Episode 100 Homes Under the Hammer

Hello, whether you're buying a property as a place to live in or an investment,

you want to make sure that you've bought wisely.

It may be difficult to find,

but what you're looking for is value for money.

Yeah, one way to find that is at the auctions.

From rundown flats to magnificent mansions,

there's always something on offer at auction.

So here are the lots

that made our buyers put their hands in their pockets on today's show.

In Darlington, I take a look at the three-bedroomed end terrace

with added extras.

It's stuck on like a bit of a carbuncle on the property.

This three-bedroomed property in Fulham, London,

sets alarm bells ringing.

Now, this would certainly put a lot of potential buyers off.

And what's going on behind closed doors

in this two-bedroomed terraced house in Burnley?

Hm, try the back.

All these properties were sold at auction,

and we find out who bought them and what they paid for them

when they go under the hammer.

Sold to you, sir, your paddle number, please?

Today in the town of Darlington,

which owes much of its development to the influence of local Quaker families

during the Victorian era.

It's most famous, however,

as the location for the world's first-ever railway.

So, will today's property be right on track or off the rails?

Well, I'm in a residential part of Darlington

where the properties are a bit more affordable than other parts,

and the property I'm here to see sounds very interesting.

It's this building here,

it's actually a terraced end there with this bit stuck on the end.

Sounds a bit strange, but it was previously a shop.

Aha, now it's making sense.

The big question is, wonder if you could convert it back, perhaps.

The entrance to this bit is round the corner,

the main part of the three-bed terrace is there,

£55,000 was the guide price, let's take a look.

The property used to be a bakers with living accommodation attached,

but it has since been converted into one three-bedroom house.

From the outside, though,

it looks like it could be big enough to develop back into two separate properties.

So, what's on offer?

Right, through the front door and a narrow corridor,

it feels a bit claustrophobic,

but on the left-hand side, oh, a bit of good and a bit of bad.

Very nice fireplace, we like that,

but, uh, not looking very good on the old damp,

or whatever's going on on the wall there.

Needs more investigating.

Hopefully it's not going to be a tale of two houses here.

Once the peeling wallpaper and cracks are sorted,

then in amongst the woodchip, the lively carpets and floral wall coverings,

there are some appealing features.

Such as this lovely fireplace.

A reminder of what this traditional home was once all about.

Through to the rear living room area, and a nice sized space,

but I am seeing some strange things going on with the floors,

it feels as you walk around that you're sort of going up and down quite a lot,

and some very strange stuff going on with the ceilings too,

lots of places where it's lower than other places.

Lots of storage, though, and a few nice original features.

You know, strip these back, that would be quite pleasant.

But then this layout continues to be strange,

you come up these, well, single step, basically, into the kitchen.

Now, it's really an unpleasant little space.

I mean, even with some nice units in here, you've got a low ceiling.

It's just stuck on like a bit of a carbuncle on the property.

All in all, the layout here, certainly downstairs,

really needs some thinking about.

It actually feels like two properties sort of smudged together,

without much thought about the grey area in the middle.

Which brings me on to the stairs.

So, up a slightly strange staircase,

it actually gets narrower at the top there,

and again, the floor feels a bit strange,

but onto this two-level, kind of landing area.

Bathroom there, it's a good size, but very tired and dated.

Three bedrooms up here, a decent size one there,

a very big one at the front of the property there,

and then up to above, basically, the shop unit downstairs,

where there is this third bedroom.

It's a good size, not very good ceiling height,

and again, uh, like downstairs,

just, it's something not quite right.

It needs to have a good think.

But at least you do have, you know, the space to play with.

# I'm lost in space, I'm lost in time... #

It's space right enough,

although it is all over the place as one property.

But this room, teamed with the kitchen carbuncle,

could create a nice little one-bedroomed house.

I wonder if this property's wonky ways continue outside?

So, out through the kitchen into this little courtyard area at the back.

Now, you got an outside loo,

you've got access to the alleyway at the back there

which is good, you could park a car in here.

The issue is going to be if you want to split this into two properties,

cos who shares this?

Certainly the planners will want to see somewhere for both properties

to store things like their wheelie bins or whatever,

and also maybe a bike rack.

So, you're going to have to address that,

but at least you have got the space.

Having the space is one thing,

but converting it into two properties

will require jumping over some logistical hurdles.

Now, this door comes out of the rear of what was the shop unit, but

it actually comes out onto the side alley at the side of the property.

Now, I think if this was to be your main entrance door

to any potential extension, maybe a flat,

I don't think that is necessarily going to be particularly popular with the planners,

you're probably going to have to relocate this door to the front,

it's more time and expense, but at the end of the day,

I still think there's enough money in this to make it worthwhile.

So, if it was me, I'd opt for turning it into two separate houses

as the potential return would be well worth the cost of conversion.

But what does a local property expert think

of three-bedroom end of terrace that had a guide price of £55,000?

It's a nice, big house, formerly a terraced house with shop

which has been knocked through into one large house.

Probably should be converted back to two separate dwellings,

a two-bedroom terrace and, I think, a one-bedroom end terrace cottage.

With the current layout, what could it achieve on the market today?

