Episode 31 Homes Under the Hammer

In today's more challenging markets, do you think you could hack it

-in the world of property?

-Get it right, you can earn a lot of money.

And it can be even more rewarding to buy your home under the hammer.

There can be some tense moments in the auction room.

Who will make the right bid at the right time?

Property can change people's fortune, for better or for worse.

Here's a look at what today's buyers bought.

'You'll need specialist equipment to view this three-bed mid-terrace in Manchester.'

Until you're properly kitted out with masks, you don't want to be wandering around in it.

'In London, I find the perfect use for this monster of a property.'

This would make an ideal film location...for a horror movie!

'And in Cardiff, this former martial arts centre has so much potential, I'm overwhelmed.'

Wow! What an amazing space!

'All these properties have been sold at auction and we'll find out who bought them

-'and what they paid for them when they went under the hammer.'

-Lady's bid.

'This is Openshaw in Greater Manchester,

'about two miles east of the city centre.

'In the 19th century, this was a thriving industrial heartland.

'Nowadays, there's very little industry around here,

'but this part of Manchester is on the up.'

Fortunately, Openshaw falls within the East Manchester regeneration scheme

and over the last few years there has been lots of redevelopment in the area to the housing

and also the building of a multi-million-pound shopping centre.

And this is the property I'm here to see. It's a three-bed mid-terrace

at a guide price of £35,000.

It can't be too bad for that, can it?

'Famous last words. No sooner was I through the front door than half the ceiling came down in the back room.

'Through no fault of mine, I hasten to add.

'Although only one ceiling was affected,

'the house was filled with dust.

'It wouldn't have been a good idea to continue filming and breathe it in

'so we regrouped round the back.'

Well, that is what happens sometimes when you're looking round properties.

And my advice is, if there's dust like that in a property, you really should avoid it.

You don't know what it contains. Some ceiling materials, such as Artex, used to contain asbestos,

and until you're properly kitted out with masks, you don't want to be wandering around in it.

But come out here and you can see what the problems are.

The rendering at the rear of the property is shot, that roof above the bay window has also gone,

so before you get involved in sorting out inside,

there's some work to do outside first.

# I can't stand up

# For falling down

'Well, what about that interior?

'Luckily, the camera crew had filmed inside before the ceiling gave way.

'So let's see what the house looked like before it was a cloud of dust.

'Downstairs, there are two large reception rooms and a good-size kitchen.

'But as you can see, like the rest of the house, it's in a poor state of repair

'and needs to be completely gutted.

'There's no central heating in the property, just gas fires.

'The windows are only single-glazed and in the rear reception room are signs of damp

'and a gaping hole in the ceiling. So no prizes for guessing it was this ceiling that fell through.

'Upstairs isn't much better in terms of condition.

'The bathroom is old and outdated with clear signs of damp issues.

'The cracks in the walls of the little bedroom don't look too good

'and as for the two main bedrooms, well those ceilings are also a cause for concern.

'I definitely recommend having a survey done here

'and getting to the root of the problems.

'But this is a good sized house with large rooms

'and there's also a substantial cellar, great for extra storage.

'And all for a guide price of just £35,000.

'Because of the dust in the house, we went to see a local estate agent

'in his office to get his take on the place.

'He'd organised the pre-auction viewings.'

It's a terrific three-bedroom terraced house.

The rooms are great sizes, two big reception rooms, good size kitchen,

three bedrooms and a bathroom, it's a terrific house.

The property obviously needs some work doing to it.

It's not in a habitable state which is why it ended up at the auction.

'But with the right buyer prepared to do some work here,

'once renovated, what could it make on the rental or resale markets?'

If we were looking at that property to rent,

I would be looking at £500 per calendar month.

If we were selling it, it would be around £70,000.

'So a potential value of £70,000.

'Given its guide price was £35,000, there could be money to be made here.'

Despite all the problems inside, I still think this is a great little property

and if it was bought for anything like the guide price,

there's lots of money to be made. Let's see who bought it when it went under the hammer.

Lot 29, vacant three-bedroom terraced house.

Where should we start this one? I've got a bid.

Proxy bid. £20,000. 20,000 I have.

Do I see 22 anywhere?

20 I have. 22. 22,000.

24 I have. 26. 26?

26,000. 28 I have.

28,000. Give us 30?

30 at the back. 31. 32. 33.

At 33,000. 33,000. 34.

34,000. I've got 35. At 36 here. 36.

I have 36,000. It's in the market.

37. 37,000. 38 anywhere?

37 and a half, new bidder.

38. 38,000 then. 38 and a half?

38 and a half. 39?

39 and a half. 40.

40,000. 40,500.

40,500. 41? 41,000.

41 and a half. 41 and a half, new bid.

41 and a half. 42.

42,000. 42 and a half. 43.

43. At 43. 43 and a half. 44.

At 43 and a half, then, for the first time.

It's your bid. At 43 and a half for the second time.

For the third time at 43 and a half thousand.

That's yours, paddle 305.

