0:00:02 > 0:00:06Hello. It's warm today, but how do you tell the temperature of the property market?
0:00:06 > 0:00:10Sometimes it's difficult to judge whether it's blowing hot or cold.
0:00:10 > 0:00:13One way to find out for yourself is to go down to your local auction.
0:00:38 > 0:00:41When you go to an auction, you can soon tell
0:00:41 > 0:00:43whether there's confidence in the room
0:00:43 > 0:00:46or everyone's playing a cautious game.
0:00:46 > 0:00:48It's usually a very revealing snapshot
0:00:48 > 0:00:50of the current property market.
0:00:50 > 0:00:54Let's see what happened on today's programme.
0:00:54 > 0:00:56'In Liverpool, this three-bed end of terrace
0:00:56 > 0:00:58'could make a lovely family home.
0:00:58 > 0:01:00'But take a look at the garden.'
0:01:00 > 0:01:02There's strimming to do first.
0:01:04 > 0:01:07'This large Victorian house in Stratford, London,
0:01:07 > 0:01:10'has lots of potential, but also, lots of this.'
0:01:10 > 0:01:14There is rubbish everywhere! You can't even get in here!
0:01:14 > 0:01:16'And in Stirchley, Birmingham,
0:01:16 > 0:01:20'this two-bed terrace leaves me a little bemused.'
0:01:20 > 0:01:21Bit of a mish-mash, really.
0:01:21 > 0:01:25All different colours and things on the walls.
0:01:25 > 0:01:27'All these properties have been sold at auction.
0:01:27 > 0:01:31'We'll find out who bought them and what they paid for them
0:01:31 > 0:01:33- 'when they went under the hammer.' - It's yours, sir.
0:01:36 > 0:01:40# I'm going down to Liverpool to do nothing
0:01:40 > 0:01:44# All the days of my life. #
0:01:44 > 0:01:46'I'm in Liverpool.
0:01:46 > 0:01:48'A city with a strong maritime history
0:01:48 > 0:01:50'which put it on the world map.
0:01:50 > 0:01:54'This made it a prime target during the war
0:01:54 > 0:01:56'and large areas of housing were destroyed.
0:01:56 > 0:02:00'As a result, many suburbs sprung up in the '50s and '60s.
0:02:00 > 0:02:03'Today, I'm in one such area, Fazakerley,
0:02:03 > 0:02:05'which is very popular with families
0:02:05 > 0:02:07'and has a close-knit community feel.'
0:02:07 > 0:02:09The property I'm here to see
0:02:09 > 0:02:12is about four miles outside the city centre.
0:02:12 > 0:02:15It's located in this really nice residential area,
0:02:15 > 0:02:17in this bit of a cul-de-sac, which is really good.
0:02:17 > 0:02:20There's no passing traffic, nice and quiet.
0:02:20 > 0:02:23The guide price, £40-£45,000.
0:02:23 > 0:02:25So I'm not expecting much.
0:02:25 > 0:02:28But hang on a minute, three beds, end of terrace.
0:02:28 > 0:02:30Looks all right from the outside.
0:02:30 > 0:02:32Maybe...it's really lousy inside.
0:02:34 > 0:02:37'The large space at the front could be very handy
0:02:37 > 0:02:39'as off-street parking is always a bonus.
0:02:39 > 0:02:41'Especially at the end of a cul-de-sac.
0:02:41 > 0:02:43'I'm just seeing good things so far,
0:02:43 > 0:02:47'but will this change when I step inside?'
0:02:47 > 0:02:52Oh, I don't know. It looks all right, actually.
0:02:52 > 0:02:55Through the door, stairs up to the bedrooms, then into the lounge.
0:02:55 > 0:02:57I love this bay window
0:02:57 > 0:03:00and looks like double-glazing as well, so that's good news.
0:03:00 > 0:03:05Um...a fireplace, but you'd need to get yourself a fire surround.
0:03:05 > 0:03:07It's a focal point.
0:03:07 > 0:03:09Bit of a downstairs storage cupboard.
0:03:09 > 0:03:12You'd have to invest in some central heating
0:03:12 > 0:03:15and radiators, amongst other things.
0:03:15 > 0:03:17But through to the rear of the property
0:03:17 > 0:03:19and what a lovely room! A sort of classic kitchen,
0:03:19 > 0:03:24dining area with the added advantage of a loo just off it.
0:03:24 > 0:03:26This is a really useful family space.
0:03:26 > 0:03:29You can imagine a table here or whatever.
0:03:29 > 0:03:30And then the kitchen itself,
0:03:30 > 0:03:34I love the fact you've got light pouring in from the windows
0:03:34 > 0:03:36and although it looks a bit shabby,
0:03:36 > 0:03:39if you pull these units out, do whatever you're going to do,
0:03:39 > 0:03:43put them back in, it would be perfectly serviceable.
0:03:43 > 0:03:46So all in all, a nice surprise.
0:03:46 > 0:03:49# It's just a nice surprise
0:03:49 > 0:03:52# For you...#
0:03:52 > 0:03:54'It's really not in a bad way at all.
0:03:54 > 0:03:59'And a tremendous bonus to have double-glazing throughout the house.
0:03:59 > 0:04:01'It's mostly cosmetic work that needs doing.
0:04:01 > 0:04:04'You'd have to check the plumbing and wiring,
0:04:04 > 0:04:08'especially as it looks like the place has been raided for parts.'
0:04:09 > 0:04:13So, upstairs, lots of light flooding in from the window.
0:04:13 > 0:04:17The whole house feels nice and light and airy. We really like that.
0:04:17 > 0:04:19Three bedrooms up here.
0:04:19 > 0:04:22A small one there, a good-sized double on the front
0:04:22 > 0:04:25and then through to the second double on the back.
0:04:25 > 0:04:29But walk in here and you don't really need to be Sherlock Holmes
0:04:29 > 0:04:31to figure out that something really badly wrong
0:04:31 > 0:04:34has gone wrong with the central-heating system.
0:04:34 > 0:04:37Looks like the boiler has disappeared, as well.
0:04:37 > 0:04:40So you're going to have to factor in £1,500-£2,000
0:04:40 > 0:04:43to get the central-heating sorted out and reinstated.
0:04:43 > 0:04:46And while I'm up here, something else I noticed.
0:04:46 > 0:04:50the flat roof on the kitchen, looks like the kitchen's an extension.
0:04:50 > 0:04:52It's got a flat roof. You'd need to check that out
0:04:52 > 0:04:56because they are notoriously prone to leakage.
0:04:56 > 0:04:57But a good thing, the garden.
0:04:57 > 0:04:59Big-sized garden,
0:04:59 > 0:05:03adding to this house's potential as a great family home.
0:05:03 > 0:05:05A bit of strimming to do first, though.
0:05:05 > 0:05:10# It's a jungle out there. #
0:05:10 > 0:05:13'Once the jungle at the back's been brought under control,
0:05:13 > 0:05:15'this would be a great space
0:05:15 > 0:05:19'and makes this place really appealing for a family with kids.
0:05:19 > 0:05:22'Another bonus is the front bedroom has an ensuite shower room,
0:05:22 > 0:05:25'which makes up for the fact there's no bathroom upstairs.
0:05:25 > 0:05:28'I often want to change the layout of a house
0:05:28 > 0:05:33'when the main bathroom is downstairs, but here, it works well.
0:05:33 > 0:05:36'I think you're getting quite a bit for your money here.
0:05:36 > 0:05:39'We asked a local estate agent for his views
0:05:39 > 0:05:44'on this end of terrace with a guide price of £40-£45,000.'
0:05:44 > 0:05:46I like the size of the garden.
0:05:46 > 0:05:48The room sizes are quite decent.
0:05:48 > 0:05:51And this property has got an ensuite, which is very unusual.
0:05:51 > 0:05:55It certainly needs redecoration.
0:05:55 > 0:05:57New floorings.
0:05:57 > 0:06:01I would say the biggest thing is the rear garden needs attention.
0:06:01 > 0:06:05It also needs the central-heating putting back in.
0:06:05 > 0:06:07And the kitchen needs attention.
0:06:07 > 0:06:10'So some hard work needed to bring it up to standard,
0:06:10 > 0:06:13'but how much could it be worth once that's been done?'
