Episode 67 Homes Under the Hammer

-Hello! Welcome to the programme.

-Auctions are an interesting place to buy and sell property.

Perhaps that's why they've become so popular over the years.

Thousands of different lots are for sale each year under the hammer.

People who buy regularly at auction know all the tricks of the trade.

One way to make sure you're not inheriting a load of problems

is to read the legal pack of the property you want to buy.

It's better to be safe than sorry.

Here are the properties that got our buyers interested on today's show.

This end-of-terrace in Macclesfield only has two bedrooms

but could prove a knock-out!

It's a small property, but it packs a punch!

In Plaistow, east London, there's a full-time job on offer.

This is a 24-hours-a-day, seven-days-a-week job!

And this former office in Cardiff

has two floors and some deadly dry rot.

It may look pretty, but in terms of a building, it's horrendous!

All these properties went to auction

and we'll find out who bought them and what they paid when they went under the hammer.

I'm in the market town of Macclesfield in Cheshire.

It has great rail links to Manchester and Stoke

and a buzzing high street.

The King's School here is over 500 years old.

Its motto is "No terror except of the bad."

So let's hope that's not what we find here!

So will the place I'm here to view get top marks?

The property I'm here to see is about a mile and a half from the town centre.

It's a two-bedroomed mews house built in the 1970s.

It had a guide price of 85,000 quid. It's tucked away at the end of this road.

Doesn't look too big from the outside, but as they say, nice things come in small packages.

It's looking pretty tidy from the front.

But will this property deliver the goods when we go through the door?

So what's it like inside?

There's a little porch area, somewhere to hang coats.

Always useful. Then through into basically the main room downstairs.

The living area. Open stairs up to the bedrooms.

It's not a bad size and there's lots of light

coming through the windows.

Then through to the only other room downstairs, the kitchen.

Again, not a bad size.

There's enough room for a dining table, I'd say, there.

Obviously the units, you can see the state they're in.

Rip them out, put a new kitchen in here.

It would definitely dramatically affect it.

But overall, it's... It's OK!

So appearances certainly seem to be deceptive in this case.

It feels much bigger inside than you might anticipate from the street.

So, upstairs, no great surprises. A good-sized double on the front,

a smaller double at the rear, then through to the bathroom.

This is good news. I reckon with a bit of grouting in here,

keep these units, take out this cupboard to create more space.

Overall you've got yourself not a bad bit of space.

And in general, it's a small property,

but it packs a punch!

And with its guide price of 85,000, there's an added bonus

with this two-bedroomed mews property.

At the front is this garage, the first one on this block, right by the house.

And there's another bonus round the back.

A nice stable door there. Out of the rear of the property into this courtyard area.

Most of the garden is laid to flags.

Very low maintenance, especially if you want to rent it out.

And then a real bonus.

At the top of the garden is this shed. It's a pretty decent size.

So that could possibly be even something like a home office, perhaps,

or just a really good workshop for activities and pastimes.

A nice thing to have. The outside area is a big plus.

So I'd give top marks to this place.

But is it going to get such a high score from a local estate agent

familiar with the housing stock round here?

How does this house compare to others?

The biggest selling feature is its end of cul de sac location.

It's a modern mews property, not in too bad a condition.

It shouldn't need much money spent on it. It's cosmetic - kitchen, bathroom, et cetera.

How much could this achieve after refurbishment to the house and summer house?

The summer house is an asset which will help it sell.

It has electricity connected, but needs money spent on it.

Once renovated, the property should reach in the region of £125,000.

Is there potential here for a buy-to-let investor?

How much income could it generate?

Should the property go up for rent,

I'd consider an open rental figure in the region of 600 to £650 per calendar month.

So did this two-bed property that had a guide price of 85,000

appeal to a buy-to-let investor

or a developer looking to refurbish and sell it on?

Time to find out as it goes under the hammer.

Lot 34.

A two-bedroomed end mews.

What's this worth?

Who's going to give me 80? 80,000?

80,000. At 80,000.

75. No lower. 75 bid. Thank you.

75,000. I have 75. Do we see 76?

76. 77.

77. 78? 78,000, then.

79? 79.

80. At £80,000.

80. 81. 82.

83?

84. 85.

86. 87.

87,000.

At 87,000 for the first time.

88. New bid. Ooh.

89.

90. 91.

90 and a half. Here we go!

91. 91 and a half.

91. 91 and a half. 91 and a half. 92.

92 and a half.

92 and a half. 93.

93 and a half. 94.

94 and a half? No. At 94,000, then for the first time.

Second time at 94,000.

Are we all done at £94,000?

There you go, sir. Your paddle number?

That final successful bid of 94,000 was made by John.

He's now retired, but used to work in sales.

