0:00:02 > 0:00:04Hello. There are property auctions held all over the UK.
0:00:04 > 0:00:09It's a thriving business. Billions of pounds worth of property is sold every year.
0:00:09 > 0:00:13And if you want to find out about buying and selling your home under the hammer,
0:00:13 > 0:00:15you've come to the right place.
0:00:40 > 0:00:45They say you should always do your research before you buy at auction, but what does that mean?
0:00:45 > 0:00:50Well, you should go and see your property, find out as much as you can about it and research the area.
0:00:50 > 0:00:56Yes, it pays to be prepared. So, what tempted the buyers on today's show?
0:00:57 > 0:00:59'Just outside Devizes in Wiltshire,
0:00:59 > 0:01:04'this house may not be perfect inside, but I think its outlook is pretty good.'
0:01:04 > 0:01:06You'd buy this place just for that.
0:01:07 > 0:01:12'Shh, don't tell anyone, but there's a property in South London which is better than it first appears.'
0:01:12 > 0:01:16Secretly, I think I'm going to really like it.
0:01:17 > 0:01:23'And I seem to have misplaced one of the rooms in this building in Colne in Lancashire.'
0:01:23 > 0:01:27Only one thing missing. Where's the bedroom?
0:01:28 > 0:01:30'All these properties went to auction.
0:01:30 > 0:01:36- 'We'll find out who bought them and what they paid when they went under the hammer.'- Your property, sir.
0:01:47 > 0:01:50I'm in Wiltshire in the little village of Easterton
0:01:50 > 0:01:52and a jolly splendid place it is, as well.
0:01:52 > 0:01:57Despite the fact it's on a bit of a commuter route, it's a lovely, tranquil little spot.
0:01:57 > 0:02:04'And you don't have to go far to experience even more remote and beautiful scenery.'
0:02:05 > 0:02:09On the outskirts of the village is a three-bed semi-detached house.
0:02:09 > 0:02:12It had a guide price of 155,000 quid.
0:02:12 > 0:02:16I've been walking up a hill to get there, so hopefully it'll have nice views.
0:02:18 > 0:02:22'Well, it appears to be pretty ordinary from the front.
0:02:22 > 0:02:26'It's an ex-local authority house which always ticks a few boxes for me.
0:02:26 > 0:02:31'Generally, these properties are well-built and structurally sound.'
0:02:33 > 0:02:36So what have we got? Through the front door,
0:02:36 > 0:02:40stairs up to the bedrooms and then into your lounge.
0:02:40 > 0:02:43Obviously hasn't been touched for a little while.
0:02:43 > 0:02:46Needs a new carpet, for sure.
0:02:46 > 0:02:51Bit of stonework by the fireplace dates it. Just change that, you'll be amazed what difference it makes.
0:02:51 > 0:02:55But it's not a bad size space. Then through to the kitchen. But look.
0:02:55 > 0:03:01Seems that somebody's started a bit of restoration. These units are actually pretty nice. Very modern.
0:03:01 > 0:03:04Gives you an idea of what this place could become.
0:03:04 > 0:03:07And I think the real good stuff's outside.
0:03:08 > 0:03:13Hang on a minute, before I even get outside, I need to tell you about this.
0:03:13 > 0:03:17This, unfortunately, is the only bathroom and loo in the property.
0:03:17 > 0:03:21It's basically almost out the back. Not ideal.
0:03:21 > 0:03:24However, what's out the back is.
0:03:25 > 0:03:30You'd hope that a house on the edge of a pretty little village like this would have nice views.
0:03:30 > 0:03:34But you know what? This place surpasses all expectations.
0:03:34 > 0:03:36Look at that.
0:03:36 > 0:03:42Rolling hillside leading into Salisbury Plain in the distance.
0:03:42 > 0:03:44You'd buy this place just for that.
0:03:44 > 0:03:48# It's a perfect view
0:03:50 > 0:03:54'But it doesn't distract completely from the issues with that bathroom.
0:03:54 > 0:04:00'What I want to know is, can you rejig the layout of this place to fit it in upstairs?'
0:04:01 > 0:04:04So, can you, can you, can you?
0:04:04 > 0:04:08Well, you know what? I don't think that's going to be possible
0:04:08 > 0:04:12because you've got a good size room here and then two fairly small bedrooms,
0:04:12 > 0:04:17so without losing one of those bedrooms, which is going to badly detract from the value,
0:04:17 > 0:04:20I think the bathroom has to stay where it is.
0:04:20 > 0:04:24Still, when you do come up here, you can go back to enjoying the views.
0:04:24 > 0:04:29'When the nights draw in and you start getting a bit chilly,
0:04:29 > 0:04:33'there's one thing I definitely want to do with this place - install central heating.
0:04:33 > 0:04:38'But that could prove a problem as there's no gas main into the village
0:04:38 > 0:04:44'so you'd probably need to go for an oil-fired or electric boiler. I'd want to investigate the costs first
0:04:44 > 0:04:47'as it could add quite a lot to your renovation bill.
0:04:49 > 0:04:52'Well, I've certainly fallen in love with the location of the place.
0:04:52 > 0:04:55'What does a local estate agent think of it?
0:04:55 > 0:04:59'This house that went to auction with a guide price of £155,000
0:04:59 > 0:05:01'needs a lot of work.'
0:05:02 > 0:05:07The house itself has got some nice features. There's some nice fireplaces in the bedrooms.
0:05:07 > 0:05:11But in the most part, I think a buyer's going to come in here
0:05:11 > 0:05:16and redo a lot of the property in terms of electrics, decor, kitchens, bathrooms.
0:05:16 > 0:05:19Any buyer needs to decide whether to keep the bathroom downstairs
0:05:19 > 0:05:23or move the bathroom upstairs, which would be more usable.
0:05:23 > 0:05:26It definitely needs a change, but it depends what the buyer does.
0:05:26 > 0:05:32'Ignoring the inside work, I'm sure purchasers will see outside as the main appeal here.'
0:05:32 > 0:05:35The garden's one of the biggest assets of the property.
0:05:35 > 0:05:38There's a lovely big garden that backs onto open fields.
0:05:38 > 0:05:42'Yes, a big attraction, but how much could it be worth once done up?'
0:05:44 > 0:05:49If the buyers were to renovate the property as it stands, as a three-bedroom semi-detached house,
0:05:49 > 0:05:53I think the finished value would be in the region of £200,000.
0:05:53 > 0:05:58In order to rent the property, it requires the renovation, and you would achieve a rental
0:05:58 > 0:06:00of £650 per calendar month.
0:06:01 > 0:06:04'So plenty of things need attention in the house,
0:06:04 > 0:06:07'but there's one thing you can't change, thank goodness.'
0:06:07 > 0:06:10So, a good, solid little house.
0:06:10 > 0:06:13Yes, you'd really like to sort out that bathroom issue,
0:06:13 > 0:06:16and it definitely needs a bit of updating, but you know what?
0:06:16 > 0:06:18For that view, I'd buy it!
0:06:18 > 0:06:22Let's see who was equally enthusiastic when it went under the hammer.
0:06:22 > 0:06:26OK, lot number four, then. Pretty little house, lovely position.
0:06:26 > 0:06:29Terrific views, as you can see from the photograph.
0:06:29 > 0:06:31Where are you going to start me?
0:06:31 > 0:06:36150, anybody? At 140, then. At 140,000.
0:06:36 > 0:06:39At £140,000 we're bid. 142. 4 now may I say?
0:06:39 > 0:06:42At 142. 144.
0:06:42 > 0:06:4546 at the back. 48. 50 to you, sir.
0:06:45 > 0:06:47150. 52.
0:06:47 > 0:06:5154 to you, sir. The bid is at the back at the left, 154.
0:06:51 > 0:06:55156. 158 to you, sir. 158.
0:06:55 > 0:06:5860. 62. 62.
0:06:58 > 0:07:0164. 66.
0:07:01 > 0:07:04£166,000 to you, sir.
0:07:04 > 0:07:06It's against you there. 167.
0:07:06 > 0:07:11£1,000, sir? No. At £166,000 at the back left-hand corner, first time.
0:07:11 > 0:07:15Anybody else? £166,000 for the second time.
0:07:15 > 0:07:18- At 166, third and last time. We're done. - HAMMER BANGS
0:07:18 > 0:07:21Your number, sir, is...?
