Episode 34 Homes Under the Hammer


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Episode 34

Martin Roberts and Lucy Alexander visit retail premises in Devon, a flat in south London and a two-bedroom house in Perth and Kinross in Scotland.


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Since the show started, we've seen thousands of people buy at auction.

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We love bringing you those stories.

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But it can be a bumpy ride,

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so fasten your seat belt as we head to the auctions.

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This programme isn't only about bricks and mortar.

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It's about real people who have got a tale to tell.

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So how did they get on? Was it a dream or a nightmare?

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Let's find out what happened when they bought stuff under the hammer.

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'This sunny house in Perthshire has me nearly lost for words.'

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Who ever... I mean, I've never... I mean, what were they thinking?

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'In London, this three-bedroom flat has great potential.'

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You know, once decorated, it could be quite a good flat.

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It's bigger than I thought.

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'And there are no complaints about this shop and flat in Devon.'

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A really good-size, spacious, two-bedroom flat. Good news.

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'All these properties have been sold at auction.

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'We find out who bought them and what they paid

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'when they went under the hammer.'

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Sold. 183. Well bid.

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Sir Walter Scott once said that if an intelligent stranger

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were asked to describe the most beautiful province in Scotland,

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it's probable that they would name the county of Perth.

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And you have to say... he had a point.

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'Perthshire's scenery proved so popular with the Victorians,

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'they established a tourist resort in the bustling town of Pitlochry.

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'And the area still thrives today.'

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I'm three miles outside Pitlochry in a little hamlet called Kinnaird,

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here to see something that used to be an old chapel.

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At a guide price of 70,000 quid, 150 years old,

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what am I going to find inside?

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'From the outside, this unusual stone cottage is very eye-catching.

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'You might not find the red-and-white colour scheme divine,

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'but it certainly stands out.

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'Now split into three different dwellings,

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'this building used to be the local chapel.

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'So let's see if it's still blessed with any of its original features.'

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Whoa! Wonderful, big old door.

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But I have to say it doesn't look like there's much else left

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from the former chapel.

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Loo there, kitchen in there - everything's in a bit of a state.

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Utility area here.

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This is more like it. A really nice, big front living room.

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But here's an indication of what's happened to it in, I guess, the recent history.

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It's been blocked up. I guess once this was all one big chapel

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and it's been separated off from the neighbouring property.

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Work to be done but, as a space, I like it.

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'Yes, it's an impressive start.

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'The kitchen is huge,

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'although to say it needs modernisation

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'is a serious understatement.

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'Up these incredibly steep stairs is a great-sized front bedroom,

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'which has retained some period features.

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'I think that's an original fireplace

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'lurking under that ugly radiator.

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'And the bathroom is OK but in need of an interior design rethink.'

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So upstairs, the second of the two bedrooms.

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And look at this. How nice. Some cupboards.

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That's what I thought.

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Open one up, though, and fans of CS Lewis...

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eat your heart out.

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You don't find Narnia when you walk through here.

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What you do find is the annex.

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Now, who ever... I mean, I've never...

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I mean, what were they thinking, to build the entrance through a wardrobe?

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Absolutely extraordinary.

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So this space at the moment is, I have to say, fairly unusable.

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But the annex is this story here

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and the downstairs, but you can only access it from outside.

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If you want to integrate this with the rest of the property,

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major structural work has to be done.

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It's an extra useful bit of space

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but it doesn't really look at all like it's been done properly.

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Now, I'm off to try and find the witch and the lion.

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SONG: "The Lion Sleeps Tonight"

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'No sign of the witch,

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'but the lion may be somewhere in that jungle of a garden.

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'The outside space is a bit of a letdown,

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'but nothing that some green fingers couldn't fix.

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'So, with a guide price of £70,000,

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'what does an estate agent make of this property?

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'Is it magical, or a bit of a nightmare?'

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I think it needs a lot of work.

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But it's in a beautiful setting.

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That's going to be very appealing to a lot of people.

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But the work may put a lot of people off.

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'Yes, this one is a real undertaking,

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'but, once renovated, it could bring in a decent rental

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'of around £750 per month.

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'But there's surely a holiday let market in these parts.

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'So, what could it command?'

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As a holiday let, I could rent this property out at between £500 and £700 per week.

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'Not bad. But if you decided to sell on, once work was completed,

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'how much could you get for it?'

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Depending on the level of finish on the property,

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I would suspect you'd be looking at £160,000 to £170,000.

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Well, a house with a room that you access through a wardrobe.

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It's certainly a first for me.

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But could this property be a fairy-tale place to live?

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It'll take a bit of money to sort it out.

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But who had the lion heart to take it on?

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Let's find out when it went under the hammer.

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'This lot came up later in the day.'

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I have a proxy bid on this property, ladies and gentlemen,

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for someone who can't be here today.

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I will start the bidding with that proxy bidder at £60,000.

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£61,000. Thank you, sir. At 61.

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Anyone else in the room?

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£61,000 I've got. The gentleman here. At £61,000.

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No? I'll go 62 with the proxy bidder, then.

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63? At 63. £64,000.

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65. 66. 67.

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68. 69. £70,000.

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71.

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72. 73. 74.

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75. 76.

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77. I can go £77,500.

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78, sir? £78,000.

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You'll be delighted to know the proxy bidder's out. £78,000.

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£79,000 at the back. At £79,000.

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£80,000.

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£80,000. There's a seated bid here at 80.

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81?

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£81,000.

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Shake of the head. At £81,000.

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I'll go 500 if it helps you, sir.

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£81,500.

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Thinking about it at the back.

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£81,500.

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£82,000. Definite shake of the head this time, sir?

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At £82,000 I'm going to sell. Give you one more chance.

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500 more? Definitely not?

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-£82,000.

-HE BANGS THE GAVEL

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Sold at £82,000. Congratulations. And your bidding number is 104.

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'The successful bid of £82,000 was placed by Gail,

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'who bought it on behalf of herself and her husband, Peter.

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'Gail's retired and Peter runs his own software company.

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'They're currently this property's next-door neighbours,

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'so why did they buy it?

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'It was a lovely day when I met up with Peter for a chat on the lawn

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'in front of his beautiful home,

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'which also gave me a chance to admire it.'

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Peter, lovely to meet you. Congratulations.

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Before we talk about the property, what an amazing location!

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Tell me about this place.

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Gosh. Well, we bought it just about four years ago now

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and we've spent the last four years working on it, redecorating,

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and getting the place to a really comfortable, super little haven.

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Slightly different from what you bought, so tell me about that.

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-Oh, my goodness.

-PETER LAUGHS

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Well, I suppose really

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it's what the supermarkets might call an impulse buy,

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because my wife went along to Glasgow -

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you saw her there, with a friend -

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and we knew the house was for sale and we'd had one quick look inside.

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We hadn't even seen all of the house.

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And she went along, and the price was lower than she expected,

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so she put her hand up by all accounts.

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-And now we have another house.

-HE LAUGHS

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But why did you buy it?

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It's such a nice spot, a lot of people want to visit us,

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so it gives us extra accommodation for people to come and stay.

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Coming to a place like this, it's nice not to have to go back the same day, so they stay over.

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So that gives us a place just across the road from us

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and they can come in for breakfast or we have drinks or whatever.

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And it's a little bit separated

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but still a very nice environment for us all to be sociable.

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SONG: "You're My Best Friend" by Queen

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'But before he sends out the invitations, he's got work to do.

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'Since the auction, experts have discovered some hidden nasties,

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'including wet rot and dry rot.

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'The electrics and plumbing also need an overhaul,

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'so it could be a while before Peter's friends can book in to stay here.'

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So, what are you going to do with it?

