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The value of homes can go down as well as up.
So it pays to buy at the right price.
One way to do that is to buy your home under the hammer.
If you'd like to have a go at buying at auction, now could be the perfect time to start.
The market is always changing so you have to judge the best time to buy.
-Today's bidders put their money on the line.
-Here's what they bought.
'In Cheshire, there's big scope for this little bungalow.'
It's a good size space. Overall, I'm loving this place.
'I need some extra space in this London semi.'
The answer to this problem may lie the other side of this wall.
'I look at this Victorian mid-terrace in Derby, and wonder if it's all it claims to be.'
How the heck you call THAT a third bedroom?
'These properties have been sold.
'We'll find out who bought them and what they paid when they went under the hammer.'
'I'm in the Cheshire town of Nantwich.
'It's steeped in history, with the buildings to prove it.
'This beautiful place is experiencing a renaissance,
'as independent shops and cafes
'have been creeping in, attracting new admirers.'
Nantwich is a desirable place to live and property prices are quite high as a result.
When you hear about a two-bedroom bungalow with a guide price of 115,000 quid
you think it's got to be worth a lot more.
It looks a bit dated outside. Let's see what it's like inside.
'It's not just dated, it looks pretty unkempt, too.
'It's been empty for over two years.
'That doesn't mean it doesn't have potential, though.'
So, what have we got? Wow!
Nice entrance! A really wide hallway.
And a parquet floor. I'd love to see that sorted out.
Two bedrooms. That's the first one. Parquet floor through there.
It's huge and it's got an open fire. You've got the bathroom there.
The second bedroom. It's interesting both bedrooms are on the front.
Both got open fires. Really nice.
Through to the rear, where the kitchen is. Good size.
You've got a pantry. I mean, it's terribly in need of some work!
Wants completely stripping out, but it's a good size.
The whole bungalow... It's really surprising.
Through here, you've got a utility area.
A place where coal used to be stored.
Fantastic for your washing machine. Views onto the garden.
# Fantastic day! #
'Looking past the rundown state,
'there's plenty of space.
'Also, the bathroom's a decent size, though obviously needs modernising.'
Through into a living room area. Not a bad size. I like the open fire.
But, uh-oh! What is going on here?
That is textbook damp. Look at the mould that's growing on there.
Mustn't get too enthusiastic! Be nice in a biology class.
In a house, it's not ideal. What's causing it?
Something to do with this bay window. I need to go outside.
'Damp is a common problem with houses that have been unoccupied.
'If you can find the cause,
'you can usually find the solution.'
It's not exactly rocket science.
It looks like the covering over that bay window has gone.
My guess is it was lead and it's been stolen.
The cast iron guttering has also gone.
It's not going to be that expensive to sort out.
Replace the covering and that should solve that problem.
While I'm out here, here's a nice bonus. A garden!
Fantastic. It needs sorting out, but it's a good size space.
Overall, I'm loving this place.
'You could extend the bungalow, making it a three-bed.
'Or you could knock it down and put up a couple of new-builds.
'I asked along a local estate agent to hear his thoughts.'
An idea would be to knock the property down
and build a pair of semi-detached houses on here
for greater return on my investment.
'If you wanted to instead restore it to its former glory,
'it could rent for up to £625 per month.
'But how much could it sell for?'
If it was kept as a two-bedroomed detached bungalow,
I would recommend it going on the market in the region of £200,000.
There is room to expand it into a three-bedroomed bungalow, with land to the rear of the property.
If you were to do that, I would recommend you put as a resale value
somewhere in the region of £240,000 to £250,000.
What a surprising little property this turned out to be.
It's a bungalow with lots of options.
Extend. Knock it down and build something in its place.
I think it's a great one to go for. Who fancied it when it went under the hammer?
Lot number 7. Nantwich.
80,000, going to say.
80 I'm bid. 85 is it now? 85 it is.
£90,000. At £90,000. 95?
£100,000. 105? 105. 106?
107. 108. 109.
110. 111. 112.
113. 114. 115.
116. 117. 118. 119.
Yeah? 122. 123.
125. 126. 127. 128.
129. 139. 131.
134. 135. 136. 137.
Yes? 138. 139.
Shaking his head. With you, sir, at 141,000.
At 141,000 for the first time.
At 141 for the second time.
Third and final time at £141,000...
It's your lot, sir. Well done.