0:07:21 > 0:07:27'The successful bid of £166,000 was made by Dennis, here on the left,
0:07:27 > 0:07:31'and his stepson Spencer. Dennis used to run a nightclub
0:07:31 > 0:07:35'and has always had a passion for property. He's bought five buy-to-lets in the past
0:07:35 > 0:07:40'and he and Spencer ran their own kitchen-fitting business for three years.
0:07:40 > 0:07:42'Spencer then worked in the building trade,
0:07:42 > 0:07:47'but they've recently teamed up again to undertake some joint renovations.
0:07:47 > 0:07:50'This will be the third property for the duo.
0:07:51 > 0:07:54'I met up with them to hear about their plans.'
0:07:56 > 0:08:00- Dennis, Spencer, lovely to meet you both.- Nice to meet you. - Congratulations.
0:08:00 > 0:08:02We had to talk in the garden, didn't we?
0:08:02 > 0:08:06- Of course, yeah. - Is that why you bought this?
0:08:06 > 0:08:09- Obviously, yeah.- Partly, yeah. - Fantastic, isn't it?
0:08:09 > 0:08:13When we first came to look at the property, as we walked round, that was the first thing I saw
0:08:13 > 0:08:18- and it was just like, "Wow, never mind the house, just look at the view".- It sold it to us.
0:08:18 > 0:08:22Apart from the view, tell me why you wanted to buy the property.
0:08:22 > 0:08:24We wanted a project for Spencer
0:08:24 > 0:08:29so we bought it and Spencer's going to do the work
0:08:29 > 0:08:32- and we'll split the profits.- Right.
0:08:32 > 0:08:36- So the relationship between you two is...?- Spencer's my stepson.
0:08:36 > 0:08:39Great. So is this the first time you've worked together on a project?
0:08:39 > 0:08:43No. We've worked on several projects in the past,
0:08:43 > 0:08:47and also together, cos I'm predominantly a kitchen fitter, bathroom fitter,
0:08:47 > 0:08:51so I do electrics, plumbing, and we've worked together as kitchen fitters in the past.
0:08:51 > 0:08:55Tell me a bit more about what you two did before you started getting into this.
0:08:55 > 0:08:59Well, Spencer was a policeman.
0:08:59 > 0:09:05- Oh, wow!- And when he left the police force, he found that he wasn't skilled in anything else
0:09:05 > 0:09:10except police work, which apart from being a security guard, there's no call for it.
0:09:10 > 0:09:15So I thought, "What do I know? I'll teach him kitchen fitting."
0:09:15 > 0:09:21So we set up together and we worked together for three years as a partnership.
0:09:21 > 0:09:25'So from the police to pipes and plumbing. Quite a change.
0:09:29 > 0:09:34'So there should be no worries about the kitchen, then. But what about the rest of the property?'
0:09:35 > 0:09:41You see this as a "tart it up and sell it on" or what? What's the plan?
0:09:41 > 0:09:44That's one of the scenarios.
0:09:44 > 0:09:47We're not absolutely decided yet,
0:09:47 > 0:09:52but plan A is to do it up as it is and then sell it on.
0:09:52 > 0:09:56Right. What would plan B be, potentially? Possibly?
0:09:56 > 0:10:00Possibly, because of the nature of the ground and everything,
0:10:00 > 0:10:04we could look to put an extension on, gain an upstairs bathroom.
0:10:04 > 0:10:08Cos obviously, at the moment, the bathroom downstairs isn't anything great,
0:10:08 > 0:10:13so it could be a possibility to turn one of the bedrooms upstairs into a bathroom.
0:10:13 > 0:10:18- Although it would reduce it to two bedrooms, it would affect the sale. - Talk me through the costings
0:10:18 > 0:10:24for plan A and what you've found out about how much difference it makes losing that bedroom.
0:10:24 > 0:10:29One of the things we've been told by one of the agents we saw
0:10:29 > 0:10:35- was that that third bedroom could be worth £30,000 to us.- Wow.
0:10:35 > 0:10:38So, obviously, that's a big consideration.
0:10:38 > 0:10:41What are the costs?
0:10:41 > 0:10:44Well, we've made an estimate of about £12,000
0:10:44 > 0:10:48with all the things we costed into plan A.
0:10:48 > 0:10:50Any idea how long it's going to take?
0:10:50 > 0:10:54- I would've thought about eight to ten weeks. Would you agree?- Yeah.
0:10:54 > 0:10:59- You're doing the work. It's down to you. - Yeah. Depends how quick I can go.
0:10:59 > 0:11:03- Congratulations.- Thank you. - I look forward to coming back and seeing how you got on.
0:11:03 > 0:11:07- Thanks.- Look forward to it.- Thank you very much.- Thank you.- Good luck.
0:11:07 > 0:11:12So, Dennis and Spencer recognising the potential of this place
0:11:12 > 0:11:16and they've certainly got the experience to make a success of the project.
0:11:16 > 0:11:20All they have to decide is exactly what they're going to do.
0:11:20 > 0:11:23You can find out what they choose later in the show.
0:11:28 > 0:11:31'I'm in New Cross, Southeast London,
0:11:31 > 0:11:37'a vibrant area which recently benefited from the expansion of the East London over-ground line.
0:11:37 > 0:11:42'This means you can now get from here to Central London in around ten minutes.'
0:11:45 > 0:11:49This part of London is also home to Goldsmiths College,
0:11:49 > 0:11:53which has been part of the University of London for 100 years.
0:11:53 > 0:11:57So straight away, I'm thinking possible student let.
0:11:57 > 0:11:59Now, on paper, it's got potential.
0:11:59 > 0:12:03The guide price was £180,000 plus.
0:12:03 > 0:12:08You can see here, it's a four-storey mid-terrace, it's very close to the college.
0:12:08 > 0:12:11Lots of potential for letting rooms out.
0:12:11 > 0:12:15But, come on, let's face it, from the outside, it looks like a right old mess.
0:12:15 > 0:12:19You've got boarded up windows, it's very run down.
0:12:19 > 0:12:23But let's see if the exterior matches the interior. I'm going in.
0:12:25 > 0:12:27'I know you should never judge a book by its cover,
0:12:27 > 0:12:32'but from the outside, this property looks distinctly dog-eared.
0:12:32 > 0:12:35'At one time, it was the office of a charitable organisation.
0:12:35 > 0:12:39'But when they moved out, some less than charitable squatters moved in.
0:12:39 > 0:12:44'So security shutters were put on and it's been empty for a while now.'
0:12:44 > 0:12:48I tell you what, it's quite noisy and hectic out there.
0:12:48 > 0:12:52And when you shut this door, ohh, lovely and silent.
0:12:52 > 0:12:56It's exactly what I would've expected to have seen on the inside.
0:12:56 > 0:13:02You've got graffiti everywhere, it looks like it's been vandalised, you've got woodchip wallpaper.
0:13:02 > 0:13:07But you have got a few nice little bits and pieces here, like this banister,
0:13:07 > 0:13:10you've got this nice little bit of panelling here.
0:13:10 > 0:13:13I'll be quite excited to see if there's some nice hidden features.
0:13:13 > 0:13:18Overall, secretly, I think I'm going to really like it!
0:13:18 > 0:13:23'And there's quite a lot to like, with several rooms spread over four floors.
0:13:23 > 0:13:26'There's what was almost a kitchen, a nearly bathroom,
0:13:26 > 0:13:29'because there are no fixtures and fittings,
0:13:29 > 0:13:33'and three rooms with decor that's, er, not to everyone's taste.'
0:13:35 > 0:13:40# But I see the writing on the wall
0:13:40 > 0:13:45# The love light's gone from your eyes
0:13:45 > 0:13:48'But not totally, because fortunately,
0:13:48 > 0:13:52'there's less graffiti in the three rooms on the first floor.
0:13:54 > 0:14:00'And up above on the second floor, there are two more large rooms.
0:14:00 > 0:14:03'Finally, up on the top floor, there are two spacious rooms
0:14:03 > 0:14:06'with great views across the city.
0:14:06 > 0:14:09'But it's the inside views that are upsetting
0:14:09 > 0:14:12'in that so much charm and character has been spoiled by neglect
0:14:12 > 0:14:16'and in some cases blatant vandalism.