Once renovated, I would see the property

selling for around the £95,000 to £100,000.

And if converted to two separate dwellings,

comprising a two-bedroom terrace and a one-bedroom property?

Once renovated, I would see the two-bedroom mid-terrace property

selling for in the region of £75,000-£80,000.

And the one-bedroom cottage, once renovated,

achieving £55,000-£60,000.

Well, there are obviously some issues to resolve here,

especially if you're looking to do what I think you should,

and that's convert it into two properties,

not least relocating the second door.

But, still, at that £55,000 guide price,

I think there's money to be made here.

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

It's your end terrace, formerly house with shop attached,

but it's now substantial three-bed home.

£53 to start?

51?

50.

It's a big house, anyone here at all want to make a bid on this one?

We'll withdraw that.

-50.

-You're here for 50?

We've got the one bid at 50, is anyone else shy as well and not being in?

We've got the one bid at £50,000.

Anything else at 50?

51 bid, 52, 53?

54? 55?

We're at £54,000, I'm going to sell, I'll take 500.

It's at £54,000, I'm selling it once, it's your last chance.

For the second, 54 and a half,

55, 55 bid, I'm going to speed you up, it's at £55,000.

I'll take a half.

Gentleman standing £55,000, I'm going to sell it once,

I'm selling it for the second time,

sold for £55,000 to the gentleman standing.

Bidding was slow to start on this one,

but nipping in to get the ball rolling just in the nick of time

with his successful bid of £55,000, was maths teacher, Mark.

I met up with him and his builder mate, John,

to find out if the sums would add up on this Darlington dwelling.

# Drivin' in to Darlington County... #

Mark, John, great to meet you both. Congratulations.

Tell me why you wanted to buy this place.

Really, I suppose it was the rental opportunity we saw in it,

-we're hoping to try to split it into two separate properties.

-Ah.

And it's the opportunity to get two incomes from the property, yeah.

Now, you had a look round before you bought it?

-Yeah, we did have a look.

-Did you see anything to worry about?

Well, there's a little bit of, well, there's the crack in the front room

but we've had a look at it, I don't think it's anything to worry about.

Before we go very much further,

the auction there, it seemed like you almost didn't get it?

Yeah, I was obviously waiting to see how low he was going to go,

and before I knew it, he'd withdrawn it from the market,

obviously at that point there was an element of panic

-which you probably caught on film.

-Ha ha, yeah.

I thought for a second that we'd lost the chance to buy the house,

so when we got back in the race, it was good news.

-A bit of a relief?

-Yeah, it was.

-So, tell me about you two.

Um, been friends for a while, haven't we?

-Yeah.

-I've got a business doing building anyway,

that's what I do for other people, for clients.

-What do you do, Mark?

-I'm a teacher, a maths teacher.

-A maths teacher, so you're good with the numbers, then?

-Yeah, well, hopefully.

I'm not making any promises.

How's it going to work financially between you two?

John's obviously going to be getting a wage for the work that he's doing.

You going to do him a bit of a deal, are you?

-Oh, definitely, definitely, mates' rates.

-Mates' rates.

# Cos friends will be friends... #

So, the boys are intent on the two-for-one idea,

but there's so much to do here, what's the master plan?

Well, first of all it'll be a full rip out,

we'll tear everything back to brick,

cos the majority of the walls are getting reskimmed.

I'm try to do it as modern as we can,

and just get everything back to a brand-new, modern look.

And the idea is then, once it's done, rent it out

-and build a bit of a pension?

-Yeah, that's the thing,

there isn't really any long-term plans as to what to do with it.

I mean, obviously, there'll be the possibility to do more,

but for now it's just the idea of getting them done up,

getting people in there, and getting the income coming in off that.

Stairs are a bit tight.

What sort of budget does Mark have to do this project?

Initially, sort of around the time of putting the bid in and stuff,

around the time of the auction,

I think we were looking at around £25,000,

but, a few more costs have cropped up,

so we're thinking if it's somewhere between 30 and top end 35,

I'll be happy with that.

So what is the timescale for the whole project?

You were thinking about...

Well, yeah, I was going to say three months,

but if I say three to four months to Mark,

then he's not panicking if we don't get anywhere near.

Well, listen, congratulations, good luck with it.

-We look forward to seeing how you get on.

-Yeah.

-Thank you.

So, how is Mark going to get on with this, his first development project?

Well, he's crossed one major hurdle, he's got a good builder lined up,

and he's a friend, it doesn't get much better than that.

Work to do to sort this place,

but I'm glad they've decided to go down the two properties route.

Still, there's the whole issue of will they get planning permission to do that?

You can find out how it all goes later in the show.

Welcome to Fulham in south-west London, I'm in the Sands End area,

Now, it used to be a quiet, less well-known part of the capital.

But the new Imperial Wharf railway station has changed all of that,

and put this place firmly on the map.

Millions have been pumped into this area,

making it a much more glamorous and accessible location.

# The glamorous

# The glamorous, glamorous... #

It's all looking very glitzy down by the river,

a good choice of transport links here

make this part of the capital much more accessible than before.

And if trains are not for you,

perhaps you'd prefer to travel by helicopter.

The property I'm here to see has an SW6 postcode.