'That successful bid of £43,500 was made by would-be developer Khan.

'He works in the building trade in property maintenance.

'His son, Sahil, also looks pretty pleased with the purchase.'

# It's a family affair

'Khan, his wife Jabena, son Sahil and baby Dean

'have all come to check the place out.

'Sahil took Dean off to explore the local area

'and to avoid any more collapsing ceiling worries

'whilst I met Khan and Jabena at the back of the property to find out about their plans.'

-Khan and Jabena, lovely to meet you.

-You, too.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

Well, we've always been interested in going into property development.

It has always been a motivation but we didn't really have the funds to do it.

-Right.

-But now, with the great help of our families,

we've been able to buy this property, it's our first purchase at auction

-so we're really looking forward to it.

-Oh, great!

-How did you broach it with the family? "Can you lend us some dosh?"

-Basically.

We said, "We really want to have a go at this property development

"and we're so dedicated to it, he's in the building trade,

"so it's going to be cost effective,

"he's going to do most of the work himself, and give us a chance."

So my family put half in, his family put half in.

So we've really got to prove we're going to make a profit on this

and then eventually pay them all back.

'So, the pressure's on, then.

'Khan has tried his hand at property development in the past

'but unfortunately, that time things didn't work out too well.'

I bought a property about seven years ago and that didn't go according to plan.

The property market wasn't right and I didn't do much research.

I broke even on that property back then, so hopefully now,

we've done a bit of research and everything, got it at a great price

-and, yeah, brilliant.

-We were pleased with the price.

'They're quite right to be pleased. £43,500 is still a good buy. But there's an awful lot of work to do.'

Tell me what you're going to do to sort it out, cos it is in a bit of a state.

-It is.

-Mostly superficial, apart from the large quantities of ceiling which have fallen down.

The majority of work I think my husband's going to do himself.

My son's going to be helping out.

I'll probably help with painting and decorating, but the initial building stuff he's going to take over.

'The couple are hoping to get everything done in just six weeks.

'So if Khan's doing most of the work himself, there won't be any time for slacking.'

Tell me exactly what you're going to do.

It'll have a new bathroom suite,

nice new tiles, new kitchen.

The basement I'm not going to do too much to, just a lick of paint.

New central heating. I've got a guy coming in to do all that.

Decorate throughout, new ceilings upstairs cos they're all bowing.

Plastering a couple of walls and a bit of damp-proofing and hopefully...

-Radiators, boiler.

-Everything.

-Basically everything.

-The list gets longer and longer.

'And the list does get longer, because outside they plan to go right back to the brick,

're-render, paint the exterior and repair the windows.

'And the budget for all the work - £12,000, with a maximum of £3,000 as contingency.'

What's the plan when it's finished? Is it to rent it out or to sell it?

Initially we want to sell it, see how we've done on it,

plus we owe all that money, pay everybody back

and then if it all goes well for us, next time round, we want to do it all on our own.

Buy another property at auction and this time it'll all be us. We won't have to borrow anything.

These are tough times in the property world in terms of selling.

-What happens if you don't sell?

-They we'll definitely rent.

We'd rent it as a second option, but initially we're looking to sell.

-Will the people you borrowed the money from be OK if you have to rent it?

-Family.

-They're brilliant.

-They're not going to charge us interest.

-It's family so...

-Plus, we haven't got a mortgage to pay, so that's a massive load off our backs.

-Right. Great. As you say, good old family rallying round.

-Yeah.

-Yeah.

-Congratulations.

-Thank you.

-Good luck with it and I wish you all the best.

-We look forward to seeing how you get on.

-Fantastic.

-Thanks.

Well, Jabena and Khan have got themselves a great property here

and Khan's certainly got the experience to sort it out. And thank goodness for families, eh?

Still, a lot of work to do to sort it out.

You can find out how they get on later in the show.

I'm in Southwest London today in an area called Battersea.

You might know it for the iconic power station

but it's also home to a host of specialist shops and boutiques.

Shoppers can find everything they need here, from fishmongers to butchers

to aromatherapy shops and bakers. What a cool place to live!

# Oh, oh, oh

# Everything I wanted

A short walk from all the shops and restaurants

and I'm in an area that's known locally as Between The Commons.

It's a pocket of quiet residential streets

that lie between Clapham Common and Wandsworth Common.

Its green credentials and proximity to all the shops

makes this a much sought-after area.

I'm here to see this substantial three-bedroom end-of-terrace

and it had a guide of £625,000.

Let's go inside and see what you get for your money.

'At first glance, the exterior of this corner property

'is in a terrible state and just cries out for repairs.

'Good news for developers hoping to add value

'but bad news if you don't have a sizable budget.

'But there are some lovely original features remaining out here.

'So what's inside?'

Oh, OK, it's quite clear to me there's only one way this house can go and that is up.

Obviously, you don't get that much for your money

because it's in a right old state.

But saying that, there's bags of character here and this is just how I love a house, really raw.