0:06:13 > 0:06:15Depending on the renovations,
0:06:15 > 0:06:21you could achieve in the region of £80,000, maybe £85,000.
0:06:21 > 0:06:26'And if you wanted to hang on to it and rent it out?'
0:06:26 > 0:06:31The rental value per calendar month would be in the region of £525.
0:06:31 > 0:06:34Well, this is a lot of house for that guide price.
0:06:34 > 0:06:37I like the garden, I like the layout inside.
0:06:37 > 0:06:40All it really needs is a bit of tender loving care.
0:06:40 > 0:06:43Let's see who saw the opportunity when it went under the hammer.
0:06:48 > 0:06:52Somebody start me off, then, on lot 50 at £35,000. £35,000.
0:06:52 > 0:06:54I've seen you, sir. Thank you. At £35,000.
0:06:54 > 0:06:58OK. £35,000. 36. I've seen you. 36.
0:06:58 > 0:07:0337, 38. 38, I have. 39?
0:07:03 > 0:07:06Yep. 40?
0:07:06 > 0:07:09I'm looking for 40,000. I'll take a half behind.
0:07:09 > 0:07:1239,500. I'll take that. 39,500.
0:07:12 > 0:07:1540,000 anywhere else now? I've got 40,000, I have. Thank you.
0:07:15 > 0:07:17You're in, sir, at 40,500.
0:07:17 > 0:07:19Can I say 41?
0:07:19 > 0:07:2240,500, then, right at the back of the room.
0:07:22 > 0:07:24It's good so far, unless anyone beats it.
0:07:24 > 0:07:27For the first time, then, at 40,500.
0:07:27 > 0:07:30Second time, then, at... You're in, 41. And a half, sir?
0:07:30 > 0:07:3441,500, I have. I'm looking to you for 42.
0:07:34 > 0:07:38All right. 41,500, then, is a strong bid at the very back.
0:07:38 > 0:07:39Anybody else? It's all gone quiet.
0:07:39 > 0:07:43£41,500 for the first time. And the second time at £41,500.
0:07:43 > 0:07:45Third and final time. Are we all done?
0:07:45 > 0:07:49With you at the very back of the room at £41,500.
0:07:49 > 0:07:51Well done, sir. Good.
0:07:51 > 0:07:55'The successful bid of £41,500 came from Tim.
0:07:55 > 0:08:00'He runs a family property business started by his dad in 1960.
0:08:00 > 0:08:02'With him is builder Andy,
0:08:02 > 0:08:05'who is heavily involved with Tim's properties in this area.
0:08:05 > 0:08:08'I met them back at the house to find out more.'
0:08:08 > 0:08:11# It's family business
0:08:11 > 0:08:14# Keep it in my family business. #
0:08:14 > 0:08:17Tim, Andy. Great to meet you both. Congratulations.
0:08:17 > 0:08:19Tell me why you bought this place.
0:08:19 > 0:08:23Andy is a local lad, a Liverpool builder.
0:08:23 > 0:08:27And I basically own and rent properties out.
0:08:27 > 0:08:29Andy drew up a shortlist for me
0:08:29 > 0:08:32because I can't see every property on the market,
0:08:32 > 0:08:37and recommended which ones I should bid for, and this was one of them.
0:08:37 > 0:08:40- So, why this one, Andy? - Well, the price of it, really.
0:08:40 > 0:08:43Plus it's a family home. They rent out quite easy
0:08:43 > 0:08:48and sell, if we wanted to resell it, much more than a terraced house.
0:08:48 > 0:08:50Because they've got gardens, etc.
0:08:50 > 0:08:53And the price we paid for it was extremely reasonable.
0:08:53 > 0:08:56Obviously, it needs some work, but that's what I'm here for.
0:08:58 > 0:09:01'Tim runs his business with his brother who lives in Thailand.
0:09:01 > 0:09:04'He's been working with Andy on properties in Liverpool
0:09:04 > 0:09:07'and the surrounding area for over two years.
0:09:07 > 0:09:12'They seem to have their working roles very clearly mapped out.'
0:09:12 > 0:09:15Who does the actual work in terms of sorting it out?
0:09:15 > 0:09:18- You do that, as well? - I do all the building work.- OK.
0:09:18 > 0:09:21Yeah. Cos that's what I do. I find them, go to auction with Tim,
0:09:21 > 0:09:24recommend that he buys this one or whichever we're bidding on,
0:09:24 > 0:09:27I'll say to him, "It needs five, eight grand, whatever."
0:09:27 > 0:09:29Provided it doesn't go over budget,
0:09:29 > 0:09:32we know we're OK, percentage-wise, on the rent afterwards.
0:09:32 > 0:09:35We'll straighten it out and have it good to go in no time.
0:09:35 > 0:09:38Great. Andy sounds like a bit of a good find.
0:09:38 > 0:09:40How did you stumble on him?
0:09:40 > 0:09:42We already had some houses in Liverpool
0:09:42 > 0:09:44we'd owned for a number of years.
0:09:44 > 0:09:47Some of them needed some repairs, so we contacted...
0:09:47 > 0:09:52looked through the book to get a local builder, stumbled across Andy.
0:09:52 > 0:09:54- Oh, wow!- He did a good job on the repairs
0:09:54 > 0:09:57in some of the rented houses we already owned.
0:09:57 > 0:10:01And he put the idea to us
0:10:01 > 0:10:04and I spoke with my brother, Chris, and we said, "Let's go for it."
0:10:05 > 0:10:08With Andy pulling together a shortlist of properties
0:10:08 > 0:10:13coming up at auction, Tim's in a good position to make sure he doesn't miss any hidden gems.
0:10:13 > 0:10:18He's been to around 500 auctions over the years, both buying and selling properties,
0:10:18 > 0:10:22so knows how to handle himself in an auction room.
0:10:22 > 0:10:24Tell me what you're going to do to sort it out?
0:10:24 > 0:10:28First of all, we're going to strip it to the bone, the flooring,
0:10:28 > 0:10:31carpets, all the rubbish in here, the kitchen
0:10:31 > 0:10:34and replace everything that is in here, including the bathroom.
0:10:34 > 0:10:38Then, redecoration right through. We'll have to get a JCB in the back garden,
0:10:38 > 0:10:42if you've seen that! It's like a jungle.
0:10:42 > 0:10:44We'll have to get that cleared and get the front tidied up.
0:10:44 > 0:10:47That to-do list will keep Andy busy for a while.
0:10:47 > 0:10:53The duo have set a budget of to £6-8,000 and Andy thinks he'll be finished in four to six weeks
0:10:53 > 0:10:58leaving Tim to work out what he wants to do with the house when it's done.
0:10:58 > 0:11:02- Is the idea to rent it out or sell it on?- I think probably rent it out.
0:11:02 > 0:11:08Unless I get a valuation that we can make a pretty good profit,
0:11:08 > 0:11:13I think I'd rather rent it because we've got it for the long-term rather than the short-term gain.
0:11:13 > 0:11:15What kind of rental are you expecting?
0:11:15 > 0:11:19- Per month, between 500 and 550.- Right.
0:11:19 > 0:11:24- So a pretty decent return on what you paid. - I'll be happy with 500 a month,
0:11:24 > 0:11:29that's £6,000 a year in total, which would represent, even with the work that has been spent on the property,
0:11:29 > 0:11:32probably around about 12% return.
0:11:32 > 0:11:38With a potential 12% return, it seems Andy has chosen well for Tim and his brother yet again.
0:11:38 > 0:11:43This successful business partnership looks set to continue.
0:11:43 > 0:11:49- Congratulations to you both, good luck with it. We look forward to seeing how you get on.- Thank you.
0:11:50 > 0:11:55Tim has obviously bagged himself a really great property here at a really low price
0:11:55 > 0:12:01and having Andy on board to do the hard work, and the finding, that's pretty priceless too.
0:12:01 > 0:12:03How is he going to get on sorting this place out?
0:12:03 > 0:12:07From a distance, it seems, Andy has all the experience to sort this out, no problems.
0:12:07 > 0:12:09But you never know with property.
0:12:09 > 0:12:12Find out how they get on later in the show.
