, turn it into flats, and we should,
0:21:16 > 0:21:18fingers crossed, get five or six flats in here.
0:21:18 > 0:21:20Three two bedders and three one bedders, that's the plan.
0:21:20 > 0:21:24- It's fair to stay we priced it on five.- Priced it on five, yeah.
0:21:24 > 0:21:26So if we get five we do OK.
0:21:26 > 0:21:29If we get six, real bonus.
0:21:29 > 0:21:31Yeah. The biggest selling point for us was the car park out the back.
0:21:31 > 0:21:34People buy places, "Oh, I'll turn it into four flats", then find you have
0:21:34 > 0:21:37one parking space and then planning won't allow you to convert it.
0:21:37 > 0:21:40Now, with a car park with 16 spaces in it, it gives us complete scope
0:21:40 > 0:21:46to keep the shop downstairs, to keep the flats, we could probably, we've got enough car parking really for
0:21:46 > 0:21:51ten flats, but obviously the footage isn't big enough for that, so we've got the parking for that as well.
0:21:51 > 0:21:53So not only have they got the parking,
0:21:53 > 0:21:57but other offices along the street have also been converted to flats.
0:21:57 > 0:22:01So there's a precedent here, however it is in a conservation area
0:22:01 > 0:22:05and there is a chance it's listed. But touch wood...
0:22:06 > 0:22:10they're confident that they will get planning permission for the flats.
0:22:12 > 0:22:18Have you thought about the budget and how much you guys are willing to spend on this project?
0:22:18 > 0:22:20Yeah, definitely I wouldn't go into anything without actually
0:22:20 > 0:22:26- thinking through the numbers but we figure about 200,000 development on top of the 150...- Yeah.
0:22:26 > 0:22:31..purchase price for the property so sort of 350,000, maybe up to 400,000
0:22:31 > 0:22:33depending on once we get into the real sort of detail of it.
0:22:33 > 0:22:37So how much do you think you're going to sell each individual unit for?
0:22:37 > 0:22:40Reckon the three one bedroom flats, being really pessimistic,
0:22:40 > 0:22:44probably about 70K each, and the three two bedders at 90K each.
0:22:44 > 0:22:49So you're probably looking at all in, doing the sums, is 480 isn't it?
0:22:49 > 0:22:53- Yeah.- Yeah?- See, he knows, he works in finance, yep that's it!
0:22:53 > 0:22:55And I'm pessimistic.
0:22:55 > 0:23:00So 480, if we can get it done for 400, that's including all costs, VAT, and everything else as well,
0:23:00 > 0:23:05that gives us 20% return and that's worse case scenario, I think anyway.
0:23:05 > 0:23:09And that's not even taking into account the business that you're going to have downstairs.
0:23:09 > 0:23:11That's without the business downstairs, um...
0:23:11 > 0:23:13But to be fair that's going to be a bit of fun.
0:23:13 > 0:23:16That's going to be a bit of fun. It could be a bit of a Brucie Bonus,
0:23:16 > 0:23:20I suppose if we get a little bit extra out of it, but it's not going to be a huge amount.
0:23:20 > 0:23:21I mean a unit like that is not going to rent for much.
0:23:21 > 0:23:24- It's pretty small.- So we might as well have fun with it and do something with it,
0:23:24 > 0:23:26- we've just got to decide. - We just haven't decided.
0:23:26 > 0:23:28- No idea at all yet.- Chaps, you've got an awful lot of work to do here,
0:23:28 > 0:23:32but I do agree it's going to be a really exciting project. Well, done.
0:23:32 > 0:23:37- Thank you very much. - Thank you.- Thanks very much. - Lovely to meet you both. Well, done.
0:23:42 > 0:23:47So hold that front page as we hope to have that breaking story later in the show.
0:23:47 > 0:23:54Ian and Steve are taking on a big, big project, although I think their grand plans make good sense.
0:23:54 > 0:23:59But what about the chance it could be listed and will the council play ball?
0:23:59 > 0:24:02You can find out what happens later in the programme.
0:24:04 > 0:24:10Coming up, I have to keep my wits about me when going upstairs at this Devon cottage.
0:24:10 > 0:24:13There are potentially a problem, look how steep they are.
0:24:13 > 0:24:17In Kent, work goes ahead without the necessary permission.
0:24:17 > 0:24:23Everything we did up until that day was completely at risk, £60,000 to £70,000 at risk.
0:24:26 > 0:24:30But first, in Derby, what did these first time buyers make of their tight deadline?
0:24:30 > 0:24:32- Stressful.- It was, yeah.
0:24:32 > 0:24:34It was stressful.
0:24:38 > 0:24:42We're back in Derby where this terraced house sold at auction
0:24:42 > 0:24:48for £83,000 to property novices, Kim and Dom.
0:24:48 > 0:24:50Been living in this area for about a year.
0:24:50 > 0:24:54- So you bought it for yourselves to live in then?- Yes.- Oh, great.- After we've done the work.
0:24:54 > 0:24:57After you've done the work.
0:24:57 > 0:25:00Kim and Dom were under no illusions about the task at hand.
0:25:00 > 0:25:06They'd planned a total renovation of the place which needed some TLC after years of being let the students.
0:25:06 > 0:25:13With a deadline of three weeks until they had to move out of their rented accommodation, the pressure was on.