Now, research has revealed that, on average,

two-bedroomed properties lucky enough to have that postcode

can achieve £690,000.

Now, four-beds in this area can fetch over a cool million.

The property I'm here to see is this, it's a three-bed,

it had a guide at £525,000.

So, that is exciting stuff.

I'm going to go inside and see what you get for your money.

From the outside, things are off to an impressive start.

Lots of detailing at the front and the windows are magnificent.

If the book gives lives up to its cover,

I think we've got a prizeworthy contender.

What a huge disappointment!

How hard is it to imagine you'd get over a million quid for this.

Look, there's holes in the walls, plaster floorboards all hanging out.

It could be beautiful, don't get me wrong.

This is the sitting room.

The windows are gorgeous but there's no architrave,

no fireplace, there's no character.

There are breeze blocks dumped in the middle of the room.

Somebody has obviously started some work and not finished it.

It is a wreck.

# I need a dollar, dollar

# Dollar, that's what I need... #

This property certainly needs more than a dollar spent on it.

There's no kitchen or bathroom in place

and the uninhabitable state of the place

could seriously hinder your chances of getting a mortgage.

In the current climate, there's no doubt it is easier to extend than to move,

if you've got some unused space.

It's worthwhile thinking about building into it to create that extra room.

If you have the space,

adding another room is usually the most reliable way to add value to a property

and you could add at least another bedroom and bathroom up there

by going into the loft.

So that is great news for anybody wanting to add value to this house.

Forget pots of gold at the end of the rainbow,

you could find them up there in the loft space

as well as down here in the basement.

Given that a precedent has been set on the road,

there's a good chance you'd get planning permission to extend

and extending is where the real returns could be made.

The outside space is decent, especially for London.

But buyer beware, there's a legal clause that could well trip you up

if you didn't read the small print.

Something in here caught my eye with regards to the sale of this house.

In the catalogue it says,

"the seller cannot sell this property to a purchaser

"who intends to occupy the property as his, her

"or their only principal home."

This would certainly put a lot of potential buyers off.

I would advise consulting your solicitor to confirm

exactly what the implications of this might be.

# Believe me

# If I see another legal paper

# I'd scream and shout and run away... #

If whoever purchased this place hoped to live in it,

then this would be problematic,

so this really is set up for a developer

to either sell on or rent out. We invited a local property expert along for his opinion

on this Fulham pad with an auction guide price of £525,000.

It's obviously a very large property.

You would be able to dig out the basement,

you'd be able to have a loft here, rearrange some rooms.

There's a lot of scope for a lot of redevelopment here.

How much could someone stand to make here

once the renovations have been done?

If it was a three-bedroomed property, I'd expect it to rent out for £3,000 per calendar month.

Extend and create another two bedrooms

and that rental figure creeps up to £3,400 per calendar month.

How much could you expect on the resale market?

If you were to fully extend the property into the basement and loft,

I'd expect it to fetch in the region of £1.1 million.

This is a little gem of a house here.

There's scope to extend, you can add value.

I think this terraced house in Fulham is a bit of a winner for me,

but without a kitchen and bathroom, it is unmortgageable,

so only the cash-rich need apply.

Let's find out who had the funds to buy this house

as we go to the auction.

Fulham, £600?

Not going to get much in Fulham at six.

Five, yeah?

£500,000 down here. Anyone else?

505.

Sorry, take it with you on the end.

510, 515,

520, 525,

530, 535, 540,

545, 550, 555.

560, 565, 570.

Bidding for this Fulham property proved to be competitive

with only two bidders eventually left in the running

as the price continued to rise well above £600,000.

631, 635,

636.

640.

641.

645.

650. 5.

656.

660.

657?

656 with you.

657 anywhere?

656, first time, second time, third and last time,

we're all done.

Sold for 656, well done.

# We started singing bye bye Miss American pie... #

With that successful bid of £656,000, it was musician, Holly.

She's originally from Georgia in America,

but has called London home for the past two and a half years.

I met up with her back at the property to find out her plans

for this serious renovation project.

It's so lovely to meet you today. Congratulations first of all.

Thank you.

Tell me about the auction, how was that?

The auction was a little nerve-wracking

because I'd never been to one before.

Even though I've owned homes and renovated and everything.

So it was a little bit nerve-wracking.

You walk into this house and it is a developer's dream.

But I know there was a condition of sale with this property.

Can you tell me about that?

They couldn't sell it to someone who wanted to occupy it

as their principal residence.

Did you get somebody to investigate that, did that put you off

because I'm sure that would have put a lot of buyers off on the day?

I was really coming more as a developer anyway

but it definitely put off a lot of individuals, which in a way is good,

because if individual families come for a house like this,

they're willing to pay more.

# It's a legal matter baby, a legal matter from now on. #

Holly's original intention was to get a mortgage,

but in its current state, she couldn't secure one, so had to get a bridging loan

which has worked out a more expensive alternative.

This goes to prove that research is absolutely key

when it comes to buying at auction, as there can be costly pitfalls.

However, Holly still has a healthy-sounding renovation budget.

Between £150,000 and £200,000.

When you walked into this house for the first time,

-what first sparked your interest?

-The windows.