0:12:14 > 0:12:20I'm in Stratford in East London today where there is a real optimistic mood.
0:12:20 > 0:12:25The organisers of the Olympics have been trumpeting positive messages since winning the bid.
0:12:25 > 0:12:28One of their promises seems to be holding true.
0:12:28 > 0:12:34They claimed that they would transform this part of the capital in three years.
0:12:34 > 0:12:37I am definitely impressed by what I've seen today.
0:12:37 > 0:12:39MUSIC: Chariots Of Fire theme
0:12:39 > 0:12:45And it's only a hop, skip and a jump from the Olympic hub to today's lot.
0:12:45 > 0:12:50I'm here to see a unique and rarely available property today.
0:12:50 > 0:12:52That sounds exciting.
0:12:52 > 0:12:54It's being used as a 12-room hostel.
0:12:54 > 0:12:58So it's obviously a substantial auction lot
0:12:58 > 0:13:03and it has excellent redevelopment potential, I hear.
0:13:03 > 0:13:06Sounds positive and it looks pretty good, as well.
0:13:06 > 0:13:12All this for £470,000 guide price.
0:13:12 > 0:13:15What a load of rubbish! No, not the house.
0:13:15 > 0:13:18Look! Let's go inside.
0:13:18 > 0:13:20# Oh, my old man's a dustman
0:13:20 > 0:13:22# He wears a dustman's hat
0:13:22 > 0:13:24# He wears cor blimey trousers
0:13:24 > 0:13:27# And he lives in a council flat. #
0:13:27 > 0:13:29Rubbish aside, this property looks to be in good order.
0:13:29 > 0:13:33Double glazed at the front, so that's a saving straightaway.
0:13:33 > 0:13:38I would have preferred to see the original sash windows in place but you can't have everything.
0:13:38 > 0:13:42I'll just have to make do with the ornate moulding around the door.
0:13:44 > 0:13:47You can see why this works so well as a hostel.
0:13:47 > 0:13:50Everywhere you turn, there is a big bedroom.
0:13:50 > 0:13:54It looks to be in fairly good condition, although there is rubbish everywhere.
0:13:54 > 0:13:57Look, you can't even get in here!
0:13:57 > 0:13:59What about the redevelopment potential?
0:13:59 > 0:14:03Let's look closer before deciding on the best course of action.
0:14:07 > 0:14:10This property is really epic.
0:14:10 > 0:14:13Two very sizeable front rooms and this generous lounge area
0:14:13 > 0:14:16with two kitchen areas leading off it.
0:14:20 > 0:14:24Out back there's a huge garden which also gives me a chance
0:14:24 > 0:14:26to take in the enormity of the place.
0:14:29 > 0:14:33Upstairs, there's bedroom after bedroom.
0:14:35 > 0:14:38The house is also awash with toilet and bathing facilities,
0:14:38 > 0:14:42so all the necessary plumbing is in place, which is great to see.
0:14:42 > 0:14:46You have to look past all the clutter and think what this house could be.
0:14:48 > 0:14:52Having had a look around here today, this building could easily be turned
0:14:52 > 0:14:56into say five or six decent one-bed flats.
0:14:56 > 0:15:01The square footage is generous, so you could easily accommodate it.
0:15:01 > 0:15:07Plus, you've got the all-important parking, and planners are so keen to see this.
0:15:07 > 0:15:11There are five to six spaces out the front. That is just perfect.
0:15:12 > 0:15:16This is a tremendous development opportunity, although turning it into flats
0:15:16 > 0:15:19would require a significant initial outlay.
0:15:19 > 0:15:22The returns could be well worth it.
0:15:22 > 0:15:26The other less lucrative option is to keep things as they are
0:15:26 > 0:15:29and refurbish this place completely.
0:15:29 > 0:15:33New kitchens, new bathrooms and a lick of paint and a good tidy up.
0:15:33 > 0:15:38This would be the cheaper way to turn this place around but it won't generate as much money.
0:15:38 > 0:15:42Having said that, if you manage to rent out all these rooms,
0:15:42 > 0:15:46you could achieve as much as to £4-5,000 a month.
0:15:46 > 0:15:48That is not anything to be sniffed at.
0:15:48 > 0:15:52We asked a local estate agent for her views on this
0:15:52 > 0:15:5612-room hostel which had an auction guide price of £470,000.
0:15:57 > 0:16:00It needs a bit of love and attention.
0:16:00 > 0:16:05I think that you would have to spend approximately £60,000
0:16:05 > 0:16:08to put it into a good standard.
0:16:10 > 0:16:15What about the prospect of redeveloping the property into flats?
0:16:15 > 0:16:21Planning could be difficult here, although you do have a precedent set by the three houses
0:16:21 > 0:16:26to the side of this property. You would be able to argue the planning
0:16:26 > 0:16:29but I think it wouldn't be a very straightforward planning.
0:16:29 > 0:16:34In its current layout, how much rental income would be achieved?
0:16:34 > 0:16:40You could achieve a rental of between £4,500 per calendar month
0:16:40 > 0:16:44to £5,000 per calendar month.
0:16:45 > 0:16:47What about resale valuation?
0:16:47 > 0:16:52As a 12-bedroom multiple house of occupation,
0:16:52 > 0:16:59you could sell this property on for between £680,000 to £700,000.
0:17:00 > 0:17:04This is an immense building and it could quite easily be split up into flats.
0:17:04 > 0:17:07Imagine the return if you were successful.
0:17:07 > 0:17:10Everything is subject to planning permission, of course.
0:17:10 > 0:17:12It's always a gamble.
0:17:12 > 0:17:16Somebody bought this and thought it was a risk worth taking.
0:17:16 > 0:17:19Let's find out who that was as we go to auction.
0:17:22 > 0:17:25Start realistic, 400.
0:17:25 > 0:17:27400 in the front. 405?
0:17:27 > 0:17:31405, 410?
0:17:31 > 0:17:36415. 420.
0:17:36 > 0:17:39425, 430?
0:17:39 > 0:17:42430, 435?
0:17:44 > 0:17:47440, 445?
0:17:47 > 0:17:51450, yeah. 455?
0:17:51 > 0:17:55460. 465?
0:17:55 > 0:17:58470. 475?
0:17:58 > 0:18:01480, new spot coming in.
0:18:01 > 0:18:06480. 485, 490?
0:18:06 > 0:18:08495.
0:18:08 > 0:18:10496?
0:18:10 > 0:18:12497.
0:18:12 > 0:18:15498, 499?
0:18:15 > 0:18:16500.
0:18:16 > 0:18:20501, back in. 502?
0:18:20 > 0:18:22503, 504?
0:18:23 > 0:18:27505, 506?
0:18:27 > 0:18:31507? 506 in the front, been here most of the time.
0:18:31 > 0:18:34If not, it's going. 506, first time...
0:18:34 > 0:18:36Second time...
0:18:36 > 0:18:39Third and last time, have you all done?
0:18:39 > 0:18:41Sold 506. Well done, sir.
0:18:42 > 0:18:48It was full-time property developer Dilawar who made the successful bid of 506,000.
0:18:48 > 0:18:53He works very closely with his builder, Amarik, and they are no strangers to Homes Under The Hammer.
0:18:53 > 0:18:59We met them in August 2010 when they purchased a three-bedroom property in Stratford.
0:18:59 > 0:19:01The plan was to convert it into two flats.
0:19:01 > 0:19:06Unfortunately permission was refused, which cost them a lot of time and money.
0:19:06 > 0:19:09I met up with them to find out what lessons they'd learned.
0:19:09 > 0:19:12So, you've come back for some more.
0:19:12 > 0:19:17Yes, this is our business, we keep buying properties and doing them up.
0:19:17 > 0:19:21We don't want to make the mistake we did last time. We were waiting on planning permission
0:19:21 > 0:19:24while the property was empty. This time, what we've decided,
0:19:24 > 0:19:28we will do it up to a basic standard, and let it out.
0:19:28 > 0:19:31While we're waiting for the planning permission,
0:19:31 > 0:19:35it might take like six months, maybe a year,
0:19:35 > 0:19:39then you see the next-door properties, we might do something like that.