0:14:16 > 0:14:19'It's dispiriting to see the house in such a sorry state.
0:14:19 > 0:14:24'The only remedy would be to renovate it from top to bottom.
0:14:24 > 0:14:29'But before that, let's consider what's the best way forward for this old property.'
0:14:30 > 0:14:34We have two options here, I think. One option is to do this place up
0:14:34 > 0:14:38and let it as individual rooms, probably to students.
0:14:38 > 0:14:44But then you enter the realms of the HMO, which is house of multiple occupancy,
0:14:44 > 0:14:47and there are all sorts of guidelines and conditions attached
0:14:47 > 0:14:52concerning fire safety and also facilities, like the number of bathrooms.
0:14:52 > 0:14:57And you also have to be licensed as "fit for use" by the local council.
0:15:02 > 0:15:07'Converting it into an HMO could be quite expensive.
0:15:07 > 0:15:11'You need to fit fire alarms and fire doors, and with at least seven letable rooms,
0:15:11 > 0:15:14'that could be a logistical nightmare.'
0:15:14 > 0:15:19The other option is to divide this place up into individual flats.
0:15:19 > 0:15:23Now, you would need planning permission for that and that is never guaranteed,
0:15:23 > 0:15:28but if you did get permission, I reckon you could fit four flats in that property,
0:15:28 > 0:15:32one on each floor, and this ground floor flat could be fabulous!
0:15:32 > 0:15:36You could extend right the way out here, have big bi-fold doors
0:15:36 > 0:15:39opening out to this lovely little garden here.
0:15:39 > 0:15:44Four flats in this area, that could really stack up financially.
0:15:45 > 0:15:50'Or if you like this kind of house, you could renovate it as a single family home.
0:15:50 > 0:15:54'There are certainly a number of options for this four-storey house
0:15:54 > 0:15:57'that was guided at £180,000.
0:15:57 > 0:16:01'Time to ask a local estate agent what's the best way forward.'
0:16:01 > 0:16:04A house would probably be the least favourable
0:16:04 > 0:16:09because I think the busy road may be too much for a family.
0:16:10 > 0:16:14'The New Cross area is in desperate need of flats for students and young professionals
0:16:14 > 0:16:18'so letting out rooms here would be a good idea.'
0:16:18 > 0:16:21Students lets are very good to let out,
0:16:21 > 0:16:23however, only for ten-month periods.
0:16:23 > 0:16:26You could achieve, for a room with the utilities in,
0:16:26 > 0:16:29depending on the size and the furnishings,
0:16:29 > 0:16:32approximately £450 to £500 per month.
0:16:32 > 0:16:37'So with seven rooms, the investor could have a monthly rental income of £3,500.
0:16:37 > 0:16:42'But the estate agent reckons converting into flats and letting them out
0:16:42 > 0:16:46'could earn a possible £3,900 a month.
0:16:46 > 0:16:51'So there would be more for flat rentals than student lets. But what if it was sold?'
0:16:51 > 0:16:55As one entire building, as a family home,
0:16:55 > 0:16:57taking into consideration the very busy road,
0:16:57 > 0:17:02I would anticipate for it to achieve around £500,000 to £520,000.
0:17:02 > 0:17:05'But if the house was converted into four flats,
0:17:05 > 0:17:09'two two-beds and two one-beds ones, the final approximate sale figure
0:17:09 > 0:17:12'could be £940,000.'
0:17:12 > 0:17:17This property has that word beloved of estate agents - potential.
0:17:17 > 0:17:21You could let to students here, you could divide this up into flats,
0:17:21 > 0:17:25but you should never underestimate the amount of work that is to do here first.
0:17:25 > 0:17:30So who was tempted, not intimidated, by the scale of this project?
0:17:30 > 0:17:32Let's find out when we head to auction.
0:17:35 > 0:17:39Who wants to start me off on lot 83?
0:17:39 > 0:17:41200,000, anybody?
0:17:41 > 0:17:46Thank you. 200 I've got. See where it goes from here.
0:17:46 > 0:17:49Thank you, how much? 205? 205.
0:17:49 > 0:17:53210. 215. 220.
0:17:53 > 0:17:57225. 230. 230.
0:17:57 > 0:18:00235. 240.
0:18:00 > 0:18:03245. 250. 255.
0:18:03 > 0:18:06260. 265. 270.
0:18:07 > 0:18:11270. 275. 280.
0:18:11 > 0:18:13276 if it helps.
0:18:13 > 0:18:18- Yeah? Still cheap. 276, yeah? - 280.- OK, 280.
0:18:18 > 0:18:23'That initial guide price of £180,000 has now been left way behind.
0:18:23 > 0:18:27'We rejoin the auction with the bidding at £325,000.'
0:18:27 > 0:18:30325. 326.
0:18:30 > 0:18:35Back to you. It's with you at £325,000.
0:18:35 > 0:18:38Against you, straight ahead. 325 for the first.
0:18:38 > 0:18:41325 for the second.
0:18:41 > 0:18:43325. 326, back in.
0:18:43 > 0:18:46Nearly. 327. 328.
0:18:46 > 0:18:50329. 330.
0:18:50 > 0:18:53331. 332.
0:18:53 > 0:18:57He said that last time. 331 for the first.
0:18:57 > 0:19:00331 for the second.
0:19:00 > 0:19:04- 331 for the third and final time. Are we all done? - HAMMER BANGS
0:19:04 > 0:19:07Sold for 331. Well bought.
0:19:07 > 0:19:13'That final successful bid was made by 28-year-old property entrepreneur Sean.
0:19:13 > 0:19:16'He got it for £331,000,
0:19:16 > 0:19:20'151 grand over the guide price.
0:19:20 > 0:19:25'I met him at the New Cross house to hear why he was so keen to buy it.'
0:19:25 > 0:19:29Sean, congratulations. What appealed to you about this property?
0:19:29 > 0:19:34- It's on a very busy main road. - Yeah, it is, but it's the area and its potential.
0:19:34 > 0:19:39You've now got an East London line, so you can be in Central within four to six minutes, so it's perfect
0:19:39 > 0:19:42for the first time buyer and the young professional.
0:19:42 > 0:19:46The size of the property, it's got so much scope for what we're looking at,
0:19:46 > 0:19:50- a HMO or convert it to four flats. A lot of potential.- So you looked beyond the dust, the dirt,
0:19:50 > 0:19:55- the grime, the graffiti, the wallpaper. I mean, it's in a right old state.- It is.
0:19:55 > 0:19:58- It needs a lot of work.- Tell me about your property portfolio
0:19:58 > 0:20:02- and how you've been going over the last few years. - I started when I was 16.
0:20:02 > 0:20:07My father lent me some money to get me going, I put a deposit on a property, bought a flat, renovated,
0:20:07 > 0:20:13before I went to university. At university, I bought two properties with the funds from that property.
0:20:13 > 0:20:18I didn't really have time to do much when I was there, but I dabbled a little bit to keep me going.
0:20:18 > 0:20:21I came out of university, back into banking, did that for three years
0:20:21 > 0:20:24and then left banking and now I'm full-time.
0:20:24 > 0:20:30'Sean's certainly been busy. The portfolio he built up was based in Bournemouth, where he studied.
0:20:30 > 0:20:35'But since moving to London, he's sold most of it to concentrate on buying in the big city.
0:20:35 > 0:20:39'12 years on from his first property purchase as a 16-year-old,
0:20:39 > 0:20:44'he now has his own development company. What drives him?'
0:20:44 > 0:20:47# The only living boy
0:20:47 > 0:20:50# In New Cross
0:20:50 > 0:20:55I worked in banking, but it's not rewarding. The money is great, but the rewards aren't great
0:20:55 > 0:20:59and you don't get to see anything for your end product. Property, you see everything.
0:20:59 > 0:21:05You see the transformation from beginning to end and when someone buys your property, it's rewarding.
0:21:05 > 0:21:09- What do you think you're going to do with this? Convert it into flats? - I think so.
0:21:09 > 0:21:14I'm speaking to the council. The best option at the moment would be to do four flats.
0:21:14 > 0:21:17Give me a rough layout of how the flats are going to be.
0:21:17 > 0:21:20We're working on open-plan layouts on the flats.