I looked in the auction catalogue and it had the little windows.

They're so cute with the little moons and I just go for stuff like that.

When I came in, I just thought, it's a real dump,

but the great thing was it has this basement.

It's got quite a lot of space in it.

Holly has plans to create even more space.

She wants to excavate the basement and she's also planning on going into the loft,

turning this from a three-bedroom to a five-bedroom property.

So, Holly, what is your background, what do you do?

I'm in the music business.

You're not a developer, then?

No, well I am now!

I'm a singer, songwriter, producer and artist.

Holly is being modest.

She's been nominated for two Grammy awards,

both in the song of the year category.

Breathe, recorded by Faith Hill

on her multi-million-selling album of the same name

is her most well-known work to date.

Does your music career allow you enough time to develop properties -

is this something that can work in tandem with your music career?

I hope so! My managers hope so!

Do they even know you've done this?

Yeah, they do.

I did not tell them I bought a house at auction,

because I thought one of my managers would be like,

"What are you doing?",

because he's expecting me to make an album in a month.

# Oh Mr Songwriter

# Write me a song

# On your trumpet... #

'Grammy Award nominee Holly has won plaudits for her songwriting,

'but I'm not sure she'll have time to pen a new album

'now that she's taken on this epic project.

'But she has high hopes for the property.'

When you take into account what you paid for this,

what sort of end value do you think you'll stamp on his property,

what you think it will be worth?

I'm hoping a minimum of £1.2 million.

Wow, that is an incredible jump from the sixes to over a million.

Do you think this area can take that?

Absolutely, 100%.

I believe there's a house just down the road that sold for £1.1 million.

I don't think they've probably done to the level of what we would do.

Houses in this area go for easily £1.2 million.

Right over here is a little conservation area and lots of artists live there,

so I don't think we'll have a problem with that.

It's been lovely meeting you today

-and good luck with this development, I can't wait to see it.

-Thanks.

Holly wants to create an alternative fantasyland in Fulham.

She's got loads of great ideas for the place,

but will £200,000 be enough for her grand designs?

And will she achieve that £1.2 million property

that she so dreams of?

You can find out what happens later on in the programme.

In Burnley, I want take things back to basics

to reinvigorate this mid-terrace.

What we're basically saying is,

this is a rip it out and start again project.

Is Holly singing from the same hymn sheet as the planners in Fulham?

Essentially, I had to submit my entire scheme and wait.

But first, in Darlington,

has everything added up for maths teacher Mark and his builder friend John?

Mark didn't want to do that, so it didn't get done.

We return to Darlington now, where maths teacher Mark

purchased this substantial three-bedroom end of terrace house at auction for 55,000.

The property had previously been a bakers',

and along with his builder mate, John,

Mark felt it had all the ingredients to make it a recipe for success.

Really, I suppose it was the rental opportunity that we saw in it,

-we're hoping to try to split it into two separate properties.

-Ah.

And it's the opportunity to get two incomes from the property, yeah.

# Why don't you do it yourself?

# DIY, baby, do it yourself... #

Mark had made the financial investment,

but lacked any real practical experience.

That was where builder pal, John, was going to earn his crust,

and he didn't seem too worried about the task ahead.

What I liked about it was it's not going to take too much major structural work

to convert it into two properties.

Six months since we first visited them,

we're back to see if it's been full steam ahead,

or if they've hit the buffers.

Well, they've succeeded in turning the property into a one-bedroom duplex flat,

and a two-bedroomed terraced house.

Downstairs in the one-bed flat,

the main door has been reinstated at the front,

the kitchen has been installed in the living area,

the old shop store room no longer has access out onto the back lane,

and has been changed into a contemporary but simple bathroom.

A staircase is being installed leading up from the ground floor living area

to the very large bedroom above.

This is the flat living area, large space,

that's the doorway where we blocked up

to make it into a separate dwelling from next door.

I think it's worked out quite well in here, space wise,

we were a bit worried about the kitchen,

I think there's enough room for both spaces to happen.

That's where the building regs specified we put the front door.

Obviously, we couldn't have the door as originally positioned,

because it was leading out onto a public highway,

but I think, originally, this part of the property was an old shop,

that's where the front door was, so we've made it back to the original.

They've been good friends for a long time,

so were there any creative differences during the project?

Next door in the house I wanted to knock through and make it open plan,

Mark didn't want to do that, so it didn't get done.

But I don't think it's had much of an effect on the final product,

-things like that.

-He doesn't seem too bitter about that, does he?

We got over that.

# Just the two of us #

# Building them castles in the sky

# Just the two of us... #

The two-bedroom house has been transformed with a new kitchen,

whilst still retaining the same layout.

During all this work,

were there any unforeseen problems which may have derailed the project?

I think it was when we found out

we had to do all the external insulation for these walls, wasn't it?

Yeah, I think that not only added cost,

but it added a lot more time, more work gone into it.

So, obviously, it slowed us up a bit.

So, no major hitches for the boys, and all seems to have run smoothly.

But as far as the budget is concerned, has that stayed on track?

In terms of budget, we haven't done bad at all, really.

We're slightly over what we'd hoped, I think we'd hope to spend,

in total for the projects, 90, pushing up to 95.

