Episode 93 Homes Under the Hammer


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Episode 93

Martin Roberts and Lucy Alexander visit a former hostel in London, a three-bed lodge house in Gravesend and a mid-terrace in Lancashire.


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Hello. Buying property can have its highs and lows

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and it's not always as easy as it looks.

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But there is one part of the process you can eliminate -

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getting rid of that dreadful property chain

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by buying at auction.

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-All sorts of places come up for auction.

-Variety is what keeps us interested.

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So these are the places that went under the hammer on today's show.

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In London, we return to a former hostel that got me hot and bothered.

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Look at this - industrial strength heating!

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Phwoar!

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This three-bed lodge house in Gravesend, Kent,

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is made of sturdy stuff.

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What I do like about it is it feels really solid.

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The kitchen in this mid-terrace in Lancashire is better than you think.

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If you put tiles down here and cleaned these units up, it would be OK.

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All these properties have been sold at auction.

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We find out who bought them and what they paid when they went under the hammer.

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I'm in the affluent area of Fulham, west London,

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to return to a property we first visited a couple of years ago.

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It's this huge building

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and the auction lot was, in fact, two separate houses.

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which had been sub-divided into six flats.

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The three-storey property may look elegant from outside,

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but was, until recently, a council hostel.

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The property's a leasehold with 50 years remaining

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and the guide price was a whopping 525 grand!

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So, through the front door and entrance foyer into the first flat.

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And, well, not a bad size space.

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It's a bedsit. High ceilings, which is always a good thing.

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Clearly, kitchen in need of a bit of tender loving care.

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Thankfully, the bathroom slightly better and it's a good size.

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Um... But, as starting points go, not bad.

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'So, onwards and upwards to the first floor,

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'where there are another two flats, one either side of the stairs.'

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So, a similar layout on the left-hand side of the top floor,

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but on the right-hand side of the top floor,

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it kind of gets a bit complicated.

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Another good size flat,

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but the issue here is this is actually a flying freehold.

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That could introduce a few complications.

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'This flat sits above an office which belongs to the next door property.

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'That's a flying freehold,

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'when part of one property extends over another.

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'It can make a mortgage difficult to obtain, so the leaseholder

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'will want to speak to the freeholder

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'to make sure there are no complications here.

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'And we're not done yet. Down in the basement, there's another flat,

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'making four in total.'

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Well, all good so far. But, in case you'd forgotten,

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there's a whole extra house to see yet.

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'Next door, there's more of the same -

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'a flat on the first floor and another one in the basement.

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'On the ground floor, though, things start hotting up.'

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In a place like this, one of the big considerations will be the central heating and hot water supply -

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very expensive to replace.

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But in this case, not a problem.

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It's all been done, and look at this -

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industrial strength heating!

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Phwoar!

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# I said, "It's getting hot in here

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# "So take off all your clothes"

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# I am getting so hot I want to take my clothes off! #

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'And, if that's not enough to get you hot under the collar,

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'there's also some office space on the ground floor that could be turned into one more flat.

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'At the moment, the room feels drab and dreary

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'but since we're in one of London's most sought-after areas,

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'transforming these dingy hostel bedsits into stunning studio apartments

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'might well be worth the challenge.

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'They also had planning permission guaranteed to turn them back into two houses

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'so, whether to buy for flats or homes,

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'with that £525,000 guide price,

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'there was amazing potential in this auction lot.'

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Well, a real double bonus with this place. Two properties

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and the chance to double your money. But don't underestimate the amount of work it'll take.

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It's probably a developer that took it on when it went to the auction.

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Do I have 600 on this? If not, where do you wish to start? It's worth six.

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Standing up, 500.

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505 anywhere?

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505.

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510?

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515.

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520.

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520. 525?

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525, madam?

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530.

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'Despite the slow start, this hot property was up and running.

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'Eventually, the bidding was between two determined parties and had reached a staggering 690,000.'

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Anyone else? That's 690.

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691.

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692.

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693, 694.

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695, 696.

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697, 698.

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699, 700, 701.

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702, 703.

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703?

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702, with you, first time, second time,

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third and last time, if you're all done...

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Sold, 702, well done.

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'After a titanic struggle, the triumphant bidder was Stephanie,

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'with her bid of £702,000.

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'Stephanie actually works next door,

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'from where she runs her marketing company.

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'She's had her eye on these properties for some time.'

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# Tell the fellas We can do what they can do

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# We can do it even better in broken heels... #

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-Stephanie! Congratulations!

-Thank you, Martin.

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Tell me why you wanted to buy it.

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I bought the building next door 13 years ago.

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-Oh!

-For the last 13 years, I've been trying to persuade the council to sell me the lease.

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When it went up for auction, with residential planning permission, it was a no-brainer.

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After 13 years, it would've been sad not to get this building.

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I would've had to sit next to it, watching the building works unfold.

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-You would've gone mad.

-I would've had to move offices!

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The day you got it, then, how did you feel?

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Scared.

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Elated.

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And I was approached immediately after the auction with an incremental bid to sell it on, so very happy.

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Tell me more.

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-For a significant amount more.

-How much?

-I can't tell you.

-Why?!

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More than £150,000 more than I paid.

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-What, the day after?

-The day of.

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Two minutes after I bought it.

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-Why didn't you take the £150,000?

-There's more value in developing this as it is, obviously.

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Money in the bank, though!

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-Mmmm, speculation.

-Really?

-Yep.

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Obviously, it's leasehold. Does that affect you?

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-I own the freehold, so I'll marry the freehold and leasehold.

-You own the freehold of the building?

-Yes.

-Wow!

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'The flying freehold is of no concern now

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'as Stephanie owns the buildings and the land they're built on.

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'So, what are her plans?

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'To keep them as flats or return them to houses?'

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Why are you so excited about this? What are you going to do?

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It's a prime position. It's a great building - I love the building.

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I think it could be very useful, either as houses, for which it already has planning permission,

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or, even better, as apartments, for which I'm going to apply for permission.

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Perhaps in future, I will marry the building I own next door and make a whole terrace of apartments,

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-which becomes a very nice development deal.

-Absolutely.

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With a view to doing what, keeping them, renting them, selling them?

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Probably selling them when the market picks up, but perhaps renting now.

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What are you going to do? What's the process now?

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-Apply for planning permission for two-bedroom apartments.

-How many?

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Seven with a couple of studios included. Seven units in total.

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Um, apply for planning permission for the building next door, my offices, to residential.

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Subject to that, I've got permission to put another floor on the top.

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-And then see what happens.

-Wow!

-Yeah.

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-This turns it into a huge...

-Quite a substantial building, yeah.

-Right.

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In terms of doing this project, any idea how much it'll cost?

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-How long it's going to take?

-Probably about £300,000 to refurbish the two buildings here

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-and I would guess six months, maximum.

-Right.

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Take it at a fairly slow pace.

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They are beautiful buildings. I'd like to restore them to something of their previous glory.

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They've been battered over the years, so it'll be interesting to see them come back.