0:19:39 > 0:19:44Dilawar and Amarik are clearly keen to avoid the pitfalls they fell into before.
0:19:44 > 0:19:49In the short term, I think it's the right idea to get the place into a fit state to rent out
0:19:49 > 0:19:52whilst they decide on what to do long term.
0:19:52 > 0:19:56Dilawar hopes eventually to get permission to build flats
0:19:56 > 0:19:59but in the meantime has a budget of around 40,000 to 50,000
0:19:59 > 0:20:03to get the place fit for tenants as soon as possible.
0:20:03 > 0:20:09Basically, if we keep the property healthy, then we don't have to worry about security and other things.
0:20:09 > 0:20:14If we spend that sort of money and rent it for couple of years, surely we will get our money back
0:20:14 > 0:20:17and, at the same time, we don't worry about the properties.
0:20:17 > 0:20:22These are let out, people living in here and it's good to everybody.
0:20:22 > 0:20:26Dilawar and Amarik are playing it smart, covering themselves in this way
0:20:26 > 0:20:28whilst they decide on the long-term strategy.
0:20:28 > 0:20:34They plan to consult architects, as well as the council, to explore possibilities.
0:20:34 > 0:20:37Converting into flats would be their preferred option.
0:20:37 > 0:20:42If you do go down the flat route and you convert this into lots of flats,
0:20:42 > 0:20:47because it is ripe for something like that. How many flats do think you could get out of this building?
0:20:47 > 0:20:50Well depends, again, you know...
0:20:50 > 0:20:56Depends on them. If you look on the left side of the property,
0:20:56 > 0:20:59there is a very huge extension.
0:20:59 > 0:21:02We could put another floor up, if they allow us
0:21:02 > 0:21:06and then we could go out, and a double storey at the back.
0:21:06 > 0:21:10That would make about ten flats.
0:21:10 > 0:21:14A lot of work would have to go to into turning this place into ten flats
0:21:14 > 0:21:17and, of course, they would need to get the planners on board.
0:21:17 > 0:21:24However, if they were to succeed, one-bedroom flats in this area are valued around 160,000
0:21:24 > 0:21:28so there could be big money to be made here.
0:21:28 > 0:21:34What's the time frame for you guys to get people in here and paying you rent?
0:21:34 > 0:21:39If we're just going to go for the cheaper move, it will be about three months.
0:21:39 > 0:21:43- Three months.- Three months, yeah. - Come on, who's going to clear this place?
0:21:43 > 0:21:47- We are going to use you as well.- I'm not helping you clear this place!
0:21:47 > 0:21:52I don't think I've ever seen anywhere so messy with so much junk everywhere.
0:21:52 > 0:21:55I think you're going to need a fair few skips out the front.
0:21:55 > 0:22:01We've ordered a big skip already and that is coming tomorrow morning.
0:22:01 > 0:22:03- Wow! It's been lovely meeting you both today.- Same here.
0:22:03 > 0:22:07Good luck with whatever scheme you choose.
0:22:07 > 0:22:09Well done, thank you very much.
0:22:09 > 0:22:13Dilawar and his builder, Amarik have experienced the highs and lows
0:22:13 > 0:22:19of property developing and know what it feels like to come up against the planners and lose.
0:22:19 > 0:22:23I really hope, for their sake, they are successful with this project.
0:22:23 > 0:22:27If all else fails, they could make quite a tidy sum annually.
0:22:27 > 0:22:30Let's not feel too sorry for the guys.
0:22:30 > 0:22:34You can find out how they get on later on in the programme.
0:22:34 > 0:22:38Coming up, in Birmingham, it seems very much like a tale of two houses.
0:22:38 > 0:22:44Front bit, good. Back bit, bad.
0:22:44 > 0:22:48In London, did the renovation meet Dilawar's expectations?
0:22:48 > 0:22:50Well, it's encouraging for us.
0:22:50 > 0:22:54That's why we're quite happy when we've done the job.
0:22:55 > 0:22:59But first, did Tim and Andy do their makeover on time in Liverpool?
0:22:59 > 0:23:02We were a little bit pushed for time getting
0:23:02 > 0:23:04finished for the deadline, etc.
0:23:09 > 0:23:13Back now to Liverpool where earlier we met developer, Tim, on the left
0:23:13 > 0:23:15and builder, Andy, on the right.
0:23:15 > 0:23:20Tim bought this three-bed end townhouse at auction for £41,500.
0:23:20 > 0:23:24He runs a family property business with his brother, Chris,
0:23:24 > 0:23:26who lives in Thailand.
0:23:26 > 0:23:30Tim's been working with Andy on properties in Liverpool and the surrounding area for two years.
0:23:30 > 0:23:35Andy's the man with the plan when it comes to which properties to go for at auction.
0:23:35 > 0:23:42Tim depends on him to come up with a shortlist to ensure they don't miss out on any plum properties.
0:23:42 > 0:23:46They've been to around 500 auctions over the years to buy and sell
0:23:46 > 0:23:49so they certainly know their plans for this place.
0:23:50 > 0:23:53We're going to strip it to the bone of everything,
0:23:53 > 0:23:56the flooring, carpets, the rubbish, the kitchen
0:23:56 > 0:24:00and replace everything that's in here, including the bathroom and redecoration right through.
0:24:00 > 0:24:04We'll probably have to get a JCB in the back garden, if you've seen that!
0:24:04 > 0:24:08It's like a jungle. We've got to get all that cleared and get the front tidied up.
0:24:08 > 0:24:12We're back seven weeks later to find out if Tim and Andy
0:24:12 > 0:24:16have tamed the jungle and turned around this Liverpool house.
0:24:43 > 0:24:47OK, as you may remember, this was rather like a jungle out here
0:24:47 > 0:24:51with over a metre high in rubbish. We didn't even know the patio was at the bottom
0:24:51 > 0:24:56until we got it all out. We did spend a lot of time, five skips later getting all the rubbish out
0:24:56 > 0:24:59and flattening it all down a bit.
0:24:59 > 0:25:02As you can see, we've cleaned it up and put new fence panels in.
0:25:02 > 0:25:06We've put a decking area down, a play area for children
0:25:06 > 0:25:08who are going to move into this kind of property.
0:25:08 > 0:25:14Some bark there to keep it soft, and generally tidied it up and made it look smart and habitable.
0:25:14 > 0:25:17Let's see what's changed inside.
0:25:19 > 0:25:22Smart and habitable is definitely the story here.
0:25:22 > 0:25:27The place has been smartened up with a brand-new feature fireplace installed.
0:25:32 > 0:25:35That damaged, old kitchen has been replaced with tidy new units,
0:25:35 > 0:25:37cooker and sink.
0:25:43 > 0:25:48In this part of the house the kitchen had been pretty much vandalised.
0:25:48 > 0:25:52The hob was smashed, etc. What we decided to do, because the kitchen is not that huge,
0:25:52 > 0:25:55we decided to keep the layout the same and changed the units.
0:25:55 > 0:25:58New hob, oven, sink, taps, the usual stuff,
0:25:58 > 0:26:03retiled and generally tidied it up and put a worktop here where there wasn't one before
0:26:03 > 0:26:05because they had a washing machine under there.
0:26:05 > 0:26:09There was no worktop so we decided to put that there, which will keep it all tidy
0:26:09 > 0:26:11and you've a work surface to work on.
0:26:11 > 0:26:14It's all clean and tidy and ready to go.
0:26:14 > 0:26:17# Baby, I'm ready to go
0:26:17 > 0:26:20# I'm back, I'm ready to go
0:26:20 > 0:26:23# From the rooftops, shout it out!
0:26:23 > 0:26:25# Shout it out. #
0:26:25 > 0:26:27Upstairs is also ready to go.
0:26:27 > 0:26:32In the bedrooms those broken floorboards and heating system have been replaced.
0:26:32 > 0:26:36Everything looks so much brighter, with new flooring
0:26:36 > 0:26:41and light colours throughout. In the master bedroom, the ensuite has been replaced.
0:26:41 > 0:26:46Did they get all this work done in their six-week timescale?
0:26:46 > 0:26:48# Baby, I'm ready to go. #
0:26:49 > 0:26:53We were a little bit pushed for time getting finished for the deadline.