It's gone up to around 100 mark, but that's everything,

solicitors' fees and everything, so we haven't done bad.

The boys had hoped to complete the work in three to four months,

but this has overrun to around six months.

Mark estimates that his overall spend on the project is around £100,000.

Which includes the auction purchase price of 55,000.

Time to hear what to local property experts think of the renovation.

I think the final finish is very good,

done to a good specification, well appointed, ideal for the properties.

I think the finish of both the house and the flat are first class.

Very appealing, and I think will appeal to most people.

Mark's intention has always been to rent the properties out,

so, how much rental income could he hope to achieve

from this newly converted one-bedroom flat, and two-bedroom house?

I think the rental valuation for the flat is £325 per calendar month,

and the rental valuation for the house, £425 per calendar month.

I think the rentable value on the house

would be in the region of 395 per calendar month,

and I think the rental value on the apartment

would be 350 per calendar month.

That would offer Mark a monthly income of around £750.

Giving him an annual yield of nine per cent, a very healthy return.

OK, that's good, that's slightly more than I was thinking.

I was thinking seven as a minimum,

as long as we got seven, I'd have been happy.

-Yeah, definitely happy with that.

-Yes, pleased, yes.

Now that the original property has been split into two,

what would the potential resale value of each be,

were they to put them back on the market?

I would value the flat at £50,000,

and I would value the house at approximately £70,000.

The apartment, firstly, I would suggest an asking price

of offers invited in the region of £55,000,

and for this lovely two-bedroomed,

I would suggest an asking price of offers invited in the region of £75,000.

So, resale valuations of between £120,000 and £130,000 for both properties,

that would provide Mark with a pre-tax profit of between 20 and 30,000.

As his outlay is currently around £100,000.

Obviously, we're not looking to sell yet,

but even if we were to sell,

-it's nice to think that we could make a profit on it, so...

-Good.

So, what's next for Mark and John further down the tracks?

Well, the next thing is obviously just try to get some good tenants in there,

get it rented out, and hopefully let it try to make some money.

Then, after that, we'll see how it goes, hopefully get another one?

-Yeah.

-And get John in doing the work.

Today I'm looking at a property in Burnley, which you can see behind me.

But it's fitting, as the town grew up in the Industrial Revolution,

that this sculpture was commissioned

and sits on the hillsides above the town.

As you can see, it's got a very industrial feel,

but it represents a tree blowing in the wind.

And the sound you can hear...

has actually been tuned,

so as to not to upset the local wildlife.

And fittingly, it's called The Singing Ringing Tree.

# Oh singing tree

# Singing tree... #

Down the hill and into Burnley itself,

which at one time was the world's largest producer of cotton cloth.

Since the closure of the mines and mills, Burnley has struggled,

with many of the terraced workers' houses now gone.

But those that remain are popular with renters.

Well, just a mile outside Burnley city centre is the property I'm here to see.

So, great for transport links and local amenities, this is it,

it's a mid-terrace, two bedroom,

had a fantastic guide price of just £18,000. Let's take a look inside.

Hm, try the back.

# I've been locked out

# I've been locked out... #

Well, other than not being able to get in from the front,

this place looks all right.

These terraces usually have a lane at the back, and this is no exception.

This one also backs onto a factory which isn't ideal.

The house itself looks less than appealing,

with these security shutters.

There are also some alarm bells ringing here,

due to these melted pipes and guttering,

as they give the clues to there having been a fire here at some stage.

Time to go inside, and with no back door,

that's not going to be difficult.

Well, that certainly easier, but I'm not liking, eugh, what I find.

That was obviously where the kitchen was, and there's nothing.

But it doesn't take a rocket scientist to figure out

this house has been the subject to fire damage,

or, actually, smoke damage.

I believe that there was a fire in that little courtyard area outside,

as you can see, things like the windows here,

completely and utterly destroyed.

The big concern is how much damage was done to the actual fabric of the property,

beams and things like that,

cos that could be expensive to replace.

I would want to get a structural engineer in here

before I did anything else.

It's not a bad-sized room, it just needs a little bit of work.

# We've got work to do

# Got so much work, yeah... #

The house was unoccupied when the fire happened,

so, thankfully nobody was hurt.

But it certainly made its mark.

Anyone taking this on will have to factor that in -

from plumbing to wiring and kitchen windows, this house needs the lot.

But what I do like is that as well as the kitchen and dining room,

you also have a decent-sized living room at the front.

Well, the further towards the front of the house you get,

the slightly less the smoke damage becomes.

What we're basically saying is, this is a rip it out and start again project.

But as long as you're prepared for that, and you've budgeted for it,

not too much of a big deal.

Whatever you do, what I would keep is the fireplace, I quite like that.

# When Smokey sings

# I hear violins... #

Heading upstairs, it's quite black from the smoke.

In both bedrooms it appears that someone has helped themselves

to some of the house's plumbing.

So, that will have to be replaced.

The good news is that both bedrooms are a good size.

The bad news is that even though there's a bathroom suite under all this muck,

it looks past its best to me, and needs to be replaced.

It's going to take more than a touch of paint to make this house a home.

But I like the layout and the size, so I think there is potential here.