He and his partner, Sue, are keen golfers

and have built up a small portfolio of buy-to-let properties over the years.

I met John back at their new purchase to hear the plans for it.

-John, lovely to meet you. Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

-I wanted to keep fit!

-OK!

-So it's a mental exercise and I also wanted to turn a profit.

So your first priority was to have something that kept you active.

I'm retired and I play a lot of golf.

It was just something to spark an interest.

Not a primary residence. Something to do up and sell on?

Primarily to do up and sell on.

If the market's not right, I'll let it.

Tell me about you. What did you do before you retired?

I was a facilities manager for a company.

I looked after 20 offices they had through the UK.

And I was a buying manager and also looked after a fleet of executive cars.

-Nothing to do with property?

-I looked after 20 offices.

-Right.

There was a fair involvement in the property side there.

I've got some buy-to-let properties as well.

-So why this place?

-It looked easy.

There's nothing wrong with it structurally. There's no damp.

It's just cosmetic. So it looked fairly easy.

-Will you do the work yourself?

-The intention was that I'd do the labouring

and there's a lot of it to do.

Decorating. But unfortunately, since the auction, I've had a heart attack!

-A heart attack?!

-Yes!

Silly thing to do, I know. I wasn't doing anything stressful.

I don't know what it was. But I've had a heart attack

so I'm bringing people in to do some of the heavy work.

-How are you?

-Fit as a fiddle! I feel really well.

Really up to the challenge.

But the doctor says, "Take it easy and don't do too much."

So how will that affect what you do?

It's going to cost a bit more, so the budgets have increased

because of bringing other people in.

But we'll do exactly the same work as we were going to do.

It's great that John's made a good recovery from his heart attack.

But I'm very glad to hear he'll get help with this project.

Tell me what work you're going to do.

I'm going to do the kitchen. That's the first priority.

There's a lot of work to do in the garden. Trees to be cut back.

There's a summer house that I intend to make a feature of. I'll carpet that.

Hopefully, when we sell it,

I'll advertise that as either a home office or art studio or music studio.

I hope that'll be a real add-on to the property.

Then carpets throughout, it'll need decorating.

Some of the double glazing is shot.

So that needs to be sorted out.

But there's nothing major.

-What about the bathroom?

-The bathroom is fairly new.

There's a bit of mildew, so clean it up, re-grout some of it.

The floor looks good, so we'll retain the bathroom.

-Will your partner get involved?

-Yes, she's golfing, but she's my style guru.

She'll pick the kitchen, work out colour schemes. I'm colour blind, so...

-Right.

-So that's really difficult, so she'll do all of that.

-And she's a part funder.

-As in funding the...

-As in putting money in.

So if John was left to it, we could find some interesting colour schemes!

But thankfully his partner and fellow golfer Sue is there to help out.

But she's also a joint investor, so John will have to watch his pennies.

So what was the budget before the heart attack and what is it now?

Seven and a half, now nine.

-OK.

-A thousand contingency. So it's got to be brought in for ten.

Otherwise the maths won't work. But I did a lot of research on the property.

I'm sure I know what the sale price will be when it's done.

Working backwards from that sets your budget, profit margin, price at the auction.

-So to me it's a mathematical exercise.

-Very sensible indeed.

Talk me through the numbers.

I think it should sell for 125, done up.

After a budget of ten, 115.

I bought it at auction for 94.

So there's a little profit gap.

Hopefully!

-What's the time scale for getting it all sorted?

-Well,

it was a tight four weeks. Now I'm saying four to six.

It gives me that extra time for planning round the edges

and bring people in if necessary.

How strict on yourself are you going to be in terms of not doing anything?

I played my first 18 holes of golf yesterday!

I worked all afternoon and went to a concert last night!

-Right!

-I have a real problem in slowing down!

I have a very strong partner at home

and she will stop me

from doing too much!

A relaxed round of golf I'm sure is fine, but ripping out units is a big no-no!

-I start on the kitchen this afternoon.

-What...

-I start on it. I'm doing it!

What?!

Well, it can't be that difficult!

It's not difficult, it's the physical exertion!

We'll take it very easy. Hour slots.

Are you sure you're doing the right thing?

Yeah.

Congratulations and good luck.

-Thanks very much.

-Good health to you.

-Very kind of you.

-We'll see how you get on.

-OK.

Well, an inspirational story from John, there.

But I really hope he gets proper advice

before he takes on too much work.

In terms of sorting the place out, not too many challenges ahead.

I can't wait to see how he gets on.

Find out later in the show.

I'm in the East End, today, a place called Plaistow.

The average price of a terraced house here is just over £200,000.

That represents fantastic value

when you consider the average property price in the capital

is over 380 grand!

Wow!

With excellent transport links into the city,

this is a hugely popular part of the capital.