0:25:13 > 0:25:17Did the excitement of moving into their very own love nest spur them on?
0:25:30 > 0:25:35Now after ten weeks, we've come back to see how they got on.
0:25:35 > 0:25:42The tired looking sitting room has been beautifully redecorated in light, neutral colours.
0:25:42 > 0:25:48It was out with the dated fireplace and stonework and in with the contemporary furniture.
0:25:53 > 0:26:00They transformed the back reception room and kitchen into a fantastic open plan dining kitchen area.
0:26:02 > 0:26:07Before the renovation, the kitchen was very outdated but has now
0:26:07 > 0:26:11been completely modernised with brand new units and appliances.
0:26:11 > 0:26:16Well, since last time it's changed quite considerably, really.
0:26:16 > 0:26:23We knocked the wall through to make it all open plan and there was a doorway there, changed the layout
0:26:23 > 0:26:26to make as much use of the space as possible,
0:26:26 > 0:26:29took all the old kitchen units out, retiled the floor.
0:26:29 > 0:26:33I'm glad that we spent a bit more on the finishings like the sink
0:26:33 > 0:26:40and the taps just to sort of give it that really clean, fresh look.
0:26:42 > 0:26:45Moving upstairs, the front bedroom has been upgraded
0:26:45 > 0:26:51to a stylish master bedroom with up to date decor and fixtures.
0:26:51 > 0:26:55The transformation continues in the second bedroom.
0:26:55 > 0:26:59It's currently being used for storage.
0:27:00 > 0:27:05Along the repainted and re-carpeted corridor to the back of the house now.
0:27:05 > 0:27:09The old bathroom has been upgraded
0:27:09 > 0:27:14to a very modern look, but ripping it out
0:27:14 > 0:27:16was a tough task for Dom.
0:27:16 > 0:27:21Well, first of all we took the bathroom suite out, then we took the tiles off the wall,
0:27:21 > 0:27:25which was a nightmare because it took all the plaster off so we had to re-plasters.
0:27:25 > 0:27:28So that's when we came up with the idea for the inset shelf
0:27:28 > 0:27:32which I think looks quite good, and then we bought the tiles,
0:27:32 > 0:27:36re-tiled all the floor, took the old radiator
0:27:36 > 0:27:40out and put a towel radiator in and then fitted the suite, really.
0:27:40 > 0:27:43It looks really modern, nice and light
0:27:43 > 0:27:46and we've put the spotlights in as well which makes it a lot brighter.
0:27:46 > 0:27:47So yeah, we're really pleased with it.
0:27:49 > 0:27:53And so they should be, they've turned this into a beautiful home.
0:27:53 > 0:28:00Considering they only had three weeks to get the major work done, it's also been a feat of organisation.
0:28:00 > 0:28:03I think that was the difficult bit, trying to coordinate
0:28:03 > 0:28:07all the contractors to kind of come at different times.
0:28:07 > 0:28:10Obviously one person couldn't start without the other person finishing.
0:28:10 > 0:28:14Luckily I had a bit of time off work which was very useful, but Dominic
0:28:14 > 0:28:16was still working fulltime and then getting back late...
0:28:16 > 0:28:20Evenings and weekends, finishing at two o'clock in the morning sometimes.
0:28:20 > 0:28:23- Yeah.- With all the hard work
0:28:23 > 0:28:27and late nights did they manage to keep focused?
0:28:27 > 0:28:32I think I found it OK, I don't know if you found it a bit stressful.
0:28:32 > 0:28:39It was, yeah, it was stressful, but we've come out of it OK, haven't we?
0:28:39 > 0:28:43- Come through the end of the tunnel. - Yeah.- Just. - THEY LAUGH
0:28:44 > 0:28:49Kim and Dom have put everything into this project.
0:28:49 > 0:28:53The job has been carried out to a high standard,
0:28:53 > 0:28:59and knocking a hole in the kitchen wall was a master stroke,
0:28:59 > 0:29:02but has this impacted on their budget of £8,000?
0:29:02 > 0:29:07- I think all in all it's probably about ten, ten and a half thousand with everything done.- Yeah.
0:29:07 > 0:29:11Which I'm quite happy with really, because we've got such a nice house really, haven't we?
0:29:11 > 0:29:14Yeah. And everyone told us at the beginning, you know, don't expect
0:29:14 > 0:29:17- to stick to your budget, you will go over.- Yeah.
0:29:17 > 0:29:22- So I don't think we've overspent in any area than we could have done. - No. No, not really.
0:29:22 > 0:29:25We probably spent a bit of money on the finishing touches,
0:29:25 > 0:29:28- but that's for us to enjoy really, isn't it?- Yeah.
0:29:28 > 0:29:33And let's not forget the most important finishing touch for Dom.
0:29:33 > 0:29:35- Kim let me have the TV.- Yeah.
0:29:35 > 0:29:39And that was about the only gadget I was allowed really, so I was a bit disappointed, but...
0:29:39 > 0:29:44Oh, well, at least Dom won't miss any of the Premiership action in this house.
0:29:46 > 0:29:50But has it been refurbished to everyone's taste.
0:29:50 > 0:29:53We asked to local property experts for their appraisals.
0:29:55 > 0:30:00The modern style and feel of the fitments really compliment the size of the house.
0:30:00 > 0:30:03The majority of people will like it, will appreciate it.