We asked the auctioneer who sold this property, guided at £18,000,

for his opinion on whether he could find any positives

behind the smokescreen.

For me, one of the positives is that there are two rooms,

two living rooms downstairs.

So you can have that layout of a lounge and a separate dining room.

And overall, the size is quite reasonable, it doesn't feel pokey,

despite the fact that it's black and has been on fire,

it's still got quite a nice feel to it.

So that's certainly a positive.

'I think the main negative would be the amount of work that's required.

'But to some, that's a positive,

'it's an opportunity to buy something'

and add some value to it.

What's the property worth in its current state,

and the potential value once refurbished?

I imagine that in the current market, and its current condition,

the property's worth somewhere in the region of maybe £15-£18,000,

something like that.

And I think once done, depending on how far that renovation goes,

you could see a value of up towards 35,000,

maybe a little bit more, but probably not much more.

So, some room for a profit in there to do the work and sell it on.

What about renting it out?

Once renovated, I think, from a rental point of view,

we're probably looking somewhere in the region of £400 per calendar month.

Well, it's going to take a fair old amount of effort and money

to turn this place back into a work of art, but I think it would be worth it,

especially from a rental point of view.

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

This auction lot was towards the end of the day,

which explains those empty seats.

I'm looking for £7,000 to start,

£7,000, seven I've got here.

Eight then, 8,000? Eight I've got there. Nine? Nine I've got, 10?

10 we've got. 11? 11 we've got it. 12? Got that.

13? 13 we've got.

14? Yes, is that 14?

It is, 14, I've got.

New bidder here on my right, 15,000? 16.

No, it's with you then, sir, at £15,000, are we all finished?

New bidder here, sat quite close together, so that's 16,000.

Yeah, sorry, so that 17,000 I've got here.

18?

18, I've got.

19, sir?

No, it's back with you, then. At £18,000.

First time at £18,000, second time at £18,000, are we all done?

Yes we are, sold to you, sir, your paddle number, please.

609, well done.

It was Mal who made the successful bid of £18,000.

He bought the property with his business partner.

Mal lives locally and used to be a chef,

but has recently turned his hand to property development.

I met up with him back at the house,

to see what was cooking with his new investment.

-Mal, good to meet you.

-You too.

-Congratulations.

-Thank you.

Tell me why you wanted to buy the house.

Actually, before that, tell me why I can't get in through the front door.

Because I'm having the door replaced,

and it seems like a long journey to pick up a set of keys that I'm going to throw in the bin.

So, that's the main reason.

The house, why did you want to buy it?

Well, basically, it's my third one that I've bought in Burnley,

um, and, obviously, the price is attractive.

The buy-to-let market is very good in Burnley.

This is the kind of project I've done before, so it made sense, really.

Mal didn't even see the property before buying it,

as he originally went to the auction to buy the one next door.

-You saw this for the first time after buying it?

-Yes.

-What did you think?

Pretty much what I expected,

it's very similar to a house I bought from auction a couple of years ago.

They need everything done to them, rewiring, soundproofing, replastering.

So long as the outside structure, and the roof was stable,

and everything else, it should be fine.

And is it, are they?

Yes, I've not had a structural survey on it yet,

but from looking at it, my builders looked at the roof

and looked at the structure outside, before we managed to get in,

and he was quite happy with what he saw.

In terms of the fire damage, what's the prognosis on that?

Well, basically, a lot of it's just facial damage.

There's a bit of heat damage inside the back of the house.

As far as actual fire damage, there isn't too much,

a couple of melted plastic fire sockets.

But nothing massively structural at all.

This place requires a total overhaul.

As there's been a fire,

it's well worth getting a professional to check out the structure,

just in case, before you get stuck into all the other work.

-So, tell me what you're going to do to sort it out?

-Everything.

HE LAUGHS

Basically, I've got to start with flooring.

I've got to re-screen the floor.

Damp proof, full rewire, plastering, central heating,

new bathroom, new floorings, new kitchen, new windows, new doors.

Pretty much everything.

How much is that little lot going to cost?

I think I can do it for about 11 or £12,000.

Doing most of the work yourself?

Obviously, the windows, plaster, electricians,

they were their weight in gold.

Um, but the actual decorating, laying the floor, laying kitchen,

bathroom, I can do myself, yeah.

What sort of things have you been involved with in the past?

I was a chef for almost 20 years,

so, um, you kind of cover every kind of thing that chefs do as far as cooking.

But I started travelling abroad.

Oh, great idea, where did you go to?

I started off in Cyprus, went to work in Cyprus for a year,

and then on to Spain, and then France, Greece, Tenerife,

and then I ended up in Bermuda, Bermuda turned into 10 years.

# Bermuda triangle... #

From Bermuda to Burnley, and after the pressures of working in the kitchen,

Mal should be able to keep a cool head throughout this project.

But has he bitten off more than he can chew?

So, what's the plan for it once it's all done?

Ideally buy-to-let,

would like to sell it if someone offered the right amount of money,

but in this area, it's more of a buy-to-let.

So what kind of rent do you think you might get?

I think between 360 and 380

is probably about the norm around here per month.

With that potential rental yield of over 15 per cent,

it seems he's done his sums correctly,

and could make a healthy return.