0:21:20 > 0:21:25With the ground-floor two-bed flat, an open-plan sitting room/dining room opening out to the garden.
0:21:25 > 0:21:31The first, second and third floor all mimic each other, open floor living to the front,
0:21:31 > 0:21:36- bedroom and bathroom to the rear. - Will they be one-bedroom flats apart from the ground floor?- Yes.
0:21:36 > 0:21:42- The first, second and third floors, one-bedroom flats.- What do you do to give them that wow factor?
0:21:42 > 0:21:44Have you got a trademark, something you do?
0:21:44 > 0:21:46Yeah. It's the quality of the finish.
0:21:46 > 0:21:50Materials don't always have to be the highest material costs
0:21:50 > 0:21:53but the finish is what... I'm a perfectionist
0:21:53 > 0:21:57so from paintwork to carpentry and all that sort of thing, we want it to look top spec.
0:21:57 > 0:22:02- What happens if something doesn't look good? How do you react? - Ripped out and start again.
0:22:02 > 0:22:06- So you really are a perfectionist. - It is a bad, bad trait, yeah.
0:22:06 > 0:22:09Is that just through working in property?
0:22:09 > 0:22:14I think it's my engineering degree, as well. It has to be pretty much spot-on.
0:22:14 > 0:22:18I brought that degree into the workplace where maybe, in property,
0:22:18 > 0:22:20you shouldn't be like that, but I can't help it.
0:22:20 > 0:22:23So you're an absolute nightmare to live with.
0:22:23 > 0:22:25To live with and to work with, yeah.
0:22:27 > 0:22:33'It sounds like this house could be emerging from its own nightmare into a dreamland comparatively.
0:22:33 > 0:22:39'But for that, Sean has to get planning permission to change its use from commercial to residential.
0:22:39 > 0:22:45'If successful, he's got a budget of £120,000 to £150,000
0:22:45 > 0:22:49'to get the flat up and running and add that wow factor to attract buyers.'
0:22:49 > 0:22:54We always go for corporate lets if we're renting, which is the higher end of the market,
0:22:54 > 0:22:56or if we're selling, we go for the young professional.
0:22:56 > 0:23:00It sounds like you know exactly what you're doing. Are there are worries?
0:23:00 > 0:23:04Anything you're a little bit, "Shouldn't have done that"?
0:23:04 > 0:23:08I think it's just timing. We've got so many projects on the go at the moment.
0:23:08 > 0:23:11Ideally, we want to get it finished in six months,
0:23:11 > 0:23:14but it's a case of juggling the other projects to fit.
0:23:14 > 0:23:21- Do you think you'll fancy one of these flats yourself?- I have bagsied the ground floor one potentially.
0:23:21 > 0:23:27- It's a nice area, but I don't know if it's for me just yet.- Good luck. I can't wait to see what you do
0:23:27 > 0:23:31- and see whether you move into the ground floor or the penthouse. - Maybe.- Good luck.- Thanks. Bye.
0:23:31 > 0:23:35Sean caught the property bug at a seriously young age.
0:23:35 > 0:23:40Buying your first house when you're a teenager? Wow! That really is something.
0:23:40 > 0:23:45But this is a big project for him and potentially more problematic.
0:23:45 > 0:23:49It all hangs on getting that planning permission to convert this into flats.
0:23:49 > 0:23:54Will he get the planning consent he needs and will the work really be done in just six months?
0:23:54 > 0:23:59And will he move in? You can find out what happens later on in the programme.
0:24:00 > 0:24:06'Coming up, in the Lancashire town of Colne, I'm in for a little surprise with this place.'
0:24:07 > 0:24:09You've got to be kidding.
0:24:10 > 0:24:17'In the New Cross area of South London, it seems Sean has gone right back to basics with his purchase.'
0:24:17 > 0:24:20We have gutted the building from top to bottom.
0:24:21 > 0:24:26'But first, we return to Wiltshire to see if this three-bed semi is now a hot property.'
0:24:26 > 0:24:30Before we had the central heating put in, it was pretty bad.
0:24:33 > 0:24:39'Just outside the Wiltshire town of Devizes, I came across a three-bed semi-detached house
0:24:39 > 0:24:42'that was pretty ordinary on the inside
0:24:42 > 0:24:46'but outside it had some fantastic views across Salisbury Plain.
0:24:46 > 0:24:50'It was a combination of the views and the house's potential
0:24:50 > 0:24:53'that attracted property developing team Dennis and Spencer
0:24:53 > 0:24:57'to part with £166,000 to buy it at auction.
0:24:57 > 0:25:00'Even though this stepfather and son partnership
0:25:00 > 0:25:04'were not 100 percent certain of what they were going to do with it.'
0:25:04 > 0:25:07# Oh, you've got to have a plan
0:25:09 > 0:25:13Plan A is to do it up as it is and then sell it on.
0:25:13 > 0:25:17Right. What would plan B be potentially? Possibly?
0:25:17 > 0:25:23Possibly, because of the nature of the grounds, possibly look to put an extension on.
0:25:25 > 0:25:27'But whether it was plan A or plan B,
0:25:27 > 0:25:33'the plan was that ex-policeman- cum-bathroom-and-kitchen-fitter Spencer did the renovation
0:25:33 > 0:25:36'while Dennis predominantly project-managed the work.'
0:25:38 > 0:25:43'But eight months on, which plan did they opt for?
0:25:45 > 0:25:48'Well, by the look of things, they've come up with a plan C.
0:25:48 > 0:25:52'Spencer and girlfriend Judith fell in love with the place,
0:25:52 > 0:25:55'the views in particular, and decided to make it their home.'
0:25:57 > 0:26:00# Then it all changed
0:26:00 > 0:26:03# You know when something's worth hanging onto
0:26:05 > 0:26:07# Anyway...
0:26:07 > 0:26:11'But however lovely the views, you can't live in a view,
0:26:11 > 0:26:13'and the house needed a lot of work.
0:26:13 > 0:26:17'There was no central heating, a downstairs bathroom and dated decor.
0:26:17 > 0:26:22'So Judith was keen some changes were made right away.
0:26:22 > 0:26:26Before we moved in, I did kind of insist that we needed to get some decent carpet in,
0:26:26 > 0:26:31because when we pulled it up, it was so old, all the underneath of it pretty much came away.
0:26:35 > 0:26:38Well, living here, it was pretty cold.
0:26:38 > 0:26:42Before we had the central heating put in, it was pretty bad.
0:26:47 > 0:26:52The lounge, Spencer went to quite a lot of trouble with his mother, who came over to help.
0:26:52 > 0:26:58They'd done all the lounge, so it felt like at least we had a nice room that was ready.
0:26:58 > 0:27:02We could sit there and it would be peaceful while the rest of the house was in a little bit a chaos.
0:27:02 > 0:27:06'Having established a base by having sorted out the lounge,
0:27:06 > 0:27:08'they started to tackle the rest of the house.
0:27:08 > 0:27:11'For now, they've just spruced up the kitchen
0:27:11 > 0:27:15'and Spencer's concentrated his skills on creating an upstairs bathroom.'
0:27:16 > 0:27:19So, this was our third bedroom
0:27:19 > 0:27:24and it's a small bedroom, but it's a good size bathroom.
0:27:24 > 0:27:30The bathroom downstairs is single-skinned, it's very cold, the walls get quite damp,
0:27:30 > 0:27:34so we decided to put the bathroom up here and forsake a bedroom.
0:27:34 > 0:27:38It's heaven in comparison to what we were having to put up with before.
0:27:38 > 0:27:41'And it does make a great bathroom.
0:27:41 > 0:27:45'And for Judith and Spencer, two bedrooms are fine for the moment.
0:27:51 > 0:27:56'With the central heating installed, a rewire and walls replastered,
0:27:56 > 0:28:01'those remaining two bedrooms are just a lick of paint away from being finished.
0:28:06 > 0:28:11'They've even found space for Judith's two rabbits, Jack and Henry.
0:28:11 > 0:28:17'They will eventually be moved to improved accommodation in the garden once it's fox-proofed.
0:28:17 > 0:28:20'But when will Judith and Spencer improve their accommodation?'
0:28:20 > 0:28:24I guess the long-term plan would really be to extend,
0:28:24 > 0:28:30to put in a garage and then perhaps gain that third bedroom back above it
0:28:30 > 0:28:34and then even outside, to have a small conservatory, extend the kitchen out.