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Having looked at the front, the more conventional part of the property,

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we're going to strip out all the electrics, strip out all the plumbing, completely redo that,

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redecorate, polish the floors probably,

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new kitchen, new bathroom...

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Just the normal stuff you'd expect to do there.

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We've already had a carpenter who's going to work with us come up,

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and I've got an architect coming in on Friday

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to look at any other options there.

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And there's the garden to deal with.

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It won't be our home, so we're doing it up at a good standard,

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but it will be very conventional at the end of the day.

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-Any ideas of costs?

-HE CHUCKLES

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Probably not.

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A lot will depend on how bad the rot is that we've already seen.

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I guess, in our mind's eye, we see £20,000 to £40,000 as a region.

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Whether that's realistic or not, we'll have to see.

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Interesting set of goalposts there.

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Quite a lot of difference between £20,000 and £40,000.

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Well, we didn't buy it to get stressed.

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It was important that, if we were going to take this on, it wasn't going to rule our lives.

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So there is a wide variance there, and it would be nice if we were closer to £20,000 than £40,000.

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If it goes much beyond £40,000, we'll start stressing,

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but I doubt we'd need to go that far unless the rot's much worse than we think.

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'Peter's hoping the bulk of the renovation will be complete in two to four months.

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'When friends are not staying, they may rent the property out as a holiday let.

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'Assuming this is the stress-free project that Peter hopes,

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'is he thinking of making any more impulse buys?'

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HE LAUGHS

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Er, no, I don't think so. Er...

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No, this is probably... I hope this isn't a bridge too far.

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No, we've no real plans.

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We're trying to enjoy our later life, if you like.

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-Well, congratulations.

-Thank you.

-Good luck with it.

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-We look forward to seeing how you get on.

-Thank you.

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What a great friend to have Peter is,

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because he'll buy you a place like this

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so you're comfortable when you come to stay.

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In terms of budget, we have people on the show

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who know down to the pound exactly how much they're going to spend.

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Peter? Somewhere between £20,000 and £40,000. What will it be?

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And will he and Gail enjoy sorting the place out?

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You can find out later in the show.

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'I'm in London, in the bustling area of Earlsfield.

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'It's got a desirable postcode in the south west of the capital.

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'So here's hoping we'll find a bargain.'

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I'm here to see a three-bedroom property. It had a guide of 170 grand.

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But it's not a house, it's a flat,

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and it's over a cafe.

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Never ideal.

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Let's take a look around and see what it's like on the inside.

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SONG: "Food For Thought" by UB40

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'Having a food outlet underneath a property

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'means there's a chance you might not get a mortgage on it

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'as there's a high risk of fire damage.

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'There could also be an issue with cooking smells,

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'which might put some buyers off.

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'Let's see how it looks inside.'

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It's a bit dated. You've got this marble-effect wallpaper.

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Looks a bit like an old-fashioned Swedish sauna down the end here.

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Look. You can see where somebody's had their guitar on the wall.

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I think it needs a whole big renovation job in here,

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although this is quite a good-size room.

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You've got some big windows to the front.

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Luckily... you can see they're double-glazed.

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You're really going to need that because that is a noisy road.

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But, you know, once decorated, it could be quite a good flat.

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It's bigger than I thought.

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SONG: "Guitar Man" by Elvis Presley

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# There ain't no room around here for a guitar man

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# We don't need a guitar man, son...#

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'Well, if the previous tenant WAS a rock-and-roll fan,

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'they certainly had plenty of space to strut their stuff.

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'As well as the generous living area,

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'there's also a bright and spacious bedroom on this floor.

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'But there's something about this flat that's got me "all shook up".'

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I can't quite put my finger on it but it doesn't feel level up here.

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Now, you can see there is a little crack down here.

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The door... well, it's sort of leaning away from the door frame.

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And then, in the kitchen at the back,

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you can see the wall has come away from the floor.

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You see, sloping floors and cracks could indicate subsidence.

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There are several ways it occurs.

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Many of them are out of your control, I'm afraid.

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You could be in an area with a high concentration of clay soil.

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Dry spells can cause movement in the clay,

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and that signals problems for your foundations.

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You'll need to employ a structural engineer to come out and assess the level of damage

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and propose a schedule of works to rectify this problem.

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So if I was buying this flat, I think I would get it checked out.

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'Next to the kitchen is a small bathroom

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'crying out for modernisation.

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'There's also a separate toilet.

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'It's a bit old-fashioned maybe

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'but could be a bonus if you're planning to let to tenants.

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'Upstairs there are two large, airy bedrooms,

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'but with big rooms like these come bigger heating bills.'

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Buyers are far more aware of energy costs these days,

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so insulate the walls, the floor and roof,

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and think about fitting a modern, energy-efficient boiler.

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A staggering amount of heat is lost through walls and loft spaces in our homes.

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So don't forget all of the unforeseen stuff.

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It can be a real marketing tool

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when it comes to renting or selling a property.

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SONG: "The Heat Is On" by Glenn Frey

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'Time to see what a local estate agent

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'makes of this flat and its location.'

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A great investment. Great location. You can walk to the station.

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There's a real buzz in Earlsfield of things going on - cafes, shops,

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little boutique shops.

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I think a lot of people would like it here.

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It's a younger generation flat once somebody's bought it and done it up.

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'Handy for local amenities, then.

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'But is the cafe downstairs a little close for comfort?'

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The shop is an issue, especially being a cafe underneath.

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Whoever buys this has to think seriously about that

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because on resales getting mortgages can be a bit difficult and tricky.

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So, if they're looking to re-sell the property at some point,

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look into that for the client

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and get a few ideas of where they can go for the mortgage

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to tell the agent they use to sell it for them.

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'This flat seems to be a prime rental opportunity.

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'But what could it make once done up?'

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It's a really good size. I think, in terms of rental, you'd be looking at around £1200 a month.

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'Bearing in the mind the guide price of £170,000,

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'what does the expert make of its resale potential?'

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# The heat is on

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# It's on the street...#

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When the property's renovated, I think you'd be looking at around £300,000.

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A flat above a food outlet.

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I've got to be honest and admit that this is not one of my favourite auction lots.

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It's always going to be difficult to obtain a mortgage here

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and I don't think it's going to be a good one to flip and sell on.

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But I do think it'll be a good rental.

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

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So, 150 anywhere?

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150 with you. Anyone else?

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155.

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160.

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165.

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170.

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175.

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180.

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185.

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190.

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195.

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200.

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201.

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202, sir?

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203? Eh?

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Is that a yes or a no?

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203. Thank you. 204.

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Have we called it quits now? 205?

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204, with you. 205?

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If not, 204, sitting down.

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204. First time. Second time.

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Third and last time. Are we all done?

0:17:570:18:00

-HE BANGS THE GAVEL

-Sold, 204.

0:18:000:18:02

'After that one-on-one battle in the auction room,

0:18:020:18:05

'the successful bid of £204,000

0:18:050:18:08

'was made by James and his business partner, David.

0:18:080:18:12

'James has worked for entrepreneur David for two years now,

0:18:160:18:19

'managing his extensive portfolio of properties.

0:18:190:18:23

'But this flat is his first acquisition for David

0:18:230:18:25

'and he'll be managing the whole renovation by himself.'

0:18:250:18:30

SONG: "All By Myself" by Big Bill Broonzy and Washboard Sam

0:18:300:18:33

# Don't need nobody to help me I'm gonna do it all by myself...#

0:18:330:18:38

'I caught up with them both to find out their plans.'

0:18:380:18:41

-Guys, congratulations.

-Thanks.

0:18:410:18:44

So, are you both business partners?

0:18:440:18:46

Not exactly. I employed James two years ago to work for me.

0:18:460:18:51

I had a small property portfolio I was running on my own.