But only if he stays on budget, and there are no nasty surprises

lurking behind these smoke-damaged walls.

So, work to be done for Mal and his business partner to sort this place out.

Do they have the right recipe for success,

and will they manage to cook up a profit?

You can find out later in the show.

The clock's been ticking and work should be well under way on our properties.

Have those piles of bricks and bags of cement gone?

-Is the paint dry on the walls?

-Let's go back and find out.

# I need a dollar dollar

# A dollar is what I need

# And if I share with you my story... #

Time to return to Fulham, south-west London, where songwriter, Holly,

paid £656,000 at auction for this three-bedroomed terraced house.

The outward appearance had caught her eye.

The windows. I looked in the auction catalogue and it had the little windows

and they're so cute with the little moons and I just go for stuff like that.

The windows may have been the selling point for Holly,

but inside was where the real challenges lay.

The property had no bathroom or kitchen fitted, which made it unmortgageable.

A fact that Holly had been unaware of.

This meant she had to finance the project with a bridging loan,

which was an expensive alternative.

A legal clause also stated that whoever bought the house

wouldn't be able to use it as their primary residence.

We return 15 months later

to see if Holly has hit the high notes or is she singing the blues?

Well, surprisingly, those cute windows she loved so much are gone.

But in their place, simple sashes.

And inside, it's also a minimalist dream.

Clean lines, modern, white and stunning.

And a complete transformation on all floors.

Where do you begin with a project on this scale?

We started basically by coming in and just taking everything out.

All the floors, everything.

It was just two and a half storeys high with brick walls and that was it.

Then we just started digging the basement.

The property has developed from a two-storey three-bedroom house,

to a four-storey five-bedroom home.

Expanding down into the basement as well as up into the loft

has allowed the creation of two new levels.

We excavated the entire basement.

A good nine feet in addition to what was already done.

I just wanted to have as tall a ceiling as I could have

and make sure I could have doors that could open all the way,

plus the conservatory ceiling so that you could get a lot of light.

But basically, the idea is that it's supposed to flow through

all the way out into the garden, and just be really light and airy

and also, you could essentially spend the whole day down here.

So, changes on all levels, and Holly hasn't been shy

about putting her own personal touches on the place.

I may be wrong, but that looks to me like a shower with a view.

Can my eyes be playing tricks?

Yes, I have a shower with a full window.

I wanted to make it feel like you were in the garden showering.

I love the idea of feeling like I'm in nature

and nature is coming in as well.

# Steamy windows

# Coming from the body heat. #

When we first met Holly, the financial arrangements for buying the property

had become slightly more complex than first anticipated.

I had to get a bridge loan because the place was so derelict,

there was no running water, no kitchen, no electricity,

and basically, it was not mortgageable, which I didn't know.

So I had to get a bridge loan, which I've been in since.

So I've paid quite a lot of interest.

Basically, from a budgetary standpoint,

I just couldn't afford to take any risks.

# I think it's amazing. #

How has this impacted upon the budget?

My budget grew!

Yes, I did go over.

I did have to go back to my funders at least two times

and ask for an additional 60,000

and then just recently an additional 25,000.

So yeah, the budget more than doubled.

So having hoped to spend between £150,000 and £200,000,

Holly's budget is now nearer the £400,000 mark.

The original timescale for the project was an ambitious six months or less.

So how did that go?

The actual work part has only taken about eight and a half months,

which is pretty amazing, when you think we literally went

from a brick shell to this, to four floors.

The project has taken a lot longer.

It sat un-worked on for six, seven, eight months,

while I was getting the planning,

getting the financing into place, finishing my other properties.

So not bad.

Despite a budget of more than double the original, and a timescale which overran,

Holly has managed to transform this Fulham property

into a spacious, very striking and contemporary home.

We invited two local estate agents to give us their opinions

now that the project is completed.

'My first impression of this place is absolutely fantastic.

'I think it's a stunning home.

'I think it has an amazing style, excellent flow of space.

'The integration into the garden'

is absolutely first-rate. The size, the light, the high ceilings,

the finish. I can't fault it at all.

My first impressions are very positive.

It's been beautifully refurbished and has a bit of a wow factor.

Holly paid £656,000 at auction for the property

and her renovation budget has stretched to over £400,000,

making a total outlay of about £1.1 million.

So how much could it now be worth if sold on?

I think at the moment, it would probably set a record

for this road and these neighbouring roads.

The current record's about £1.05, that's a million and 50.

I would think that we could get £1.1 million to £1.2 million

for a house like this right now.

If I was looking to market the property, I would bring it on at £1.2 million.

If she achieves the high end of those values,

that could give Holly a pre-tax profit of around £100,000.

If the property were to be rented out,

what could the monthly rental income be?

This property would rent for between £4,500 to £5,000 per calendar month.

If this was to go on the rental market, I would expect it to achieve £3,600 per calendar month.

Holly feels these values are a bit on the low side

and believes the property could fetch up to £1.5 million.

But the real value of this project

is the incredibly stylish home she's created.

Now it's complete, how does she view the project?

I have been through hell with this project from a financial standpoint.

But it's been incredibly rewarding.