0:26:53 > 0:26:58We got there, near enough anyway, 99.9%.
0:26:58 > 0:27:02I'm quite happy with the way everything's gone. We haven't had any major hiccups at all.
0:27:02 > 0:27:06Everything's gone pretty smoothly and, as you can see, everything's looking good.
0:27:06 > 0:27:09Interestingly Tim didn't oversee the building work.
0:27:09 > 0:27:13In fact he's not been back to the property since he bought it at auction
0:27:13 > 0:27:16and left Andy in complete control of the renovation.
0:27:16 > 0:27:22We discussed one or two things - should we do this or that and we've agreed over the phone.
0:27:22 > 0:27:25No, I've left it to him and I'm very happy with the result.
0:27:25 > 0:27:31So did Tim's hands-off approach affect the original budget of 6,000 to 8,000?
0:27:31 > 0:27:35We've gone slightly over the 10,000 mark now.
0:27:35 > 0:27:38Owing probably to the landscaping gardening aspect of it.
0:27:38 > 0:27:43Because it was so bad and so big and we've had to completely renovate the inside as well.
0:27:43 > 0:27:48We have gone over budget, slightly, but it's still well within the figures that we need.
0:27:48 > 0:27:51We wanted to do a really good job on it.
0:27:51 > 0:27:55Should we ever sell it at a future date, then hopefully,
0:27:55 > 0:27:59what we've perhaps overspent we'll get back in the resale value.
0:28:01 > 0:28:06They bought the place at auction for 41,500 and spent around 10,000
0:28:06 > 0:28:10on the refurbishment, making a total outlay of around £51,500.
0:28:10 > 0:28:15We asked two local estate agents for their views on this property.
0:28:19 > 0:28:21I think the property is quite a good property
0:28:21 > 0:28:24and it's been refurbished to a decent standard.
0:28:24 > 0:28:26There are a few features I quite like.
0:28:26 > 0:28:28I like the way they've tidied up the back garden,
0:28:28 > 0:28:30it makes it look a lot bigger.
0:28:30 > 0:28:35Anyone coming here to either buy or rent will have a good spacious area.
0:28:35 > 0:28:38I think it's a nice property. I think it's been done up quite well.
0:28:38 > 0:28:42I love what they've done with the garden, I think that could be a real selling point.
0:28:42 > 0:28:47What could this house achieve on the rental market?
0:28:47 > 0:28:53A property in this condition would probably reach about 500 to 525 per calendar month.
0:28:53 > 0:28:58I think, for rent, this property could achieve between 500 and 550 per calendar month.
0:28:58 > 0:29:01That's pretty good. That's about what I expected.
0:29:01 > 0:29:05That was the range I was expecting for the rent on the property,
0:29:05 > 0:29:08bearing in mind the standard it's been finished to.
0:29:08 > 0:29:11Yeah, that's what I expected, to be fair.
0:29:11 > 0:29:14Wow, that's a potential rental yield of between 11 and 12%
0:29:14 > 0:29:17minus the usual taxes and expenses.
0:29:17 > 0:29:23As the plan was to rent it out anyway, Andy's already lined up a potential tenant.
0:29:23 > 0:29:27But if they decided to sell, how much could this sell for?
0:29:28 > 0:29:32If the people who have done the refurbishment are going to sell the property,
0:29:32 > 0:29:38they will probably obtain between £75,000 to £80,000.
0:29:38 > 0:29:42My valuation for this property would be between 70 and £75,000.
0:29:42 > 0:29:47It's certainly up in the figure I was expecting or slightly better.
0:29:47 > 0:29:51We've always got the option. I think prices have bottomed out at the moment.
0:29:51 > 0:29:55We've got the option to rent it out for two or three years, or as long as we want,
0:29:55 > 0:29:59and we've always got the option to sell it in the future if we need to.
0:30:00 > 0:30:05With a potential resale profit of up to £28,500,
0:30:05 > 0:30:07minus the usual tax and expenses,
0:30:07 > 0:30:14Tim and Andy are on to a real winner with this place. What's next for the property duo?
0:30:14 > 0:30:17I'm hoping Andy is going to look at one or two others
0:30:17 > 0:30:20and draw up another shortlist for me, and if and when he does
0:30:20 > 0:30:24we shall go to wherever the auction is and try and buy one or two more.
0:30:24 > 0:30:27And, if we are successful, Andy can do the work again.
0:30:27 > 0:30:30- It'll give you something to do, won't it?- A production line worker!
0:30:35 > 0:30:39In the 1860s, John and Richard Cadbury were looking
0:30:39 > 0:30:42for new premises for their chocolate business.
0:30:42 > 0:30:47Somewhere outside Birmingham town centre where the air was cleaner.
0:30:47 > 0:30:50# Sweet... #
0:30:50 > 0:30:52They also needed excellent transport links
0:30:52 > 0:30:56so what could be better than a canal right next to a train station?
0:30:56 > 0:30:59That's how the area of Bournville was developed.
0:30:59 > 0:31:03Let's hope the property I've come to inspect will be just as sweet.
0:31:03 > 0:31:06The property I'm here to see is in sunny Stirchley,
0:31:06 > 0:31:09five minutes' walk from Bournville train station.
0:31:09 > 0:31:14Great for commuting and avoiding the sticky traffic on the main road into town.
0:31:14 > 0:31:17It's on this long line of Victorian terraces,
0:31:17 > 0:31:20two bedrooms and at a guide price of 60,000 quid.
0:31:20 > 0:31:22Let's take a look.
0:31:22 > 0:31:25From the outside, it looks like this house just needs a bit more love.
0:31:25 > 0:31:30On a street where people clearly take great pride in their homes, smartening up the exterior
0:31:30 > 0:31:32could add some value.
0:31:32 > 0:31:34# Sweet... #
0:31:34 > 0:31:38Through the front door and first impressions,
0:31:38 > 0:31:40a bit of a mish-mash really.
0:31:40 > 0:31:44Different colours and things on the walls but not a bad sized space.
0:31:44 > 0:31:48You've got an open fire there behind the gas fire which clearly needs to be ripped out.
0:31:48 > 0:31:52Maybe floorboards that you could strip back here.
0:31:52 > 0:31:55Under-stairs cupboard, through to a rear sitting room,
0:31:55 > 0:31:58very traditional design for these sorts of properties.
0:31:58 > 0:32:03Nice high ceilings, although you'd definitely want to get rid of those polystyrene tiles.
0:32:03 > 0:32:06Oh, that's nice, a cupboard with beautiful lead work in there.
0:32:06 > 0:32:11That's OK, then it gets horribly wrong when you come to the rear of the property.
0:32:11 > 0:32:16This is your kitchen. Very low ceiling and an absolutely tiny space
0:32:16 > 0:32:23and predictable, I guess, right at the rear of the property, your bathroom and loo.
0:32:23 > 0:32:28In a nutshell, front bit good, back bit, bad.
0:32:28 > 0:32:30# B-b-b-bad
0:32:30 > 0:32:32# Bad to the bone #
0:32:32 > 0:32:35Mmm, it's tricky to know what to do about this
0:32:35 > 0:32:40but the £60,000 question is, do you have enough room to move the bathroom upstairs?
0:32:44 > 0:32:48There are two good-sized bedrooms but trying to squeeze a bathroom up here
0:32:48 > 0:32:50could seriously compromise the space.
0:32:50 > 0:32:56However, it might be something to consider as the current layout is far from ideal.
0:32:56 > 0:33:00And the garden - well, it's a bit more of a jungle really
0:33:00 > 0:33:03and you'd need more than a whip around on the lawnmower to sort it.
0:33:03 > 0:33:10But this house has more secrets. This property comes with a special set of conditions
0:33:10 > 0:33:14and you'd be well advised to take note of them.
0:33:14 > 0:33:17You might be surprised to learn that the property isn't freehold
0:33:17 > 0:33:22but leasehold with a 125-year lease.
0:33:22 > 0:33:25The council, who sold the property, retained the freehold
0:33:25 > 0:33:31with a stipulation that whoever bought the property has to do the renovation works within 12 months.
0:33:31 > 0:33:33I'm sure after that time, if you applied to them,
0:33:33 > 0:33:37you'd probably get the freehold, but for any developer who was planning
0:33:37 > 0:33:41to sit on the property and maybe not do the work, that's not an option.