You've got these beautiful doors. Look at all this amazing cornicing. You've got the old ceiling rose.

All of this space. You've got two big rooms here which have been opened up.

Two lovely fireplaces. It really is quite spectacular.

Something that does concern me are the windows. You can see, there's obviously a security issue

because there's bars on the windows.

What I would like to do would be to get them off and think about installing some internal shutters.

You only need to walk along the road to see most houses have done that.

It's a much better look. But it's a great house. I can't wait to explore the rest of it.

'As you move through the property, you can see this former beauty is long past its prime

'and yearning to be restored. There's no plaster on the wall, chronic signs of rot,

'plus a rather dingy cellar, and that's just for starters.'

This would make an ideal film location for a horror movie!

And the kitchen is placed right at the end of the house. Hm.

Fancy a cuppa?

'Mm, I think I'll pass this time.

'But can this house, that went to auction guided at £625,000, get any more horrific?

'Well, in a word, yes.

'Halfway up the stairs and at the back, the bathroom and separate toilet are completely trashed.

'It's all got to go.

'The patchwork wallpaper in this bedroom might have looked cheerful once upon a decade,

'but I suspect it's hiding a multitude of sins now.

'Continuing on up, there are two further decent-sized bedrooms, good doubles I'd say.

'But they all have a worryingly similar feature.'

I'm no timber expert but this to me looks like a serious case of dry rot.

Now, dry rot sounds serious and that's because it is.

It's a wood-destroying fungus.

Now, it's not always confined to just wood.

It does have the ability to travel through other building materials.

So it can spread quickly through the building.

If left untreated, it can cause widespread structural damage. Scary.

'With specialist help, you can stop dry rot in its tracks and treat it.

'One thing you can't do is ignore it.

'But it seems that for every piece of bad news here, there's some good,

'because onwards and quite literally upwards, I think there's some potential for a loft extension.'

The average cost is about £35,000,

so it's a significant outlay but it could add as much as 15 percent to the value of this house.

So it's definitely worth considering.

And if you can squeeze a bathroom up there as well, you're laughing.

'As for the garden, well, that needs serious attention.

'Not only has the greenery grown wings and started sprouting out of the house itself,

'but there's a whopping great tree stump out the back that needs to be removed.

'The roots might be far-reaching, which would undermine the stability of the building.

'So a challenging property with great potential.

'What does the local estate agent think?'

This is a very popular area, lots of shops, coffee bars, restaurants

and there's a real vibe and style of living here that people do like.

It's an end-of-terrace Victorian house,

fantastic in its day with the coving cornice,

still got the original fireplaces, marble and granite, fantastic.

Doesn't get much better than that. Though it does need some TLC.

Looking down the road, you can see there's been a lot of conversions done to the lofts and extensions.

It would be a good idea cos it would extend the property from a three to a four or five bedroom.

'The property went to auction guided at £625,000.

'So after all the remedial work's been done, how much rental income could it generate?'

The rental on this property as a three-bed would probably be around the £2,500 mark per calendar month.

As a four to five, it'd be £3,000 to £3,500.

'That's a real hike in price. And this is mirrored in the resale value, as well.

'Renovated as a three-bed property, the new owner could achieve

'as much as £850,000.

'But there's a big increase if you were to start adding extra living space.'

If converted to a four or five-bed, the price does go up quite rapidly.

You'd be looking at £1 million plus, maybe £1.1 million, on a resale.

This is in a fantastic location, plus there's scope to extend and add value.

But the dry rot in this property is cause for concern.

I hope whoever bought this had it surveyed first.

Let's find out who wanted it as we go to auction.

Battersea now. Three-bed end-of-terrace house.

Requires some modernisation.

Very popular area, Between The Commons.

500 anywhere?

On my right sitting down, blue. 500.

525. 550.

575. 600.

625. 630.

635, yeah? 635. 640.

With you at £640,000. Anyone else?

It's against you, 640. 641.

642.

643.

644. 645.

646. 647.

648. 649.

650. 651.

651, new spot.

652.

652.

653. 654.

653. 654?

654, another spot at the back. 655.

660. 661.

662. 663.

664. 665.

666.

You two coming in?

If not, 665 down here. First time. Second time.

Third and last time if you're all done.

Sold, 665.

'That final winning bid of £665,000 was made by Rob.

'His background is in telecommunications

'but after taking a couple of years off to enjoy time with his young family,

'he's recently started his own property investment company.

'I met up with him at his first purchase.'

-Rob, congratulations.

-Thank you.

-What did you think the first time you saw this and came inside?

I thought it wasn't as bad as I imagined.

From the outside, it looks really awful and I didn't think it was quite so bad when I came in.

Did you view this property prior to the auction?

I came along to the viewing but the agents didn't have any keys so I only saw it from the outside.

-So for your first property venture, your first property you do up, you didn't view it?

-No.

'Perhaps it wasn't the best start to his new career in property to skip doing a viewing.

'I just hope he inspected the legal pack.'

I did look at the legal pack but there was something that went under the radar.