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'Stephanie has secured her mortgage and is using savings

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'to finance her grand plans for this elegant building.'

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We haven't talked about one thing, which is the boiler.

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-It's a work of art!

-Yes!

-Something to behold.

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The first time I came in here, I was amazed by it. I thought it might be a nuclear force!

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We're going to have to put individual central heating units in.

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-What happens to the boiler?

-Make me an offer!

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I'll be round here with my transit van!

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'Well, that was in March 2009, but when we returned 20 months later,

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'there were no new apartments to admire. The interior was a mess.

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'But that was because Stephanie was thinking big.

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'She'd come up with a much larger scheme

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'which meant starting from scratch. Even the lovely boiler had gone.

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'She'd been working with her architects on applying for planning permission,

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'but it took a lot longer than she'd hoped.'

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We bought the property with planning permission for two family houses.

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We applied to put on an extra floor and changed the planning permission to nine one-bed apartments,

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which took us a while, but we got that about a year ago.

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'So, Stephanie finally got planning permission for nine one-bed apartments

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'with two on the basement level,

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'two on the ground floor

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'and three on the first floor.

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'There'll be a new extension in the attic space,

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'which will allow for the creation of another two flats.

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'Her estimated budget for the whole project was around £1 million.

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'Whilst waiting for planning permission,

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'Stephanie decided to try her wings on the rental market

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'by giving the flying freeholder flat a quick refurbishment.

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'It's currently empty, but if this is a temporary makeover,

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'I can't wait to see the finished product here.'

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I'm really looking forward to getting to the finishing stages

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and to seeing how a building which is really iconic, in my view,

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can be restored to its former glory.

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And then to seeing some very happy people living here.

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'That was then.

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'Stay with us to see how Stephanie transformed this elegant building.'

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I'm in Gravesend in the northwest of Kent.

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It's a busy commercial town with a good range of shops and great transports links to Dartford.

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I'm here to see a lodge house today.

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Lodge house, hmm! You're thinking wooden retreat,

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log cabin, perhaps a fantastic hideaway in the hills.

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Well, do away with those fancy ideas,

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because this is the lodge house.

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I've got to get in there and see if things can improve.

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'Mm, definitely not the kind of lodge I was imagining.

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'Guided at 175 to 185,000,

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'this property was a halfway house for young people.

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'Before that, it was the matron's house for the care home next door. Now, it's empty,

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'and in serious need of some TLC.'

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This house is quite depressing on the outside.

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It's got boarded up doors and windows.

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So, not a great start.

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But, saying that, once you actually walk inside,

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it's fairly big and bright.

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It's a really nice open-plan space in here.

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You've got light from that window, doors leading out to the garden.

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This is an ideal dining area.

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You could fit a big table and chairs in this space.

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Through here is the kitchen.

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'The living room is a good size, but I'd think about knocking this wall down

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'to create a more open area, as it's slightly boxy in here.

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'The kitchen's pretty poky too. I'd knock through here

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'and create an open-plan kitchen living area to maximise this space.'

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Upstairs in this property, you've got a series of bedrooms leading off this landing.

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Even though this house is completely characterless,

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what I do like about it is that it feels really solid.

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# Solid as a rock... #

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'Solid indeed. There isn't a damp patch in sight.

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'The bathroom is in good order and perfectly serviceable.

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'The three bedrooms are all a fair size too, which is good news, and the windows up here look new.

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'There's an extra WC next to the boiler.

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'There's some great potential inside this house

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'that was guided between 175 and 185,000.

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'But it's the generous plot outside where the real possibilities lie.'

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It's rare to find a detached house on such a large plot

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for such a low guide price.

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The property...it's not inspiring, but the land on which it sits is.

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Now, imagine if this house was demolished.

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You'd have a real sizeable plot here.

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Obtain planning permission to build

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and this lot could be a financial winner.

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# Everyone's a winner, baby That's the truth!

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# That's the truth

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# Making love to you is such a thrill. #

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'A developer would see real potential here. You wouldn't miss this house

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'if you got planning permission to demolish it and build two new ones, would you?

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'With a guide price of between 175

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'and 185,000, we asked a local estate agent

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'what he thought of the place.'

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This property is a very good size

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three bedroom detached house.

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I think there's minor cosmetic work that needs doing,

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but, otherwise, as a whole, it would be a good buy.

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'So, it's off to a good start.

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'But what work is necessary?'

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'The work that needs to be done to bring this up to a good standard is really minor cosmetic work.

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'Bit of paintwork, and, as you go around,'

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really minor work, to be honest with you.

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It is as it is a good property.

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'What about knocking down the house and developing the site?'

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'The site is a very good size.

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'As a redevelopment, I think you're more than likely better off'

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extending the property rather than demolishing and rebuilding.

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I think it'd stick out from the other properties around.

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'So, he doesn't really agree with any grand development ideas here,

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'though does think you could convert it into two flats.

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'Back to basics - what could you sell it for

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'if you just renovated it as it is?'

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Once this property was renovated, the resale value would be about £220,000.

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'What level of rental income could you get per calendar month?

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Three bedroom properties are very sought after in Gravesend.

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We've got a lot of people moving from London to this area.

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You would be fetching around £750 plus.

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The house is a good size and it doesn't require too much work.

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Having said that, if you're looking to make real money on this site,

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demolition and redevelopment on this site is the only way to go.

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

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The next one...

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It's a detached modern house

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for investment, occupation or possible redevelopment.

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What can I be bid for this one?

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Lovely opportunity. Guide at 175 to 185.

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170 anywhere to start me off?

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Looking for 170.

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170 anywhere. Give me 160,

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not going lower than 160, if you're here to bid. 160, I've got.

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160 and 5.

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165, 170.

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170 and 5. He says no.

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Got 170 sitting down on the right, looking for 175,000.

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I'll take 2 if it helps.

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170 on the right, looking for 172.

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172 and 5.

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And 5, and 7...

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177 and 180.

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180 and 2.

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Says no. 180, sitting down on the right.

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It's in the room and it will be sold.

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180, and it'll be sold. For the first time at 180,

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second time at 180. Sure you don't want to go another 2?

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180, second time. Third and final time, 180,000,

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if you're sure you're all out, 180,000,

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sitting down, it's going to be sold.

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180,000. Your number is?

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'The successful bid of 180,000 was made by Graham

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'bidding on behalf of a charity for the elderly.

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'He's been finance director of the charity for three years

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'and, before that, worked in the film industry

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'when he ran the South Bank Studios.

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'I caught up with Graham back at the house to hear his plans for it.'

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Graham, congratulations. What were your reasons for wanting to buy this house at auction?

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We own the property next door

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which we're going to completely remodel or rebuild for elderly care.

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This house basically completes the site

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and enables us to put probably at least a dozen independent housing, affordable housing, units

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on the site, which makes it all viable and a complete site.

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So, what has this been over the last few years?

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It was the matron's house that went with the care home.

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But Kent County Council, when they sold us the care home,

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kept this as a drop-in centre for some kind of social care,

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step-up, step-down social care.