0:18:510:18:54

I needed someone to take over,

0:18:540:18:57

and I was very fortunate to find James because he's very organised

0:18:570:19:01

and he's turned my small portfolio into quite a sensible holding.

0:19:010:19:07

James, what is your background?

0:19:070:19:09

I studied as an engineer, worked as an engineer for a bit,

0:19:090:19:12

then went into property development and ended up working just down the road as an estate agent.

0:19:120:19:17

I was there for just over a year before moving over to Essex,

0:19:170:19:21

running a property portfolio there,

0:19:210:19:23

and then coming over here and working for David.

0:19:230:19:26

'It sounds like James is more than experienced enough

0:19:270:19:30

'to manage this renovation on his own.

0:19:300:19:32

'So, what has he got in mind?'

0:19:330:19:36

There's lots we can do.

0:19:360:19:37

There's three double bedrooms. We'll make one of them en suite.

0:19:370:19:41

We'll change the location of the kitchen,

0:19:410:19:43

knock down this wall to create an open-plan reception,

0:19:430:19:46

white woodwork,

0:19:460:19:48

neutral colour carpets upstairs and in the bedrooms.

0:19:480:19:52

All pretty standard,

0:19:520:19:54

but well-finished, good quality, nicely done.

0:19:540:19:57

How much money do you think you'll spend?

0:19:570:20:00

What is your budget on something like this?

0:20:000:20:02

I think we've allowed for about £40,000, possibly up to £50,000.

0:20:020:20:07

Wow! That's quite an impressive budget.

0:20:070:20:10

Yeah. We want to make the product good. We're proud of what we do.

0:20:100:20:13

Obviously we want to make a profit, but it's more important that we get a nice product,

0:20:130:20:18

and if it costs a few thousand more, from experience it pays off.

0:20:180:20:22

So what's the end price of this?

0:20:220:20:24

How much would you like to market this for, once you've finished?

0:20:240:20:27

I think we expect to get about £310,000 to £320,000.

0:20:270:20:31

So you've got to break through that £250,000 threshold

0:20:310:20:36

-and really make this an all-singing, all-dancing property.

-Yeah.

0:20:360:20:40

What about the fact that it's above a fast-food shop?

0:20:400:20:42

Do you think that's going to put buyers off, perhaps?

0:20:420:20:47

I think it's going to be an issue in terms of finding a mortgage,

0:20:470:20:50

and we were aware of that when we bought it.

0:20:500:20:54

If we stick it on the market

0:20:540:20:56

and if we can't find a buyer within a couple of months,

0:20:560:20:59

we'll be looking to let it until the market comes round,

0:20:590:21:02

and we'll sell it then.

0:21:020:21:04

'David and James plan to finish the work and put the flat on the market in just three months.

0:21:050:21:10

'James knows the area and has done his homework,

0:21:100:21:12

'so no wonder David's confident he can handle the project.'

0:21:120:21:16

David, you've obviously got your fingers in many pies.

0:21:160:21:19

Are you going to totally leave this to James to get on with?

0:21:190:21:22

I hope so, yes. I think it's going to be his baby.

0:21:220:21:25

I contributed from the financial point of view,

0:21:250:21:29

and I'm going to leave it to James and not get in his way.

0:21:290:21:32

-So this is going to be a bit of a showcase for you.

-Yeah.

0:21:320:21:36

This is my chance to prove to David what I can do,

0:21:360:21:38

and hopefully it'll be the first of many to come.

0:21:380:21:41

It's been fantastic meeting you. James, this is your big chance.

0:21:410:21:45

-Thank you very much.

-Good luck.

-Thank you.

0:21:450:21:48

This is James's chance to shine, and David is taking a back seat.

0:21:490:21:53

But the big question here is:

0:21:530:21:55

will they secure a buyer, or will they be forced to rent this out?

0:21:550:21:59

'This property could give James a taste for success.

0:21:590:22:03

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

0:22:030:22:07

'Coming up, this property in Devon is fine just the way it is.'

0:22:080:22:12

But in general, for once, I'd keep it like it is.

0:22:120:22:14

It doesn't want to go open plan. This room I like.

0:22:140:22:17

'We return to London to see how this brave new venture

0:22:180:22:21

'has worked out for David and James.'

0:22:210:22:23

This is my only time I've been back here, and I'm absolutely delighted with what I've seen.

0:22:230:22:28

'But first, has it been a stress-free renovation

0:22:290:22:32

'for Peter and Gail in Perthshire?'

0:22:320:22:34

It's been very hard work, and I've lost all my nails.

0:22:340:22:38

'Now we're back in Pitlochry

0:22:410:22:43

'where this end-of-terrace cottage sold at auction for £82,000.

0:22:430:22:47

'Gail bought it on behalf of herself and husband Peter.

0:22:470:22:50

'They currently live just a short stroll from the property.'

0:22:500:22:54

Why did you buy it?

0:22:550:22:57

It's such a nice spot, a lot of people want to visit us,

0:22:570:23:01

so often people are trying to get in, and we've got some people here,

0:23:010:23:05

so it gives us extra accommodation for people to come and stay.

0:23:050:23:09

It's nice not to have to go back the same day.

0:23:090:23:12

SONG: "Come On Over" by Shania Twain

0:23:120:23:16

# Pull up a seat Take a load off your feet...#

0:23:160:23:19

'Isn't that a lovely idea!

0:23:190:23:20

'But was it so lovely once the refurbishment got under way?

0:23:200:23:24

'We're back just over eight months later,

0:23:240:23:26

'and from the front it looks like things haven't changed much.

0:23:260:23:29

'Let's hope it's a different story inside.

0:23:290:23:32

'Well, what a transformation!

0:23:380:23:41

'From dull and dowdy, Gail and Peter have turned this kitchen

0:23:410:23:44

'into a bright and inviting space.

0:23:440:23:47

'They've even added a wood-burning stove to give their visitors a warm welcome.

0:23:470:23:51

'But the work also uncovered some uninvited guests

0:23:510:23:54

'when woodworm and rot were discovered.

0:23:540:23:56

'It meant replacing the entire kitchen floor.'

0:23:560:23:59

It was completely rotten, and so we took it all out -

0:23:590:24:02

the joists, the wood, everything -

0:24:020:24:05

and that's all brand-new.

0:24:050:24:07

Likewise, in the top of the house,

0:24:070:24:08

the roof we had to lift on one side because there was a huge amount of woodworm.

0:24:080:24:13

So the house had a fair few more issues than we'd anticipated.

0:24:130:24:17

'At least they've done the job properly,

0:24:170:24:20

'so hopefully they'll have few problems in the future.

0:24:200:24:23

'The living room was a great size,

0:24:230:24:25

'and, apart from that ugly, bricked-up doorway, there didn't seem much to do.

0:24:250:24:29

'But, on closer inspection, they found the floor in here rotten too.

0:24:290:24:34

'A complete replacement was the only solution.

0:24:340:24:36

'Now the living room's finished, it's a gorgeous, airy space.

0:24:360:24:40

'One of the house's biggest mysteries was that strange annex

0:24:420:24:46

'with separate entrances on each floor.

0:24:460:24:48

'Gail and Peter decided to turn the puzzle into a beautiful play area

0:24:480:24:52

'for their younger visitors.'

0:24:520:24:54

Well, we've created a safe play area for children.

0:24:540:24:57

We had a door here which we've removed

0:24:570:24:59

and we've now made a window.

0:24:590:25:01

And, as you can see, we've made a clear, spacious area for all the children to play in.

0:25:010:25:06

It's got a nice television set, books, games and things like that.

0:25:060:25:12

'And where does that brand-new staircase lead?