-Which was what?

-Seller's fees and the seller's legal fees.

So the two main things you should've picked up on in that legal pack you missed.

-I missed.

-How much did that cost you?

-£12,000.

'Oh, £12,000 is a huge sum of money, especially when it's unexpected.

'Add stamp duty of nearly £20,000

'and the purchase price has leapt up from £665,00 to around £697,000.

'But there's something about this house that Rob's drawn to.

'He's from this area and figures there's an end value in sight of about £1.1 million.

'But there's a great deal of work to do before then.'

From the top down, we're going to put in a loft extension in the main part of the house.

We're going to drop the ceiling on the upstairs floor to give us more height in the loft.

Put a second loft extension on the back addition and put a bathroom in the front.

Refurbish the bathroom and knock the two through. Take out chimneys to give some space at the back addition.

Coming down here, this partition is going to come out

and then we're going to punch a hole through to step down into what will be a big kitchen/dining room

-with a glass roof side extension, and have a very open facade at the rear extension.

-Wow.

What about the dry rot? You can see it everywhere. It's riddled.

I've had someone come in to look at that. It's in hand. It will be rectified.

Have you done any costings as far as how much this might be costing you?

-I've budgeted... I'd like to get out of it by spending under £200,000.

-OK.

And how long do you think it's going to take you to do all the work here?

I think three months. Three months. My builders said they'll do it in two.

'A £200,000 budget sounds realistic

'but just two months to finish the work?

'I guess that by working with as big a team of professionals as Rob is planning, it could happen.

'And he's steadfastly optimistic.'

Is there anything that's worrying you about this?

Financially I'm stretched, so that's a worry.

Everything's gone in, pretty much every penny that I've got is sunk into this property right now,

so that's the big worry. But I think it's a sound investment.

It doesn't look like it at the moment but providing we do the work to the right standard...

-I can't wait to see what you do in here. Good luck.

-Thank you.

Martin and I are always advising buyers to read the legal pack.

Poor Rob has to find £12,000 he hasn't bargained for.

That is some people's entire budget.

Learn from his mistake, viewers, and read the legal pack thoroughly before going to auction.

Let's hope for his sake there are no more surprises.

Will he get the planning to take this property to the next level

and break through that £1 million barrier?

You can find out later on in the programme.

'Coming up, I go to an area of Cardiff that always tickles my fancy.'

I'm in a place which has one of my favourite names of anywhere in the country - Splott.

'It's been full steam ahead for Rob at his first development in Battersea.'

We've had up to 14 people on site for large portions of the build.

'But first, in Manchester, Khan's found the secret to property success.'

It's the wife. She's found bargains everywhere.

'In the Openshaw area of Manchester, would-be property developer Khan and his wife Jabena

'bought this mid-terrace property at auction for £43,500.

'It was in a pretty derelict state already

'and the day I visited, one of the ceilings actually collapsed.

'But the couple stood strong.

'With financial help from family members, they were up for the challenge.

'And quite a challenge it was going to be.'

New bathroom suite, nice new tiles, new kitchen,

decorate throughout, new ceilings, plastering a couple of walls and a bit of damp-proofing.

-Radiators, boiler.

-Everything.

-Basically everything.

'They gave themselves a budget of £15,000 and only six weeks to do everything

'with Khan doing most of the hard graft himself.

'So, eight weeks later, we're back to see how they got on.

'The transformation is pretty amazing,

'especially when you consider that Khan has done most of the renovation himself.

'You definitely have to take your hat off to him.'

Last time you were here, the kitchen was in a right state.

Rotting away, we had mouse droppings, woodlice, everything.

So we've just ripped the whole kitchen out, put new tiles on the floor,

new kitchen sink, tap, drawers, everything. It looks brilliant now.

'Khan has done some serious work fixing the sagging and bowed ceilings.

'The upstairs bedrooms appear to be in top shape.

'But it's the bathroom that does it for Jabena.'

This is my favourite room in the house.

My husband didn't let me see it till right at the end

cos he kept it a surprise.

I absolutely love the tiles, the way he's done it up.

I did choose the bath and the radiator and all the equipment that's gone into it.

But I'm really happy with the bathroom. It's my favourite room of the house.

'Last time we were here, the walls and ceilings looked to be riddled with damp.

'But there's no sign of that now. So just how bad was it?'

The plaster was all coming away from the walls. Over the years, the rain had got behind the plaster

and basically pushed the plaster out, so we had to redo quite a few walls,

replaster them, and the roof was leaking quite a bit, as well,

so we just pushed a few of the tiles back into the roof

and that sorted the problem out.

# Keep it together, in the family

'It's been a real family project, with Khan doing the work,

'his son Sahil lending a hand and Jabena project-managing and keeping a close eye on the budget.'

The budget was essentially my responsibility.

Luckily, while we were doing the house up, it fell in the Christmas period sales,

so we got a lot of bargains. I was very pleased with that.

I did a lot of research, did shop around, but got the best deal in the end.