0:28:34 > 0:28:41So they could be long-term plans. But, obviously, it depends on how far we get with the property.
0:28:41 > 0:28:48'Given the change in circumstances, the couple have come to an agreement with Spencer's stepfather Dennis.
0:28:48 > 0:28:53'It means that while he paid for the house, they will cover the renovation costs and will pay rent
0:28:53 > 0:28:58'to compensate for interest he would've earned had he kept the money in the bank.
0:28:58 > 0:29:03'The long-term plan is for Spencer and Judith to buy the house outright themselves.
0:29:03 > 0:29:07'So what are the costs so far?'
0:29:07 > 0:29:14I think, in total, the biggest costs have been the rewire and installing the central heating,
0:29:14 > 0:29:19so I think to date we're probably looking at about £8,000 to £10,000.
0:29:19 > 0:29:25That includes the bathroom and all the decorating, plastering.
0:29:26 > 0:29:31'Adding the initial £166,000 purchase price
0:29:31 > 0:29:33'to their approximately £10,000 spend,
0:29:33 > 0:29:39'their outlay on what's now a two-bed house would be around £180,000, including costs and fees.
0:29:39 > 0:29:44'Is that a good investment? What are the views of two local property experts?'
0:29:46 > 0:29:49The work they've undertaken to date is of a good quality.
0:29:49 > 0:29:52I particularly like the bathroom.
0:29:52 > 0:29:56I think that if they continue to finish the house to this high standard,
0:29:56 > 0:29:59it will be desirable in the market.
0:29:59 > 0:30:02At the moment, what they've done they've done really well.
0:30:02 > 0:30:05They admit themselves that the property does need finishing off.
0:30:05 > 0:30:08It perhaps could benefit from an extension.
0:30:08 > 0:30:12'It's Spencer and Judith's new home, so they're not looking to rent it out.
0:30:12 > 0:30:15'But does it have good rental potential?'
0:30:15 > 0:30:21I would consider a rental value in the region of £600, perhaps £625 per calendar month.
0:30:21 > 0:30:24A two-bedroom property of this style in this area
0:30:24 > 0:30:27would rent for £625 per calendar month.
0:30:27 > 0:30:31'Perhaps a four percent yield on rental is reasonably OK.
0:30:31 > 0:30:37'But would their £180,000 investment do better if it was resold?'
0:30:37 > 0:30:39I would recommend a guide price of £200,000
0:30:39 > 0:30:43and expect possibly to receive offers based on that.
0:30:43 > 0:30:47If you put the property on the market at the moment, with finishing off to be done,
0:30:47 > 0:30:50I'd suggest a guide price of £180,000.
0:30:50 > 0:30:55If the property was extended, then I would consider a guide price of £250,000
0:30:55 > 0:30:58would reflect the work they've undertaken.
0:30:58 > 0:31:03If you were to extend the property and create a fourth bedroom, a more comprehensive extension,
0:31:03 > 0:31:07I would imagine you'd reach the stamp duty threshold of £250,000.
0:31:07 > 0:31:09- Yeah, good, good.- Very good.- Yeah.
0:31:09 > 0:31:15- Goes to show there's a lot that can be done here.- Yeah. Well, it's always had potential.
0:31:15 > 0:31:18'Certainly the resale figures give plenty of encouragement,
0:31:18 > 0:31:22'not only to finish off the house, but to go ahead with an extension.
0:31:22 > 0:31:26'Now they've lived here a few months, have the views lived up to expectations?'
0:31:27 > 0:31:31Well, fantastic, really. Throughout the year, you can see it change.
0:31:31 > 0:31:35Mm. The seasons. It's lovely with the seasons.
0:31:35 > 0:31:40# There is a season, turn, turn, turn
0:31:40 > 0:31:44'Perhaps like the seasons, this house has surprised them
0:31:44 > 0:31:48'by turning from a development project into their new home.'
0:31:52 > 0:31:57'Today I'm in the sleepy mill town of Colne in East Lancashire.
0:31:57 > 0:31:59'Once known for its mill industry,
0:31:59 > 0:32:04'there's plenty of evidence for its glory days in the heart of the Lancashire cotton industry.
0:32:04 > 0:32:07'It's also the birthplace of Wallace Hartley,
0:32:07 > 0:32:13'who famously continued playing as the doomed unsinkable ship the Titanic sank.
0:32:13 > 0:32:17'It's not far from Manchester and Leeds and the Lake District beckons to the north,
0:32:17 > 0:32:21'but this is a quiet little town with loads of shops, a couple of markets
0:32:21 > 0:32:24'and you're never far from a bank.'
0:32:24 > 0:32:28The property I'm here to see is the rear of a bank.
0:32:28 > 0:32:32It's been converted into three flats. The guide price was 65,000 to 70,000 quid.
0:32:32 > 0:32:36Big question is, will it be worth a mint one day? Who knows?
0:32:36 > 0:32:40Good news - there's lots of renovation going on nearby.
0:32:40 > 0:32:42Let's see if it's mintier inside.
0:32:42 > 0:32:48'Sitting right on the corner, this is the back end of the rather impressive bank building.
0:32:48 > 0:32:51'They used to say, "Put your money in a bank, it's as safe as houses".
0:32:51 > 0:32:54# My daddy was a bank robber
0:32:54 > 0:32:56# But he never hurt nobody
0:32:56 > 0:33:01'Could this building, with three self-contained one-bedroom flats,
0:33:01 > 0:33:04'guided at £65,000 to £70,000, be a steal?'
0:33:04 > 0:33:10I don't know what you'd do about that, but that is a massive space that's a bit wasted in the entrance.
0:33:10 > 0:33:17But into the first flat and, well, one big area here, very high ceilings
0:33:17 > 0:33:20which definitely gives a small flat a lovely feeling of space.
0:33:20 > 0:33:24Kitchen looks recently refurbished. That's good. Bathroom at the back.
0:33:24 > 0:33:27Only one thing missing. Where's the bedroom?
0:33:30 > 0:33:33You've got to be kidding. This is absolutely tiny.
0:33:33 > 0:33:37Just about big enough for a single bed, I would say.
0:33:37 > 0:33:41And it smells damp. That's not good, is it?
0:33:41 > 0:33:43'Hm, small isn't the word.
0:33:43 > 0:33:48'The bedrooms are tiny and the flats, well, they're really just apartments.'
0:33:48 > 0:33:53# The small things make the big things what they are
0:33:53 > 0:33:56'All three of them are the same compact size.
0:34:00 > 0:34:03'From the middle floor to the top floor.
0:34:07 > 0:34:12'But from an investment point of view, this could be a case of small is beautiful.'
0:34:12 > 0:34:17# The small things make the big things what they are
0:34:17 > 0:34:20'What does a local estate agent think?'
0:34:24 > 0:34:28This property, there's not much that probably could be done with it,
0:34:28 > 0:34:31apart from a lick of paint and a re-carpet.
0:34:31 > 0:34:36But someone will take this on and make it into a decent property.
0:34:36 > 0:34:42'If there's not much you can do with them, can you still do enough to get any financial uplift?
0:34:42 > 0:34:47'Remember, this place was guided at £65,000 to £70,000.'
0:34:47 > 0:34:53Once renovated, I would expect these flats to go for £40,000 to £45,000 each.
0:34:58 > 0:35:04I expect each of these flats to rent out for £200 per calendar month.
0:35:05 > 0:35:10'That rental return would be £600 a month in total
0:35:10 > 0:35:13'or £7,200 a year.
0:35:13 > 0:35:18'On a property that was guided at £65,000 to £70,000, that could mean a ten percent yield.'
0:35:20 > 0:35:24Well, the flats aren't huge, but they don't need a lot of work to sort them out
0:35:24 > 0:35:29and I reckon they could be a good little earner. Let's see who fancied it when it went under the hammer.
0:35:30 > 0:35:33Lot number 152.
0:35:33 > 0:35:39Part former bank premises, converted into three self-contained apartments
0:35:39 > 0:35:43offered with vacant possession. Looking for 30 to start me.
0:35:43 > 0:35:47£30,000. 30 there. Can I say 35?
0:35:47 > 0:35:5135,000. 35 I've got here. 40.