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They've now decided they don't want it and that's perfect timing for us.

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'There was a lot riding on getting this property,

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'so, how did Graham feel on auction day?'

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Very nervous! It's the first time I've ever taken part in an auction.

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But you did look incredibly calm on the day.

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Well, that's years of practice.

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What is it that you do? Explain your job to me now.

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I'm an accountant by background, but I spent 25 years in the film industry, strangely,

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and then came to the charity world when I got too old

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to relate to the film people.

0:19:400:19:42

I basically started as the director of finance

0:19:420:19:46

but I've now taken over as director of development as well.

0:19:460:19:51

What role will you play in developing this site?

0:19:510:19:55

The scary guy in the suit.

0:19:550:19:57

-You're not scary.

-The progress chaser.

0:19:570:20:00

I won't be directly involved. We will have a professional project management team.

0:20:000:20:05

They're quite a big firm of architects

0:20:050:20:08

who will be looking after it for us.

0:20:080:20:10

-Are you the man everybody has to answer to?

-Yeah.

0:20:100:20:14

'So, Graham is the head honcho on this project.

0:20:140:20:17

'What plans do his team have to bring this care home up to modern standards?'

0:20:170:20:21

We're in consultation with Gravesham Borough Council

0:20:230:20:26

to find out exactly what sort of housing they want.

0:20:260:20:29

We will then liaise with the housing corporation to decide whether or not

0:20:290:20:33

to knock it down and rebuild the whole site

0:20:330:20:37

or to remodel it extensively, to allow independent living units,

0:20:370:20:42

to put nursing capacity in there.

0:20:420:20:46

And also varying degrees of independence,

0:20:460:20:48

so we can cater for elderly people

0:20:480:20:51

at every stage of the rest of their lives.

0:20:510:20:53

'To get a clearer idea of the development, I asked Graham to talk me through the plans.'

0:20:540:21:00

-It certainly has got a contemporary feel to it.

-We think so.

0:21:000:21:03

We don't want to go traditional,

0:21:030:21:05

but we do want to be as eco-friendly as possible.

0:21:050:21:08

We're bringing in modern products - sustainable timber cladding,

0:21:080:21:12

plenty of trees and grass round the outside,

0:21:120:21:15

to keep the visual effect acceptable to all the local residents.

0:21:150:21:20

It does matter to us what they think.

0:21:200:21:23

We're not a property developer. We're not in it for profit.

0:21:230:21:26

We are care providers and that means caring for our environment.

0:21:260:21:29

'The plan is to build the accommodation units in a U shape around the courtyard.

0:21:290:21:34

'If the charity hadn't bought the former lodge house,

0:21:340:21:37

'the number of new units would've been much more limited,

0:21:370:21:40

'so this purchase has been a huge boon.

0:21:400:21:43

'How much is it all going to cost? Remember, their budget will cover development of the whole site,

0:21:430:21:48

'including the lodge house, care home next door, plus the land they're both on.'

0:21:480:21:53

At this stage, we're looking at about £4.5 million.

0:21:530:21:56

It'll probably take about two years to build.

0:21:560:22:00

We'd be targeting end of 2010 for completion.

0:22:000:22:04

So, if anybody goes over budget here,

0:22:040:22:06

you're the man in control of this! It's all down to you.

0:22:060:22:10

Well, yes, but as I said before, we're a not-for-profit organisation.

0:22:100:22:15

What we really want is the best we can produce from this site,

0:22:150:22:20

for the elderly of Gravesham. That's our target.

0:22:200:22:22

I think it's a really exciting project

0:22:220:22:24

and I'm so pleased it was you that got that at auction.

0:22:240:22:27

-I hope it goes really well for you, Graham.

-Thank you.

-It's been very nice to meet you.

-And you.

0:22:270:22:32

Graham has clear objectives and his cool and calm exterior

0:22:320:22:37

will no doubt sail him through this development.

0:22:370:22:40

With over £4 million in the pot,

0:22:400:22:42

I'm sure his team will make a huge success of this.

0:22:420:22:45

And what a great project to be part of -

0:22:450:22:48

constructing safe, secure and comfortable accommodation for the elderly.

0:22:480:22:53

You can find out how the build is going later on in the show.

0:22:530:22:57

'Coming up, this two-bed in Bury has me hunting for the bathroom.'

0:22:580:23:02

There, you'd expect to see a loo. It's not. It's been moved. Great.

0:23:020:23:07

'We head back to Kent to see if the charity's plans have come to fruition.'

0:23:080:23:13

Buying the house was integral to our plans. It's allowed us to develop what we've achieved.

0:23:130:23:17

'But, first, in Fulham, London, has Stephanie realised her vision?'

0:23:200:23:25

The flats look exactly as I imagined.

0:23:250:23:27

'Earlier in the show, we looked back to March 2009

0:23:310:23:35

'where, in fashionable Fulham, southwest London,

0:23:350:23:38

'Stephanie had bought this attractive three-storey building for £702,000.

0:23:380:23:44

'She owns and works in the house next door,

0:23:440:23:47

'where she runs her own marketing business.

0:23:470:23:50

'Stephanie had her sights on this building for 13 years.

0:23:500:23:53

'Although it looked grand on the outside,

0:23:530:23:55

'inside was a different story,

0:23:550:23:57

'with six very uninspiring flats.

0:23:570:24:01

'There was planning permission to turn them back into two houses,

0:24:010:24:05

'but Stephanie had bigger ideas - to develop nine apartments.

0:24:050:24:10

'When we first returned,

0:24:100:24:12

'the interior was nothing but a gutted shell,

0:24:120:24:15

'but Stephanie had got planning permission for her development and the excitement was plain to see.'

0:24:150:24:21

I'm really looking forward to getting towards the finishing stages,

0:24:210:24:24

to seeing how a building which is really iconic

0:24:240:24:27

can be restored to its former glory.

0:24:270:24:29

And then to seeing some very happy people living here.

0:24:290:24:32

'Well, that was 11 months ago.

0:24:320:24:34

'We returned to Fulham to see if Stephanie's 13-year dream

0:24:340:24:38

'for this building had finally come true.

0:24:380:24:42

'The freshly-pointed exterior

0:24:420:24:44

'has recaptured the elegance of this building.

0:24:440:24:46

'Let's hope it's the same for the interior.'

0:24:460:24:49

'Well, this is impressive.

0:24:570:25:00

'Very impressive indeed.

0:25:000:25:01

'From an empty shell, Stephanie has created nine new flats,

0:25:010:25:05

'top to bottom.

0:25:050:25:07

'Each just one bed, but all smart, contemporary and stylish.

0:25:070:25:12

'With the same attention to decor and styling,

0:25:140:25:17

'they're definitely going to appeal to the fashionable set of Fulham.

0:25:170:25:21

'Up at the top are the most attractive of all.'

0:25:210:25:25

These are two new flats.

0:25:250:25:27

A mansard roof extension, flats eight and nine, both fairly sizeable.