# Keep it together

'So, have they kept it together money-wise?

'With all these bargains, how far did their £15,000 budget stretch?'

Our budgets have been fantastic.

We're well under ten grand.

It's amazing, I know. It's the wife. She's found bargains everywhere.

Double-glazing, radiators, everything we've got really cheap.

Yeah, budget was under ten grand.

So yeah, very, very pleased with the budget.

'They may have shaved pounds off their budget, but unfortunately,

'Khan has put pounds on around his waistline instead.'

My husband's eating habits went absolutely diabolical.

He totally forgot his healthy diet

because he was starting early, 7 o'clock in the morning, finishing really late

and every night I kept asking, "Are you coming home for your tea?"

and he's like, "No, I want to get this finished, I want to get the tiling and the plastering done"

so it was takeaways, takeaways, takeaways.

So all he did was have takeaways.

'Oh, naughty Khan. Hopefully, when it comes to the fruits of his labour,

'he'll be rewarded with a healthy profit.

'We asked two local property experts

'what they made of the finished result.'

First impressions of the property are good.

It's a good size property and the renovation has been done well.

You go in some refurbishments and wonder where money has been spent.

But with this one, you can see that everything has been done, nice modern bathroom and kitchen,

new floors, new ceilings, replastered.

Just about everything has been done.

'Khan and Jabena have spent a total of around £53,000,

'including their purchase price of £43,500.

'So have they invested their money wisely?

'Firstly, what could they earn on the rental market?

From a rental point of view, I think the property would achieve in the region of £450 per calendar month.

The property, if rented, would achieve around £525 to £550 per calendar month.

'That's a whopping yield of between 10% and 12.5%.

'But the couple would prefer to sell.

'Could they make an equally impressive profit by doing that?'

I think if we were to put the property on the market for sale,

I would suspect that, in the current market, the price would probably be around £75,000.

Property value for something like this, in the condition that it's now in,

would probably sell for around £80,000 to £85,000.

'These figures would give a potential pre-tax profit

'of between £22,000 and £32,000, minus the usual selling fees.

'Are they happy?'

Even if it sold at £75,000, we'd still make £20,000 profit.

-It's still really good.

-So we'd be happy.

For two months' work, that's more than enough.

'On the strength of these figures, they should be able to pay back the money they owe their families

'and move onto their second project together.

'But will there be any conditions when it comes to the location of their next auction purchase?'

-Not if it's next to a fish and chip shop.

-Nowhere near a takeaway.

'I'm in Cardiff, the historic yet happening capital city of Wales.

'And I've come to the childhood stomping ground of the great and the grand Dame Shirley Bassey.

'So, where am I?' I'm in a place which has one of my favourite names of anywhere in the country - Splott.

It's a residential suburb of Cardiff. Isn't that great?

And there's a very interesting opportunity on the cards.

It's this building here. It's the former Aikido centre here. It's a residential development opportunity.

The big question is, will it be Diamonds Are Forever for the buyer

or does it need a Big Spender?

# The minute you walked in the joint

# I could see you were a man of distinction, a real big spender

'From the outside, this former martial arts centre is certainly impressive.

'It's a two-storey detached property with a lovely brick and stone facade.

'The guide price at auction was £42,000. Let's take a look inside.'

# Hey, big spender

So, what's behind the big black door?

Erm, OK. Well, downstairs here, one very large room.

I have to say, slightly disappointing. Big industrial space.

Bearing in mind this was a former martial arts club,

I guess this was one of the training areas, you've got changing facilities.

But not a lot else.

Still, intriguing. Let's take a look upstairs.

# Everybody was Kung Fu fighting

-# Those kids were fast as lightning

-Wow.

# In fact, it was a little bit frightening

What an amazing space!

Oh, you come up here and this place has suddenly redeemed itself. Look at this.

The high ceilings, the wooden floorboards.

I guess this was where the main training area for the martial arts centre would've been.

So what could you use this for? I guess the biggest issue at first glance

is that fact that you've only got light, windows, on the front and that side.

So if you're looking at converting this into residential use,

you've got that whole wall there and that whole wall at the back with no windows.

So you'll have to get creative, maybe think about knocking it down or putting a steel frame inside

and converting it into flats. Er, the options are endless and very exciting.

'There are many options here

'and it's a great space for sure.

'But the building is not without problems.

'Redevelopment as residential will need the planners on your side,

'not to mention the neighbours.

'Structurally, it's clear that the walls and roof are in serious need of repair and that's going to cost.

'What does a local estate agent make of the property?

'Is it more than just a Splott on the landscape?'

I think it's an exciting project for an investor.

It holds a lot of potential. I feel its main potential is apartments.

I feel, from an investment potential, as much as it would be nice to have two houses,

I don't think the investor would get the return that he'll need to make it financially worthwhile.

'So, the current building could be converted into four one to two-bedroom flats.

'What ball park figure could the purchaser rent each flat out for?'

Rental values as far as flats are concerned would be certainly £450 per calendar month.