0:33:41 > 0:33:45So, it might be your house and your project
0:33:45 > 0:33:49but it's not all up to you how and when you go about it.
0:33:49 > 0:33:52This is not the house for you if you want to wait.
0:33:52 > 0:33:55I think in essence the council have the right idea here.
0:33:55 > 0:33:58They want to make sure houses like this don't continue to decay
0:33:58 > 0:34:00and bring down the overall feel of the street.
0:34:00 > 0:34:02We asked the local estate agent
0:34:02 > 0:34:06if he agreed that the £60,000 guide price was rather tempting.
0:34:07 > 0:34:11With regard to changing the first floor layout,
0:34:11 > 0:34:13it would be a shame to lose the two double bedrooms
0:34:13 > 0:34:17and it would be best to keep the bathroom downstairs.
0:34:17 > 0:34:23I don't think there would be much merit in moving the bathroom upstairs from a value point of view.
0:34:24 > 0:34:28What could the property be worth when it's finished?
0:34:28 > 0:34:30The property, in its present condition,
0:34:30 > 0:34:34is probably worth somewhere around 75,000, possibly up to £80,000,
0:34:34 > 0:34:38bearing in mind it does need quite a lot of money spending on it.
0:34:38 > 0:34:41When fully renovated I'd expect a property of this type, in this locality,
0:34:41 > 0:34:45to achieve somewhere around £110,000.
0:34:45 > 0:34:50Once fully renovated, and it would depend on the standard of renovation undertaken,
0:34:50 > 0:34:53I'd expect a property of this type, in this area, to achieve a rental figure
0:34:53 > 0:34:56of around £500 per calendar month.
0:34:56 > 0:35:01Well, there was a lot of interest in this property before the auction and I can see why.
0:35:01 > 0:35:05It's a convenient location, an improving area and a lot of house for the money.
0:35:05 > 0:35:09Let's see who bought it when it went under the hammer.
0:35:09 > 0:35:11Lot two at Stirchley in Birmingham.
0:35:11 > 0:35:15It's being offered on behalf of Birmingham Council.
0:35:15 > 0:35:16Where shall we start?
0:35:16 > 0:35:1840? At 40,000 I'm bid. Yes?
0:35:18 > 0:35:2245 and 50, so it's 50.
0:35:22 > 0:35:25At 50. 55?
0:35:25 > 0:35:2851, we've got a lot to go through. Can I have 55 anywhere?
0:35:29 > 0:35:3155, thank you, at 55.
0:35:31 > 0:35:33And now, can I have 60?
0:35:33 > 0:35:36At 55 I'm bid, is that 60? Thank you, madam, at 60.
0:35:36 > 0:35:3965, at 65. Is it 70?
0:35:39 > 0:35:42At 70, thank you, madam, at 70.
0:35:42 > 0:35:43Is it 75, sir?
0:35:43 > 0:35:47A new bid at 75. 75 I'm bid. Madam, is it 80?
0:35:49 > 0:35:5276, at 76. 77?
0:35:52 > 0:35:54Is it 78?
0:35:54 > 0:35:5879? 79, is it 80?
0:35:58 > 0:36:00No? Are we all done?
0:36:00 > 0:36:03£79,000. One, two, three...
0:36:03 > 0:36:06Sold. Well done, madam, congratulations.
0:36:08 > 0:36:13The winning bid of £79,000 was made by Rachel, who is a property developer.
0:36:13 > 0:36:16# Sugar...
0:36:16 > 0:36:18# Oh, honey, honey #
0:36:18 > 0:36:20She's been in that business eight years
0:36:20 > 0:36:23but this is her very first auction buy.
0:36:23 > 0:36:26- Rachel, great to meet you. - And you.- Congratulations.- Thank you.
0:36:26 > 0:36:30- Tell me why you wanted to buy this place. - I buy properties, or have done
0:36:30 > 0:36:33for the past eight years now, but the first one was eight years ago
0:36:33 > 0:36:37and I do them up, for a hobby, really, more than anything.
0:36:37 > 0:36:41- So it's not your day job? - No, but it's starting to be. It's starting to be.
0:36:41 > 0:36:47It wasn't, it was a hobby to start with but now it's turning into a bit of a commitment.
0:36:47 > 0:36:52- What was your job before that? - I was a consultant for nursing homes and care homes,
0:36:52 > 0:36:57- interior design, that type of thing. - That's a useful experience to have, then?- Yeah.
0:36:57 > 0:37:00How's it gone? Because there's been some ups and downs in the market.
0:37:00 > 0:37:07There have. It's gone OK, really. I've bought a few as I can, really.
0:37:07 > 0:37:14As I tend to keep them and let them out, that type of thing. It's gone OK.
0:37:14 > 0:37:17It hasn't really affected what I want to do.
0:37:17 > 0:37:21- So you've managed to build up a portfolio, then?- Yeah, yeah, yeah.
0:37:21 > 0:37:25- Do them up, keep them, rather than sell them.- Yes.- Right.
0:37:25 > 0:37:28What was it that attracted you to this one?
0:37:28 > 0:37:31I think the price and the potential, really.
0:37:31 > 0:37:34The rental market is quite good in this area,
0:37:34 > 0:37:37having spoken to some of the local estate agents.
0:37:37 > 0:37:41I think it's the price we could get it for and what it needed doing, really.
0:37:41 > 0:37:46What we could do to achieve that and then what we could gain from it.
0:37:46 > 0:37:47How was the auction?
0:37:47 > 0:37:52Brilliant! I enjoyed it. It was great.
0:37:52 > 0:37:55I loved it because, having gone to other auctions
0:37:55 > 0:37:58you use your magazine to put your hand up but they gave you a paddle.
0:37:58 > 0:38:03I quite enjoyed that bit. It was nerve-wracking. It was exciting.
0:38:03 > 0:38:06It was what I wanted it to be, really.
0:38:06 > 0:38:09Were you happy with what you paid?
0:38:09 > 0:38:12Er, never happy with what I pay, no. I'd rather pay less.
0:38:12 > 0:38:15But yeah, I think so - in the scale of things
0:38:15 > 0:38:18I think that was quite a good price, really.
0:38:18 > 0:38:22Time will tell, see what we get for it when it's done.
0:38:22 > 0:38:24A true developer speaking there.
0:38:24 > 0:38:27We always want things just a bit cheaper, don't we?
0:38:27 > 0:38:31# Sweets for my sweet
0:38:31 > 0:38:32# Sugar for my honey #
0:38:32 > 0:38:37But this house was certainly sweet enough to catch Rachel's eye in the first place.
0:38:37 > 0:38:43- Tell me your plans.- Basically, to fully modernise the entire house.
0:38:43 > 0:38:48- The bathroom at the back, we'll be moving upstairs.- Oh, you will?- Yes.
0:38:48 > 0:38:51I know the location of that now and it will work.
0:38:51 > 0:38:56- Describe exactly where it's going. - As you walk up the stairs, you'll turn left
0:38:56 > 0:39:00and then immediately to your left will be a door. That will be the bathroom.
0:39:00 > 0:39:05- Right.- In front of you there will be a door into the bedroom.- Right.
0:39:05 > 0:39:08Have you worked out the economies of doing that and how much
0:39:08 > 0:39:10it will add to the house? Cos you are renting it out.
0:39:10 > 0:39:16- Will it make that much difference in terms of rent?- It probably won't.
0:39:16 > 0:39:19If it improves the property, which it will do,
0:39:19 > 0:39:22then I think it will be money well spent, really.
0:39:22 > 0:39:25I don't personally think it will be too expensive.
0:39:25 > 0:39:28I'm looking to spend 15,000, 20,000.
0:39:28 > 0:39:31The whole house needs rewiring, that type of thing.
0:39:31 > 0:39:34If I spend 15,000 to 20,000 doing it up, I'll be happy.
0:39:36 > 0:39:38With eight years of experience,
0:39:38 > 0:39:42Rachel is clear about her options once the house is complete.
0:39:42 > 0:39:45I've got three options. I say I'm going to rent it.
0:39:45 > 0:39:50My son is coming back from university so he might move out of our house and move in here.