0:25:270:25:32

An open-plan kitchen, as per the other units, and the bathroom with the Italian sanitary ware.

0:25:320:25:37

This one's gone under offer in the last couple of days.

0:25:370:25:40

'Good news for Stephanie there.

0:25:400:25:43

'The loft flats also have balconies -

0:25:430:25:45

'a small one at the front, offering views of Fulham,

0:25:450:25:49

'and another at the rear.

0:25:490:25:51

'Also getting a taste of the London air are the two basement flats.'

0:25:540:25:59

This is one of the original lower ground floor units.

0:26:010:26:05

This is one I'm particularly pleased with.

0:26:050:26:08

It's got this conservatory finish, the open-plan kitchen

0:26:080:26:11

and real wow feature of the garden with bi-fold doors opening into it.

0:26:110:26:16

'Expanding the lower ground floor flats has eaten into the garden area

0:26:160:26:21

'but once the work's finished, these outdoor spaces will be a bonus

0:26:210:26:25

'because while the two lower ground floor flats

0:26:250:26:28

'and the two loft apartments are a good size,

0:26:280:26:30

'the remaining five properties are more compact.

0:26:300:26:33

'They all have an open-plan kitchen living area.

0:26:340:26:38

'While the two ground floor flats mirror each other,

0:26:380:26:42

'one benefits from a small balcony.

0:26:420:26:44

'On the first floor, the original flying freehold flat

0:26:440:26:48

'has been transformed with the addition of a balcony.

0:26:480:26:52

'With nine apartments in all, some still needing finishing off,

0:26:520:26:56

'Stephanie has almost realised her dream.'

0:26:560:26:59

The flats look exactly as I had imagined they would.

0:26:590:27:01

I think the kitchens and bathrooms are a real wow factor.

0:27:010:27:05

The balconies look terrific. The building's been restored to its former glory, so I'm very happy.

0:27:050:27:10

'And it's not just the look she's happy with.

0:27:100:27:13

'It seems the loft flat that was under offer was just the start!'

0:27:130:27:18

Yep, we have already got five flats either sold or under offer,

0:27:180:27:21

so that's great news as we're only just finishing at the moment.

0:27:210:27:24

So, yes, it's gone very much to plan.

0:27:240:27:26

'I love it when a plan comes together.

0:27:360:27:39

'It's taken much longer than the six months Stephanie anticipated,

0:27:390:27:43

'but the plan evolved and the 2½ year wait has been worthwhile.'

0:27:430:27:49

It's been a real labour of love. I've wanted to do it a long time.

0:27:490:27:52

I've learnt a lot in the process, not begrudgingly.

0:27:520:27:55

It's been a terrific piece of work to do.

0:27:550:27:57

'With five of the nine flats already under offer,

0:27:570:28:00

'it looks like this investment is already starting to pay for itself.

0:28:000:28:05

'But, for such a big renovation,

0:28:050:28:07

'how did her forecast for a £1 million spend hold out?'

0:28:070:28:11

The budget has gone pretty well.

0:28:110:28:13

It slipped a little over the original budget of a million,

0:28:130:28:16

but not in too bad a way.

0:28:160:28:18

Of course, the market has gone up in the intervening period,

0:28:180:28:21

so, actually, the whole profit looks quite good.

0:28:210:28:24

'Stephanie originally bought the building

0:28:260:28:29

'for £702,000, so her outlay could be just over 1.7 million.

0:28:290:28:35

'We asked two local estate agents

0:28:350:28:37

'what they thought of her big investment.'

0:28:370:28:41

'I think the whole project that has happened is fantastic.'

0:28:410:28:44

The property was obviously in pretty poor repair,

0:28:440:28:47

it needed a lot of work.

0:28:470:28:48

They've refurbished it to a very good standard.

0:28:480:28:51

'I think this building has been an amazing find.'

0:28:530:28:57

'The project is a really sweet development.'

0:28:570:28:59

The saying is location, location, location

0:28:590:29:02

and you can't get better than this.

0:29:020:29:04

They've been clever in the way they've incorporated outside space in the upper units.

0:29:040:29:09

That balcony will add a great amount of value.

0:29:090:29:12

The light they've created downstairs is also good, with the garden.

0:29:120:29:17

'The whole building itself fits in perfectly with the area.'

0:29:170:29:21

The buyers love this type of building.

0:29:210:29:25

The property itself, they've retained the character people are looking for and the feel of it.

0:29:250:29:32

The amount of time it's taken to do the project has worked in her favour.

0:29:320:29:36

If we were marketing these a year and a half ago,

0:29:360:29:38

we would've seen significant over-values.

0:29:380:29:41

Due to confidence in property against the stock market, she's caught the timing right.

0:29:410:29:45

'It seems like a big thumbs-up from the estate agents.

0:29:450:29:49

'But will Stephanie get the return she's after?

0:29:490:29:53

'She spent over £1.7 million on four large one-bedroom apartments

0:29:530:29:56

'and five smaller one-beds.

0:29:560:29:58

'So, what could she achieve here?'

0:29:580:30:01

The larger properties, I could see fetching £350,000 to £375,000.

0:30:010:30:07

For the smaller units, I would put them in the range of £275,000 to £300,000.

0:30:070:30:13

If I were to market these flats, I know I have buyers

0:30:130:30:16

that would buy these for about £300,000 for the smaller ones.

0:30:160:30:20

For the larger ones, I could see buyers paying £420,000, maybe £430,000.

0:30:200:30:26

I think your second agent is spot-on.

0:30:260:30:29

We're selling for a minimum of 300 and 420 to 440 as our top price.

0:30:290:30:33

So, yeah, that's spot-on, that second valuation.

0:30:330:30:36

'Wow! If Stephanie can get the figure she says for all nine flats,

0:30:360:30:40

'she could turn over a staggering £3.6 million to £3.7 million!

0:30:400:30:46

'That's a potential gross profit of £1.9 million to £2 million,

0:30:460:30:50

'minus the usual taxes, fees and expenses. Phew!'

0:30:500:30:56

'Although it wasn't planned, riding the dip in the London property market

0:31:010:31:05

'has worked to Stephanie's advantage

0:31:050:31:08

'and will hopefully secure her some pretty serious returns

0:31:080:31:12

'on this big investment. But she doesn't plan to stop there.'

0:31:120:31:15

We've put in a tender for a much larger development in the same area.

0:31:150:31:20

I don't know whether we'll get it,

0:31:200:31:22

but that would be six houses and 15 apartments,

0:31:220:31:25

so significantly bigger. We're thinking big.

0:31:250:31:28

'Thinking big can lead to bigger rewards, as Stephanie has seen on this project.

0:31:280:31:33

'I wish her all the best.'

0:31:330:31:36

'I'm in Bury, Lancashire, smack in the middle of England's Northwest.

0:31:450:31:50

'There are great transport links into Manchester city centre, with many commuting daily.

0:31:500:31:56

'But there's plenty going on in Bury to keep people right here.'