'And if they wanted to sell them on?'

As far as resale value is concerned, flats should sell for £80,000.

So, will this former martial arts centre be retained and converted into flats,

set up as a community centre, perhaps, or knocked down and replaced by houses?

I fear it may well be for the karate chop.

Let's go to the auction and find out what happened.

On we go now to lot number 24 in your catalogue.

Detached two-storey commercial premises this time.

I have a £49,000 reserve

and I have a £49,000 proxy bid.

So what am I bid for it? Can I see 50 in the room?

I'm selling all the time. I have the £49,000 bid.

At £49,000 I am selling. 50 if you like.

At £49,000. 50, thank you. 50,000 I'm bid.

51 for my proxy bid. At 51.

2 if you like now, madam. My proxy bid is out.

At £52,000, I'm selling all the time and it is your bid, madam.

At 52,000. Can I see 3 anywhere?

It's the lady's bid. At £52,000. She's going to get it if you're not quick.

Have you all done, then? 3, thank you, standing in the back.

I thought you'd got it, madam. 4. 54 for the lady.

55 with you, sir. 5, 55 for the gent.

56 please, madam. 56 I'm bid.

At 56. Are you coming again, sir?

Don't shake your head, you don't get it that way.

At 56,000 for the lady, then.

At 56,000. Are you coming again, sir? Yes or no?

The lady's going to get it at 56,000.

Have you all done, then? At £56,000. Lady's bid, thank you.

'The successful bid of £56,000 was made by Nua on behalf of her husband Ahmed.

'Ahmed is a retired child psychiatrist

'who's using his pension pot to invest in property.

'He already has six others, five of which he rents out.

'I met up with the doctor to find out if he had a remedy for this ailing building.'

-Beautiful.

-I'd love to see these floorboards cleaned up.

-I hope we keep on top of it for the time being.

-Listen, congratulations.

-Thank you.

-Interesting project.

-Very.

Tell me why you wanted to buy this place.

-Because it's interesting.

-OK.

It's different than other buildings around it. It seemed to have character.

-I didn't have the opportunity to come inside.

-Really?

-But I just... It's location, location, location.

So you have to study the territory around you,

you have to know what buildings are around,

so you can think what the potential of developing this into.

And I felt that was a reasonable price.

'Of course, I always advise against buying at auction without viewing the property first,

'but Ahmed had at least done some valuable location research beforehand.'

-So what's the plan for this place?

-I don't think there are clear plans as yet, actually.

It goes all the way from demolishing it and redeveloping it from scratch

into, kind of, why not keep the walls?

'So no clear plan yet, then.

'There's quite a difference between the option of demolishing and rebuilding

'and converting the current building to flats, which is Ahmed's other idea.

'Whichever he goes for will have a big impact on the budget for starters.'

Do you have any idea of budget? How much have you got to play with?

With this size, the minimum I would think of,

if we can make that a couple of semis or three flats, that would be worthwhile,

that will mean we may need to spend maybe £70,000, £80,000 more on developing it.

'So the doctor's budget for redeveloping the building,

'either by rebuilding or converting it into flats, is similar,

'around the £70,000 to £80,000 mark.'

-What kind of timescale have you got?

-Realistically, I give this project a year.

I'm hoping it will be eight months, something like that.

That's realistic, I think.

'As there are no planning consents in place here,

'I just hope that eight months to a year will be long enough.

'And although Ahmed may be hazy over which direction to take,

'he's very clear about making an informed decision based on professional advice.

'So time to meet the doctor's trusted architect.'

Somas, you're Ahmed's architect. What do you think of this place?

Initially when I saw this building, I thought it has got character. That's what I told him.

And if he can retain the building in our development, that will be a great achievement.

So I am in the process of designing something where I will be retaining the building.

How are you going to do that? What ideas do you have?

It's trying to create small openings to act as light wells so that you can get light into the middle,

so you can have bedrooms looking into the courtyard

and yet keep the structure as it is.

I'll try my best to convince the doctor that that is the best

and try to show it in terms of economising wherever possible

to reduce the cost in the conversion

and get as many units as possible so that it becomes a better return for him.

So, will the doctor take the advice of his architect and save this place

or will he go for profit over preservation?

You can find out later in the show.

If you want to profit from property, timing is crucial.

And you have to be flexible with your plans.

And don't let time pass you by.

Let's take a look and see how our buyers got on today.

'Time now to return to Battersea in London

'where Rob had bought this dilapidated three-bedroom end-of-terrace for £665,000.

'With a background in telecommunications, he'd opted for a career change

'and set up his own property investment company.

'But he could hardly have chosen a more challenging first project.'

Rob, what are you going to do to really turn this house around and give it the change it needs?

We'll put in a loft extension in the main part of the house, a second loft extension on the back addition,

refurbish the bathroom, knock the two through,

this partition is going to come out and then we're going to punch a hole through

to step down into what will be a big kitchen/dining room.

'It's now three and a half months later and we're back just in the nick of time

'to see the scaffolding come down.