0:25:120:25:14

'Remember that Narnia entrance through a cupboard that led to a dark, almost unusable, room?

0:25:140:25:19

'Well, now it's a light, bright mezzanine,

0:25:190:25:23

'which could be used as another bedroom or a study.'

0:25:230:25:26

This is where we originally came through from the bedroom. It was a hole in the cupboard.

0:25:260:25:30

Now we've changed all that.

0:25:300:25:32

We've closed that off and made this into a space on its own.

0:25:320:25:35

A mezzanine area with plenty of light,

0:25:350:25:38

and a balcony area here.

0:25:380:25:41

It all works very well. We really like it a lot this way.

0:25:410:25:43

'The master bedroom upstairs was a good size.

0:25:430:25:46

'Now, with some tasteful decoration, it's a beautiful room.

0:25:460:25:50

'And, once Peter and Gail removed that ugly radiator,

0:25:500:25:53

'they uncovered this wonderful fireplace.

0:25:530:25:57

'Without those wardrobes, the second bedroom

0:25:580:26:01

'feels entirely different - fresh and light.

0:26:010:26:05

'The bathroom needed a complete overhaul.

0:26:050:26:08

'Now, with a new suite, flooring and decoration,

0:26:080:26:10

'it's a lovely modern bathroom,

0:26:100:26:13

'with the addition of a new shower as well.

0:26:130:26:16

'The cottage has been rewired and replumbed throughout,

0:26:160:26:19

'with new gas central heating and loft insulation installed.

0:26:190:26:24

'Outside, there's been extensive earthwork,

0:26:240:26:27

'with more parking created.

0:26:270:26:29

'The garden's been tamed, but there's still plenty to do.'

0:26:290:26:32

'There's all the outside painting to be done

0:26:320:26:35

'and more landscaping work.

0:26:350:26:37

'We've got to get some grass down there and do more work on that.'

0:26:370:26:40

'It seems the lion's share of the work is done.

0:26:410:26:44

'When we were last here, Peter was adamant

0:26:440:26:46

'that this project wouldn't take over their lives.

0:26:460:26:49

'Did they stick to their guns?'

0:26:490:26:51

It's been very hard work, and I've lost all my nails.

0:26:520:26:56

It's been more work than we'd anticipated.

0:26:560:26:59

I think we'd have still done it because it's very local to us.

0:26:590:27:04

But certainly I hadn't anticipated putting as much of my own personal effort and time in, or Gail's.

0:27:040:27:09

Nor had I. It's been really hard work.

0:27:090:27:12

However, when you walk round it finished, it feels really good and exciting.

0:27:120:27:16

'As Peter and Gail were so thorough in refurbishing this house,

0:27:160:27:21

'they rescued it from some potentially disastrous problems like woodworm and rot.

0:27:210:27:26

'After all their hard work, what were the highlights?'

0:27:260:27:30

Seeing the roof come right, seeing this floor go down,

0:27:300:27:33

and it all coming together when everything had been ripped out.

0:27:330:27:36

The electric's in, the plumbing's in, everything hidden away,

0:27:360:27:40

and it starts to look like a proper house again.

0:27:400:27:42

'Originally Peter thought it would take two to four months,

0:27:430:27:46

'but so far it's been eight months of hard work,

0:27:460:27:49

'and he thinks it will be another two before it's finally finished.

0:27:490:27:52

'He also estimated the cost of renovation

0:27:520:27:54

'to be between £20,000 and £40,000.

0:27:540:27:57

'So, has his budget suffered as badly as his timescale?'

0:27:570:28:02

Even when all the external work is finished,

0:28:020:28:05

we'll still be under £40,000.

0:28:050:28:06

So we've spent a fair bit of money

0:28:060:28:08

but we've produced what we think is a very good result as a consequence of that,

0:28:080:28:14

so we're not too concerned.

0:28:140:28:15

'The couple paid £82,000 at auction,

0:28:170:28:19

'and Peter has estimated roughly 40 grand will have been spent

0:28:190:28:23

'by the time he finishes the exterior work.

0:28:230:28:26

'So, with about £122,000 invested in total once it's all finished,

0:28:260:28:32

'plus addition fees and expenses,

0:28:320:28:34

'have they made any money here?

0:28:340:28:37

'We asked two local property experts for their opinions.'

0:28:370:28:42

It's very nice, very well done. It's very modernised.

0:28:420:28:46

Compared to the last time I saw it, it's a total transformation.

0:28:460:28:49

It's lovely. It's a super location.

0:28:490:28:52

And he's done everything from replacing flooring, ceilings,

0:28:520:28:56

and he's definitely not cut any corners.

0:28:560:28:59

'That's brilliant feedback for Peter and Gail.

0:28:590:29:02

'Both experts agree that renting the house out as a holiday let

0:29:020:29:05

'could be very lucrative.

0:29:050:29:07

'So, what could their cash return be?'

0:29:070:29:10

I could see this going between £500 and £600 per week

0:29:100:29:13

on the holiday let market.

0:29:130:29:15

I would expect, as a holiday let, they could achieve £500 per week.

0:29:150:29:20

-Golly.

-SHE LAUGHS

0:29:200:29:22

Gosh. We could be millionaires, darling. That's the best.

0:29:220:29:25

-That's quite a lot of money for a small place.

-For a week!

0:29:250:29:29

I wouldn't like to be the person having to pay it, though.

0:29:290:29:33

'If they were to rent the property out as a residential let,

0:29:330:29:37

'the experts estimated they could achieve

0:29:370:29:39

'between £500 and £700 per calendar month.

0:29:390:29:42

'So not a bad return there,

0:29:420:29:45

'although the demand for this type of let in this area is fairly low.

0:29:450:29:49

'If they were to sell the cottage,

0:29:490:29:50

'what might they achieve in the current market?'

0:29:500:29:54

I would set the value of this property at £175,000 to £180,000.

0:29:540:29:58

I think this house could fetch between £170,000 and £180,000.

0:29:580:30:04

Really?! HE LAUGHS

0:30:040:30:06

-That's amazing!

-It's pretty good.

0:30:080:30:11

-It surprises us, I think.

-I thought about £125,000 or something. Whoo!

0:30:110:30:16

'I can see why they're pleased.

0:30:160:30:19

'That could give them a remarkable pre-tax profit of up to £58,000.

0:30:190:30:25

'The couple bought the cottage so that family and friends

0:30:250:30:28

'could have somewhere comfortable to stay close by when visiting.

0:30:280:30:32

'But after hearing the property experts' valuations,

0:30:320:30:35

'have they had a rethink?'

0:30:350:30:37

It certainly is tempting to look at the holiday season

0:30:370:30:41

and look at a few weeks in the holiday season,

0:30:410:30:44

-but we'll have to think about that.

-It's a lot of money to say no to.

0:30:440:30:48

'Now with a successful renovation project under their belts,

0:30:480:30:52

'what do they plan to do next?

0:30:520:30:55

Travelling. Having fun.

0:30:550:30:57

-Yes, relaxing a little bit.

-Doing nice things. Relaxing, yes.

0:30:570:31:00

Reading.

0:31:000:31:02

Yeah, just having a nice time.

0:31:020:31:03

'I'm in Plymouth, Devon, in an area called St Budeaux.

0:31:090:31:13

'It's a part of the city which has affordable housing in abundance.

0:31:130:31:17

'The property that went to auction is on a main road,

0:31:170:31:20

'good for shops and amenities, but not so good for the traffic.'

0:31:200:31:24

SONG: "Cars" by Gary Numan

0:31:240:31:27

I'm here to see a two-bedroom flat that had a guide price of £120,000.

0:31:340:31:41

Sounds like a lot for a two-bedroom flat, but that's not all you get.