0:31:560:32:00

Bury town centre is currently undergoing a £350 million rejuvenation programme

0:32:000:32:05

with new shops and all sorts of things.

0:32:050:32:09

So, is this the place to buy? Well, it could be.

0:32:090:32:12

This is the property that's up for auction at a guide price of £50,000 to £55,000,

0:32:120:32:16

two-bed, mid terrace. Let's take a look inside.

0:32:160:32:20

# Got a lust for life

0:32:200:32:22

# Got a lust for life... #

0:32:230:32:25

'First impressions of the exterior are favourable,

0:32:250:32:28

'with lovely railings and brickwork.

0:32:280:32:31

'In fact, the whole terrace looks in pretty good nick.

0:32:310:32:34

'Let's hope it's not hiding a multitude of sins inside.'

0:32:340:32:37

What have we got?

0:32:370:32:39

A fairly standard layout so far, as far as I can see.

0:32:390:32:42

I'd like to see that enclosed,

0:32:420:32:45

a little porch is a lovely thing. It keeps the draught and the cold out.

0:32:450:32:49

Put a door on there, perhaps. Apart from that, decent size lounge.

0:32:490:32:52

At some stage, it's had an open fire. That's gone.

0:32:520:32:55

It's been replaced by a lovely bit of Artex-ing(!)

0:32:550:32:58

Replace that, I think.

0:32:580:33:01

'Getting rid of that Artex is an absolute must

0:33:020:33:05

'and, if you had the inclination, why not open up the fireplace?

0:33:050:33:09

'It would give the room a lovely focal point.'

0:33:090:33:12

Through to the kitchen and, well, it looks a lot worse cos it doesn't have anything on the floor.

0:33:140:33:20

I'm sure if you put tiles down here and cleaned these units up,

0:33:200:33:24

it would be OK. I mean, not ideal,

0:33:240:33:28

but if you're going to rent it out, you make do and mend.

0:33:280:33:31

One of the good things - there, you'd have expected to see a loo.

0:33:310:33:36

It's not. It's been moved. Great.

0:33:360:33:39

'Terraced houses like this originally had outside loos,

0:33:390:33:43

'but around the 1970s, they started to be moved inside.

0:33:430:33:47

'Back then, the trend was to put it in a ground floor extension, off the back of the kitchen.

0:33:470:33:53

'But it looks like the bathroom here has been and gone,

0:33:530:33:57

'leaving a great space for a utility or dining room.

0:33:570:33:59

'Fingers crossed that means the bathroom's upstairs.'

0:33:590:34:02

This is a fairly classic layout.

0:34:020:34:04

Stairs in the middle of the house, and what was originally a bedroom one side and a bedroom the other.

0:34:040:34:10

What do you do to get over the issue of the downstairs bathroom?

0:34:100:34:13

You want to move it upstairs. How do you do it?

0:34:130:34:16

I think they've come up with a good solution.

0:34:160:34:19

They've converted part of the bedroom into the bathroom,

0:34:190:34:22

then they've created this... a stud partition wall.

0:34:220:34:25

A small corridor, which leads down to the second bedroom.

0:34:250:34:30

This is the most effective way of getting your bathroom upstairs,

0:34:300:34:33

but retaining your two bedrooms.

0:34:330:34:35

'OK, so this bashed-up suite is beyond redemption,

0:34:350:34:40

'but at least the bathroom's upstairs,

0:34:400:34:43

'the plumbing's sorted and it's already partitioned.

0:34:430:34:46

'A big saving on your renovation budget for starters.

0:34:460:34:50

'Something else that may need attention is the ceiling.

0:34:500:34:53

'A spot of damp is visible in both bedrooms,

0:34:530:34:56

'so some roof work will be needed.

0:34:560:34:58

'At a guide price of between £50,000 and £55,000

0:34:580:35:02

'we asked a local estate agent to give us his thoughts on the place.'

0:35:020:35:06

'It's a very popular location, all your amenities on your doorstep.'

0:35:060:35:10

Quite a lot of work to be done, full scheme renovation.

0:35:100:35:13

There's a few signs of damp.

0:35:130:35:15

New kitchen, new bathroom, a full re-plaster.

0:35:150:35:18

A few of the windows, you could possibly get away with a clean,

0:35:180:35:21

but there's quite a bit of work to be done.

0:35:210:35:24

'Is it an advantage, having the bathroom upstairs?'

0:35:240:35:27

'The fact it's upstairs, they have sacrificed some bedroom space,'

0:35:270:35:33

but it's a good sacrifice to make.

0:35:330:35:34

'Is there demand for rental in this area?'

0:35:340:35:37

There's a great demand in the area. Two bedroom terraces are popular

0:35:370:35:41

and you'd look to achieve around about £425 per calendar month.

0:35:410:35:45

'Once refurbished, what could it sell for?'

0:35:460:35:49

Done up to a good standard, you'd be looking to achieve around £85,000.

0:35:490:35:55

So, a nice enough little property.

0:35:570:35:59

What do you think?

0:35:590:36:01

Do it up, spend a bit of money on the kitchen and bathroom,

0:36:010:36:04

and it'd be ideal for rental or a place to live.

0:36:040:36:06

Let's see who spotted it at the auction.

0:36:060:36:09

Vacant two bedroom terraced property, guide £50,000 to £55,000.

0:36:140:36:17

Start this one at 55.

0:36:170:36:19

55,000. Anywhere at... 55 bid, thank you.

0:36:190:36:23

55... Sorry, 50, I have, tell a lie.

0:36:230:36:25

50,000.

0:36:250:36:26

Your bid, 50,000. Do I see 51?

0:36:260:36:30

51, 52?

0:36:300:36:32

52.

0:36:320:36:33

51,500?

0:36:330:36:35

51,500. 52?

0:36:350:36:38

52,500? At 52,000, then.

0:36:380:36:40

At 52. 52,500 now.

0:36:400:36:42

53.

0:36:420:36:43

53, 53,500?

0:36:430:36:45

At 53,000, seated. It's going to be sold at 53,000.

0:36:450:36:49

53,500

0:36:490:36:51

53,500. Your turn, 54?

0:36:510:36:54

54,000. 54,500?

0:36:540:36:57

At 54,000, seated, for the first time.

0:36:570:37:00

At 54,000, then, for the second time, are we all done?

0:37:000:37:04

54,500. 55? 55.

0:37:040:37:07

55,500?

0:37:070:37:08

55,500. 56, 56,500?

0:37:080:37:10

56,500. 57?

0:37:100:37:12

57. 57,500?

0:37:120:37:14

No. At 57,000, then, for the first time.

0:37:140:37:18

At 57,000 for the second and final time, are we all done at 57,000?

0:37:180:37:22

At £57,000.

0:37:220:37:25

'It was Mohammed who got the property for 57,000.

0:37:250:37:28

'He was at the auction with a friend, who did the bidding.

0:37:280:37:31

'Mohammed owns a takeaway business and works as an area manager for a security company,

0:37:310:37:37

'but has always hankered at trying his hand at property developing.'