0:30:03 > 0:30:07On balance, the work that they've done is good, it suits the property
0:30:07 > 0:30:11and if they're looking to live in it they'll get good value.
0:30:11 > 0:30:14The kitchen is very modern, I think opening that up
0:30:14 > 0:30:17into a dining area really works, they've got the lounge
0:30:17 > 0:30:22to cosy down in the evenings, and two good size double bedrooms.
0:30:22 > 0:30:24It stands out from the rest on the street
0:30:24 > 0:30:27with having the lovely bright door and bright windows.
0:30:31 > 0:30:35The couple bought the house at auction for £83,000 and spent
0:30:35 > 0:30:41£10,500 on the refurbishment, so what could it be worth on the market now?
0:30:41 > 0:30:47This is a very popular area of the city, it will sell well for between £105,000 and £110,000.
0:30:47 > 0:30:52To put this property on the market I'd recommend £115,000.
0:30:52 > 0:30:56- We're pleased with that, aren't we? - Yeah, I'm happy with that,
0:30:56 > 0:31:00- definitely. I think we would have made a hefty profit on it.- Yep.
0:31:03 > 0:31:06That's a fantastic result for first time buyers, Kim and Dom.
0:31:06 > 0:31:11Not only have they increased the value of their property,
0:31:11 > 0:31:14they now also have a lovely place to call their home.
0:31:14 > 0:31:17I'm really pleased we did it, yeah.
0:31:17 > 0:31:19We've got a house exactly how we want it.
0:31:19 > 0:31:22Yeah. It's been a little bit stressful, but it has been enjoyable.
0:31:26 > 0:31:29I'm in the south Devon village of Harbertonford.
0:31:29 > 0:31:33It's about three miles south of Totnes within easy reach of Plymouth
0:31:33 > 0:31:37and Exeter, and that's not all this place has going for it.
0:31:37 > 0:31:40Harbertonford falls within a conservation zone
0:31:40 > 0:31:44and has also been designated an area of great landscape value.
0:31:44 > 0:31:52Well, it's certainly a cute little place so will the property I'm here to see live up to expectations?
0:31:52 > 0:31:55Well, it's certainly on a nice little road here
0:31:55 > 0:31:58and you know what, it's looking not at all bad from the outside.
0:31:58 > 0:32:02It's a cottage, good start, had a guide price of 85,000 quid.
0:32:02 > 0:32:04Let's take a look inside.
0:32:14 > 0:32:20Sandwiched between a pastel blue and pastel pink cottage, this place certainly scores on curb appeal.
0:32:20 > 0:32:25OK, so first thing is, is how high is the ceiling going to be and actually it's not too bad.
0:32:25 > 0:32:27You've got this beam going across which gives it a bit of character
0:32:27 > 0:32:30but overall it doesn't feel too cramped, which is good news.
0:32:30 > 0:32:37Basically one big open space, kind of living room area there, and a kitchen which is obviously kind of open plan.
0:32:37 > 0:32:41Given the size of the little cottage I actually think this is a very sensible way to go
0:32:41 > 0:32:44and the units themselves look fairly new, so we like that.
0:32:44 > 0:32:47What we don't like is this wall here.
0:32:47 > 0:32:51Now this is a fairly significant wall in the property and as
0:32:51 > 0:32:55you can see there are lots and lots of indications of damp.
0:32:55 > 0:32:59Damp coming down, all sorts of mould and stuff going.
0:32:59 > 0:33:06Look at that. Yuk. And being such an old property that could be
0:33:06 > 0:33:09kind of expensive and difficult to sort out. Hmm.
0:33:10 > 0:33:12Any potential buyer
0:33:12 > 0:33:17will have to make finding the source of this damp their first priority.
0:33:17 > 0:33:19But what else is on offer?
0:33:19 > 0:33:27So upstairs and before I even go up them I can see these are potentially a problem. Look how steep they are.
0:33:27 > 0:33:31If you were to build this place you'd never get building regulations for stairs like this.
0:33:31 > 0:33:33However, I don't know if there's
0:33:33 > 0:33:36any options in terms of how else you could have these.
0:33:36 > 0:33:41You're going to lose more space and there really isn't the space in the cottage to accommodate an alternative
0:33:41 > 0:33:43so they're pretty much going to have to stay as they are.
0:33:43 > 0:33:47But come up here and more indications of the problems
0:33:47 > 0:33:50with this particular wall and I am a little concerned because this is a
0:33:50 > 0:33:58fairly major beam in the property and because it's going into the wall, you can see again, completely damp there.
0:33:58 > 0:34:01It's actually causing this beam to rot.
0:34:01 > 0:34:04That could be very serious and it's not until you start taking
0:34:04 > 0:34:07this wall apart you're going to discover quite how bad that is.
0:34:07 > 0:34:09But up here, two tiny bedrooms but,
0:34:09 > 0:34:12you know, reasonably light and airy which is quite surprising,
0:34:12 > 0:34:15but helped by these roof lights. Bathroom is up here
0:34:15 > 0:34:17which is good, and it's not a bad size.
0:34:17 > 0:34:21And you know, I like it, it's got some problems, but I really like it.
0:34:21 > 0:34:24A real mixed bag here then.
0:34:24 > 0:34:26There's plenty of charm and character,
0:34:26 > 0:34:29but if you took this on as a renovation project
0:34:29 > 0:34:34goodness knows what you would uncover once you start investigating those damp walls.