It has a proud established heritage that's evident everywhere,

a fabulously fruity market,

and in the middle of it all, the West Ham football ground stands tall.

-#

-I'm forever blowing bubbles...

-#

I'm here to see a property that's in the new city triangle.

A cluster of roads that are deemed to be desirable by local estate agents.

The houses along here are well kept

and retain a lot of lovely Victorian features that we all crave.

So I'm looking forward to seeing today's auction lot.

Not so great from the outside,

but I won't let those boards deter me.

The guide for this two-bed terrace is £100,000.

Let's go and see if it gets better on the inside.

And on a sunny day like today, let's hope I see the property in its best light.

Hmm. Maybe not!

Whoa!

If that front door is anything to go by,

I think this is going to be a pretty grim viewing!

I cannot tell you what it's like to be on the inside in here.

It really, really smells of damp.

It feels damp. It's quite cold in here, yet it's a warm sunny day.

Look at the old electrics, the Bakelite there.

The whole place just needs an overhaul. It's incredibly dated.

Health and Safety hazards down here.

There are holes in the floorboards,

holes in the walls.

At any point you feel like you're going to go through the floorboards.

There's probably woodworm everywhere.

Come and look over here.

Even the pipe work underneath is completely rusted away.

There's the kitchen but there's a shower in the middle of it!

There's nothing to make you think it's a kitchen. It really needs to be taken back

to the absolute bare bone.

This is going to need full-time commitment.

This really is a 24-hour-a-day, seven-day-a-week job.

No slackers need apply!

This property that was guided at £100,000

is damaged, dirty and in dire need of attention.

The back and the bizarre kitchen/shower room is in such a state

I can't get through to look at the garden.

I had to make do with peering through the window.

And upstairs, bedroom one - you've guessed it - needs loads of work.

And through there, much the same. This is bedroom two,

and as you see, it needs a lot of work.

And there's nowhere to move that downstairs bathroom up here.

Bit of a shame.

This had a guide price of £100,000.

We asked a local estate agent to give us his opinion

on this conundrum of a property.

The property needs a lot of work.

It's quite confusing as to where you'd put the kitchen and bathroom.

It'll take some imagination in planning.

But what to do once the work's done? Is this a good rental investment

or is the real money to be made by selling this on?

With everything that's happening in the local area and projections for the next four to five years,

I'd suggest an initial rental and wait for an upturn in the market to sell in future.

Depending on how the property was finished,

we'd rent it between £950 per calendar month

to 1,050 per calendar month.

But if the buyer has their heart set on selling?

I would value a finished product somewhere between £205,000

and £210,000.

A downstairs bathroom is a real turn-off for me

but buyers in this area, they come to accept it.

It does require a lot of work, but once complete,

I think it could be a nice little home or great rental investment.

Let's see who wanted this as we go to auction.

Who'd like to kick it off?

-120.

-120. Bold bids get it. Don't forget that.

121. 122.

123. 124.

125.

126.

127. 128.

129.

130. 131.

132. 133.

133. Sorry.

134. 135.

136. 137.

138.

145?

Ah, 140. 141.

'The bidding continued at a pace.

'We rejoin it as it reaches 150,000.'

158.

159. 160.

161. 162.

161 on my right. First time.

Second time.

Third and last time. Have you all done?

Sold 161. Well done, sir.

And it was Daniel who was successful with his £161,000 bid.

He runs a recruitment company

but also has several investment properties in West London.

His move east is a new venture for him.

He brought along a couple of side-kicks to check out this danger zone of a property!

Daniel, great to meet you. Why did you want to buy this house?

It wasn't that I set out to actually buy this.

I was looking at another area, Hounslow,

where I have property, ten properties over there.

I went to the auction. The property I was going for was over-priced.

I was going in at about 200,000. It went for 280.

I hadn't picked this house. I hadn't actually, if I admit, seen inside it!

-Uh-oh!

-It went roughly... I had marked out about 150,000.

I went into the auction, got carried away and then bought the place.

-Did you buy it blind?

-Erm...

-Tell Lucy!

I did!

-OK.

-Blind inside, but I've done research on the area.

-Did you even peer through the letter box?

-No, it was boarded up!

OK, so you literally bought the house... Did you even visit the street?

-I did the area. Not this exact street.

-Not the street.

-No.

But I had done research on the area, the letting area, the potential of the area.

And this is what I was after.

And it's in the price range.

OK, I think we all know that is a good dead cert rental area.

It's a really nice road, you only need to go up and down.

It's when you get inside that all the problems start!

How did you feel when you walked in here for the first time?

Because it's not great, is it?

When I came in the first time, I must admit, the place was a shambles.

I did put my hands to my head and said, "What have I done?"

I went around, looked upstairs, tried to look for positive things.