0:37:370:37:41

-Mohammed, lovely to meet you.

-Hi.

-Congratulations.

-Thank you.

0:37:470:37:51

-Tell me why you wanted to buy this place.

-It's my ambition,

0:37:510:37:54

to renovate a property,

0:37:540:37:56

then, once I'm satisfied, try to sell it or rent it

0:37:560:38:01

and see what is more worth.

0:38:010:38:04

'This is his second property purchase.

0:38:040:38:07

'He currently lives in the first house he bought and renovated,

0:38:070:38:11

'but this is his first investment project.'

0:38:110:38:14

It was just a hobby, you can say,

0:38:140:38:18

you know, hobby, plus profession.

0:38:180:38:20

So, do you see yourself as a property developer?

0:38:200:38:23

Student of property development.

0:38:230:38:25

THEY LAUGH

0:38:250:38:26

It's a big field and you can't say you are anything and you have to keep learning.

0:38:260:38:32

You can't learn without experience.

0:38:320:38:34

Once you have experience, you can say either you done well or you learnt wrong.

0:38:340:38:39

You need to have a start and this is going to be mine.

0:38:390:38:42

So, why this place, then? Why did you choose this one?

0:38:420:38:46

I have my place roughly two miles away.

0:38:460:38:49

If I come back from my work at six or seven,

0:38:490:38:52

still I can come over here for an hour or something

0:38:520:38:56

and see what I can do here.

0:38:560:38:58

I came here before buying this property, I looked around,

0:38:580:39:02

not inside, outside.

0:39:020:39:04

So you hadn't seen it inside before you bought it?

0:39:040:39:07

Not properly, but...

0:39:070:39:10

I had a little idea.

0:39:100:39:12

What do you think, now you've seen it?

0:39:120:39:15

It's more work than I suppose it will be.

0:39:150:39:17

Trust me, I've seen much worse.

0:39:170:39:20

I really have seen a lot worse.

0:39:200:39:23

'Mohammed got off lightly here, though he may not think it.

0:39:230:39:27

'But not viewing beforehand isn't the best way to start a property developing career.

0:39:270:39:31

'Mind you, he's no stranger to the auction room.

0:39:310:39:35

'Over the past years, he's been to quite a few.'

0:39:350:39:38

-22nd auction where I've been.

-Huh?

0:39:380:39:42

-This is the first time I've bought something.

-You've been 22 times before and not bought?

-No.

0:39:420:39:48

-Just looking or went over your prices?

-Prices,

0:39:480:39:50

looking, getting an idea and all this.

0:39:500:39:54

What are you going to do with it?

0:39:540:39:56

What actually I want to do is I will try to do bits and pieces

0:39:560:40:00

which I can do myself actually.

0:40:000:40:02

Like the walls and all this stuff,

0:40:020:40:05

which is quite easy.

0:40:050:40:07

Obviously not, like, roofing and all that stuff.

0:40:070:40:11

I have to hire a builder or something. But, renovation,

0:40:110:40:15

I will be more than happy to do myself.

0:40:150:40:18

I want to remove the chimney and all this stuff.

0:40:180:40:21

That's a big job.

0:40:210:40:23

Yeah, it will be a big job.

0:40:230:40:25

So, OK, any idea how much it's going to cost to do the work?

0:40:250:40:29

When I came first time, I was thinking it will be roughly 15 to 18.

0:40:290:40:36

But, now, it can go from 16 to 20.

0:40:360:40:42

Thousand pounds?

0:40:420:40:43

Actually, at the moment, I'm not sure what the roof will be.

0:40:430:40:47

If you see the upstairs,

0:40:470:40:48

you can easily see there's water coming from the roof.

0:40:480:40:51

So, first of all, the roof needs to be fixed.

0:40:510:40:53

You don't have any water on your head.

0:40:530:40:57

'Mohammed's right to prioritise fixing the roof.

0:40:570:41:00

'He also plans a new bathroom and kitchen, so £16,000 to £20,000 should cover that.

0:41:000:41:05

'He's been realistic with his timescale too.

0:41:050:41:08

'Because it's his first renovation, he's giving himself six months.'

0:41:080:41:13

And, if this is successful?

0:41:130:41:16

If it's successful, I'll go for another one,

0:41:160:41:19

cos I will learn from this place.

0:41:190:41:21

Obviously the next time, I'll go with a lot of experience,

0:41:210:41:25

with more things I can do better and stuff like that.

0:41:250:41:31

Listen, congratulations, well done.

0:41:310:41:34

-We look forward to seeing how you get on.

-Thanks a lot.

-Thank you.

0:41:340:41:37

Well, Mohammed broke, of course, the cardinal rule.

0:41:370:41:41

He didn't see the property before he bought it.

0:41:410:41:44

As a result, there's more work needed than he anticipated.

0:41:440:41:47

I don't think it's too bad

0:41:470:41:48

and as long as he keeps a tight rein on his budget, there's still money to be made.

0:41:480:41:53

Find out how he gets on later in the show.

0:41:530:41:55

It's been a while now since we last saw those purchasers.

0:41:580:42:01

Have they been busy bees?

0:42:010:42:03

Or have they been stung and the projects ground to a halt?

0:42:030:42:06

Let's go back and find out.

0:42:060:42:08

'Time to head back to Gravesend in Kent,

0:42:110:42:14

'where earlier we met finance director, Graham,

0:42:140:42:17

'who worked for an elderly care charity,

0:42:170:42:19

'who'd bought this detached property

0:42:190:42:22

'and its sizeable plot for £180,000 at auction.

0:42:220:42:25

'The site was ripe for redevelopment

0:42:250:42:27

'and that's exactly what the non-profit charity intended to do.'

0:42:270:42:32

What were your reasons for buying this house at auction?

0:42:320:42:35

We own the property next door, which we're going to completely remodel

0:42:350:42:40

or rebuild for elderly care.

0:42:400:42:43

This house completes the site

0:42:430:42:45

and enables us to put probably at least a dozen independent housing,

0:42:450:42:51

affordable housing units on the site,

0:42:510:42:53

which makes it all more viable and a complete site.

0:42:530:42:56

'There were big bucks involved in this redevelopment,

0:42:560:43:00

'with a proposed 4.5 million needed for the work.

0:43:000:43:03

'With a timescale of two years, this project depended on getting funding

0:43:030:43:08

'and planning before anything could start.

0:43:080:43:11

'The heat's been on, but three and a half years later,

0:43:110:43:14

'I can't wait to see how things have progressed.

0:43:140:43:17

'Wow! The site is unrecognisable.

0:43:210:43:24

'The former care home and house have been demolished and, in their place,

0:43:240:43:27

'there's a whole complex of apartments.

0:43:270:43:29

'Since Graham's now left to work elsewhere,

0:43:290:43:32

'it's down to Ian, the charity's director of property,

0:43:320:43:35

'to explain what looks like an ambitious change of plan.'

0:43:350:43:39

You may notice we've demolished the house we bought from the auction.