0:34:41 > 0:34:47Sadly there's no garden attached to the cottage, but this isn't where the property ends.
0:34:47 > 0:34:51One of the issues you have with cottages like this is storage space,
0:34:51 > 0:34:54however the good news is that the property does come
0:34:54 > 0:34:58with a bit of additional storage, one of these things here, kind of like a little cavern.
0:34:58 > 0:35:02You could use it for wood, your bike, a bit of coal or whatever.
0:35:02 > 0:35:04So all is not lost.
0:35:13 > 0:35:16So it's a quirky and appealing little cottage,
0:35:16 > 0:35:18but does a local property expert
0:35:18 > 0:35:20think its charms can override the problems?
0:35:20 > 0:35:24This particular property, very small but very cute.
0:35:24 > 0:35:27It needs modernisation, refurbishment from top to bottom,
0:35:27 > 0:35:28but could be a lovely little
0:35:28 > 0:35:31property, starter property or investment for letting.
0:35:32 > 0:35:36Once the work is completed to a good standard,
0:35:36 > 0:35:38what could the re-sale value be,
0:35:38 > 0:35:41bearing in mind the guide price of £85,000?
0:35:43 > 0:35:50Once renovated I would expect the property to be put on the market for somewhere in the region of £125,000.
0:35:50 > 0:35:55Harbertonford is a popular place to live so what sort of rental could this place earn?
0:35:55 > 0:35:58Once the property was renovated and if decided to be let out
0:35:58 > 0:36:03you could achieve probably £500 to £550 per calendar month.
0:36:04 > 0:36:10Well, properties in this area don't come cheap, but there is a reason for that, it is a lovely place to live,
0:36:10 > 0:36:15and here's your chance to get a characterful place for not too much money.
0:36:15 > 0:36:18Let's see who fancied it when it went under the hammer.
0:36:18 > 0:36:22Lot 38, character two bedroom, two-storey, mid-terrace cottage,
0:36:22 > 0:36:25who will say to us 75 and we'll kick it off?
0:36:25 > 0:36:2775, who will say it? 75? Nobody want it at 75?
0:36:27 > 0:36:3175, thank you, 75.
0:36:31 > 0:36:33That's the way, that's how it works. At 75. At 75.
0:36:33 > 0:36:36At £75,000 then for the first time.
0:36:36 > 0:36:47At £75,000, 78 on the right. At 78, at 78, at 78, at 78, up to you.
0:36:47 > 0:36:52At 78, 80, at 80, at 80, at 80, like tennis, at 80, 82, 84, 86.
0:36:52 > 0:36:5786, now it's gathering pace.
0:36:57 > 0:37:00Say 90, blow him out of the water, look, that's the way.
0:37:00 > 0:37:0488? 86 I've got then.
0:37:04 > 0:37:0686, at 86, at 86, at 86.
0:37:06 > 0:37:13OK, looking left. 87, 87, 87, 87.
0:37:13 > 0:37:16At 87, 88 or not?
0:37:16 > 0:37:1987 first time then.
0:37:19 > 0:37:21At 87 second time.
0:37:21 > 0:37:23At 87, are you sure and done? Last chance then.
0:37:23 > 0:37:25At 87, you're up, 88.
0:37:25 > 0:37:28Oh, hell's bells. 88, did you get that?
0:37:28 > 0:37:35You got that, 88. At 88, at 88, at 88, at 88, don't scowl at me, it's him over there that's caused this.
0:37:35 > 0:37:41At 88 once, at 88 twice, at 88, here we go, third and last time,
0:37:41 > 0:37:45here we go, are you all out? At 88. Sir, well done, 88.
0:37:45 > 0:37:48The successful bit of £88,000
0:37:48 > 0:37:54came from friends Mike and Nathan who both live in the village.
0:37:56 > 0:38:01Mike has retired from the oil industry and Nathan's a builder.
0:38:01 > 0:38:06They've recently teamed up to do some property developing together and this is their first joint project.
0:38:07 > 0:38:11- Good to meet you both. Congratulations.- Thank you.- Cute little cottage.
0:38:11 > 0:38:15- Yeah.- That wasn't that enthusiastic! HE LAUGHS
0:38:15 > 0:38:20- There's work to be done.- Yeah. - There is work to be done, but why did you want to buy it?
0:38:20 > 0:38:26Partly because it was so close to us as a first project. We kind of knew the history of it and knew what was
0:38:26 > 0:38:32needed to be done and Mike did the research on what it was worth and I
0:38:32 > 0:38:35- left it to him after that.- We've been thinking about it for some while and with it being
0:38:35 > 0:38:38on our doorstep it just made sense to go for it.
0:38:38 > 0:38:41Tell me about you two and the collaboration, what's happening?
0:38:41 > 0:38:44- Well, we've been friends for, I don't know, five or six years?- Yeah.
0:38:44 > 0:38:49We're neighbours for a long time, we get on really well and we've talked,
0:38:49 > 0:38:52I've talked about doing up something for a long time, I've been building
0:38:52 > 0:38:58for a while now, but couldn't afford to do it on my own so we kind of formed a collaboration.
0:38:58 > 0:39:00And I retired at the end of last year so I needed something
0:39:00 > 0:39:04to keep me off the streets so that's how it all kicked in really.
0:39:04 > 0:39:09If Mike's looking for something to keep him out of trouble he's certainly got his work cut out here.