The best thing was there's two good rooms upstairs. I love these houses where

I can get in, I'm going to get a skip outside, everything out,

the floors, the walls, put new electrics, new plumbing.

-This is going to be a kitchen/diner area.

-You're going to open the space up?

-I'll open up the space.

I was looking at it. It's not enough potential to do it up to sell.

I'll do it up to rent and make an investment that way.

So it's a rental investment. Long term, what a fine investment.

I'm going to put in 30,000, bring it up to about 190.

I hope to get it valued at 215.

You think £30,000 is going to be enough to really turn it around?

I'm going to put 15 in labour, 15 in all the work, and the plumbing work.

I have a 5,000 contingency on that.

Daniel's imagination will certainly need to go at full speed to turn this place around,

particularly to sort out that odd kitchen/bathroom combo.

Does the prospect fill him with delight or dread?

Are you excited by the fact you've got to rip this place back to the bare bone?

I'm beginning to love it. I'm dying to get into it, I really am.

When I say I'm dying to get into it,

I have a team of two builders, they come in, I use the head and plan it all

and go ahead like that.

We hope to start work next Tuesday

-and within three months I will have this finished.

-Really?

-To the spec, yes.

-Something I said when I first viewed this property was no slackers need apply

because it needs somebody to come in here and graft.

It's the type of job I love. I love to get a property,

normally I go for probate properties.

But a property where you take out everything,

and even though I have the recruitment business,

I would like to get back into the property market,

look at an area like West Ham, it's up and coming for the prices.

You're going to make money on the buy-to-let.

Anything you're worried about, having bought this at auction?

If you'd asked me five minutes after coming into the house,

I'd have said, "What the hell have I done?"

I went outside, had a cigar, came back and said, "No, it's something I like."

I've been out here today, looked at the area and I really like the area, the people, the road outside.

Daniel, it's been wonderful meeting you. I'm sure you'll do a fine job. Can't wait to see it!

-I hope you'll have fallen in love with it.

-I believe I will. Thank you very much.

-Thank you.

Buying blind is always a no-no in my book.

Luckily for Daniel, things seem to have worked out for him.

So we all need this house is in desperate need of an overhaul.

But he seems to have a firm plan in place.

Question is, will he do it all in three months

and stick to that £30,000 budget?

Find out what happens later in the programme.

Coming up: in Cardiff, there could be a new lease of life for this office.

With some clever designs, you could get four, five, maybe six flats in here.

We return to east London to discover what Daniel discovered at the back.

The garden was terrible. You couldn't get into it. We didn't know what was there.

But first, we return to Macclesfield to find that the shed's finished.

The electrics have all been checked out. So it's all ready to go.

Back to Macclesfield in Cheshire, now,

where earlier in the programme this two-bed end-of-terrace

with a large summer house was bought for £94,000 by John and his partner, Sue.

He's a retired facilities manager and Sue's a lecturer.

They're both keen golfers and have a small portfolio of buy-to-let properties.

But the plan here was to refurbish the house and sell it.

-Will you do most of the work yourself?

-The intention was that I'd do the labouring,

and there's a lot of it to do, decorating.

But unfortunately, since the auction, I've had a heart attack!

-A heart attack?!

-Yes! Silly thing to do, I know.

How strict on yourself are you going to be in terms of not doing anything?

-I'll start on the kitchen this afternoon!

-What?

-I start. I'm doing it.

What?!

-Are you sure you're doing the right thing?

-Yeah.

It's now two months later and John's invited us back to see the end result.

Well, the garage door's been painted, so a good start.

The paved garden has been jet-washed and the summer house has been repainted.

More on that later.

Inside, the living room has been carpeted and decorated.

Even the lobby by the front door looks much better.

The kitchen was a decent size, but the units were past it.

Now the new flooring and classy white units have been installed, it looks fantastic.

And despite my concerns, it was the first job that John tackled.

When I walked in, the kitchen was very dated and very worn.

So my first job was to rip it out and start again.

My partner suggested putting the colour stripe in to lift the whole kitchen,

but I particularly wanted the clean look of the gloss white.

We've put a larder unit in to cover the boiler.

All in all, it's turned out very well indeed. I'm pleased with it.

Upstairs, the two bedrooms have been decorated. The colour scheme is down to Sue.

Fortunately, the bathroom was in good condition when we came in. But the grout was really dirty.

So we've re-grouted it, put a bath screen in,

new toilet seat, and generally cleaned it very, very well.

Prior to John's heart attack, he'd set a timescale of four weeks.

He then extended it by two weeks and the work has been finished in six.

The outside looks great.

The summer house was one of the main attractions to the property.

We've refurbished that, put a new floor in,

and waterproof membrane.

We've carpeted it. The electrics were already there. They've been checked out.