0:31:410:31:44

You also get this. Not the charity shop itself,

0:31:440:31:47

but the commercial unit that the charity shop is in.

0:31:470:31:51

They say charity begins at home. Let's start with the home.

0:31:510:31:55

'Of course, by having a shop leased out underneath,

0:31:560:31:59

'the flat could generate more income for whoever bought it.

0:31:590:32:03

'It will also be handy for tenants to pick up any shopping.'

0:32:030:32:07

So, up one flight of stairs to this little landing.

0:32:120:32:15

That's your loo and bathroom. Looks like it could do with a tidy up.

0:32:150:32:20

But in general the flat actually feels in pretty good condition.

0:32:200:32:25

A fairly classic kind of decorating going on.

0:32:250:32:27

White, with a bit of cream and some white detailing. I like that.

0:32:270:32:30

I also, believe it or not, like the woodchip wallpaper.

0:32:300:32:33

In a place like this that you'll rent out,

0:32:330:32:36

it's easy to patch in another bit of woodchip if you get some damage.

0:32:360:32:40

So don't knock it and don't necessarily take it off -

0:32:400:32:42

you'll be delighted to hear, because it is a horrible job to get woodchip off.

0:32:420:32:47

But what have we got? Two bedrooms. One there, one there.

0:32:470:32:51

Kitchen - not an ideal size, but it looks like it's pretty serviceable.

0:32:510:32:55

So would we think about knocking it through to the living area?

0:32:550:32:59

There's a window there. You could open that up.

0:32:590:33:02

But in general, for once, I'd keep it like it is.

0:33:020:33:04

It doesn't want to go open plan. This room I like.

0:33:040:33:07

A big bay window, you've got your open fire.

0:33:070:33:10

At the moment it has a horrible gas fire but you can sort that out.

0:33:100:33:13

A nice space. So, all in all,

0:33:130:33:15

a really good-size, spacious, two-bedroom flat.

0:33:150:33:19

Good news.

0:33:190:33:21

'Indeed, those big, bright, open corridors

0:33:210:33:24

'only add to the instant appeal of this flat.

0:33:240:33:27

'By the look of it, there really isn't much to do here.

0:33:270:33:30

'It's pretty much ready to move straight into.'

0:33:300:33:34

One of the things which strikes you about this flat is the size.

0:33:350:33:38

It is a really nice-sized unit.

0:33:380:33:42

I mean, two huge bedrooms, as I said.

0:33:420:33:44

Maybe you could think about creating three smaller ones,

0:33:440:33:47

but I think you'd lose some of the charm of this place by doing that.

0:33:470:33:50

Nice little features.

0:33:500:33:52

Oh. I was hoping for a slightly deeper cupboard than that.

0:33:520:33:55

But OK, a very thin, narrow cupboard.

0:33:550:33:58

But anyway, at least it is inbuilt storage.

0:33:580:34:01

Another nice touch, all the rooms have got these open fires.

0:34:010:34:05

All in all, then, it's a great place, really.

0:34:050:34:08

Great place.

0:34:080:34:10

SONG: "It's Been A Great Afternoon" by Merle Haggard

0:34:100:34:14

'So far so good,

0:34:150:34:16

'and all for a tempting guide price of £120,000,

0:34:160:34:20

'which, remember, includes the shop below.'

0:34:200:34:24

Well, mixed-use units like this

0:34:240:34:27

with a commercial area downstairs and a flat above

0:34:270:34:30

can sometimes be quite difficult to get finance on for some reason.

0:34:300:34:34

However, I think they offer a really good opportunity

0:34:340:34:37

for some solid rental income.

0:34:370:34:39

Can't go wrong, really.

0:34:390:34:41

'I've certainly been won over by this property's potential.

0:34:420:34:46

'But will it charm a local estate agent?

0:34:460:34:48

'We asked one from the auction house who sold it

0:34:490:34:52

'to take a look and tell us what he thought.'

0:34:520:34:55

The flat's in a very good condition.

0:34:550:34:57

It will allow somebody to rent the property straightaway.

0:34:570:35:00

'The property is decorated to a reasonable standard for letting.

0:35:000:35:05

'In terms of location,

0:35:050:35:07

'it's ideally suited to anybody who wants to work in the city centre.'

0:35:070:35:10

'Because it's so easy to pop into Plymouth from here,

0:35:100:35:13

'this flat would generate a healthy rental income.'

0:35:130:35:17

Once renovated, I estimate

0:35:170:35:18

that the property should achieve between £500 to £525 per calendar month.

0:35:180:35:24

'So a reasonable rental return from the upstairs alone.

0:35:240:35:27

'What if the new owner decided to sell the flat on?'

0:35:270:35:31

I would recommend the current market value to be between £75,000 to £80,000.

0:35:310:35:36

'Remember, that's only the value for part of this property.'

0:35:360:35:40

One of the big commercial benefits of this particular auction lot

0:35:410:35:45

was the fact that it did come with this commercial unit,

0:35:450:35:48

which has already got somebody renting it out.

0:35:480:35:51

The auction catalogue says

0:35:510:35:53

that it does enjoy the comfort of a newly signed five-year lease.

0:35:530:35:58

'That sounds simple enough,

0:35:590:36:01

'and the current rental income from the shop is about £7,000 a year.

0:36:010:36:05

'So that could be a nice little earner

0:36:050:36:08

'for whoever bought the property at auction.

0:36:080:36:10

'But it's worth checking these things,

0:36:100:36:12

'and the auctioneer had a little explaining to do on the day.'

0:36:120:36:16

We have more information for you.

0:36:180:36:20

The new lease referred to in the catalogue description

0:36:200:36:23

is still in preparation

0:36:230:36:25

and will not be signed until after the auction date.

0:36:250:36:28

Where shall we start?

0:36:280:36:30

I'll take 100. I've got 100.

0:36:300:36:32

£100,000 I've got.

0:36:320:36:34

£101,000.

0:36:340:36:36

102.

0:36:360:36:38

103, sir?

0:36:380:36:39

103. 104.

0:36:390:36:41

105, sir?

0:36:410:36:43

105. 106.

0:36:430:36:44

New place. 107. Got your bid, 107.

0:36:440:36:47

I'll come back to you at 108, sir.

0:36:470:36:49

£108,000. 108.

0:36:490:36:52

£109,000. I need 110.

0:36:520:36:55

110.

0:36:560:36:57

111. Go 112, sir?

0:36:570:36:59

112.

0:37:000:37:01

112. 113. 114 I've taken.

0:37:010:37:05

115?

0:37:050:37:06

£115,000. 116.

0:37:060:37:09

117, sir?

0:37:090:37:11

117? I've taken 117.

0:37:110:37:13

£117,000.

0:37:130:37:15

118. Creeping up. 118.

0:37:150:37:17

119, sir?

0:37:170:37:19

£119,000.

0:37:190:37:20

At £120,000. I need 121. It's still rolling on.

0:37:200:37:24

121? 121.

0:37:240:37:26

122.

0:37:260:37:28

122. Taken 122.

0:37:280:37:30

123, please.

0:37:300:37:32

123.

0:37:320:37:33

£124,000.

0:37:330:37:35

Go 125, sir?

0:37:350:37:37

£125,000.

0:37:370:37:39

At £125,000. Finished?

0:37:390:37:42

-OK.

-HE BANGS THE GAVEL

0:37:420:37:44

'It was Chris who made that final bid of £125,000.

0:37:450:37:50

'He and his wife Lily

0:37:510:37:53

'have been investing in and developing property

0:37:530:37:56

'for the last ten years.

0:37:560:37:57

'I caught up with him at his latest purchase to hear about the plan.'

0:37:570:38:02

-Chris, Congratulations.

-Thank you very much.

-Well done.