0:39:09 > 0:39:14Mike, tell me exactly what you're going to do to sort this place out.
0:39:14 > 0:39:19OK, well the biggest issue is the damp in this wall at the back, rectifying that situation.
0:39:19 > 0:39:24Once we've overcome that it's just a case then of going through the place, sprucing it up.
0:39:24 > 0:39:29I don't think there's much more will be needed to bring it up to a reasonable level.
0:39:29 > 0:39:32So what's the budget for the works?
0:39:32 > 0:39:35- We think about ten. - Ten we were working on.
0:39:35 > 0:39:40Hopefully we'll get everything done in that, hopefully it will be less than that, but you never know until
0:39:40 > 0:39:42you start raking around in the wall what you're going to find.
0:39:42 > 0:39:44And the timescale?
0:39:45 > 0:39:49- Well, if I say two weeks I think that will be pushing it but I think that...- Two weeks?!
0:39:49 > 0:39:55Yeah, I reckon we could do all this wall fairly quickly and then spruce it all up.
0:39:55 > 0:39:57- But I think we'll say a month.- Yeah.
0:39:57 > 0:39:59Wow.
0:39:59 > 0:40:03It's just as well Nathan has got experience in the building industry
0:40:03 > 0:40:10as that's a tight timescale and I'd be very nervous about what's lurking under those damp patches.
0:40:10 > 0:40:13That could affect the budget and the schedule and,
0:40:13 > 0:40:17of course, there are more quirks in this property that need looking at.
0:40:17 > 0:40:21Now what about the stairs, because they're not ideal but I can't
0:40:21 > 0:40:23- necessarily see a way of improving it given the size.- No.
0:40:23 > 0:40:27Because we're just renovating we haven't got to comply with the building regs.
0:40:27 > 0:40:30If we did we'd have to move and make a bigger hole here and
0:40:30 > 0:40:34you'd lose landing space and then you'd lose space down here as well.
0:40:34 > 0:40:37Somebody suggested a spiral but there's not enough room for that
0:40:37 > 0:40:41- really so I think they might have to stay as they are.- Which is a shame.
0:40:41 > 0:40:44As this is an investment for them, their first thought
0:40:44 > 0:40:47is to sell the cottage when the work is finished,
0:40:47 > 0:40:50but they're also open to the idea of renting it out.
0:40:50 > 0:40:54Well, we thought it would bring a reasonably good rental income.
0:40:54 > 0:40:57We know the previous people who were renting it, we know the rent
0:40:57 > 0:41:00they were paying for it even in this condition.
0:41:00 > 0:41:03- What was that?- 500.- Right.
0:41:03 > 0:41:08So you know if you rented a place in this condition for 500 then there's some rental value there.
0:41:08 > 0:41:10And how is it going to work financially between you?
0:41:10 > 0:41:13Have you bought this jointly, are you going to share any profits?
0:41:13 > 0:41:16- Yes.- Yeah, 50:50. - So that will be the formula
0:41:16 > 0:41:20- moving forward.- Yeah. We'll see how we get on with this
0:41:20 > 0:41:23one and then hopefully we'll do something together again.
0:41:23 > 0:41:26- Well, listen, good luck with it all, we wish you all the best.- Thank you.
0:41:26 > 0:41:28We look forward to see how you get on.
0:41:28 > 0:41:31- OK.- Thank you.- Thank you. - Well, I think Nathan
0:41:31 > 0:41:37and Mike have chosen well for their first project together and they are under no illusions that the big issue
0:41:37 > 0:41:42here is that main wall and all the damp issues therein.
0:41:42 > 0:41:45What are they going to unearth when they start digging around?
0:41:45 > 0:41:48You can find out later in the show.
0:41:51 > 0:41:54So, did our fearless developers emerge victorious?
0:41:54 > 0:41:57Or did they flounder in the shallow end of the property developing pool?
0:41:57 > 0:42:00Let's find out!
0:42:00 > 0:42:05In Sittingbourne, Kent, right on the High Street were the old offices of the local newspaper.
0:42:05 > 0:42:10With the journalists long gone there was just a large, empty space left.
0:42:10 > 0:42:16But local lads Steve and Ian thought the place was right up their street and bought it for just £150,000.
0:42:21 > 0:42:24What are you going to do with all this space?!
0:42:24 > 0:42:29The shop downstairs has to stay as a commercial property so that has to stay as retail, but
0:42:29 > 0:42:31we're going to convert it if we can get it through
0:42:31 > 0:42:35planning, turn it into flats and we should, fingers crossed, get five or six flats here.
0:42:35 > 0:42:38It's three two bedders and three one bedders.
0:42:38 > 0:42:42Eight months on, have things gone to plan?
0:42:42 > 0:42:46By the looks of it the small shop space is now occupied
0:42:46 > 0:42:50and bringing in money, but what about the large office space?
0:42:50 > 0:42:54Well, there are signs things have changed, though not quite in the way I had envisaged.
0:43:04 > 0:43:08It looks like it's gone from press to press ups.
0:43:15 > 0:43:17And from flats to fitness.
0:43:17 > 0:43:20How did that work out? What's the story here?
0:43:20 > 0:43:24We need Steve and gym owner Shelley to give us the headlines.
0:43:24 > 0:43:28Well, since last time you came, the idea was to convert the whole building into flats.