So it's all ready to go.

Former salesman John's hunch that the summer house was the USP of this property

proved right on the day we very first met him.

In the afternoon, I started to take out the kitchen.

Within two hours, somebody knocked on the door and wanted to buy the property

because of the summer house. They wanted to use it as a dark room.

So that's been a very successful project!

John has increased his initial budget from six to 10,000

to allow for the work he was sensibly not going to tackle.

-So how much has he had to spend?

-I've brought it in for 9,700.

So I'm very satisfied with that.

Time to see what two local property experts think of the property

with its garage and summer house.

I think the vendor's made a fantastic job of the property.

Good finish with the kitchen and bathroom.

The summer house is great.

With the additional benefit of the garage and parking,

it's a great job.

The kitchen's come up extremely well.

He's chosen the right kind of units, high-gloss white with the red tile.

The bathroom is superb. Beautiful.

-Again, white and chrome.

-I particularly like the summer house.

The parking is especially good. Many properties here don't have parking and a garage.

How much is the place now worth? John paid £94,000 at the auction,

and has spent 9,700, making a total of just under 104,000.

You could put this on the open market for around 120 to £127,500.

I would market the property for £130,000.

That valuation range will produce a gross profit for John

of between 16 and £26,000.

When I purchased the property,

I thought it would fetch about 125 because that's the stamp duty level.

So I'm pleasantly surprised. If I can get 130, that'll be terrific.

If John had to rent the property out, what income could it produce?

You'd be looking on the open market for rental in the region of 600 to £650 per calendar month.

I would be able to rent this property out for £600 per calendar month.

I have buy-to-let properties, but on this particular venture,

what I really wanted to do was renovate the property and sell it straight on.

It seems I've been successful.

Fantastic. The person who knocked on the door decided to buy.

How much did John achieve from the sale?

Because of the stamp duty level at 125, I've said the price is 125

and that's what they've agreed to pay.

Before the auction, John had done his research

and calculated that there was potential profit here.

Even though his budget expanded because of his health scare, he's been proved right.

The house is finished, he's got a buyer and hopefully his health scare is behind him. So what next?

If I was to buy again, I would certainly go to auction.

But I don't think I'll be doing it in the short term or the medium term!

Perhaps not even the long term. I deserve a rest at the moment, so I'm not even thinking about it.

I'm in Cardiff Bay in South Wales.

Nowadays, a trendy area with bars, shops and restaurants.

But this is a very important part of Cardiff's history.

Because it was from here that the coal from the South Wales' mines

was exported to the rest of the world.

And that helped develop Cardiff into the capital city that it is today.

But sadly, as the mines began shutting, most of the industry closed down as well

and the area became derelict. But it's now been regenerated

with the building of the Cardiff Bay barrage.

This is just round the corner from the heart of Cardiff Bay.

A mix of commercial and residential properties.

I'm here to see an old office building. Two storeys, a guide price of 59,000 quid.

Let's take a look inside.

Ooh. An interesting shape! Got an industrial feel to it straightaway.

And I'm also seeing, boy oh boy, one big space

in need of a lot of renovation.

Tell you what, that's not good!

This part of the ceiling has completely collapsed, as you can see.

My guess is that water's come through the roof at some point.

It's gone through the floorboards and it's collected here.

Before the ceiling itself collapsed,

that created the perfect conditions for the growth of dry rot, as you see there.

A beautiful specimen!

May look pretty, but in terms of a building, it is horrendous.

They call it building cancer, for a good reason.

It spreads through wood, through stone and concrete

and the only thing to do is cut that out and burn the wood.

Not good news. Expensive to fix.

# There's a problem at the office

# He can't seem to solve

# There's a problem at the office

# We need to talk about. #

Well, not a great start. But when looking past the nasty rot,

there's a large opening on the ground floor area with a handy kitchen unit at the back.

There are two ways to get to the first floor.

Through this hatch or by the rear staircase.

There are two toilets at the top of the stairs. That's the route I'm taking.

Whoa! That's a nice surprise. A really big-sized space up here.

Here's the top side of all that dry rot and damaged ceiling.

That's where the water's come in.

But a big space. A few things I see straightaway.

A major part of it these pillars.

They form a serious part of the structure of the building

and whatever you do with this internal space, you have to look at how to get rid of those.

They're terribly in the way.

A big space. What are you going to do with it?

You could try and renovate it as a commercial unit.

But I think the money in this one is to think about converting to flats.

It's a great location, close to the heart of the action.

With some clever playing around and clever designs

you could get four, five, maybe even six flats in here.

Now it's interesting!

But any investor thinking of converting the property

would require planning permission for this former office that went to auction guided at £59,000.

There's an added bonus of a rear entrance

so the opportunity here looks promising.