0:43:390:43:43

And we've built 56 apartments for older people,

0:43:430:43:47

obviously not all on the site of the three bedroom house,

0:43:470:43:51

but it's obviously quite a transformation

0:43:510:43:54

and buying the house was integral to our plans,

0:43:540:43:57

cos it's allowed us to develop what we've achieved here.

0:43:570:44:00

'It certainly looks very welcoming from the outside.

0:44:000:44:04

'Let's go inside and take a look around.'

0:44:040:44:08

We've built 56 apartments.

0:44:150:44:18

There are 42 one bedroom apartments and 14 two bedroom apartments.

0:44:180:44:23

The one bedroom apartments are designed for two people,

0:44:230:44:26

so they're suitable for a couple. Each flat, even the one-beds,

0:44:260:44:30

have a separate bedroom, lounge, bathroom and kitchen.

0:44:300:44:35

They meet the modern standards for older people's independent living.

0:44:350:44:40

'Independent living is a key factor in the complex.

0:44:400:44:43

'But it's hand-in-hand with 24/7 support, care

0:44:430:44:46

'and companionship and a secure building.

0:44:460:44:49

'It's all been carefully designed with its future residents in mind.'

0:44:490:44:54

We're standing in one of our standard, two bedroom apartments.

0:44:540:44:57

This is the kitchen, lounge, dining area.

0:44:570:45:00

It's fairly spacious.

0:45:000:45:01

It's been designed with a furniture layout

0:45:010:45:04

to make sure you can get all the furniture you need in here and still access everywhere in a wheelchair.

0:45:040:45:09

The kitchen is fully fitted out

0:45:090:45:13

and we've made it very easy to change the units if we need to.

0:45:130:45:16

We've got fittings in here, such as this advanced warden call system,

0:45:160:45:20

which has lots of different attachments we can put onto it to meet people's needs.

0:45:200:45:25

'But don't think of this place as a standard care home.

0:45:250:45:28

'There are still quite a few surprises.

0:45:280:45:31

'Anyone for a haircut?'

0:45:310:45:33

We've got a hairdresser's, an on-site kitchen, a restaurant,

0:45:390:45:44

shop, there's a health suite.

0:45:440:45:47

There are smaller lounges around the building, so that residents

0:45:470:45:50

don't have to come down into the central area,

0:45:500:45:53

they can chat to friends and meet them on the floor they live in.

0:45:530:45:57

'I'm sure these areas will nurture a real sense of community here.

0:45:580:46:02

'It all seems much bigger than originally planned!'

0:46:020:46:06

Originally, we were going to build a slightly smaller unit for each flat.

0:46:060:46:10

We've increased the size of each unit,

0:46:100:46:13

so now I think you'll find there are eight apartments on the site of the old house.

0:46:130:46:17

It also allowed us to make the courtyard wider.

0:46:170:46:21

We squeezed another two apartments over the central lounge areas.

0:46:210:46:28

We've achieved ten extra, probably, through purchasing the house.

0:46:280:46:32

'The timescale of this development was originally two years,

0:46:320:46:36

'but raising finance for the new plans during the economic downturn,

0:46:360:46:41

'plus some very bad weather, all held the building back.

0:46:410:46:44

'However, once the building started, it took 18 months from demolition

0:46:440:46:48

'to completion.

0:46:480:46:50

'What impact has the bigger plan had on the original 4.5 million budget?'

0:46:500:46:55

The building contract value was about £6.6 million.

0:46:550:46:58

The overall spend as a development for us is about £8.3 million,

0:46:580:47:02

including land purchase, fees, financing costs.

0:47:020:47:07

'The flats will be let out at affordable rents to elderly tenants

0:47:090:47:13

'on a local council waiting list.

0:47:130:47:15

'The overall spend here is a whopping 8.3 million.

0:47:150:47:20

'It'll be interesting to hear what two local estate agents

0:47:200:47:23

'make of this exciting development.'

0:47:230:47:25

All of the room sizes are well apportioned.

0:47:290:47:32

Good sizes. All retirement homes do have communal areas.

0:47:320:47:35

Here, it's been well apportioned and the quality is there to see.

0:47:350:47:40

'The reality is, the market is poor on residential and commercial property,

0:47:400:47:45

'basically down to the lack of lending.'

0:47:450:47:47

The beauty about retirement homes is, quite often, lending's not required.

0:47:470:47:51

The communal areas in this building have been spaced out quite nicely, so everybody's got their own area.

0:47:510:47:57

The rooms have been decorated so they have a nice, homely feel.

0:47:570:48:00

I've had a look around. It's very spacious, neutral decor

0:48:000:48:04

and the kitchen is very well equipped.

0:48:040:48:07

'If we were to treat this as a normal flat, what kind of rental could it earn?'

0:48:070:48:13

If we treated this flat as a normal residential rental,

0:48:130:48:16

we would expect to achieve around the £600 per consecutive month mark

0:48:160:48:22

for a one bedroom apartment.

0:48:220:48:24

For a two bedroom apartment,

0:48:240:48:27

we would expect to achieve £725 per consecutive month.

0:48:270:48:30

The rental price for a new build in Gravesend, which would carry a premium, because it's new build,

0:48:300:48:36

would be £525 per calendar month.

0:48:360:48:39

The two bedrooms, £675 per calendar month.

0:48:390:48:43

Obviously delighted with those, cos they're a lot more than we charge.

0:48:430:48:47

Obviously, being a charity, our rents are set a lot lower than that.

0:48:470:48:50

Delighted that they've achieved a good market rate.

0:48:500:48:54

'What about resale?'

0:48:550:48:56

The one bedroom price for a retirement home locally

0:48:560:49:00

would be £215,000.

0:49:000:49:02

For a two bedroom, it would be £235,000.

0:49:020:49:05

For a one bedroom, around the £220,000 mark.

0:49:050:49:10

For the two bedrooms, we'd be looking at £235,000.

0:49:100:49:14

I'm absolutely delighted.

0:49:140:49:16

They're much better than we estimated before we started the development.

0:49:160:49:20

Absolutely fantastic the charity has such a great asset.

0:49:200:49:24

'What if the whole development was for sale? What could it be sold for?

0:49:250:49:29

'Remember the total investment here is 8.3 million.'

0:49:290:49:35

If they were considering selling the whole complex as a business,

0:49:350:49:39

I think they would achieve around the £12-13 million mark.

0:49:390:49:44

The price for the sale of the whole development - £12.5 million.

0:49:440:49:48

Again, it just proves what a good development it was, worth the effort.

0:49:480:49:52

It's just great they're low cost, affordable rent, but it's nice to know we invested our money wisely.

0:49:520:49:58

'The charity has really done itself proud here.

0:49:580:50:02

'They've potentially added value of between 3.7 and 4.7 million.

0:50:020:50:07

'to a site that's been completely transformed for the better in three and a half years.

0:50:070:50:12

'How does Ian think the project has gone?'

0:50:120:50:16

It's been a good process.

0:50:160:50:17

It's our first major development for many years.