0:35:51 > 0:35:53Another 5. 40 I have.
0:35:53 > 0:35:5545 now? Got it.
0:35:55 > 0:35:57Can I say 50? 50 I have.
0:35:57 > 0:35:5955. I have. 60.
0:36:00 > 0:36:0460, yes? 60 I have. 65, then.
0:36:04 > 0:36:06No? Would 61 help?
0:36:06 > 0:36:10No, it doesn't. At £60,000 on my right.
0:36:10 > 0:36:13Looking for 61. Are we finished at 60?
0:36:13 > 0:36:1661 there, sir. 62 now.
0:36:16 > 0:36:2063, sir. 64. Another one?
0:36:20 > 0:36:24I've got it. 65. 66.
0:36:24 > 0:36:28No, looking away. At 65,000. Centre aisle.
0:36:28 > 0:36:31Are we finished at £65,000? I'll sell it for that figure.
0:36:31 > 0:36:34First time at 65.
0:36:34 > 0:36:37- Second time at £65,000. Are we finished? - HAMMER BANGS
0:36:37 > 0:36:41Yes, we are. It belongs to you, sir. Could I see your paddle number, please?
0:36:42 > 0:36:47'Hidden from view, for £65,000, the successful bidder was Howard.
0:36:47 > 0:36:51'He is, appropriately enough, a retired banker.
0:36:51 > 0:36:54'He joined me, along with his wife Karen, to tell me why he thought
0:36:54 > 0:36:57'the former bank building was a good investment.'
0:36:57 > 0:37:02Howard, Karen, lovely to meet you both. Congratulations. Tell me why you wanted to buy this place.
0:37:02 > 0:37:06What first interested me in the building was
0:37:06 > 0:37:11it was owned by the bank that I used to work for when I first left school.
0:37:11 > 0:37:15Oh, fantastic! And anything else about it that initially struck?
0:37:15 > 0:37:22Yes, well, when I go to these auctions, I always have a look at the last conveyance in the pack.
0:37:22 > 0:37:26And I noticed that this property that I bought for £65,000
0:37:26 > 0:37:32- changed hands two years ago for £105,000.- Oh!- So a 40 percent reduction is quite good.
0:37:32 > 0:37:38- Being a banker, I tend to look for a yield of ten percent return on the capital, you see?- Right.
0:37:38 > 0:37:44And I think, with these flats. I could probably get a good ten percent, maybe 15 percent yield.
0:37:44 > 0:37:50- Definitely. For sure. And Karen, what did you think when you saw it? - I didn't see it till today.
0:37:50 > 0:37:55Howard comes back from these auctions and says, "I bought you another present."
0:37:55 > 0:37:59Present in inverted commas. I'm never really sure what he's bought.
0:37:59 > 0:38:04- THEY LAUGH - So I'm quite pleasantly surprised. - Does he ever gift wrap them?
0:38:04 > 0:38:09- No.- A bow on the door, perhaps? - Should do. - THEY LAUGH
0:38:10 > 0:38:14'Well, some women get diamonds and pearls from their husbands,
0:38:14 > 0:38:17'but it seems Karen gets an investment property.
0:38:17 > 0:38:21'They plan to add this building to their small portfolio.'
0:38:22 > 0:38:25So tell me about you two. Are you local or what?
0:38:25 > 0:38:30Well, I was born in Bolton. We both live in Lytham St Annes now.
0:38:30 > 0:38:35- Oh, right. So the other side of the country. - I've retired from banking now.
0:38:35 > 0:38:39We both got involved in local politics. We're on the council.
0:38:39 > 0:38:44- Yes, Fylde Borough.- Lytham St Annes. - Oh, wow. OK. What kind of level have you attained on that?
0:38:44 > 0:38:48- Well, I'm leader of my party.- Right.
0:38:48 > 0:38:54- Fantastic!- After being on 16 years. - Great. Does that mean you have aspirations to be more?
0:38:54 > 0:38:59- Mm. Well, if things go right, I may be given the mayor of the borough next year.- Oh, great!
0:38:59 > 0:39:04- Oh, fantastic!- If I get re-elected. - You get to wear the chain and everything.- Yes.
0:39:04 > 0:39:08- Wonderful.- And I have to wear hats. - You have to wear hats. Marvellous.
0:39:08 > 0:39:14- And what do you do when you're not doing this sort of thing?- Erm, I'm a magistrate and a school governor.
0:39:14 > 0:39:17- I'm chairman of our local music festival.- Wow!
0:39:17 > 0:39:20'So these two really are pillars of their local community.
0:39:20 > 0:39:25'I'm sure they have clear ideas of how they're going to proceed with their flat triplets.'
0:39:25 > 0:39:27Tell me what you are going to do to sort it out.
0:39:27 > 0:39:33Tidy it up, basically. Fill in all the cracks, the holes, get all the wiring checked.
0:39:33 > 0:39:36Some of it looks suspect. Some of the wiring and the pipes.
0:39:36 > 0:39:41There's no heating that I can see. So that has also got to be sorted.
0:39:41 > 0:39:44The kitchens and bathrooms look in a reasonable condition.
0:39:44 > 0:39:50Erm, apart from that, just general tidying and cleaning.
0:39:50 > 0:39:53So what kind of budget have you got set aside for sorting it out?
0:39:53 > 0:39:59- I wouldn't say it would cost more than £10,000 at the most. Maybe five. - Right.
0:39:59 > 0:40:02And in terms of timescales, to get it back and sorted?
0:40:02 > 0:40:07- I'd say four to six weeks.- Yes. - No more than that.- Yes.
0:40:07 > 0:40:11- So who's going to do the work? - Guess.- I don't know, you?
0:40:11 > 0:40:14I won't be doing the work but I'll be organising it.
0:40:14 > 0:40:20- Right.- I'm the practical one of the partnership.- I'm afraid I'm not much of a handyman, you know?
0:40:20 > 0:40:25- You won't be out round here with your roller or your drill.- No!
0:40:25 > 0:40:29I look after the house finances, Karen is the more practical one.
0:40:29 > 0:40:31- Well, listen, congratulations. - Thank you.
0:40:31 > 0:40:35- Good luck with it. I look forward to seeing how you get on. - Thank you.- Thank you.
0:40:35 > 0:40:39'Well, as Howard continues his ambition for high office,
0:40:39 > 0:40:45'I suspect this high office should be slightly easier to achieve the end results that he hopes for.'
0:40:48 > 0:40:53Well, Howard and Karen certainly seem to know what they're doing and the figures do stack up,
0:40:53 > 0:40:55so Howard will be delighted.
0:40:55 > 0:40:59I'm a bit concerned that there will be more work to sort out these flats than they think.
0:40:59 > 0:41:02Because people do demand a lot these days.
0:41:02 > 0:41:05Still, you can find out how they get on later in the show.
0:41:08 > 0:41:13This is the part of the programme where we find out if all those dreams came true.
0:41:13 > 0:41:18Yes, did our buyers achieve what they wanted? Or were there hazards in their way?
0:41:18 > 0:41:20Let's return and find out.
0:41:20 > 0:41:24'In the New Cross area of South London,
0:41:24 > 0:41:28'a large, four-storey, seven-bedroom mid-terrace property went to auction.
0:41:28 > 0:41:33'But this former office block had been empty for a while. Not only had it fallen into disrepair,
0:41:33 > 0:41:37'but it had been used as a squat and was covered in graffiti.'
0:41:37 > 0:41:40# Have you seen the writing on the wall
0:41:40 > 0:41:43# Reaching out for your calls?
0:41:43 > 0:41:48# Have you seen the writing on the wall reaching out for your calls?
0:41:48 > 0:41:51'But none of this put off 28-year-old developer Sean.'
0:41:51 > 0:41:53# Writing on the walls
0:41:53 > 0:41:59'He paid £331,000 at auction. After all, he is an old hand at this game.'
0:41:59 > 0:42:04Basically it started when I was 16. My father lent me some money to get me going, a deposit on a property.
0:42:04 > 0:42:07Bought a flat, renovated, before I went to university.
0:42:07 > 0:42:11At university I bought two properties with those funds from that property.
0:42:11 > 0:42:16With studies I didn't have much time to do much when I was there, so I dabbled to keep me going.