'And the depressing battleship grey property has been restored to its former glory.

'The original brickwork has been exposed and the beautiful moulded features look stunning.

'At the rear of this corner property, the tree stump has gone

'and incredibly, it took specialists a week to remove it.

'There's now a new wall which matches the brickwork of the house.

'And do I spy an impressive new extension at the top there? I can't wait to see inside.

'On the ground floor, the two reception rooms are now one large living area.

'And at the rear, the previously rotten dining room and tiny kitchen

'have been knocked through to create a magnificent new kitchen area.

'The original side wall has been demolished and a new glass roof side extension added.

'On the first floor, the large rear bedroom has been totally rebuilt.

'And this luxury bathroom's been installed.

'Up another set of stairs and that brown bedroom that was riddled with rot

'has been reduced in size, but it's still a double.

'And the space it's lost has gone to the front bedroom, as Rob explains.'

On this floor, we've got the two main bedrooms of the original house.

The front bedroom, which was possibly the master bedroom,

has now got an en suite and then the second bedroom behind.

And as we walk onto these stairs here, this is now the new double loft extension.

This room here is the smaller pod over the rear addition of the house.

And then up behind me is into the main loft above the main part of the house

which has got a large room with its own en suite, as well.

'Yes, this is the crowning glory of the property.

'This bedroom is a lovely space with lots of character and another en suite.

'That makes a total of three bathrooms and five double bedrooms.

'Rob hasn't skimped on size here. The house is almost unrecognisable.

'Back down all those stairs now to the kitchen

'where Rob explains how his team of builders set about transforming the ground floor.'

There were two stud partition walls, which we've taken down. They were serving no purpose really.

The pantry. Kitchen was really tiny.

Obviously, this is the area where we had the main side extension,

put a glass roof in to bring light into the kitchen.

Fully tiled it out, under-floor heating, put in high standard appliances and fit out.

Made it a very nice family space.

'The walled outside area is a real bonus.

'Rob's planning to add decking to finish it off and when it comes to making the most of the space inside,

'he's even converted the cellar into a utility area.

'His team of builders have achieved this major refurbishment

'and new build in a very impressive three and a half months.'

We've had up to 14 people on site for large portions of the build.

The whole house has been gutted from top to bottom.

There's a brand new roof, all new plumbing, all new wiring.

Wherever we found dry rot, we've cut away the original timbers

and we took so much of the wood out and so many of the ceilings out

that we ended up replacing most of the internal walls.

'Although Rob project-managed the job, he has also got stuck in and done some of the work himself.

'What were the biggest issues?'

The biggest problem on the development really was the drains at the back.

That caused us the biggest delay and expense

because we had to build over the public sewer.

'Rob had to liaise with Building Control and the water company to get the necessary planning approval.

'So what effect did that have on his budget?'

The budget has over-run. The budget has gone from originally 200

to now 250, but that's including high specification and various other works.

'We invited two local estate agents

'to come and cast their expert eyes over the five-bedroom property.'

My first impression is it's absolutely fantastic.

A lot of period features retained, original doors,

they've put cornicing back and ceiling roses.

This area appeals to family buyers, so having lots of double bedrooms

and en suites is going to make this property certainly more saleable.

He's redone everything, even cleaned the brick back to the yellow-stock brick,

which looks fantastic, it absolutely gleams.

The kitchen's been done in a very modern style.

Glass worktops, modern stainless steel appliances

and the kitchen island will certainly go down very well.

Most of these properties are converted into the loft to four-beds.

He's done five bedrooms but there's no single bedrooms. They're all really good sizes.

'Rob has no intention of renting the house out. He's looking to sell, hopefully at a profit.

'Rob paid £665,000 at auction,

'plus he had an additional £12,000 to pay in fees.

'Added to the stamp duty of 3%, that makes £697,000.

'Then his budget stretched to £250,000,

'bringing the grand total to £947,000.

'So how much is this place now worth?'

Looking at the current market and resale values,

I believe the resale value for this property to be around the £1 million mark.

I think this house is worth between £1 million and £1,025,000.

'That valuation range would generate a gross profit, before the usual selling expenses,

'of between £53,000 and £78,000.

'What does Rob think of that?'

Erm, disappointing, initial reaction.

Obviously, I overspent on my budget.

And if that's a true reflection then that's going to be quite difficult.

'But Rob's crossing his fingers that he won't have to advertise the house at all.'

Fortunately, I've had an offer before it's gone to market

and the offer is in excess of the valuation that I've been given today.

'If Rob can sell it for more then I'm delighted for him.

'The transformation is amazing. Someone will be very happy living here.

'So how has he found his first venture? And would he do it again?'

I have an interest and a passion for property, so whilst it's been a real hard slog,

I found it much more enjoyable than working in a corporate space in telecommunications.

So yes, I'll take a month off but start to look for another property

and start to try and build an empire and something to leave my children.

'We're back in Cardiff to see what's been happening

'in this two-storey former martial arts centre in Splott.