I have had a lot of fun doing the design, choosing tiles,

designing the kitchen, designing the windows.

So that part's been absolutely fun.

Back now to Burnley in Lancashire, where Mal and his business partner

bought this two-bedroom terraced house for £18,000 at auction.

This was Mal's third investment property.

The house needed total refurbishment as it had suffered significant fire damage.

Mal, a former chef, was hoping to be hands-on with the development.

But would this be a case of him jumping straight from the frying pan into the fire?

Do you have much experience of that kind of thing?

Not masses. Only the previous two houses.

But I learnt a lot off my builder the first time

and my builder will be doing bits and pieces as well.

But I will try and lower the cost by doing as much as I can.

We're back just under four months later to see

if Mal has done enough for us to award him a Michelin star.

For starters, the front of the house has been freshened up with a lick of paint.

Inside, the living room has been stripped back,

replastered and decorated.

It's a bit of a shame to see that old fireplace go,

but the place really has been brought back to life.

Laminate flooring has been laid right through the ground floor

to the rear reception room and kitchen.

Here we have the kitchen. It's almost finished. It's a work in progress.

Basically, we've done everything we need to do.

We've just got the units to finish off. All the plumbing's in.

We've had to put flooring all the way through. New flooring. New concrete floor.

Basically, there was no floor at all before so we've had a new concrete floor and new laminate on top of it.

This is the window that had the most fire damage.

New woodwork, new plastering, and completely finished, except for the windowsill.

Then it just needs a bit of paint.

Upstairs now for the next course.

The bedrooms have had the same treatment as the rooms downstairs.

Stripped, replastered and decorated.

Also, some new floorboards have been laid.

The windows in the back bedroom needed replacing too,

because of the fire damage at the back.

And as for the bathroom...

We're in the bathroom. Completely new ceilings.

It was all fire damaged in here. This room was quite damaged so we had to have new ceilings.

Replastered throughout, rewired.

You can see the new windows down the back of the building.

Completely new suite and also a new boiler for a complete system throughout the building.

New flooring. Still a work in progress, but we're getting there.

Mal and his business partner were planning to do

as much of the work as they could to keep the budget down.

So how was it split between themselves and the tradesmen?

I've had builders in. I've had plasterers in.

They've done the plastering. I've also had a plumber in who's done the central heating.

They've also done a bit of the concrete floor.

We ourselves have done most of the decorating and laying the floor.

We've put in the bathroom suite.

It's an ongoing process but we're putting in the kitchen as well.

Mal had originally planned to complete the renovation in around 10 weeks.

Have they managed to keep to that deadline?

We had problems getting electricity.

It took about six or seven weeks to get electricity, which slowed us down.

I was hoping to have it done by the 10-week mark,

but unfortunately now it's been 12 or 13 weeks.

Unfortunately, Mal has gone slightly over on his timescale.

How has he done with his budget?

Budget-wise, I thought around £10,000.

I was hoping for around the £10,000 mark.

We have gone over, but not drastically.

I think we'll finish on around £11,000,

which is relatively what we'd expect.

The property cost £18,000 at auction.

Added to the renovation costs of £11,000,

that means a total outlay of £29,000.

What do two local property experts think of Mal's refurbishment?

First impressions are good.

He's obviously done all the major work that was required

because of the fire damage.

All the replastering looks good, he's obviously in the process

of putting in a kitchen and the bathroom needs finishing,

but you can see that the finished product will look good.

It's your standard mid-terraced property.

It's had all the essentials done to a decent standard

in terms of central heating and double glazing.

It's clean and tidy and I can imagine someone moving straight in.

What valuation would they give if it were to be sold?

From a resale point of view, the market's tough everywhere.

It's tough in Burnley at the minute, but again it might stand out

because of the work that's been done.

We're probably looking somewhere in the region of £30,000.

Looking at the resale value,

I would think you'd be looking somewhere in the region of £37,000.

OK. I thought we might be able to get £40,000 to £45,000.

I'm going to rent it anyway.

According to the experts, that would give Mal a pre-tax profit of between £1,000 and £8,000,

although as he says, he's going to rent it out.

So what could that earn him?

From a rental point of view, given the current market,

there's a strong demand for rental property,

although there's a lot of rental property in the area.

So I think we're probably looking somewhere in the region of £375 per calendar month.

In a rental market, you'd be looking at somewhere in the region of £300 per calendar month.

That's pretty much what I thought it was going to be.

I was expecting around £350, so £375 is great.

It's obviously worth renting out, then.

That would give him a whopping yield of between 12% and 15.5%.

This being the third property Mal has developed, what's his verdict on this one?

I do think it's been a success. It's taken a little longer than I thought

and there have been many frustrations on the way,

but it doesn't put me off doing these.

There's only about three weeks to go and then I'll move on to the next project.

With his chef's career now on the back burner,

what does Mal find is most satisfying now that he's a property developer?

I generally enjoy just the sense of achievement once they're finished.

Taking something that's burnt out,

from a shell to a finished end result is just amazing.

Join us next time when we meet more brave auction buyers,

either trying to make a killing or maybe just finding somewhere to live.

-Looking forward to seeing you then.

-Goodbye.

-Goodbye.

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