'The successful bid of 141,000 was made by local entrepreneur Tony.
'I wanted to find out why he paid £26,000 over the guide price.'
I fell in love with the property.
Bungalows are highly sought-after in the area, which made it an attractive proposition.
When I saw the guide price, it was one I was very keen to get.
So you bought it for you to do up, or what?
It's basically part of a 20-year plan.
I'm buying a number of properties in the area.
I've got one very close by. This is my second property.
I'm looking to rent it out so it'll be refurbished to a high standard.
-What's your experience?
-In terms of property, very little, to be fair.
-What do you do?
-I run a computer company.
-We make computers that make special effects for films.
I stepped away from it four years ago. It's run for me now.
It's a small business.
Just to follow a passion, really,
-I became a professional dance teacher as well.
-A dance teacher? Fantastic!
-It keeps me fit.
-What kind of dancing?
The main one I do is ceroc, a modern French jive,
probably the most popular partner dancing in the world, and great fun.
'Must give it a go some time!
'Tony's 20-year plan is to make enough money from development
'for a pension when he retires.
'This is his second property and I was intrigued to know what he was going to do with it.'
The kitchen, as is, is going to be converted into a third bedroom.
We'll have three large double bedrooms.
The lounge at the moment is fairly small.
We're going to be creating an extension at the back
with a pitch roof coming away from the property.
Then that will link in to the extension.
-The lounge will be 21, 22 foot long.
By about 17 foot wide, in an L-shape.
Which is proportionate to the bedrooms in the property.
Then the utility room, as is, will become the new kitchen.
'The plans sound good but I wonder if Tony thought about knocking it down and rebuilding.'
It's something I looked at and had a few tentative enquiries to the planning department.
I felt that access was going to be quite restrictive.
It is a bungalow and they are in high demand.
I felt that it was probably safer, as it's my first project,
to stick with what I've got.
At least I've then got a property which I know is desirable.
'That's pretty sensible, really.
'Tony paid 141,000 for this bungalow
'and has a further budget of 40,000.
'He discovered that he can get a grant of £15,000 from the council.'
The property's been empty for more than two years.
It makes me eligible for the landlord regeneration scheme.
'The council takes charge of the lettings for five years.
'They give Tony a list of tenants,
'and the council pay the market rental rate.
'Sounds a good idea.
'How long does he think the renovation is going to take?'
-Six to seven weeks.
-What? Including the extension?
I paid cash for the property. The longer it's empty, in theory, I'm losing money.
But I'm not on a strict deadline. If it takes ten weeks, that's fine.
'Tony seems quite relaxed about the timescale, but was he just as laid back at the auction?
'It was the first time he'd bought under the hammer.'
It was great! Fantastic! I thought I'd be nervous.
The bidding was going back and forth.
My head was like a nodding dog! Must have looked ridiculous!
-I'm delighted you got it. Congratulations.
-Thanks, Martin. God bless you.
I think Tony picked up a really good property for the second one in his 20-year plan.
It is great to set your sights and have a goal like Tony has.
In terms of what he's going to do, that extension, is it worth doing?
I'm not sure, and certainly his timescale is a little optimistic.
You can find out if it'll be a slow waltz
or a quickstep to success for Tony later in in the show.
'I'm in southeast London today, in Plumstead,
'a few miles from Woolwich,
'to see a property that's typical of the area.
'It's a 1930s three-bed semi
'with off-street parking and a sizeable garden.
'It sits right on the edge of the conservation area Plumstead Common.'
That may or may not have implications for doing this house up. We'll talk about that later.
It's got three bedrooms. The guide price was 160,000 to 165,000.
The windows look like they're brand new.
I love the period arch and those bays.
Will there be any surprises inside? Let's take a look.
'This could be a typical three-bed semi in need of modernisation.
'You know that deal - new kitchen, bathroom, redecoration throughout.
'Auction properties of this age usually need all of the above,
'but that double glazing gives me positive vibes.'
# ..Sweetest feeling Baby, the sweetest
# Sweetest feeling... #
Now...that IS a surprise.
It's like the decorating fairies have been in
and completely revamped this place.
You can smell fresh paint. It's been decorated.
There's no banister, so that's dangerous as it is.
A big store cupboard in there
and a very disappointing kitchen.
This kitchen is tiny, not big enough for a three-bedroom house.
But I have a feeling that the answer to this problem may lie the other side of this wall.