What does a local estate agent think of the chances of getting

all-important planning consent?

The prospect for any buyer to consider

converting to residential would need to take a value judgement.

If you look at the adjoining properties here,

they are converted lofts and residential

so there is a precedent already for apartments.

It's worthwhile speaking to the planners what their view is for converting

and I think it's likely it would be favourable

as they are endeavouring to make this zone more residential.

Good news. But what would be the best use of this space?

At present, it's two floors. Looking at adjoining properties,

there's a possibility of three or even four, in view of the height.

But I would be thinking in terms of having good quality spacious apartments,

perhaps one on each floor.

What sort of money could you make if you went down that route?

In my opinion, if this was converted to three spacious apartments,

each apartment would be worth in the region of £145,000 each.

-And rental income?

-Each apartment

would command a rental figure of 500 to £600 per calendar month.

What about the valuation if the property was just renovated and left as an office?

If this was renovated as offices,

to modern standards, the realisation value would be in the region of £200,000.

So, some work to be done to sort this place out.

But quite a lot of potential with this building.

Would you keep it as a commercial unit or convert it to flats?

Let's see what the person who bought it decided to do

when it went to auction.

Now we go on to Lot 20.

The vacant office premises in need of refurbishment.

Approximately 2,000 square feet.

Two miles from the city centre. Ideal location.

Can I see 60 to get on?

60 I'm bid, at the back. Thank you.

Can I see two now?

Two. Your bid, sir, at 62,000.

At 62. I'll take three, then. 63.

Fresh bid at four.

65 standing in the back.

66, thank you. At 67 standing in the back.

68 I'm bid. Nine I'm bid.

At 69. Fill it up. 70, now. 70 I'm bid.

At 70 and one if you like. 71.

Two, can I? Two. 72. 73 standing in the back.

Four. 74.

Gentleman on the steps. I've got him. 75.

And six. 76. Seven on the steps.

At seven. Eight. 78. Against you. Nine on the steps.

At 79. Fill it up. 80, will you sir?

80 I'm bid. One is bid.

81 on the steps. Two. 82.

The gentleman on the steps shouted 90. That's the way to do it!

At 90. You heard the bid.

92. Thank you. At 92.

Four. 96. There we are.

Eight, can I? Eight.

98. 100, then? 100 I'm bid.

At 100 on the steps. And two, will you sir? Or you?

Two. At 102.

110.

At 110 I'm bid. 12, if you like, sir.

At 110 on the steps.

12, either of you? He's driven you out. I didn't think you'd let him do that.

Have you all done at £110,000?

It's yours, sir. Your number, please?

What an auction!

That determined bidder who wasn't going to give up was Barry,

who paid 110,000.

He's run his own lettings agency in Cardiff for over 10 years.

I met up with him to find out his plans.

Barry, congratulations. Well done.

So why did you want to buy this place?

-To make some money.

-OK. In a nutshell.

-Yes.

-How will you do that?

-We plan to convert it from a derelict office building

to six modern one-bedroomed flats

which should be worth in the region of 80 to 85,000 each.

The build should come in at around 200,000

with disbursements.

So there's a hefty profit in that.

You paid quite a lot over the guide price, but you obviously felt it was worth it.

I'd inspected the property before, we'd done some figures.

I thought we could get an extra floor in above.

We spoke to planning. Planning are not averse to going up a floor.

-So we're actually trying for eight flats.

-Eight? Wow.

We don't expect to get it, but you've got to try! So.

-Four, six, eight flats. Perfect.

-Right.

Tell me about you. Is this something you do?

Yeah, I do a little bit. I've got 20 investment properties I let out.

-I run an estate agent's, with four Cardiff branches.

-Wow.

So everything I do is surrounding property.

The plans that Barry's architect has submitted

are for two flats on each of the current floors.

They hope to add one or even two further floors

if their grand plans for eight flats are accepted.

So any idea of the timescale for what you're planning here?

Fingers crossed, 12 months and it'll be up and running.

-On the market.

-Right.

-Is the idea to sell on?

-We'll see nearer the time.

I might rent them out. There's a good return if we rent them out.

What would you expect for a one-bed flat?

I'd expect them to achieve about 475.

Per calendar month. But we'll see nearer the time.

Barry seems to know the local market very well.

But the space here is restricted when it comes to the layout.

My concern is that the flats could end up being quite narrow

and getting enough natural light in could be an issue.

This is an ambitious project he's taken on.

So anything about the building which concerns you at all?

Obviously the dry rot which I spotted when I came round.

There is dry rot. Possibly structural issues.

But because we're ripping it apart, we're raising the roof,

we're starting again, so it doesn't make much difference.

-Have you had plans already drawn up?

-Yes.

-Shall we take a look?