0:39:50 > 0:39:51I hope.
0:39:51 > 0:39:55The second one will be to rent it
0:39:55 > 0:39:59and the third one... Once I've done it, I will get it valued
0:39:59 > 0:40:04and see how much we've made and whether it's worth selling it or not.
0:40:04 > 0:40:07Having done up properties for years Rachel's in a good position
0:40:07 > 0:40:10to get skilled tradesmen in to lighten the load.
0:40:10 > 0:40:16I mean, I've got contacts that will do me favours and I'll do most of it myself, anyway.
0:40:16 > 0:40:20I'll do the garden myself, and all the decorating myself.
0:40:20 > 0:40:22I'll tackle the jungle myself!
0:40:22 > 0:40:27I'll do all the stripping out, redecoration and help fit the kitchen.
0:40:27 > 0:40:32I'll do all the tiling, all that sort of decor myself.
0:40:32 > 0:40:37Plumbers, electricians and carpenters will be called in to do the rest, really.
0:40:37 > 0:40:42- Do you enjoy getting hands-on? - Love it. Absolutely love it.
0:40:42 > 0:40:46Sounds a bit sick, actually, but I do love getting into a jungle like that
0:40:46 > 0:40:48and just clearing it.
0:40:48 > 0:40:53The bigger it is and the worse it is, it's great for me.
0:40:53 > 0:40:58It's just to achieve... That will be me, on my own, doing that.
0:40:58 > 0:41:02It's not the first time I've just gone in and cut all the trees down
0:41:02 > 0:41:04and then you start to find what you've got really.
0:41:04 > 0:41:08It allows you to plan a little courtyard or see what you've got.
0:41:08 > 0:41:12At the moment you can't see it, you can just see trees from the bedroom window.
0:41:12 > 0:41:14I have to climb out there at the moment.
0:41:14 > 0:41:17It will be fantastic when I get in there.
0:41:17 > 0:41:20That will be the most enjoyable bit for me.
0:41:20 > 0:41:24Then seeing the end result once we've started, really.
0:41:24 > 0:41:28The painting, the painting I love as well.
0:41:28 > 0:41:32- It's all the mundane, menial tasks, I enjoy.- That's perfect, if you do.
0:41:32 > 0:41:35Essentially what started out as a hobby,
0:41:35 > 0:41:37sounds like it's still enjoyable for you.
0:41:37 > 0:41:43It is, yeah. I put the radio on and just paint away and I'm quite happy.
0:41:43 > 0:41:48Then you see your end result, the paint goes on the walls, the colours and that type of thing.
0:41:48 > 0:41:50- Great, congratulations.- Thank you.
0:41:50 > 0:41:54- Good luck with it. We look forward to seeing how you get on. - Thanks very much.
0:41:56 > 0:41:59There aren't many people who think the bigger the project the better
0:41:59 > 0:42:03but Rachel clearly can't wait to get her hands dirty
0:42:03 > 0:42:06and get stuck into sorting things out.
0:42:06 > 0:42:11I am concerned that she'll overspend on moving that bathroom.
0:42:11 > 0:42:14Find out how it all goes later in the show.
0:42:16 > 0:42:24Finding good tradesmen is often the key to getting properties done up to a good standard and on time.
0:42:24 > 0:42:28Sometimes people do try to do it themselves to maximise profit.
0:42:28 > 0:42:33Are today's buyers getting stuck in, or just stuck? Let's find out.
0:42:39 > 0:42:42Back to Stratford in East London
0:42:42 > 0:42:47where full-time property developer Dilawar bought this former hostel for 506,000.
0:42:47 > 0:42:52Along with his trusty builder Amarik, the long-term goal was to convert the property into ten flats.
0:42:52 > 0:42:58However, they've had their fingers burnt in the past over getting planning permission.
0:42:58 > 0:43:02This time they had a cunning ploy.
0:43:02 > 0:43:04We don't want to make the mistake we did last time,
0:43:04 > 0:43:07waiting on planning permission while the property was empty.
0:43:07 > 0:43:12This time what we decided, we will do it up to a basic standard and
0:43:12 > 0:43:15let it out, while we're waiting for the planning permission.
0:43:15 > 0:43:20I don't know how long it will take, it might take six months, maybe a year.
0:43:20 > 0:43:24And you see next door's properties, we might do something like that.
0:43:26 > 0:43:30Nearly four months later, we're back to find out how Dilawar and Amarik got on
0:43:30 > 0:43:33with the renovation of this mammoth property.
0:43:40 > 0:43:43The front of the building has been freshened up.
0:43:43 > 0:43:47A brand-new entry phone system has been installed.
0:43:49 > 0:43:52And inside there have been some changes.
0:43:52 > 0:43:56It's still a hostel but the larger rooms have been partitioned,
0:43:56 > 0:43:59increasing the number of rooms from 12 to 16.
0:44:02 > 0:44:07Although not all the work has been completed yet, there have still been some significant additions,
0:44:07 > 0:44:10especially at the back as Amarik explains.
0:44:10 > 0:44:14It was a big office, we turned it into a communal kitchen.
0:44:14 > 0:44:20As you can see, with the six cookers and three ovens, four sinks
0:44:20 > 0:44:23and hopefully it will serve all the people who live here.
0:44:24 > 0:44:28As well as the larger better equipped communal kitchen area,
0:44:28 > 0:44:33the increase in bedrooms required more bathroom and toilet facilities on both floors.
0:44:33 > 0:44:38As extra rooms were being created, they had to be in regular consultation with the council
0:44:38 > 0:44:42to ensure the work complied with all the regulations.
0:44:42 > 0:44:46Well, we have done to the property whatever the council required.
0:44:46 > 0:44:51You know, you have to go by certain rules and regulations.
0:44:51 > 0:44:56You have to have a fire certificate, and electric and gas certificates.
0:44:56 > 0:45:01We've done that. We've put emergency lighting in as well.
0:45:01 > 0:45:06Smoke alarms... Whatever the requirement was, it is there.
0:45:12 > 0:45:16Outside the back's been completely cleared and concreted over.
0:45:16 > 0:45:20Whilst it's a shame to lose all the greenery, from a practical point of view
0:45:20 > 0:45:23it makes sense while it's still a hostel.
0:45:23 > 0:45:27So how does Dilawar feel it's all gone?
0:45:27 > 0:45:30It's like any other project.
0:45:30 > 0:45:34This one hasn't been that bad as much as we expected.
0:45:34 > 0:45:41There was a lot of interest in this property to take it on from councils, different councils.
0:45:41 > 0:45:45It was encouraging for us.
0:45:45 > 0:45:48That's why we were quite happy when we've done the job
0:45:48 > 0:45:51because we had offers already.
0:45:53 > 0:45:58As the council will be renting this back from Dilawar to use as a hostel for the homeless,
0:45:58 > 0:46:01it means he's got a guaranteed income for three years
0:46:01 > 0:46:03while he decides what to do next.
0:46:04 > 0:46:08If the council permits and they let us extend,
0:46:08 > 0:46:15you can see the property on the left and right and they are extremely large.
0:46:15 > 0:46:20If they let us do that, then we can easily make it into about ten flats.
0:46:20 > 0:46:25Overall, how much did he have to spend to get the project to this stage?
0:46:25 > 0:46:31All in all, putting everything into it, we spent about, including my legal fees,
0:46:31 > 0:46:36including what we bought it at and all the repairs,
0:46:36 > 0:46:40I think it's cost us about £600,000.
0:46:41 > 0:46:45With that spend of around 600,000, which includes
0:46:45 > 0:46:49the purchase price at auction of 506,000,
0:46:49 > 0:46:51we asked two local estate agents for their opinions
0:46:51 > 0:46:54on this East London hostel.
0:46:56 > 0:46:59I think that the accommodation is very good.
0:46:59 > 0:47:01I think that the facilities,
0:47:01 > 0:47:04including the kitchen is fantastic.
0:47:04 > 0:47:08The standard is quite good. The colour schemes are very neutral.
0:47:08 > 0:47:10Nice property.
0:47:10 > 0:47:13Dilawar has already rented the hostel out to the local council,
0:47:13 > 0:47:16but what sort of rent should he be achieving for it?