A-ha! As I suspected!
Whoever had this home previously has taken this wall out
to make these two rooms one - the lounge here, the dining room here.
I wouldn't have taken this wall out. I'd put this wall back up.
I would take this wall out here to really open the kitchen up.
You've got room for a lovely big breakfast table,
access into the garden, then this will be a fantastic family home.
As it stands at the moment, that kitchen is too small.
'Before any walls are removed, check they aren't supporting ones.
'In this case, I don't think that's a problem.'
Let's have a look upstairs. We've got a bathroom through here.
That does need an update.
You know I said it's all been recently decorated?
On close inspection, it just looks as though all the rooms have had
the old-fashioned wallpaper painted, the tiles have just been painted.
You've got a bedroom here.
Really nice bedroom to the front and, typically for a 1930s house,
you've got the box room.
You can't really call it bedroom.
It would be OK as a nursery or a good size office space.
You know what? It's a cool house.
Big garden, off-street parking - for the price, you've got a good one.
'The space that's lacking in bedroom three
'is more than made up for by the huge back garden.'
There's no getting away from it. It's a wild garden out here.
Lots of junk you'd need to clear out.
You've got about 120 foot of space to play with so it's quite exciting.
I would get rid of this old shed. You've got a garage up the top.
Once it's been cleared out, maybe lay some patio, a pergola overhead.
You've got the makings of a really nice family garden.
'An extension could be an option,
'although there may be issues being so close to that conservation area.
'Let's see what a local estate agent says.'
Plumstead conservation area is a quarter of a mile from here.
It's an area of listed properties
where you can't change the exterior without permission from the council.
These properties are not listed. It's primarily the period houses.
These are 1930s houses. It doesn't apply to these, but this is a very sought-after location.
'The sky's the limit, then,
'but a sensible investor would keep their feet on the ground.'
In my opinion, there needs to be spent only £10,000 to £15,000.
The kitchen and bathroom need to be replaced, wiring needs to be done.
Extending would be viable for the future.
I don't think you'd get an immediate return.
It's a good configuration. 1930s houses are well-built.
A solid property and a very desirable road.
'Once it's completed, will the value of the property be as desirable?'
If this property was refurbished,
I would place it on the market between £225,000 and £230,000.
The going rate for rental properties would be between £900 and £950 per calendar month.
This house is ready to move into. All it needs is carpets and sorting out that kitchen.
You could spend cash on an extension but you might not get your money back.
Let's see who placed that winning bid at the auction.
Good looking semi-detached house. Needs small improvement. Good value.
Bid me at 150. Got to be worth that.
I should think so, too. 150 at the back.
152. And four. And six.
156, sitting down. 158? 160. Knows its value. 160.
At £160,000. 162, in a fresh place.
164? It's against you. 165. And eight?
168 I'm looking for. 168 I have.
And 70? 170.
And two? 172. And five?
175. And eight?
178? 178. And 80, if you like?
At £178,000 I've got.
180 I'm looking for. Are we all done then, at 178?
If you're sure you're all done.
It's yours, sir, for 178,000.
And your card number is 8481.
'The successful bid of £178,000 was placed by husband and wife
'David and Stephanie.'
You must be so pleased. Did you view this property prior to the auction?
No. We didn't get the chance to have a viewing.
We made a lot of assumptions from the catalogue.
We read it in detail and had a good look at the legal stuff.
So we knew that it was OK.
It was remortgaged two years ago so it should be structurally sound.
'That wasn't their only stroke of luck.
'The photo in the catalogue was an old one
'and there had since been unexpected improvements.'
Pictures can be deceiving.
They can, but what we got was better than what's in the catalogue.
Exactly! And usually it's the other way round! You guys got lucky!
The picture in the catalogue isn't the front of the house today.
No. A new front door, double glazing and it's been painted internally.
How did you feel when you opened the front door and walked inside for the first time?
It smelled of fresh gloss paint and looked fairly straightforward.
New kitchen, new bathroom, no problem at all.
'David was made redundant from his job in communications nine years ago
'and the couple have made their living renovating properties since.'
-Did you feel happy that you had bought a good solid house?
We were really pleased. Everything stacked up.
There's a nice little profit there if we want to take it.
'Helping them with everything from legal advice to demolition
'is their old friend, Janet.'
She's required for everything.
-Just to make sure...