-Yes.

-After you.

So Barry's bought the office space and has a clear idea of what he's got planned for it.

He's done his sums so he can see this could be a real money-spinner.

-Talk me through it. This is the front elevation.

-Yes.

We've got four floors and eight flats.

We don't really expect to get eight. We expect planning for six.

-We'll see.

-So if you get planning for six, you'll build one extra floor,

-and if it's eight, you'll add two floors?

-Yes.

We've got four floors, two flats on each floor.

Each flat has to be quite long and thin

but we're restricted to the shape of the existing plot.

One thing that strikes me is lack of light.

How will you get natural light in?

You've got windows at the front

but a dark area in the middle near the shower room.

We don't need as much light in these areas as we do in the living room and bedroom.

So we'll put these rooms at the front and rear to make sure they get adequate light.

The bathroom doesn't need any light, so we've put it at the darkest spot.

-We may borrow some light from the bedrooms.

-Right.

But it's not an issue at this stage. Get it through planning and take it from there.

-Good luck with that. Congratulations.

-Thank you.

-We look forward to seeing how you get on.

-Good man.

So, Barry on for potentially quite a big profit with this project.

Still a few hurdles to cross.

One, planning permission, and two, I'm not sure about the design of the flats.

Will they be what people want to buy?

Find out how he gets on later in the show.

I wonder if our buyers' plans have turned out OK or if there have been problems?

Time has passed. Now is the day of reckoning. Let's go back and reveal all.

We return now to Plaistow in east London

where Daniel bought this derelict mid-terrace property for 161,000.

He runs a recruiting company and has several investment properties in west London.

He had recently decided to increase his portfolio in the East End.

He bought this house in the property danger zone without looking inside first.

When I came in the first time, I have to admit, the place was a shambles.

I did put my hands to my head and said, "Oh, what have I done?"

I went around, looked upstairs, tried to look for the positive things.

The best thing was there's two good rooms upstairs.

It's now three and a half months later.

Daniel's arranged to show us around the completed property.

Wow!

The crumbling concrete has gone and the beautiful features of the house are restored.

There are new windows, roof and door.

Inside a front reception room has lost the chimney breast

and a wall's been removed to create a lovely spacious living area.

The former rear diner is now a classy kitchen...

with work surfaces on two sides of the room and a pleasing pastel colour scheme.

Originally when we purchased the property, we had two separate rooms.

What I decided, as you can see, I took out this wall

and we put a kitchen/diner to give it that liveable open air feeling.

It turned out very nice and I'm very pleased with it, as you can see.

Upstairs, Daniel's retained the two bedrooms.

They're both good-sized doubles.

And the property now has central heating plus replacement electrics and plumbing.

It's really been a complete rip out and start again job.

It really was terrible.

We actually rewired, re-plumbed, new flooring, and re-plastered.

It was a whole fit out.

So there's now a cracking new kitchen.

But what happened to that empty room at the back, a cross between a kitchen and a shower room!

I decided to put the bathroom here

and we put in a new door to the side.

And then we put in this partitioning wall. The effect is lovely.

On this East End project, Daniel used the same builders

he's worked with on other properties in west London.

And if the inside seemed a challenge,

outside, the rear was something else!

The garden was terrible. You couldn't get out into it. We didn't know what was at the back.

But we went through and four skips, it's a well done job.

I think I'll take my builders out tonight and congratulate them!

Well deserved. But will the toast be to a refurbishment that stayed on budget?

My original budget was 30,000.

I came in, in total, at 32.

The labour comes in at 13.

12,000 for all the materials, plus the furniture, plus the kitchen.

7,000 for the additional, the solicitors,

the interest up to date. So 32.

Time to see if two local estate agents

think it's money well spent.

It's been done to a very high standard. I'm very impressed with the finish.

The accommodation is very good.

Two bedrooms, open-plan lounge and kitchen.

It's done to a high specification.

The bedrooms are very large. Two doubles.

I think it would very well suit two sharers.

The property has got a downstairs bathroom.

In this area, it's not really a problem.

Most Victorian terraces have ground-floor bathrooms. People expect it.

Daniel paid £161,000 at the auction. His gross budget is sitting at 32,000,

making a total outlay of £193,000.

How much would local experts value the property at?

I'd suggest this goes on the market for £220,000.

I'd put this on the market for £210,000 to £215,000.

That valuation range would generate

17 to £27,000 pre-tax profit for Daniel.

Oh! Lovely!

That is very nice because I had targeted about 210.

So that's lovely.

A lovely little investment. I'm very pleased with that.

Daniel's going to rent the property out, so how much could that generate?

I would put this on the market for rental at £1,000 per month

to 1,050 per calendar month.

Rental per calendar month I'd say £1,100 per calendar month.