0:43:28 > 0:43:32After we started going through that process, I actually joined a gym, met Shelley.
0:43:32 > 0:43:39Steve's very like-minded business-wise and I explained to him I was looking for a bigger premises.
0:43:39 > 0:43:42And I just said, I've got a place that might be perfect for you, she
0:43:42 > 0:43:46came down and had a look and it's all spiralled from there, really.
0:43:46 > 0:43:51It was perfect because we just worked together, rather than me going and finding the building and then having
0:43:51 > 0:43:56to change it to make it suitable we worked with each other trying to you know, saying what I thought
0:43:56 > 0:43:59was best and obviously what could be done building-wise.
0:43:59 > 0:44:04So we just changed over to that, so we changed design, went back to the
0:44:04 > 0:44:08architect, re-laid the areas out and ended up with what we've got now.
0:44:08 > 0:44:14That seems to be the ideal solution for both parties in the short term
0:44:14 > 0:44:17but in the long run, Steve hasn't given up on the idea of flats.
0:44:22 > 0:44:25These are the plans the architect came up with.
0:44:25 > 0:44:31After we obviously won the property, we gave him the originals and he then split them up into seven flats.
0:44:31 > 0:44:36We ended up with two bedsits, I think it was one or two single bedders and some two bedders.
0:44:36 > 0:44:41And what we basically did was after this was designed and we decided to go for the gym option, we used
0:44:41 > 0:44:45this as a blue print and from that blue print we could work out where the structural openings were
0:44:45 > 0:44:50going to be, where the structural alterations were going to be and then use them for the gym layout.
0:44:53 > 0:44:57As the kitchens and showers are now in place, should they go for the
0:44:57 > 0:45:01flat option at a later date they'd be able to hit the ground running.
0:45:01 > 0:45:07They also made a headstart on the gym, but that meant taking quite a gamble.
0:45:07 > 0:45:12We didn't actually get planning application approval until two weeks before she was due in,
0:45:12 > 0:45:17so everything we did up until that date was completely at risk, which was a big risk.
0:45:17 > 0:45:20You know, we've put in £15,000 worth of air conditioning.
0:45:20 > 0:45:22All right, the roof maybe had to be re-done anyway but all the
0:45:22 > 0:45:28structural alterations, a lot of the structural support works, so we've probably spent 60, £70,000 at risk.
0:45:28 > 0:45:31Until we got that final bit of paper from the council saying
0:45:31 > 0:45:37yes, you have the approval, that was the risky bit and there were a few sleepless nights, but not too bad.
0:45:37 > 0:45:39- I didn't bother telling Ian. - HE LAUGHS
0:45:39 > 0:45:44Speaking of Steve's business partner Ian, where is he?
0:45:49 > 0:45:55Regarding my business partner, Ian, he's more of a silent partner, shall we say.
0:45:55 > 0:45:58This is my expertise, I've got my own building firm, this is what we do day in, day out,
0:45:58 > 0:46:02so he's basically prepared to go along with whatever I say.
0:46:02 > 0:46:05He's more the finance guy really, he's more on that front.
0:46:05 > 0:46:09So I bang ideas off Ian like rent incomes and stuff like that.
0:46:09 > 0:46:14Regarding the construction, the cost of the build, Ian really didn't care
0:46:14 > 0:46:18it was just a case of, you just do it, let me know how much I've got to pay and we'll go from there.
0:46:18 > 0:46:23So the only working out Ian was doing was on the figures.
0:46:23 > 0:46:27But how many pounds did Steve rack up?
0:46:27 > 0:46:29Initially, probably about 50, 60K to do the conversion.
0:46:29 > 0:46:36With engineers fees, architectural fees and everything else we're probably looking at all in about the
0:46:36 > 0:46:39110 mark, something like that we've spent on the building.
0:46:39 > 0:46:46They paid £150,000 for the building and that £110,000 budget takes their
0:46:46 > 0:46:52spend to around £260,000, but it's already paying its way.
0:46:52 > 0:46:56Rental return we're looking at on this premises, we've basically got
0:46:56 > 0:47:01the gym upstairs which we've agreed our contract for 40,000 a year.
0:47:01 > 0:47:03And then we've got the shop downstairs as well which we've
0:47:03 > 0:47:07been able to sell self-contained which is rented out separately.
0:47:07 > 0:47:11We're probably getting 44K here for the whole unit.
0:47:11 > 0:47:14That's fantastic.
0:47:14 > 0:47:18£44,000 a year from a total investment of around £260,000.
0:47:18 > 0:47:23Keep that up and the building will pay for itself in just six years.
0:47:23 > 0:47:28What does a local commercial property expert think about what Steve and Ian have achieved here?
0:47:28 > 0:47:32I think it has been excellent that an investor has come in and been
0:47:32 > 0:47:38able to put in a gym and get an immediate return within one year to such a high extent.
0:47:38 > 0:47:43Steve and Ian have invested around 260,000 in this shop and office space.
0:47:43 > 0:47:49Has converting it to a gym enhanced or decreased the value here?
0:47:49 > 0:47:55When we look at now we've got rental income coming in from two different sources, a gold shop, retail outlet
0:47:55 > 0:47:58plus a gym which is a long-standing business, so it's not a new business
0:47:58 > 0:48:02coming in, the values can quite easily double to 400 to 450.
0:48:03 > 0:48:07But is this really the way forward?