-Particularly sledgehammering down that wall!
-Will Janet be involved in knocking walls down?
-She's in charge.
She will be taking this wall down with her sledgehammer.
'I need to meet this modern-day wonder woman with legal knowledge
'and, it seems, strength to take walls down with her bare hands.'
-What is all this about you and a sledgehammer?
I'm quite used to wielding it. I work in an office five days a week.
I get so frustrated that I take my frustration out on the wall.
-But seriously, your friends are really leaning on you.
-For the whole...
-They have done throughout the whole process.
I helped with the legal pack, giving them ideas,
giving them pointers for the way to go.
We've been friends for 30, 40 years. We trust each other.
We know how we work.
-Have you ever knocked down a wall with a sledgehammer?
-No. Come on!
How long is it going to take you to get that wall down?
The last time, it took me four hours.
A builder said it would take him two days, and gave us a weekend to do it in. I did it in four hours.
-Janet! Put it there, lady!
# I want to be
# Your sledgehammer... #
'The demolition's sorted. What else are David and Stephanie planning?'
Conservatory out the back.
Put double doors between the two existing rooms.
Re-do all the electrics, new heating system, new plumbing, hot water.
And just spruce it up a bit.
-David, how much money do you think you need to spend?
-Yes. Kitchens, bathrooms, surprisingly expensive.
Then there's the other work, the conservatory.
We think 20,000. It wouldn't be unreasonable to spend over 30,000.
If we were staying longer, then we would be looking to spend that sort of figure.
-You really want to have it looking fantastic?
-It's got to look good.
David and Stephanie have got an ideal auction property.
There's not a lot to do, so I'm surprised at that £20,000 budget.
And Janet will be in charge of the demolition! Hard hats at the ready!
Join me later in the programme and find out what happens.
'Coming up, I'm not seeing straight at this Victorian mid-terrace.'
The door frame looks a bit wonky.
'We return to this London semi, where there's been fire damage.'
I said, "Have I lost my eyebrows?" They said, "No. You've lost your hair."
'First, how did novice Tony get on with that Cheshire bungalow?'
14, 15-hour days have been typical.
'Earlier, we were in the historic town of Nantwich in Cheshire,
'where Tony bought this bungalow at auction for £141,000.
'Entrepreneur and dance teacher,
'Tony decided to have a go at property developing, and is looking to the future.'
It's basically part of a 20-year plan.
I'm buying a number of properties.
'This is his second project and, three months later, it looks like he's been busy.
'The access has been opened up and a gravel driveway laid.
'The roof has been replaced and there's double glazing throughout.
'Those two spacious bedrooms have been replastered and painted
'and that parquet flooring has come up a treat.'
My beautiful parquet floor!
It's been labour of love. It was sanded way to early in the project.
Trying to keep the dirt off it has been difficult, to say the least.
I think the result is beautiful. You wouldn't get it in a new house.
'You certainly wouldn't.
'Restoring original features can be costly
'but will add significant value to an older property.
'In the sitting room, Tony has extended into the back garden
'to create a huge L-shaped area
'with new doors out onto the patio.
'The bathroom has been elongated by moving a wall,
'and a high-spec suite installed.'
Ah! The bathroom! I needed help with this.
So I called my dad. My dad has done an amazing job here.
He's in his early 70s, not that I should say that.
He's been on his hands and knees and done a fantastic job.
'Hasn't he just?
'Tony's dad, Harry, is a retired company director,
'but clearly an expert DIY-er, too.
'Finally, that prehistoric kitchen has been transformed
'with white units and modern appliances.'
This is the site of the kitchen. We've gone with contemporary units.
High-gloss units. It's a fully integrated kitchen.
With the downlighters to give it that contemporary feel.
'There's a beautiful blend of the traditional and modern here.
'Tony had the original internal doors dipped and stripped
'and finished with new hardware - and don't they look stunning?
'My slight worry is that Tony spent too much on luxury fittings
'for what he intended to be a rental house.
'I wonder if he got a bit carried away.'
The property was very much designed to be a rental property.
Within two or three weeks, it was clear that it would make a beautiful home.
Rather than putting fencing around the property, for instance,
we've laid 85 metres of beech hedging.
The kitchen has been increased, the specification.
Overall, the light fittings and other things have been increased
so that it appeals to someone who might want to buy the property.
It's also functional, if I do decide to rent it.