0:42:16 > 0:42:19Came out of university, back into banking, did that for three years.
0:42:19 > 0:42:22Then I left banking and I'm full-time.
0:42:22 > 0:42:27'With his latest purchase, he hoped to convert the building into four flats.
0:42:27 > 0:42:33'But even with his experience and enthusiasm, this large building was a daunting task.
0:42:35 > 0:42:38'What's the writing on the wall for this former office block?
0:42:38 > 0:42:41'Well, eight and a half months later, we're back.'
0:42:45 > 0:42:49'With the security shutters off, new windows and doors and fresh paintwork,
0:42:49 > 0:42:54'the outside shows promise. What about inside?'
0:42:54 > 0:42:57The only four walls that remained were the outer four walls.
0:42:57 > 0:43:00We have gutted the building from top to bottom.
0:43:00 > 0:43:05'By ripping it back to a shell, Sean was able to reconfigure the whole building.
0:43:05 > 0:43:09'It was the ground floor where the most significant changes occurred. as it was converted
0:43:09 > 0:43:12'into an amazingly spacious two-bedroom flat
0:43:12 > 0:43:15'by adding a large, single-storey extension.'
0:43:18 > 0:43:21OK, so this is the ground floor extension that we've newly built.
0:43:21 > 0:43:26We've increased the floor area of this flat by 100 percent. Had a few issues with planning.
0:43:26 > 0:43:31The way we navigated around the planning issues is by incorporating a courtyard area
0:43:31 > 0:43:35into this flat which allows ventilation and light into the back bedroom.
0:43:35 > 0:43:38Really happy with the extension. The turnout is a good spec.
0:43:38 > 0:43:42We still have to do the floor and the kitchen, which will be a galley kitchen.
0:43:42 > 0:43:44But really happy so far.
0:43:44 > 0:43:47'If that extension wasn't enough extra room,
0:43:47 > 0:43:50'the ground floor flat not only had sole access to the garden,
0:43:50 > 0:43:54'but Sean had also built a separate annex at the bottom of the garden,
0:43:54 > 0:43:57'perfect for a study or an office.
0:44:01 > 0:44:06'Whereas upstairs, on the first and second floors, there are two one-bedroom flats,
0:44:06 > 0:44:10'both in need of some finishing off, but well on their way.
0:44:14 > 0:44:18'All the flats have solid wood flooring and fully-fitted kitchens.
0:44:25 > 0:44:29'And on the top floor, there is another one-bed flat.'
0:44:29 > 0:44:35So this is the front living-dining room for flat four on the roof, on the top floor.
0:44:35 > 0:44:41Kitchen has solid oak worktops, high white gloss units, erm, stainless steel oven and hood.
0:44:41 > 0:44:46The same spec throughout the whole building. It works well. Quite happy with the finish. It looks good.
0:44:48 > 0:44:53'Sean did have some delays with planning, sorting out the skylight windows on this flat,
0:44:53 > 0:44:59'and he's also been busy on other projects, but generally it's all gone pretty smoothly.
0:45:01 > 0:45:07'Sean is a self-confessed perfectionist, so as project manager, was he very picky?'
0:45:07 > 0:45:12Extremely picky. Honestly, to the last details, finish, paintwork.
0:45:12 > 0:45:17Paintwork is the finished object. If you walk into a flat with poor paintwork, it's noticed.
0:45:17 > 0:45:22That's one of my big issues. Also bathrooms and tiling, it's a case of a tiler can do a great job,
0:45:22 > 0:45:27and the person behind them doing the silicone can do an awful job and the bathroom can look shocking.
0:45:27 > 0:45:32So, overall, yeah, it's a case of I'm very picky. And I think it's noticed when you see the units.
0:45:32 > 0:45:38'And he's right. So far it does look like there's going to be a good standard of finish here.'
0:45:38 > 0:45:41# I only want to make things right
0:45:42 > 0:45:46'That is so important in the ultra-competitive London market.
0:45:46 > 0:45:49'But getting a quality finish doesn't come cheap.'
0:45:49 > 0:45:52# Only want to make things right
0:45:52 > 0:45:58We've actually come in at 155. With the finishing touches, probably about another 10,000 to go.
0:45:58 > 0:46:01So we're looking about the 160, 165 mark in total on this project.
0:46:03 > 0:46:07'£165,000 spend on top of the £331,000 purchase price,
0:46:07 > 0:46:14'plus costs and fees, would take Sean's investment here to a cool half a million pounds.
0:46:14 > 0:46:20'So can his four flats still add up to making a profit? What do two local estate agents think?'
0:46:23 > 0:46:25Very, very good. What was a derelict building
0:46:25 > 0:46:29is now a very well-developed block of flats.
0:46:29 > 0:46:33I feel the flat has been decorated to a very good standard.
0:46:33 > 0:46:36Er, neutral decor, great finishing on the kitchen.
0:46:36 > 0:46:40And will definitely appeal to the young market in this area.
0:46:40 > 0:46:45'At present, Sean plans to sell two of the flats and rent out two of them.
0:46:45 > 0:46:47'So how could that work financially?'
0:46:47 > 0:46:53Looking at the one-bed flats, I believe you'll get between £800 and £850 per calendar month.
0:46:53 > 0:46:59However, the top floor one will get less because of the size. It may go down to £750, £775.
0:46:59 > 0:47:03The two-bedroom flat I believe will get around £1,100 per calendar month mark.
0:47:03 > 0:47:09For the two-bedroom downstairs, I believe we could achieve up to £1,100 per calendar month.
0:47:09 > 0:47:13And for the one-bedroom flat, between £800 and £850 per calendar month.
0:47:13 > 0:47:20The top flat is slightly smaller. I believe we could achieve between £700 to £775 per calendar month.
0:47:20 > 0:47:26'Even on the lowest estimate, that's an annual income from the four flats of £31,000.
0:47:26 > 0:47:29'Or a respectable six percent yield.
0:47:29 > 0:47:35'But with around £500,000 invested here, how would they fare on the resale market?'
0:47:35 > 0:47:41The sales market for the properties, the two-bedroom flat would pretty much pan out at £250,000.
0:47:41 > 0:47:45However, with a good wind, he may break that barrier.
0:47:45 > 0:47:50So if I was him, I'd be a bit cheeky, put it on for £265,000, £270,000 and take offers from there.
0:47:50 > 0:47:57In regards to the one-beds, I believe the first and second floor one-beds would get around £180,000.
0:47:57 > 0:48:01And the actual top floor flat, I think that's going to be £170,000,
0:48:01 > 0:48:07I'm afraid, just cos of the sheer size of it. It will be the last flat to go, or he may keep it to rent.
0:48:07 > 0:48:13Right, I believe the two-bedroom would achieve between £250,000 to £275,000.
0:48:13 > 0:48:17And the one-beds would be about £180,000.
0:48:17 > 0:48:23But the slightly smaller property at the top would be between £165,000 to £175,000.
0:48:23 > 0:48:29'Well, that little lot adds up to values of between £775,000 and £810,000.
0:48:29 > 0:48:34'Or a potential pre-tax profit of around £300,000.
0:48:34 > 0:48:37'Wow! Sean must be happy with those figures.'
0:48:38 > 0:48:44It's been a longer project than we expected. But on those figures, it's all good.
0:48:44 > 0:48:47'Undoubtedly another successful project for Sean.
0:48:47 > 0:48:50'Does he still see his future in property?'
0:48:50 > 0:48:55Yeah, as a naive 17-year-old, I said, "At 30, I'll be retiring". So it's a couple of years away yet.
0:48:55 > 0:49:01But it's enjoyable, it's fun and it's rewarding when you've got this at the end of the day. We'll see how we go.
0:49:01 > 0:49:08'He may not be planning to retire soon, but with over ten years experience already as a developer,
0:49:08 > 0:49:11'he certainly seems to have an old head on young shoulders.'
0:49:11 > 0:49:13# We are young, we are young
0:49:19 > 0:49:22'It was in the Lancashire town of Colne that we came across
0:49:22 > 0:49:25'a property where you got three for the price of one.
0:49:25 > 0:49:28'Originally owned by the bank it was attached to,
0:49:28 > 0:49:33'this tall, imposing building had been converted into three self-contained flats.
0:49:33 > 0:49:36'They were, to say the least, rather compact.