0:38:020:38:05

Tell me why you wanted to buy this interesting opportunity.

0:38:050:38:08

With the shop and the flat are two opportunities for income,

0:38:080:38:11

so it makes a good rental year for us

0:38:110:38:14

-on the money we've got to invest.

-Right.

0:38:140:38:16

-Tell me more about you.

-My wife and I just returned from Australia.

-Oh!

0:38:160:38:21

We were in New Zealand and then Australia for six years.

0:38:210:38:24

-What were you doing in Australia?

-Not too much.

0:38:240:38:28

We did a little bit of development on a piece of land in Australia,

0:38:280:38:32

and also in New Zealand before that.

0:38:320:38:34

Why did you choose to invest in this area?

0:38:340:38:37

When I viewed the property, it seemed like a nice street, with a good feel to the property.

0:38:370:38:42

It's fairly local to where we are,

0:38:420:38:44

so we've got a chance to see it and manage it,

0:38:440:38:46

but not too close to home, so we don't have it on the doorstep.

0:38:460:38:50

'All those years of experience developing land and property,

0:38:500:38:54

'both at home and abroad,

0:38:540:38:56

'came in very handy for this flat.

0:38:560:38:58

'Chris knew he needed to do his homework,

0:38:580:39:01

'and a quick call to the auction house a week before the auction

0:39:010:39:04

'meant he knew about that unsigned shop lease

0:39:040:39:08

'well in advance of making his bid.

0:39:080:39:10

'A lesson to be learnt there:

0:39:100:39:12

'do your research first to prevent complications later.

0:39:120:39:15

SONG: "Confusion" by The Zutons

0:39:150:39:19

There was a bit of confusion over the lease

0:39:200:39:23

-in terms of what the catalogue said and the reality.

-Yes.

0:39:230:39:26

The catalogue said there was a new five-year lease in place,

0:39:260:39:30

-but actually that five-year lease hadn't been signed.

-Ah!

0:39:300:39:33

So it was in place on a desk somewhere!

0:39:330:39:35

Probably on somebody's desk. We don't quite know whose.

0:39:350:39:39

So what we've done is asked our solicitor to amend the existing lease

0:39:390:39:43

to extend it by a further five years,

0:39:430:39:46

and they're dealing with that now.

0:39:460:39:47

-The lease already in place.

-Yeah.

0:39:470:39:49

It was a fairly standard commercial lease with nothing in it for us to think about,

0:39:490:39:54

so we might as well just extend it for a further five years.

0:39:540:39:59

What are you going to do to the property, then?

0:39:590:40:01

I think a bit of tidying up. It's got some nice features.

0:40:010:40:04

The lovely fireplaces, which I think will look nice.

0:40:040:40:07

We're going to take away the gas fires and put central heating in,

0:40:070:40:11

replace the floorings,

0:40:110:40:13

things like the doors,

0:40:130:40:15

and just a good general tidy up.

0:40:150:40:17

-Why replace the floorings?

-They've got to come up to get the heating in,

0:40:170:40:20

so it's a good opportunity to replace them at that point,

0:40:200:40:24

make it look spick and span.

0:40:240:40:26

-And then rent it out.

-Yes.

0:40:260:40:28

'Chris thinks that the work here could be completed in about a month

0:40:300:40:34

'for £3,000 to £4,000.

0:40:340:40:36

'For this, their first property venture back on these shores,

0:40:360:40:40

'I reckon the couple have picked an ideal flat.

0:40:400:40:43

'Not much work needed but great rental potential.

0:40:430:40:46

'By the sounds of it, this will be the first of many.'

0:40:460:40:49

-The plan is to build a portfolio of how many?

-As many as we can.

0:40:530:40:57

-Realistically, I suppose we're initially looking for 30 to 40 properties.

-Blimey! Initially?

0:40:570:41:03

-Well, we've got a plan.

-Which is?

-Erm...

0:41:030:41:06

To purchase only positive cash flow property

0:41:060:41:09

that will actually pay us to have them.

0:41:090:41:12

That way, with the market as it is and prices as they are,

0:41:120:41:15

we've got a chance to perhaps accelerate a bit quicker

0:41:150:41:18

than we could have done when prices were very high.

0:41:180:41:21

-But you still have to come up with the finance.

-Yes. Some finance.

0:41:210:41:25

We're fortunate that we can initially proceed with some cash

0:41:250:41:29

and then refinance after.

0:41:290:41:32

But yes, obviously finance will become the big issue on the quantity that we can get.

0:41:320:41:37

But as long as the properties are paying us an income rather than costing money,

0:41:370:41:41

we've got a much better chance of success.

0:41:410:41:43

-Well, congratulations.

-Thank you very much.

-Good luck with it.

0:41:430:41:48

All our buyers hoped their journeys had been worth it.

0:41:500:41:53

They'd taken the right turns and avoided the pitfalls.

0:41:530:41:56

So did they? Decisions, decisions. Did they make the right ones?

0:41:560:42:00

Time to go back and find out.

0:42:000:42:02

'Now we're back in Earlsfield, South West London,

0:42:030:42:06

'where this three-bedroom flat above a cafe

0:42:060:42:08

'sold at auction for £204,000.

0:42:080:42:11

'I met the new owner, property developer David, and his assistant, James.

0:42:110:42:15

'Beginning a new chapter in their professional relationship,

0:42:150:42:19

'James is taking the lead in his first acquisition for David.'

0:42:190:42:23

I think it's going to be his baby.

0:42:230:42:26

I contributed from the financial point of view

0:42:260:42:29

and I'm going to leave it to James and not get in his way.

0:42:290:42:33

So this is going to be a bit of a showcase for you, isn't it?

0:42:330:42:36

Yeah. This is my chance to prove to David what I can do,

0:42:360:42:39

and hopefully it'll be the first of many to come.

0:42:390:42:42

'James had some big plans for reorganising the space in the flat,

0:42:420:42:46

'which included relocating the kitchen.

0:42:460:42:49

'Did he manage to pull that off?

0:42:490:42:51

'We're back four months later to see how they got on.

0:42:510:42:55

'The living room in this flat was out of tune with the times

0:42:560:42:59

'and in desperate need of modernisation.

0:42:590:43:01

'But now...

0:43:010:43:04

'James has brought harmony to this space

0:43:040:43:06

'with solid-wood floors

0:43:060:43:08

'and a beautiful cast iron fireplace,

0:43:080:43:10

'giving the room an impressive focal point.

0:43:100:43:12

'The wall between the living room and the first-floor bedroom has been removed

0:43:120:43:16

'to create an amazing open-plan kitchen and lounge.

0:43:160:43:20

'What was the front bedroom is now a stunning and stylish kitchen.'

0:43:200:43:25

In the lounge and kitchen, what we've done...

0:43:250:43:27

This was originally two rooms. We've taken this wall down.

0:43:270:43:31

We've tried to bring in and make the most of the kitchen.

0:43:310:43:34

To give it that "wow" factor, we've got a nice big range-style cooker.

0:43:340:43:38

Also, because of the light, the windows either side,

0:43:380:43:42

it makes the room very light.

0:43:420:43:43

We've got a nice big feature fireplace in here.

0:43:430:43:46

I think it really works.

0:43:460:43:48

It's been a positive step, I think, and a selling point for the flat.

0:43:480:43:51

'The original kitchen at the back of the flat was dull and dated.

0:43:510:43:55

'But now the kitchen has moved to the front,

0:43:550:43:57

'this has become the master bedroom.

0:43:570:43:59

'James has really let the light flood in here.

0:43:590:44:02

'Previously the bathroom was separate from the toilet.

0:44:040:44:07

'But they've been cleverly combined to make an en suite shower room.