'He may have fallen into the classic trap
'of doing up a place to meet his own standards.
'While beautiful, that may be excessive for the rental market.
'Tony might have to shell out again if he sells the house later.
'But he saved a packet on labour by doing much of the work himself.'
I spent so much time at the property.
14, 15-hour days have been typical.
At least six days a week.
Sometimes, I've gone for two weeks working continuously through.
It's not for the faint-hearted, buying property.
I don't think people appreciate how much it takes over your life.
# You've got to work hard You've got to work hard... #
'But the proof is in the pudding and this is a feast for the eyes.
'Tony only went over his schedule of two months by a few weeks,
'but I wonder how he did with that all-important budget.'
My original budget was 41,000.
It was a fairly loose budget but I'd anticipated about that mark.
The budget HAS been increased and deliberately so.
There haven't been any things that have happened
that meant I had to increase the budget unnecessarily.
The budget's increased because we increased the specification.
I would estimate now that the budget is going to be about £47,000.
'That's more than a 10% increase in his original budget.
'The total expense, including the purchase price, is £188,000
'plus the usual fees.
'Let's hope it makes good financial sense in the long run.
'We invited two local experts to tell us what they thought.'
First impressions, returning to the property,
he's done a fantastic job with the extension
and quality of the fitments.
It's well-modernised. Good quality kitchen and bathroom.
I love those wood block floors. He's done a really good job.
For rental, I would put it on in the region of £775 per calendar month.
If I was to offer this property to rent, I would be asking between £750 and £800 per calendar month.
The rental is about spot-on, to be fair.
We're going to chance our arm and try 825 but, realistically,
I think 800 would be a good rate for the property.
If I was to market it for resale today, I would look to market it in the region of £275,000 to £285,000.
I would market the property at £225,000.
My target had been 260, but since I've been working on the property and increased the specification
I would estimate to get 280 to 290.
'If he gets around the 290-grand mark -
'and Tony's had two valuations done independently that suggest this -
'that could make him a potential profit of over £100,000.
'Not bad for a first go.
'Will he do it again?'
Absolutely want to do it again. I start on Monday.
This is my full-time job.
I'm looking forward to many projects in the future.
'Since filming, Tony decided to move into the bungalow
'and is doing his old house up to rent out.'
'This is Derby in the East Midlands.
'A hub of the Industrial Revolution,
'the city enjoyed tremendous prosperity during Victorian times.
'One lasting legacy from that boom period is in Derby's housing stock,
'namely its streets of Victorian terraces.'
This is a fairly traditional street of terraced houses.
It was - before they did a fantastic job of making it family friendly.
We've got traffic calming, a park over there.
A different way to park the cars. A great start.
The property is this one. It had a guide price of £58,000.
A three-bedroom mid-terrace. Let's take a look.
Probably not too many surprises. Well, there's a pleasant one!
It doesn't smell damp or look to be in too bad a condition.
Straight in off the street into your living room. Very traditional.
It's obviously dated.
Hasn't been wallpapered for a while.
You'd want to change this gas fire,
maybe open that into an open fire.
You know what? It's fine.
These glass doors are a hazard. That's probably not safety glass.
If you've got kids, they should go.
A rear sitting room. Fireplace could do with updating.
Then a very traditional layout, through to the kitchen.
It's long and thin.
Again, fairly traditional, bathroom and toilet at the rear.
Your big debate is do you go to the expense of moving that to another part of the house?
Is it going to make much difference to what it's worth or what you get in rent? I don't think so.
So leave it there.
'I've noticed that there's no other form of heating
'than those old gas fires.
'Installing central heating would be top of my agenda.
'Apart from that, it's just cosmetics.
'A big positive is the back garden.
'It's small but attractive. It's obviously been well cared for.'
Upstairs, traditional layout continues.
One bedroom one side. One bedroom on the other.
I have to say, the door frame looks a bit wonky on both sides.
My guess is there has been some historic settlement.
You might want that checked out.
The guess is that it is something in the past.
What concerns me more is how the heck you call that a third bedroom!
Would you move the bathroom into this and create a corridor?
I don't think you would. It IS a bedroom.
It's not ideal but you wouldn't necessarily want to lose it.
I'd keep it as something like a nursery.
'What can the auctioneer who sold the property tell us about it?'
We're in a suburb of Derby called Normanton,
which is largely terraced housing like this with some later houses.