0:48:07 > 0:48:13Are they missing out on a bigger payday if they took the option to turn it into flats?
0:48:13 > 0:48:19In terms of one or two bedroom flats we're looking at between £46,000 to £50,000 coming in and this is
0:48:19 > 0:48:23achieving slightly more with one tenant rather than having to deal
0:48:23 > 0:48:26with seven tenants, and a business person which I think is excellent.
0:48:26 > 0:48:29So the building has increased in value,
0:48:29 > 0:48:34it's bringing in a significant income and Steve and Ian could still turn it into flats at a later date.
0:48:34 > 0:48:38That's a good news story if I ever heard one.
0:48:38 > 0:48:42We were lucky finding someone who wants to use it as a gym, obviously,
0:48:42 > 0:48:46and overall Ian and myself were really, really happy with this return we're getting on it.
0:48:47 > 0:48:51And you have to say, in these tough times if you have the opportunity
0:48:51 > 0:48:56to get an investment working for you immediately, you'd be daft not to jump at it.
0:49:05 > 0:49:09We've returned to Harbertonford near Totnes in Devon.
0:49:09 > 0:49:12This two-bed mid-terrace cottage had sold at auction for £88,000
0:49:12 > 0:49:19to friends Nathan, a builder, and Mike who's retired from the oil industry.
0:49:19 > 0:49:22The major problem was the serious damp affecting the back wall
0:49:22 > 0:49:27and the A-frame beams resting on it which had started to rot.
0:49:27 > 0:49:32But despite all this, the pair were pretty confident about how long the work would take.
0:49:32 > 0:49:37- Well, if I say two weeks I think that will be pushing it but I think that...- Two weeks?
0:49:37 > 0:49:42Yeah, I reckon we could do all this wall fairly quickly and then spruce it all up.
0:49:42 > 0:49:46- But I think we'll say a month. - Yeah.- Wow.
0:49:52 > 0:49:56So, not two weeks but two months later, what's the update?
0:50:09 > 0:50:12If these walls could talk they might be saying, phew.
0:50:12 > 0:50:17It's looking much better, but eight weeks on the house is still not finished.
0:50:17 > 0:50:21Some areas have been prepared for decorating but a new
0:50:21 > 0:50:24kitchen and bathroom have yet to be installed.
0:50:24 > 0:50:30To be fair the timescale stretched, because Nathan was finishing another project,
0:50:30 > 0:50:34but was that damp a bigger problem than they anticipated?
0:50:34 > 0:50:38Well, there were a few scary moments when I opened up the ceiling downstairs because there was a
0:50:38 > 0:50:41big bulge in the ceiling downstairs and I opened it up and I thought
0:50:41 > 0:50:44oh, my God, because all the joist ends were all rotten
0:50:44 > 0:50:50and then I found out how much damp there was in the wall because the paint was hiding a certain amount.
0:50:50 > 0:50:55So there was definitely a moment where I thought oh, my god, this could be the money pit.
0:50:55 > 0:50:58Probably easier to make a water feature out of the wall,
0:50:58 > 0:51:02there was that much water coming down, than to try and repair it,
0:51:02 > 0:51:05but that's not what we're here for, so we've now
0:51:05 > 0:51:09done all the major work, all the fundamental works and the wall is drying out quite nicely.
0:51:13 > 0:51:18Tracking down the source of the damp was the first job for Mike and Nathan.
0:51:18 > 0:51:22That led them up to the skylight and onto the roof.
0:51:25 > 0:51:32The old television aerial on the chimney had split the render over many years during bad weather.
0:51:32 > 0:51:35Well, we've had to redo the chimney, because this was the main problem.
0:51:35 > 0:51:40It was leaking like a sieve, water going all the way down through.
0:51:40 > 0:51:43So we took everything back to basics.
0:51:43 > 0:51:49We took all the render off, we took off the top of the chimney and I've had to put new lead in,
0:51:49 > 0:51:52in certain places to try and stop water coming in.
0:51:52 > 0:51:57And then we've re-rendered, built a new chimney pot on.
0:51:57 > 0:52:03Underneath this section here where the new chimney meets the old existing chimney we've got a big
0:52:03 > 0:52:11sheet of lead now so any moisture that does breach here should drop off so that's hopefully fixed it.
0:52:11 > 0:52:16Now the source of the problem is fixed their attention has turned to those beams.
0:52:19 > 0:52:23Well, the beams are rotten on the ends, the A-frame beams.
0:52:23 > 0:52:27Two of them aren't too bad so we'll just put a new piece of timber alongside them and just make them
0:52:27 > 0:52:32look like one big chunky one, build them into the wall so they'll be structural, they'll be fine.
0:52:32 > 0:52:34The main one in the middle needs a bit more.
0:52:34 > 0:52:38I think we'll probably put steels alongside that one
0:52:38 > 0:52:41because it's got to support the main structure of the roof.
0:52:41 > 0:52:48Structurally the cottage is definitely on the mend, so now they can concentrate on the interior.
0:52:48 > 0:52:50But what about that steep staircase?
0:52:50 > 0:52:54They've investigated building a new stairwell in line with modern
0:52:54 > 0:53:00regulations but at £1,500 they want to finish the rest of the property before deciding if it's worth it.
0:53:00 > 0:53:08Mike is keeping a tight hold on the purse strings.