0:44:070:44:11

'The stairs leading to the next floor have been spruced up

0:44:140:44:17

'with new carpets and a fresh paint job,

0:44:170:44:20

'which has also really cheered up the landing upstairs.

0:44:200:44:24

'The first bedroom on the next floor was a decent size

0:44:240:44:27

'and just needed some TLC.

0:44:270:44:29

'Some neutral paint and a carpet have done the trick.'

0:44:290:44:34

'The last bedroom was large

0:44:340:44:36

'and again just needed brightening up.

0:44:360:44:38

'Now it's light and inviting.

0:44:380:44:41

'One thing that James has achieved is to add a bathroom up here.

0:44:430:44:47

'By losing a bit a space from this already massive room,

0:44:470:44:50

'he's made a great improvement to this flat.

0:44:500:44:52

'The bathroom, fresh and simple, really is a tremendous enhancement.

0:44:520:44:57

'There certainly have been big changes here.

0:45:010:45:04

'But I wonder if it was all plain sailing.'

0:45:040:45:07

It's gone really smoothly. We've had a really good team of guys.

0:45:070:45:11

They've done a great job. They've been working hard for me.

0:45:110:45:14

I've been over here checking up on them.

0:45:140:45:17

The shop downstairs could have been an issue, but they've been great.

0:45:170:45:21

It's all run pretty much according to plan, so... happy days.

0:45:210:45:25

'Yes, happy days indeed.

0:45:250:45:27

'But when we were last here,

0:45:270:45:29

'the distinct odour of cooking was coming from the downstairs cafe.

0:45:290:45:33

'Has James managed to do anything about it?'

0:45:330:45:35

We were getting a bit of a smell coming through.

0:45:350:45:38

So what we did was beefed up the dividing wall

0:45:380:45:41

between the cafe and the incoming staircase

0:45:410:45:44

and we put down a vapour barrier across the whole of the first floor

0:45:440:45:48

to stop it from coming through,

0:45:480:45:50

and it's worked a treat.

0:45:500:45:52

'But what about those cracks we spotted?

0:45:530:45:55

'Fingers crossed it wasn't subsidence!'

0:45:550:45:58

We got a structural engineer, who reassured us that wasn't the case.

0:45:580:46:02

There's been some movement over the years but that was a long time ago,

0:46:020:46:05

and we've not had any problem since.

0:46:050:46:08

'Everything seems to have gone well for James.

0:46:080:46:11

'But what does David, the man holding the purse strings, think?'

0:46:110:46:15

I came here when we first bought it.

0:46:150:46:18

I got back to the office. James took over from there.

0:46:180:46:21

This is my only time I've been back here

0:46:210:46:24

and I'm absolutely delighted with what I've seen.

0:46:240:46:27

'So has James impressed David enough to risk it again?'

0:46:280:46:32

'Without doubt, he has proven himself.

0:46:330:46:35

'I really did want this to be a success for him,

0:46:350:46:39

'and that's what I really want him to do,

0:46:390:46:41

to be a long-term partner with me in my business.

0:46:410:46:44

And I think this is going to be the right stage for us

0:46:440:46:50

to start doing other deals.

0:46:500:46:51

'It sounds like everything has worked out for David and James.

0:46:520:46:56

'So let's get down to business.

0:46:560:46:58

'They reckoned they'd need three months to complete the renovation.

0:46:580:47:02

'But now it's four months on and there's still snagging to sort.

0:47:020:47:06

'So, what was the hold-up?'

0:47:060:47:08

We had Christmas in the middle, so there was a bit of a break there,

0:47:080:47:13

and really just tweaking, making sure we go that extra step

0:47:130:47:16

to get the finish that we're after.

0:47:160:47:18

'Their budget for the work was between £40,000 and £50,000.

0:47:190:47:23

'So how did James do at spending David's money?

0:47:230:47:26

Originally our budget was £40,000 to £50,000.

0:47:280:47:30

I did think I might be able to get it done for a bit less.

0:47:300:47:33

I think we've ended up spending about £45,000,

0:47:330:47:35

so really we're where we originally thought we would be.

0:47:350:47:39

So we haven't really gone over budget.

0:47:390:47:41

'That 45 grand budget included £5,000 in fees.

0:47:420:47:46

'Added to the purchase price of £204,000,

0:47:460:47:49

'that makes a grand total of £249,000.

0:47:490:47:53

'So, have they made any money on this venture?

0:47:530:47:56

'We invited two local estate agents to give us their thoughts.'

0:47:560:48:00

'Looking very good.

0:48:010:48:02

'Done a good job. Very neat.'

0:48:020:48:04

Used a lot of the space very well.

0:48:040:48:06

I'm very impressed by that.

0:48:060:48:08

This room especially. Fantastic. A really big reception.

0:48:080:48:11

They've been very clever with their allocation of bathrooms.

0:48:110:48:14

We've got an en suite bathroom and another main bathroom,

0:48:140:48:17

which was sneaked in using a little bit of a bedroom.

0:48:170:48:20

You don't notice the missing size of the room.

0:48:200:48:23

Very impressed. Very good.

0:48:230:48:25

My first thoughts are that the finish is really good,

0:48:250:48:28

especially in the kitchen and living area.

0:48:280:48:31

Some very nice traditional features, especially the fireplace.

0:48:310:48:35

And it's got a very good layout.

0:48:350:48:37

'That's great, really positive feedback for James.

0:48:390:48:42

'How much do they think the flat could earn on the rental market?'

0:48:420:48:46

Looking at the finish and the location,

0:48:460:48:48

in the rental market, I'd put it on at around £1300 per calendar month.

0:48:480:48:51

I'd put this on the rental market at £1450 per calendar month.

0:48:510:48:56

I think that's about right. Maybe a touch more than that but...

0:48:560:49:01

'If the property was put up for sale now,

0:49:020:49:04

'how much could they expect to get for it?'

0:49:040:49:07

In terms of resale value,

0:49:070:49:10

I'd be quite happy to put it on between £285,000 and £300,000.

0:49:100:49:15

I'd put this on the resale market at £365,000.

0:49:150:49:19

Wow. That's a big difference between the two.

0:49:190:49:24

I think that speaks for itself. I've had that same problem myself.

0:49:240:49:27

It's difficult to find good comparables for it.

0:49:270:49:30

I've had some agents come up at the £350,000 mark,

0:49:300:49:34

some down at £310,000 or £300,000.

0:49:340:49:37

If we end up somewhere in the middle, that'd be great.

0:49:370:49:40

'This seems to have worked out really well for David and James.

0:49:410:49:45

'With a further two properties they bought at auction recently,

0:49:450:49:49

'this marks the beginning of a new business venture for them both.'

0:49:490:49:53

It was a leap of faith, obviously, in him,

0:49:530:49:55

because I didn't interfere and he got on with the job,

0:49:550:49:58

and he has proved himself,

0:49:580:50:00

and it is very much what I'd hoped for and what I'd expected.

0:50:000:50:05

So we move on from here, and I have confidence in him for the future.

0:50:050:50:11

'We're back in Plymouth now,

0:50:150:50:17

'where this two-bed flat sold for £125,000

0:50:170:50:22

'but also included the shop below.

0:50:220:50:25

'It was bought by Chris,

0:50:250:50:27

'who had big plans for his growing property-developing portfolio.'

0:50:270:50:31

-Realistically, I suppose we're initially looking for 30 to 40 properties.

-Blimey! Initially?

0:50:330:50:39

-Well, we've got a plan.

-Which is?

-Erm...

0:50:390:50:42

To purchase only positive cash flow property

0:50:420:50:45

that will actually pay us to have them.

0:50:450:50:48

That way, with the market as it is and prices as they are,

0:50:480:50:51

we've got a chance to perhaps accelerate a bit quicker

0:50:510:50:54

than we could have done when prices were very high.