Derby City Council did an environmental improvement scheme.
They've tried to cut out a lot of on-road parking,
make the environment better, put in little open spaces and called it the Home Zone.
'Derby Council didn't only improve the surroundings.'
It's a property which has been reasonably well maintained.
Before the council did the Home Zone environmental scheme,
they did a group repair scheme.
All these houses got re-roofed,
new double-glazed windows, new downpipes and gutters.
A lot of that has been achieved.
'It sounds promising, but what improvements could be made?'
To keep it as a three-bedroom house,
you've got to passage out the back bedroom,
so you've got access to your third bedroom,
even though it's a small single.
'Would this make a solid rental investment?'
There's a good rental demand here.
These properties, because of what they are, will never fetch huge rental values.
This would rent out at about £375 to £400 a calendar month.
'What about a sale value, once renovated?'
Any terraced house in this locality, two bedrooms, three bedrooms, have a ceiling value of £85,000.
With money spent on it, to make a nice modern job out of it,
I would guess its value is probably about 80,000.
So, a solid little property that would rent out any day of the week,
and, with the work they've done, a nice place to live.
Who went for it when it went under the hammer?
Who's got 58 for a three-bedroom terrace?
55? Don't mind where we start.
55? 54? £54,000. Thank you. 55 is bid here.
61 is bid. 500.
64. 64,000. I've taken a bid at the back of the room.
Going for the first time. Second time.
Third time... Yours, sir.
66,500. Thank you..
'The final bid of £66,500
'came from Bobby and his business partner, Dean.
'Regular viewers may recognise restaurateur and property developer Bobby.'
# Welcome home... #
'Last time we met him, he'd just finished restoring a Grade II listed
'Elizabethan manor house he bought at auction.
'Why was he bidding for a two-up, two-down terrace in Derby?
'I met him back at his new purchase to find out.'
# You've been gone too long... #
-Bobby, good to see you again.
-How have you been?
-Fine. Good, thank you.
-How's Wakelin Hall?
-Doing well. Still standing.
-Yes, it is.
We've come down a peg. It's not quite Elizabethan.
No. No. Hm.
-But it's good.
-It's a good buy.
Tell me how come you've ended up buying this.
-The property's purchased by Dean.
-Your business partner?
He's my friend and he's purchased the property...
I've sort of gone along to the auction with him...
I'm his inspiration and guidance in this project.
I'm also his speaker. He's lost his voice. He's croaking away.
What was it that made you think it was a good one for him?
The property hasn't got a lot that needs doing to it, just the decor.
It hasn't got central heating, so that'll need to be addressed.
That's it. Nothing too taxing.
'This little terrace isn't really going to be Bobby's project at all.
'His friend Dean wanted to learn about property developing
'and what better way to do it than start with something small?
'All it needs is a central heating system, then it's just the decor.
'Dean should manage that.
'My instincts are that Bobby may find it hard to take a back seat.'
How much budget has he put aside to sort out what needs to be sorted?
Hm. I'd say, probably about... 4,000 to 5,000.
Top end, 4,000 to 5,000.
-Are you going to be involved in any of the hands-on work?
Probably not. MARTIN LAUGHS
Hands-off property developing?
It's getting it done and getting some more properties.
# Relax, take it easy
# For there is nothing that we can do... #
What about timescales? How quickly to get it sorted?
-Three to four weeks.
-Right. So a team of people coming in?
Get it ready. Get it rented out.
How are you going to manage to not interfere?
I think I'll get asked to do certain parts of the job.
So...I won't NEED to interfere!
-Your help will be welcome throughout?
If you see him making mistakes, are you going to say, "Don't do that"?
Anything drastic, yes.
I'm a bit of a Scrooge. You may not think, in terms of the last project, how much money was spent.
But I don't think a lot should be spent on this particular project.
So if he has any ideas of spending a certain amount on decorating,
and it's a lot, then I will "step in".
-Well, he's very lucky to have you as his mentor.
I hope so.
Congratulations. Look forward to seeing you again perhaps.
-On a project somewhere between an Elizabethan manor house and a terrace.
Bobby picked a good first project for his business partner Dean.
Nothing structural to sort out, just a bit of cosmetic work.
How will they get on? Will Dean like being a property developer? Find out later in the show.
Time can be a healer. It can also be the enemy when you're up against a deadline.
-What has happened to those properties?