0:49:36 > 0:49:40'But despite their size, retired banker Howard and his wife Karen
0:49:40 > 0:49:44'thought that actually these small apartments could give big returns.
0:49:44 > 0:49:46'For Howard, it was all about the money.'
0:49:46 > 0:49:50# I need a dollar, dollar, dollar is what I need
0:49:50 > 0:49:55- Being a banker, I tend to look for a yield of ten percent return on the capital, you see.- Right.
0:49:55 > 0:50:01I think with these flats, I could probably get a good ten percent, maybe 15 percent yield.
0:50:01 > 0:50:07- Definitely. For sure. And Karen, what did you think when you saw it? - I didn't see it till today.
0:50:07 > 0:50:12Howard comes back from these auctions and says, "I bought you another present."
0:50:12 > 0:50:16Present in inverted commas. I'm never really sure what he's bought.
0:50:18 > 0:50:24'Howard and Karen are based 40 minutes away in Lytham St Annes, where Howard is a local councillor.
0:50:24 > 0:50:30'And surprise present or not, this purchase was all about getting a decent return on their investment.
0:50:31 > 0:50:36'With a budget of between £5,000 to £10,000 for all three flats, they set about their task.
0:50:39 > 0:50:42'Just under three months later, we're back.
0:50:47 > 0:50:50'So, how's it all been going?'
0:50:50 > 0:50:53Howard bought it at auction about three months ago,
0:50:53 > 0:50:59right at that time we were suddenly projected into the electioneering for local councils,
0:50:59 > 0:51:02so we had to find someone to take it on.
0:51:02 > 0:51:08And you asked your nephew, Daniel, to act as the project manager.
0:51:08 > 0:51:11He came and we came with him and talked about what needed doing.
0:51:11 > 0:51:16'So did Howard's nephew Daniel manage to deliver the goods?'
0:51:27 > 0:51:32'Certainly the flats have been spruced up. New carpets, curtains and paintwork.
0:51:32 > 0:51:37'And the place has been given a good clean. So it appears as though it was all fairly straightforward.'
0:51:37 > 0:51:42Well, the only problems we encountered was when we spoke to the pub landlord next door.
0:51:42 > 0:51:46He told us, he said, "Do you know the history of the place?"
0:51:46 > 0:51:50And then we found out there had been a fire about three years ago
0:51:50 > 0:51:56and there'd been a flood and the bottom flat, apparently, was three feet high in flood water.
0:51:56 > 0:52:00'So, it seems the flats came with a bit of a chequered past.
0:52:07 > 0:52:10'But those problems seem to have been washed away.
0:52:10 > 0:52:14'And having removed any sign of damp by replastering in the ground floor flat,
0:52:14 > 0:52:18'they also tried their best to improve the bedroom area.'
0:52:21 > 0:52:24We thought it was rather dark in there,
0:52:24 > 0:52:29and we've put in these windows above each door,
0:52:29 > 0:52:34which means that it has natural light in there and is not so much of a cupboard.
0:52:34 > 0:52:37'Well, the bedroom might be brighter, but no bigger.
0:52:37 > 0:52:41'However they did find some additional space elsewhere.'
0:52:41 > 0:52:45This yard is... When I bought the property, I didn't realise this is an extra
0:52:45 > 0:52:50because we have access over this, right of access over this yard.
0:52:50 > 0:52:54And I think we could do something with it.
0:52:54 > 0:52:56We tidied it up. It's much better than it was.
0:52:56 > 0:53:02But I think if we paved it and put a few hanging plants from this wall,
0:53:02 > 0:53:08and use these steps as a bit of a feature, I think it could make quite a difference.
0:53:08 > 0:53:12And it could be a smoking area for your guests, as well.
0:53:12 > 0:53:18'Any outside space is welcome in a flat. Especially when they are as compact as these three.
0:53:18 > 0:53:22'So making this space accessible to tenants certainly gets my vote.
0:53:22 > 0:53:27'But did Howard do it enough in his local elections to get what he hoped for?'
0:53:27 > 0:53:31Most of our time was given to canvassing, knocking on doors,
0:53:31 > 0:53:35reminding people of the 16 years he'd given to the borough.
0:53:35 > 0:53:39And he came back in top of the poll with an increased majority.
0:53:39 > 0:53:42So he is now mayor of the Fylde Borough Council.
0:53:42 > 0:53:45# Hello, citizens, all right, follow me
0:53:45 > 0:53:48# And vote for Mr Bishop's jamboree
0:53:48 > 0:53:52'So with the chains of office hanging proudly round their necks,
0:53:52 > 0:53:54'they got back to work on the building.
0:53:54 > 0:53:59'Did the work carried out by Howard's nephew Daniel get their vote?'
0:53:59 > 0:54:05I think a woman would probably have been a bit more pernickety about the finish.
0:54:05 > 0:54:09But for a young man, for his first project, I think he did well.
0:54:09 > 0:54:15'So in the last few weeks they helped with the finishing touches, such as curtains and lampshades.
0:54:15 > 0:54:19'Has it cost them more being more hands-off than on?'
0:54:19 > 0:54:22We decided between £5,000 and £10,000.
0:54:22 > 0:54:26It's come in around £7,000 for the basic work.
0:54:29 > 0:54:33'They paid £65,000 at auction for the three flats,
0:54:33 > 0:54:36'spent £7,500 with costs and fees,
0:54:36 > 0:54:40'so that means a total outlay of just over £72,000.
0:54:40 > 0:54:44'Has that added up to a good investment? What do two local estate agents think?'
0:54:47 > 0:54:50The property is actually very nice.
0:54:50 > 0:54:54The purchaser has done a little bit of work to it.
0:54:54 > 0:54:59A bit of titivation, they've painted, put new carpets in, spent a bit of money on the kitchens,
0:54:59 > 0:55:04which is good. So they've done a respectable job of the renovation.
0:55:04 > 0:55:07Compact. It's got everything that somebody would need,
0:55:07 > 0:55:10bedroom, sitting room, kitchen, bathroom.
0:55:10 > 0:55:13It ticks all the boxes as far as that's concerned.
0:55:13 > 0:55:16'This purchase was aimed at the rental market.
0:55:16 > 0:55:20'But having invested just over £72,000, how much could it be worth if sold?'
0:55:20 > 0:55:26Investment would be anywhere between £100,000 and £110,000 for this property.
0:55:26 > 0:55:31In the current market, I would expect the properties to achieve
0:55:31 > 0:55:34in the region of £90,000 to £100,000.
0:55:34 > 0:55:36That's brilliant. Brilliant.
0:55:36 > 0:55:41For a total investment of about £72,000, that's not a bad deal.
0:55:41 > 0:55:46'That's potentially a pre-tax profit of around £30,000.
0:55:46 > 0:55:49'So could it fare just as well as a rental?'
0:55:49 > 0:55:56Individually, these properties should rent for anywhere between £55 and £75 a week,
0:55:56 > 0:56:01which is anywhere between £250 and £300 per calendar month.
0:56:01 > 0:56:03In the current rental market,
0:56:03 > 0:56:09I'd expect to achieve in the region of £70 to £75 per week, per flat,
0:56:09 > 0:56:12in the order of £275 per calendar month.
0:56:12 > 0:56:16- That's very good.- Very good, yeah. - Good return.
0:56:16 > 0:56:19'Even a £275 monthly rental
0:56:19 > 0:56:24'would bring in a total annual income for the three flats of £9,900.
0:56:24 > 0:56:31'On an overall investment of around £72,000, that would mean a yield of nearly 14 percent.
0:56:31 > 0:56:36'That's slightly above what Howard was aiming for. Does that make him keen to do another property?'
0:56:36 > 0:56:40I certainly would. Especially now that I've got my nephew Daniel involved.
0:56:40 > 0:56:45He's very keen to start up a family business in investment properties like this.
0:56:48 > 0:56:53Well, we'll be back with more stories from the world of property for you next time,
0:56:53 > 0:56:57some successful, some less so, but always jolly interesting to watch.
0:56:57 > 0:57:02- See you then for more Homes Under The Hammer. - See you then, goodbye.- Goodbye.
0:57:03 > 0:57:07Subtitles by Red Bee Media Ltd
0:57:07 > 0:57:11E-mail subtitling@bbc.co.uk