0:50:540:50:57

'But how quickly have the renovations gone?

0:50:570:51:00

'We caught up with him six weeks later to find out.'

0:51:000:51:04

SONG: "With A Little Bit Of Mending (We Could Be As Good As New" by Lamont Dozier

0:51:060:51:12

We didn't have too much to do.

0:51:170:51:19

The main job was the central heating, so we put that in.

0:51:190:51:22

In the kitchen, we had to replace the floor where the floor came up.

0:51:220:51:26

A little bit of boxing in.

0:51:260:51:27

But mostly it's just decoration, which has yet to be finished off.

0:51:270:51:31

'It's not the most dramatic of transformations,

0:51:330:51:35

'but remember, the flat didn't need much done to it in the first place.

0:51:350:51:40

'Talking of dramatic, check out the new floor in the bathroom.'

0:51:400:51:44

In the bathroom, we've redone this wall and the ceiling,

0:51:450:51:49

all plasterboarded and made good.

0:51:490:51:51

We've replaced the bath, which was pretty poor,

0:51:510:51:54

put a new shower and shower screen in,

0:51:540:51:56

new taps on the sink,

0:51:560:51:58

the toilet's had a new seat,

0:51:580:51:59

and, to match the kitchen, we've got a flashy new floor.

0:51:590:52:03

-MARTIN CHUCKLES

-'Yes, and it continues into the new kitchen.'

0:52:030:52:07

We didn't have to do too much in the kitchen.

0:52:090:52:11

As you can see, we put a new central heating boiler on the wall.

0:52:110:52:15

The pipes go under the floor.

0:52:150:52:17

We've got a new cooker. The units are all the same.

0:52:170:52:19

We've got a bit of decoration left to do on the walls and ceiling.

0:52:190:52:23

And we've got a sparkling new floor.

0:52:230:52:25

'But apart from a lick of paint throughout the flat,

0:52:250:52:28

'there are a few other little finishing touches that Chris would like to do.'

0:52:280:52:32

I've got new doors to go on because the old doors were quite horrible.

0:52:340:52:38

But really, it's going to be a carpet-clean,

0:52:380:52:41

and I've just got some boards to stop draughts from the fireplaces.

0:52:410:52:45

But that's really it. It's just a light decorating job.

0:52:450:52:48

'It sounds like it's been a fairly straightforward renovation.

0:52:480:52:52

'Chris did most of the work himself,

0:52:520:52:54

'except for installing the new central heating system and boiler.

0:52:540:52:58

'Has the budget come in on target?'

0:52:580:53:00

Our budget was a maximum of £5,000.

0:53:030:53:05

The central heating was a bit more expensive than we thought,

0:53:050:53:09

at just about £3,500.

0:53:090:53:11

And we've actually spent £4,984.

0:53:110:53:14

'Approximately(!) You can't get more precise than that.

0:53:140:53:18

'Accurate down to the last pound.

0:53:180:53:21

'But can he be as specific about the time taken?'

0:53:210:53:24

We've owned the property for about six weeks.

0:53:260:53:28

We've been working on it for about three weeks in total,

0:53:280:53:31

so not an awful lot of time.

0:53:310:53:33

We've got a tenant coming in in two weeks, so we've got to be done by then.

0:53:330:53:37

So about five weeks in total,

0:53:370:53:39

not quite on a full-time basis but about three days a week.

0:53:390:53:42

'So, with a tenant already lined up,

0:53:420:53:44

'that answers the question of whether he'd rent or sell.

0:53:440:53:47

'What was the outcome of the still unsigned lease on the shop below?'

0:53:470:53:52

They were in there when we came. They have agreed the new lease.

0:53:530:53:58

So we have a four-year extension on the lease.

0:53:580:54:02

They just carry on with it as it is,

0:54:020:54:04

so we don't have to do anything.

0:54:040:54:05

'Chris's luck really has been in on this project -

0:54:050:54:09

'on time, on budget,

0:54:090:54:11

'and both the shop and the flat are rented out already.

0:54:110:54:14

'Perfect.

0:54:140:54:15

'Chris bought the shop and flat for £125,000

0:54:150:54:18

'and spent just under £5,000 fixing it up,

0:54:180:54:21

'including the usual expenses.

0:54:210:54:23

'That makes a total outlay of around £130,000.

0:54:230:54:27

'We asked two local property experts

0:54:280:54:30

'what they thought of his work.'

0:54:300:54:33

My first impression of the building is that it's nicely set up

0:54:350:54:39

to be a mixed commercial and residential rent machine.

0:54:390:54:43

The new owner's done the correct thing.

0:54:430:54:45

He's not overspent on the property, and he put in new vinyl flooring,

0:54:450:54:49

which brings out the bathroom suite that's currently there.

0:54:490:54:52

The fact that it's got central heating now is a pretty big bonus

0:54:520:54:56

because they would have had trouble renting it out

0:54:560:55:02

at anything but a paltry figure

0:55:020:55:04

had they not had central heating.

0:55:040:55:06

'But there is heating,

0:55:060:55:08

'and it looks like Chris has made all the right decisions here.

0:55:080:55:12

'Could the refurbished flat generate a healthy rental income?'

0:55:120:55:16

The current rental value of the flat

0:55:160:55:19

is between £525 to £550 per calendar month.

0:55:190:55:24

The flat would fairly readily rent out

0:55:240:55:26

at anything between £500 and £550 per calendar month.

0:55:260:55:30

That's about right. We've actually let it for £525 per month.

0:55:300:55:34

That's right in the middle. We're quite happy with that.

0:55:340:55:36

'It's no surprise Chris is quite happy

0:55:360:55:39

'because, added to the rental income from the shop,

0:55:390:55:42

'that's a total yield of 10 per cent.

0:55:420:55:44

'Outstanding.

0:55:440:55:46

'What if he decided to sell the property on?

0:55:460:55:48

'Remember, his total spend was £130,000 here.

0:55:480:55:52

'So, have his renovations added any value?'

0:55:520:55:56

The resale of the property in its entirety - two components,

0:55:560:55:59

commercial on the ground floor, residential on the upper floor, both generating income -

0:55:590:56:04

would be in the region of £140,000.

0:56:040:56:06

The resale value of both the commercial unit and the flat

0:56:060:56:09

in the current market would be about £135,000.

0:56:090:56:13

That's very good.

0:56:130:56:14

That's slightly more than we've invested in the property itself.

0:56:140:56:19

With the market as it is now, that's a very fair figure.

0:56:190:56:22

As long as we've kept our money in the property, we'll be very happy.

0:56:220:56:26

'It sounds like Chris has picked a winner with this property

0:56:270:56:30

'and he's merely whetted his appetite to tackle the next one.

0:56:300:56:33

'Hmm. Did I say "one"?'

0:56:330:56:36

Yeah, we're still aiming to get 30 to 40 properties.

0:56:360:56:39

If we can achieve that, we will be in a very comfortable position

0:56:390:56:43

and really can just settle back a bit and enjoy them.

0:56:430:56:46

That's it for the buyers on today's programme,

0:56:480:56:51

but we'll have plenty more.

0:56:510:56:53

So join us next time for more Homes Under The Hammer.

0:56:530:56:56

-See you then.

-Goodbye.

-Goodbye.

0:56:560:56:58

Subtitles by Red Bee Media Ltd

0:57:190:57:22

E-mail [email protected]

0:57:220:57:24

Martin Roberts and Lucy Alexander visit retail premises in Devon, a flat in south London and a two-bedroom house in Perth and Kinross in Scotland. All of these properties have been sold at auction, and Martin and Lucy find out who bought them and what they paid when they went under the hammer.