-Let's find out.
'We're back at this 1930s semi in Plumstead, southeast London.
'It was bought at auction by David and Stephanie for £178,000.
'The couple planned to renovate the house to sell on.
'David felt pretty confident.'
We were really pleased.
Everything stacked up and there's a nice little profit if we want to take it.
'So, seven months later,
'how DID things stack up?
'A fresh coat of paint and a tidy-up of that hedge
'has made the house much more attractive.
'Inside, a lick of paint, new carpets and a fireplace
'bring the living space up to date.
'They decided against the neutral colours
'usually chosen when doing a property up for the market,
'and went for a bold contemporary feature wall and lighting instead.
'The wisest move was taking down the wall
'between the galley kitchen and the dining area.
'This created a large open kitchen living area
'which flows all the way from the front of the house to the back.
'A new kitchen maximises the space.
'There are new units, surfaces and appliances.'
This was the original kitchen, from that wall to approximately here.
There was a doorway from the hallway.
The door to the garden there meant that the kitchen was five foot wide.
It was totally impractical. There was no room to do anything.
The wall here came down and then we came through
and that made this great big space here.
We've moved the main kitchen here,
which makes this a big through-space.
'David and Stephanie's friend Janet did most of the heavy work.'
One of the first tasks she did was to sledgehammer the wall down.
David was the other side of the wall to where I was.
He told me to hit it after he'd hit it.
He hit it the first time and nothing happened.
I hit it and six bricks fell out.
His comment was, "I'll leave it to you." It took me two hours.
# If I had a hammer I'd hammer in the morning
# I'd hammer in the evening All over this land... #
'Upstairs, things haven't moved along quite so smoothly.
'The three bedrooms are being used as storage, while work continues downstairs.
'Outside, it's a different story.
'That big overgrown garden has been transformed.
'The south-facing aspect and large size makes it a fabulous spot to relax in .
'To get it to this state wasn't without its perils.'
This area here was almost waist-high in weeds.
As you go down the garden, there was a very large shrub
which almost blanked the back end of the garden.
Beyond there, there was a huge shed, full width of the garden,
semi-derelict and a complete mess.
It was an eyesore. David took one look and said, "Leave that to me."
Turned away and I said, "No."
And pulled it down in front of him!
Set fire to the doors that the shed comprised of.
Had a bit of an accident with that.
Put one of the doors on the fire. Stood a bit too close.
Turned round and said to Stephanie and David, who were both aghast,
"Have I lost my eyebrows?" They said, "No. You've lost your hair."
# O-o-oh, I'm on fire... #
'I guess Janet really suffers for her art,
'The burning question is, did David and Stephanie stay on schedule?'
We were hoping to be done in the region of four months.
We're now running at, um...six months.
Partly because we had a very hard winter.
That caused a lot of delays.
'What about their budget?'
The original budget was 20,000.
We are running at...
16 and a half at the moment.
We expect to spend another two to finish off.
We're going to come in a little below,
but we haven't found as many problems as we thought we might.
'Added to the projected £18,500 budget,
'the £178,000 purchase price brings their total spend to nearly 200,000.
'Have they spent their money wisely?
'We invited two local estate agents
'to give us their opinions.'
I'm impressed with the kitchen, particularly how they've arched open
the wall between the kitchen and the lounge, to give it a lot of light.
Much bigger. Much more space. It makes it much more saleable.
'How much could the couple expect if they rented the house out?'
In the current conditions,
this property would rent for about £975 per calendar month.
You'd get a lot of interest and I think it'd get rented quickly.
You could rent this property for £1,000 per calendar month.
About what I expected.
Yeah. The rental's a bit higher than I thought but, you know, hm...
'How much might it make if they sold it?
'Remember, their total spend was about £196,500.'
Reflecting the current market, the property would go on for £225,000 to £230,000.
You'd get a lot of interest from cash buyers, and I think it's a price we'd sell the property for.
With the work completed, I would value this property between £220,000 and £225,000.
Yes. What we were expecting.
Yeah. It's in the range. Yeah.
'That sounds like a potential profit of between 23,000 and 33,000,
'minus tax and fees.
'They'd need to finish upstairs to the same standard as downstairs.
'Between David and Stephanie, and the invaluable Janet,
'they look to have things under control.
'The secret of their great working relationship?'
-Oh, well. I do what I'm told.