0:53:08 > 0:53:12I look at things and say, I'd like to do that, and Mike says, I don't think we need to do that.
0:53:12 > 0:53:18So it does help having somebody else's ear to sort of rein me in a little bit, yeah.
0:53:18 > 0:53:23Well, at the end of the day we did a great budget and from time to time it would be nice to do
0:53:23 > 0:53:28a Rolls Royce job. Unfortunately when you're working within a budget then that's
0:53:28 > 0:53:34not always possible, but he does like to do quality work so we have to tread on his fingers sometimes.
0:53:34 > 0:53:40Good for you, Mike, reining Nathan in, but it does seem the collaboration is working.
0:53:41 > 0:53:44Yeah, I get stuck in, he stands there looking at me sometimes
0:53:44 > 0:53:47because he's not sure, obviously he's not from a
0:53:47 > 0:53:50building background, but I don't do the finances,
0:53:50 > 0:53:55Mike does the finances side so yeah, we work well together.
0:53:55 > 0:54:00With the renovation well underway and the team functioning, let's hear how the finances are going.
0:54:00 > 0:54:06We budgeted 10,000 to rectify the place, that's without our time.
0:54:06 > 0:54:09We've spent so far 4,500.
0:54:09 > 0:54:14We've got one or two things that we need to buy still so it'll bring us up to around the £7,000
0:54:14 > 0:54:19which will still leave us a few shillings in the pot if we need to do anything else.
0:54:19 > 0:54:23Looks like Mike's got it all under control.
0:54:23 > 0:54:28Now we need to find out if the work they are putting in will translate into a successful investment.
0:54:28 > 0:54:33We asked along two local property experts to hear what they thought.
0:54:33 > 0:54:38This type of character cottage will have an immense appeal to many different types of buyers.
0:54:38 > 0:54:40It could be people looking for a second home, locals who
0:54:40 > 0:54:43need a first purchase, or indeed buy to let people.
0:54:43 > 0:54:48It would sell brilliantly. There is a lot of demand for character cottages,
0:54:48 > 0:54:52the village is a popular village, it's got a thriving community.
0:54:52 > 0:54:56Cottages like this in the area are very popular for professional couples.
0:54:56 > 0:54:59It's commutable to Plymouth city centre and obviously a
0:54:59 > 0:55:04lot of towns in the vicinity, so professional couples are going to be the main marketplace.
0:55:04 > 0:55:06The property needs a couple more weeks of work
0:55:06 > 0:55:11to complete the renovation so Mike will need those extra pennies.
0:55:11 > 0:55:14But what about the staircase? Could a new one add value?
0:55:14 > 0:55:20The stairs were an issue and I must admit by moving them it would help and make it easier to obviously
0:55:20 > 0:55:26access the first floor. However, by the cost and involvement and time it's probably not worth doing.
0:55:26 > 0:55:28Well, that's one saving to be made then.
0:55:28 > 0:55:31Let's hear about re-sale values.
0:55:31 > 0:55:37Mike and Nathan estimate a total spend here of £98,000 including their 88 grand purchase price.
0:55:37 > 0:55:39What could it be worth?
0:55:39 > 0:55:43Once the property is fully renovated to a reasonable standard you could
0:55:43 > 0:55:48expect to achieve somewhere between £120,000 and £125,000.
0:55:48 > 0:55:51If I was to market the property in the finished condition with a lot of
0:55:51 > 0:55:56character, I would be looking at a figure of between £145,000 and £150,000.
0:55:56 > 0:56:01I think the first one of 120, 25 was probably the figure we've been
0:56:01 > 0:56:04working to so the other one is a very pleasant surprise.
0:56:04 > 0:56:06Yeah, that's good to hear the higher one.
0:56:06 > 0:56:09There's quite a bit of room for some profit hopefully there.
0:56:09 > 0:56:16Come on guys, don't get too excited! That is a pre-tax profit of £50,000.
0:56:16 > 0:56:17That is good. We haven't sold it yet.
0:56:17 > 0:56:20You don't count your chickens do you, until they've hatched!
0:56:20 > 0:56:23The other option would be to put it on the rental market.
0:56:23 > 0:56:26Two bedroom cottages, especially in these sort of backwater locations,
0:56:26 > 0:56:31would fetch somewhere between £600 and £650 per calendar month.
0:56:31 > 0:56:35We'd be looking a rental of, say, of £650 per calendar month.
0:56:35 > 0:56:37- Pretty good. - I think that's pretty good.
0:56:37 > 0:56:42- It's probably slightly above what we were thinking so that's good.- Yeah
0:56:43 > 0:56:49The effort they've put in to their first joint investment project is clearly paying off.
0:56:49 > 0:56:52So are they planning to do another renovation together?
0:56:52 > 0:56:54Yeah. I would happily work with Mike. We've done very well.
0:56:54 > 0:56:58If he asked me nicely, I'd consider it. Yeah, I'm sure we will.
0:56:58 > 0:57:01Yeah, we work well as a team. It was good.
0:57:02 > 0:57:05Not enough for you? Well, there's plenty more.
0:57:05 > 0:57:07Join us next time for more Homes Under The Hammer.
0:57:07 > 0:57:09- We'll see you then.- Good bye. - Good bye.
0:57:25 > 0:57:29Subtitles by Red Bee Media Ltd
0:57:29 > 0:57:33Email subtitling@bbc.co.uk