0:50:170:50:20

We're delighted the people of Gravesend who couldn't afford to buy

0:50:200:50:24

this sort of accommodation can have access to it.

0:50:240:50:27

It's a flagship project for us and a blueprint for the future.

0:50:270:50:30

'Back to Bury in the northwest of England where we met Mohammed,

0:50:340:50:38

'who bought this house at auction for £57,000.

0:50:380:50:42

'He runs his own takeaway business and works for a security firm,

0:50:420:50:45

'but has always been interested in property developing.

0:50:450:50:49

'This was his first investment purchase.'

0:50:490:50:52

-Do you see yourself as a property developer?

-Student of property development.

0:50:520:50:56

THEY LAUGH

0:50:560:50:57

It's a big field and you can't say you are anything and you have to keep learning.

0:50:570:51:03

You can't learn without experience.

0:51:030:51:05

Once you have experience, either you done well or you learnt wrong.

0:51:050:51:10

You need to have a start and this is going to be my start.

0:51:100:51:13

'Worryingly, Mohammed bought this place without seeing it inside first,

0:51:160:51:20

'as he didn't get time to see it before the auction.

0:51:200:51:24

'When he got in, he discovered how much work it needed,

0:51:240:51:27

'but this didn't put him off

0:51:270:51:28

'as he planned to do some of it himself on a budget of £16,000 to 20,000.

0:51:280:51:33

'We returned six months later

0:51:330:51:35

'to see if Mohammed has managed to fix this place.'

0:51:350:51:37

It was nothing here. And we put each and every bit and pieces here,

0:52:020:52:07

like all the shelves,

0:52:070:52:11

all the cupboards, worktop, sink. We hired a professional and he did it.

0:52:110:52:16

'Out the back, well, it's not changed that much.

0:52:190:52:22

'The ground floor extension off the rear of the kitchen

0:52:220:52:25

'is now used as a storage area for building supplies,

0:52:250:52:29

'so, no utility area yet.

0:52:290:52:32

'Upstairs, a new bathroom's been installed

0:52:320:52:36

'and is starting to take shape.

0:52:360:52:37

'But there's still a lot of work to do here.

0:52:370:52:40

'As for the bedrooms,

0:52:400:52:42

'those cracks in the walls have been repaired and painted

0:52:420:52:47

'and new floorboards and carpets laid.

0:52:470:52:49

'Mohammed currently has house guests staying in the property while he finishes it off.

0:52:520:52:57

'Did he run into any problems during the renovation?'

0:52:570:53:01

There were a lot of difficulties, so we hired some people.

0:53:010:53:05

Then we hired a professional as well.

0:53:050:53:07

Slowly and slowly, it's almost done.

0:53:070:53:10

Almost 90% of the work is done.

0:53:100:53:12

I'm not in a rush. I want to complete everything.

0:53:120:53:16

It's always good to do full work, before to rent out.

0:53:160:53:21

'Mohammed did some of the easy jobs himself to help save the costs.

0:53:230:53:26

'But for everything else, he hired tradesmen.

0:53:260:53:30

'What is there left to do?'

0:53:300:53:33

Still a few bits and pieces. Toilet needs to be tidied up,

0:53:330:53:39

tiled up and all that.

0:53:390:53:42

'His original budget was between £16,000 and £20,000.

0:53:420:53:46

'Has he been a spendthrift or has he been on a spending spree?'

0:53:460:53:50

There's no ending for the spending.

0:53:500:53:53

But hopefully around 20.

0:53:530:53:55

'£20,000 does seem rather a lot for a renovation on this scale.

0:53:550:54:01

'Adding that to the purchase price of 57,000

0:54:010:54:04

brings the total outlay to 77,000.

0:54:040:54:07

Do two local estate agents

0:54:070:54:09

think it's money well spent?

0:54:090:54:13

First impressions - good rental property.

0:54:180:54:20

It does want a bit of work on the edges. Bathroom, kitchen,

0:54:200:54:23

little bit dated.

0:54:230:54:25

But rental prospect, very good.

0:54:250:54:27

If it's going for sale, I'd put a new kitchen in it, new bathroom,

0:54:270:54:30

bit of decorating,

0:54:300:54:32

tidy it up and it might sell quite well.

0:54:320:54:34

You can clearly see there's been some subtle improvements.

0:54:340:54:37

But I don't think enough to warrant an increase in price.

0:54:370:54:41

By the looks of it, there's perhaps been some minor decoration,

0:54:410:54:45

but, in reality, the things that counted -

0:54:450:54:47

central heating, kitchen, bathroom -

0:54:470:54:50

I don't think have been done to the extent they should've been for a profit.

0:54:500:54:54

'Let's get down to figures. What kind of rental could you expect?'

0:54:570:55:02

A property like this, in good condition, you could achieve in the region of £400 per calendar month.

0:55:020:55:07

In the current condition,

0:55:070:55:09

you'd look to achieve £400 to £420 per calendar month.

0:55:090:55:13

Lovely!

0:55:130:55:14

Yeah, fantastic.

0:55:160:55:17

'Those rentals would give a tidy yield of around 6% to 6.5%.

0:55:170:55:23

'That beats the banks hands down.

0:55:230:55:25

'But what about the property's resale value?

0:55:250:55:28

'Remember, total outlay here is around 77,000.'

0:55:280:55:31

To put the property on the market in its current condition,

0:55:310:55:35

I would recommend asking £65,000, with a view to achieving £60,000.

0:55:350:55:40

In its current condition,

0:55:400:55:42

I'd expect it to be selling for in the region of £60,000.

0:55:420:55:45

'A resale value of £60,000 means Mohammed would make a loss

0:55:450:55:50

'on his first investment project of £17,000.

0:55:500:55:54

'So, there's no money to be made if he sells it in its current condition.

0:55:540:55:59

'But all is not lost.'

0:55:590:56:01

It's a good rental property, so I'd expect put it on the market to rent,

0:56:010:56:05

put a tenant in it for a few years, then reap its capital value later.

0:56:050:56:09

'Wise words. It's a trend we've become very familiar with

0:56:090:56:12

'on Homes Under The Hammer, due to the current financial climate.

0:56:120:56:17

'I think Mohammed has learned some valuable lessons on his first investment,

0:56:170:56:21

'but will this be his last auction purchase?'

0:56:210:56:24

I'll go back to the auction again and I will try to have a go again.

0:56:240:56:30

This is the first try. I'll go for the next one as well.

0:56:300:56:35

But not too soon!

0:56:350:56:37

That's it for now. We'll be back next time with more action from the auction.

0:56:390:56:44

Will the buyers make huge profits or a loss? Will you be jealous or relieved?

0:56:440:56:48

-Find out next time on Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

0:56:480:56:53

Subtitles by Red Bee Media Ltd

0:57:140:57:17

Martin Roberts and Lucy Alexander visit a former hostel in London, a three-bed lodge house in Gravesend and a mid-terrace in Lancashire. All of these properties have been sold at auction. Martin and Lucy find out who bought them, and what they paid when they went under the hammer.