-You can't say that!
-I just have!
-Not with Janet, anyway.
'We're back at this three-bed mid-terrace in Derby.
'It had been snapped up for £66,500 by Dean, who bought it as a buy-to-let.
'It was his first property investment,
'so Dean decided to have it mentored by business partner Bobby,
'who has previous renovation experience and a tough business head.'
I don't think a lot of money should be spent on this particular project.
If he has ideas of spending a certain amount on decorating, and it's a lot, then I will "step in".
'Six months later, we joined Bobby to see how things have been going.
'Someone's moved in, by the looks of it.
'But apart from some new flooring, the rooms haven't changed much.'
We've done a small amount of work, the reason being tenants wanted to move in very quickly.
They didn't have anywhere to live.
They were living at a relative's house.
There was no need to spend any extra cash.
'It's great that they got tenants in so fast.
'This house was bought as a buy-to-let, after all.
'Despite appearances, Bobby did manage to get some jobs done in the few weeks before they moved in.'
OK, so we've plastered the walls.
The painting's not finished, as you can see.
New central heating system and new flooring. They're the three items.
'What about that tiny third bedroom?
'Are the tenants happy accessing it through the second bedroom?'
They were happy with the arrangement
for the bedrooms to be through one to the next.
So we left it. For now.
'With a minimum of fuss, Bobby has had the house rented out for six months,
'which means a steady income for Dean.
'Recently, the first tenants moved out, allowing more work to be done.'
We've got a new set of tenants in.
And we can now complete some of the work whilst these tenants are in,
because they're OK for us to carry on.
Somebody will come back and finish off bits of trim,
painting around the door frames, just remedial work.
If it means getting the rent in quickly rather than losing rent for another week or two,
it's better that way.
'I think Bobby's got the right idea.
'His focus is on having the property work for its keep.
'That means ensuring the house is occupied by tenants.'
My personal belief is,
if you're keeping this property a long time, as long as the fabric of the property is sound,
I don't think you need to spend much more.
If the tenants are happy, leave it at that.
If you're spending extra, you've got to justify it.
If you're going to market it and sell it, spend more.
If you're keeping it long term, you could spend thousands later.
'With such a frugal approach, did he allow Dean to go over his £4,000 to £5,000 budget?'
We spent 4,000 in total. The majority on central heating.
And around £1,000 for the flooring, painting these walls and replastering these two rooms.
A few hundred pounds need to be spent finishing off, but that's all.
'Adding the renovation budget of £4,000 to the £66,500 paid for the house,
'a total of £70,500 has been spent.
'It seems to have paid off, as it's an in-demand rental property
'that's working well for Bobby's friend Dean.
'We invited two property experts along to see what they thought
'of Bobby and Dean's approach.'
I have to say, not a lot has changed, has it, really?
Laminate flooring, a central heating system
and a quick wallop of paint.
I think, as a future improvement, you would passage out the bedroom.
It's a logical thing to do. It doesn't work well as it is.
It's a thing you'd do if you took it further.
If the owner's renting it out for a good return, and done minimal work,
great, leave it as it is.
'With a basic refurbishment, did they settle for a lower monthly rent?'
This sort of property in this location is easy to rent out.
In rental value, it's about £400 a calendar month.
A bit more, a little bit less, but it's about that sort of ballpark.
Judging on the properties around here, you could get £400 per calendar month.
We're getting 410.
It's £10 over, not under, so that's fine.
'It looks like Bobby's businesslike approach is paying dividends.
'How much could this house fetch, if put up for sale?'
If you offered the property as it is, there's a market for it, yes.
You could take it a bit further, improve the kitchen and bathroom.
You will add value, but you can't take it too much further
because there's a cap on the level of values of standard terrace houses in this location.
If this was on today's market,
you'd have an asking price of around £75,000, and expect to get fairly close to that.
I would put this property on the market at £69,950 and hope to get an offer fairly close.
Won't be tempted to sell, but I think, with the market the way it is, it's OK.
I think the 65 to 70 is slightly low for private treaty.
For auction, OK, it'll be somewhere close to that.
75 is still a realistic price.
'No matter. This place is a rent machine.
'Bobby and Dean approached the venture on business principles
'and are already reaping the rewards.'
We'll be back with more action from auctions around the country.
-Make sure you're watching Homes Under The Hammer.
Subtitles by Red Bee Media Ltd