I'm very pleased with that.

Originally, I'd come in, looked at the area. It was about 950.

So I'm very pleased with that.

Daniel's decision to buy property in the east of London was a shrewd decision.

But initially he had his doubts!

Those first two weeks, you think, "God, what have I done?"

Feels like a Jekyll and Hyde experience. First it was a rubbish place and now it's brought to life.

It's a great experience. I would tell anyone to just try it.

It's great!

We're returning to Cardiff, where earlier, Barry, who runs a local lettings agency,

bought this office block for £110,000,

£51,000 over the guide price.

The property had severe damp problems

and would need a total refurbishment.

Barry was going to apply for planning permission

to change the property from commercial to residential use.

You paid a lot over the guide price, but you obviously felt that was worth it.

I'd inspected the property. We'd done some figures.

I thought we could get an extra floor in above.

We spoke to planning. Planning are not averse to going up a floor.

-So we're trying for eight flats.

-Eight? Wow.

We don't expect to get it, but you've got to try!

It's now 13 months later.

And Barry has successfully converted the former offices into residential accommodation.

A new floor has been added with dormer windows.

There are a total of six narrow flats, two on each floor.

The ground floor is divided in half.

Both flats have a kitchen/diner at the front...

..a bedroom at the rear...

..and a bathroom in the middle.

The three doors on the street lead to a communal staircase

for the upper floors and the two ground-floor flats.

We met Barry in the left-hand one.

We're in the ground floor flat. The kitchen layout is unique to the flat.

We had some issues getting the right layout.

Originally the kitchen came around the corner

and returned on this wall.

So there was no separation between the kitchen and the lounge.

So we amended the kitchen as it was going in and moved the electrics to the other side.

We think it's far improved.

The severe damp issues in the building have been cured

and the whole building was refurbished.

Access to the four other flats is via this communal staircase.

The room layout on the first floor is the same

but Barry's added touches to each flat to personalise them.

Structurally we've gone up a floor, from two storeys to three storeys.

We were hoping for four storeys, but planning weren't too keen.

We think we could have perhaps got planning on appeal,

but we didn't want to delay. It would have taken 12 to 18 months.

We made the call to carry on with six flats.

At the top of the building are the last two flats.

Here we are on the top floor.

Flats either side.

The layouts are all the same per side.

We have light tunnels in each flat,

getting light into the hallways of each flat.

On this side we have a door.

On the other side, no door.

It's still en-route from Amsterdam.

Well, the project has overrun a little due to the damp issues and delivery timescales.

-So how much longer will it take?

-We're not far away.

Probably another four weeks. The heaters have arrived

and are on the wall.

The doors have been an issue with a three-month delay.

But four weeks and we should be out.

So, six flats almost finished in just about one year.

We always knew the building was tight. Very narrow.

But they're pretty much as we expected.

We've got fairly wide kitchen/lounges to the front.

The bedrooms are tight at the rear. The bathrooms had to go in the middle

to utilise every single inch of these flats cos they're quite compact.

How much has the conversion cost? Barry paid £110,000 at auction.

But did he stick to his budget?

Our budget was 200,000.

We are roughly, give or take, at 200,000

so the only fees left then would be to sell.

Time to get the opinions of two local property experts.

What will they think of the six apartments created here?

First impression coming down the street, fantastic.

It's in-keeping with the style of the street.

It's got the dormers, three-storey,

and it blends in well with the street scene.

Considering the square footage isn't enormous, the layout with the open plan area,

separate bedroom and bathroom is quite good.

Very clever use of portholes in the penthouse apartments.

I think the finish is very good.

The bathrooms are a very high standard.

The bedrooms are narrow. Although they're long,

putting furniture in might be a tight squeeze.

Although Barry has a portfolio of other buy-to-let properties,

his plan is to sell this development.

With his budget sitting at £200,000 on top of the £110,000 paid at auction,

he'll be looking for more than 310,000 to see any profit here.

What's the likely valuation of the individual flats?

In my opinion, the value of the ground floor flat is £95,000.

The first and second floor apartments, the value of those is between 95,000 and £100,000.

I think these properties would re-sell individually

between 95 and £99,950.

If all six flats were sold for 95,000

that would realise £570,000.

That's a healthy £260,000 gross profit before selling expenses and taxes.

I'm ecstatic. Amazing.

But you've got to be realistic in these times.

If we gained an average of 85 per flat, we'd be more than happy.

So what's next? Will he add to his buy-to-let portfolio

or do another refurbishment to sell on?

We have another one on the go. Nine much larger flats around the corner.

We've got planning in for others. So it's certainly a good sideline.

We hope you've enjoyed watching the properties on today's show.

-We'll have more thrills and spills from the auction room next time!

-See you.

-Bye!

-Bye!

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