'Semi-retired child psychiatrist Ahmed bought the property at auction for £56,000.

'It was a great space and I saw plenty of potential here.

'But Ahmed hadn't quite decided what he was going to do with it.'

-What's the plan for this place?

-I don't think there are clear plans as yet, actually.

It goes all the way from demolishing it and redeveloping it from scratch

into, kind of, why not keep the walls?

# Should I stay or should I go?

'So, would the building stay and be converted into flats or would it go and be rebuilt?

'Ahmed was waiting for his architect's advice before deciding

'but at least he was clearer on his timescale.'

Realistically, I'll give this project a year.

I'm hoping it will be eight months, something like that.

That's realistic, I think.

'Hm. Realistic, eh? Well, it seems that Ahmed's timescale was brushed aside

'because not one year but 20 months later, we're back.

'And whilst it doesn't look exactly tenant ready,

'it's at least still standing.

'And inside, quite literally, there's another story to tell.

'They've added a whole new floor.

'So, where the accommodation used to be over two floors,

'it's now on three. So why all the delays?'

The original hope that I had at the very beginning

was that I may have six one-bedroom flats.

We applied for that and then were told no.

And so eventually, after some long negotiations, we agreed to the three one-bedroom flats.

'So Ahmed's grand plans for six one-beds were rejected in favour of three larger one-bed flats.

'Each flat comprises a double bedroom, a bathroom and a large kitchen/dining/living area.

'The flats are pretty spacious, each measuring around 100 square metres.

'All the to-ing and fro-ing with the planner really held Ahmed back

'and then there were the neighbours to get on side.'

We had to negotiate with the neighbours how to go through the process of the development

and how to keep them comfortable and coping with...

Yes, I suspect builders around the place are an intrusion,

so in that sense, they had reason to be comforted.

'It's always wise to see things from the perspective of those living close by and keep things amicable.

'One agreement that was reached was for Ahmed to rent the garden space of five neighbours

'to put scaffolding up to take off the roof.'

So eventually we were able to make the deal

and we were all kind of happy with the work to progress.

'Phew. So the builders could then set about creating three one-bedroom flats.

'There's one flat on the ground floor.

'One apartment on the new first floor.

'And a light and airy penthouse on the top floor.

'But the most intriguing feature of the accommodation

'is that it's all been built around an ingenious light well.'

# Light up, light up

# As if you have a choice

'OK, so this needs a bit of imagination,

'but ignore the scaffolding planks at the top

'and picture this shaft painted white and you'll get the idea.

'When this is finished, there will be loads of light bouncing around and into the flats. Clever, eh?

'Things are moving on site now and Ahmed's builders are pulling out all the stops.

'But just how long until the flats are finished?'

I think we should finish the properties, the building process, in about five or six weeks.

'So there's light at the end of the tunnel

'with the development not too far off completion,

'albeit closer to two years down the line rather than one.

'But how has Ahmed done on the budget front?

'Initially, he hoped to spend around £70,000 to £80,000 on the work.'

We are spending about £105,000 on it so far.

It may obviously need a little more.

I don't expect an awful lot more, but I expect it to be maybe £10,000 more.

'With his final budget estimated to be around £115,000 including all fees and expenses,

'plus his purchase price of £56,000, that makes a total of £171,000.

'Has he invested his money wisely?

'We asked two local property experts to look around the development

'and shed some light on what it could be worth once completed.'

I think it's an exciting project.

Obviously, it's difficult to look at it now in its unfinished state.

But it could be very exciting when it's finished.

I think it's quirky, it's going to appeal to first-time buyers,

it's got something of an unusual factor,

so yes, it's going to be of interest.

'Ahmed's wish is to help create more affordable housing in the area.

'He intends to add these three one-bed flats to his small but growing buy-to-let portfolio.

'What could they achieve as rentals?'

I could rent the ground-floor apartment for £400 per calendar month and also the first floor.

With regards to the penthouse, which I think will have the views,

£450 per calendar month.

Potential rental for this type of property would be approximately £400 to £500 per calendar month.

'And if the doctor were to sell?

'Remember, he thinks his total outlay here once the building's restored to good health

'will be just over £170,000.'

In my opinion, I could sell the ground floor apartment for £85,000.

Also the first floor for the same amount.

And with regards to the penthouse, which I think is the icing on the cake of this development,

I could achieve £90,000.

Potentially you'd market these properties in the region of about £100,000 to achieve about £95,000.

'These resale valuations mean that the whole building could achieve

'between £260,000 and £285,000.

'If the doctor changed his mind and put the property on the open market,

'he could make a pre-tax profit of between £89,000 and £114,000, minus the usual selling expenses.'

If I sell for within these prices, I'll be a happy man, yes.

'And would the doctor do this kind of development again?'

I will do this again because, at the end of the day, it's serving many people

and I should like to be able to make money but also to be a good servant to the public.

-There'll be more great stories for you next time on Homes Under The Hammer.

-Do join us then. Goodbye.

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