0:47:16 > 0:47:20In the property's entirety, I could rent this property out,
0:47:20 > 0:47:25potentially to a housing association, for £5,000 per calendar month.
0:47:25 > 0:47:29To rent out the property in its entirety,
0:47:29 > 0:47:35you would be looking at a rental income of £5,800 per calendar month.
0:47:35 > 0:47:39Too low. I won't say that.
0:47:39 > 0:47:41We're achieving much more than that.
0:47:42 > 0:47:47- We have achieved much more than that... 83,000.- Per year.
0:47:47 > 0:47:52That's internal repairs, plus furniture.
0:47:52 > 0:47:59So Dilawar's achieving a monthly rental income from the council of around £6,900.
0:47:59 > 0:48:03That's an astonishing yield of almost 14% on his investment.
0:48:03 > 0:48:06At that rate, I'm guessing he's no intention of selling.
0:48:06 > 0:48:09But, how much COULD it sell for?
0:48:09 > 0:48:15If I was marketing this property, I would put it on the market for £900,000.
0:48:15 > 0:48:19I could sell this property for approximately £650,000.
0:48:19 > 0:48:23That's a very wide range on the agents' valuations
0:48:23 > 0:48:28and would represent pre-tax profit of between 50 and 300,000.
0:48:28 > 0:48:32Clearly, Dilawar believes it will be towards the high end of this.
0:48:32 > 0:48:36I think it's between 950 and one million.
0:48:36 > 0:48:38We've spent about 600, anyway.
0:48:39 > 0:48:43Plus, it's a commercial building. It's not domestic.
0:48:43 > 0:48:47It should achieve that sort of figure. That's what we think.
0:48:47 > 0:48:50So, bearing in mind the high rental returns it's achieving,
0:48:50 > 0:48:55have the future plans to develop the property into flats changed?
0:48:55 > 0:48:57We're going to use it as a hostel for the time being
0:48:57 > 0:49:01and if we can't get permission, we'll try to get permission
0:49:01 > 0:49:06and rebuild it, or use that money to buy some other properties.
0:49:06 > 0:49:12Given the success of this purchase, it seems likely we'll see Dilawar soon at another auction.
0:49:12 > 0:49:16I go to every auction.
0:49:16 > 0:49:20I just like... I think I've got something wrong with me!
0:49:25 > 0:49:29Back to the Stirchley area of Birmingham where property developer Rachel
0:49:29 > 0:49:34bought this two-bedroom Victorian terrace at auction for 79,000.
0:49:34 > 0:49:37# Sweet... #
0:49:37 > 0:49:41It was a leasehold, with the council retaining the freehold and stipulating
0:49:41 > 0:49:43that it had to be developed within a year.
0:49:43 > 0:49:50Whilst the house had good, large rooms and high ceilings, it required a fair amount of modernising.
0:49:50 > 0:49:52At the back, the kitchen was very small.
0:49:52 > 0:49:58To make matters worse, it led directly onto the bathroom which made the layout far from ideal.
0:49:58 > 0:50:03However, Rachel had some ideas to change all that.
0:50:04 > 0:50:08- The bathroom at the back, we'll be moving upstairs.- You will?- Yes.
0:50:08 > 0:50:11As you walk up the stairs, you'll turn left
0:50:11 > 0:50:14and then immediately to your left there will be a door and that will be the bathroom.
0:50:14 > 0:50:17- Right.- In front of you there will be a door into the bedroom.
0:50:17 > 0:50:22With Rachel's plans in place and with a budget between 15 and 20,000,
0:50:22 > 0:50:29we returned four months later to see if her vision has come to fruition.
0:50:29 > 0:50:34# Stay there
0:50:34 > 0:50:40# Cos I'll be coming over
0:50:42 > 0:50:46# And while our blood's still young
0:50:46 > 0:50:50# It's so young it runs
0:50:50 > 0:50:52# Won't stop to surrender... #
0:50:53 > 0:50:58Well, it looks like Rachel has certainly not surrendered to this project, or that garden.
0:50:58 > 0:51:01It's been completely transformed.
0:51:01 > 0:51:06One of the windows in the kitchen extension was raised to be in line with the others
0:51:06 > 0:51:08and there's also been some roof work done.
0:51:08 > 0:51:13The garden, when we first bought it, you couldn't get out of here,
0:51:13 > 0:51:18you had to cut your way through the garden to get to a certain point.
0:51:18 > 0:51:20What we have done now, I am thoroughly overjoyed
0:51:20 > 0:51:23because I never thought I'd see the day when we got some
0:51:23 > 0:51:26nice turf down, a patio area and it's a bit of a sun trap.
0:51:26 > 0:51:30Anybody who enjoys this property will thoroughly enjoy sitting out
0:51:30 > 0:51:33here with a glass of wine, hopefully in the summer.
0:51:33 > 0:51:38What about that tiny kitchen that came complete with its own ensuite bathroom?
0:51:38 > 0:51:42# Stay there
0:51:44 > 0:51:48# Won't stop to surrender #
0:51:48 > 0:51:49Wow!
0:51:49 > 0:51:54The bathroom's been ripped out, the kitchen made bigger with a wood effect flooring,
0:51:54 > 0:51:57units and appliances. What a difference!
0:51:57 > 0:52:02There was a small kitchen here and a single door there
0:52:02 > 0:52:07and then the bath ran along here
0:52:07 > 0:52:11and there was a small WC at the end.
0:52:11 > 0:52:15I decided to gut all of that, put a new kitchen in
0:52:15 > 0:52:19and this allows for a small dining area here.
0:52:19 > 0:52:23I'm really happy with how it's turned out.
0:52:23 > 0:52:26Upstairs, both bedrooms have been gutted.
0:52:26 > 0:52:31There's fresh decor throughout with new carpets and radiators.
0:52:31 > 0:52:34The whole place has been well spruced up
0:52:34 > 0:52:38and surely Rachel must have created some space to fit the bathroom in.
0:52:38 > 0:52:43Indeed, she did. This is a far more satisfactory arrangement
0:52:43 > 0:52:47and she's done really well to adapt the upstairs layout to accommodate it.
0:52:47 > 0:52:52Moving it upstairs, it allowed me to put a larger kitchen in
0:52:52 > 0:52:56and a small dining area as well. I wouldn't have been able to do that.
0:52:56 > 0:53:02Really, upstairs has got the bathroom in the middle of the two bedrooms.
0:53:02 > 0:53:08We made the rear bedroom slightly smaller to accommodate the bathroom in the middle to serve both bedrooms.
0:53:11 > 0:53:15There has clearly been a lot of work done on this property to turn it into an ideal family house.
0:53:17 > 0:53:22Rachel's a seasoned developer but did she run into any problems during renovation?
0:53:22 > 0:53:28The most difficult job was changing the roof and making it one level
0:53:28 > 0:53:35because it was at two completely different levels. That was probably the most difficult, really.
0:53:35 > 0:53:39What about that all-important budget?
0:53:39 > 0:53:44I thought when looking at it, it would be 15,000, you know,
0:53:44 > 0:53:50possibly 20. To be honest, there were a few things that I did myself
0:53:50 > 0:53:58and roped in some people that owed me one and managed to spend £8,200.
0:53:58 > 0:54:04It's not all quite finished, so I'd say about 8,500, 600,
0:54:04 > 0:54:05which I'm quite pleased with.
0:54:07 > 0:54:10Rachel's done well to stay under budget.
0:54:10 > 0:54:15It just goes to show the benefits of having good contacts in the property development game.
0:54:15 > 0:54:20It's been announced that a new supermarket is being built close by, and such amenities on the doorstep
0:54:20 > 0:54:22are always desirable.
0:54:23 > 0:54:27So Rachel could be the cat that got the cream.
0:54:28 > 0:54:34She bought the property for 79,000, so with her refurbishment costs of around 8,500
0:54:34 > 0:54:38that's a total outlay of around 87,500.
0:54:38 > 0:54:43We invited along two local estate agents to see what they thought of the place.
0:54:48 > 0:54:52I personally think the property has worked well. Good layout.
0:54:52 > 0:54:56I like the bathroom going upstairs. We've got two reasonable bedrooms.
0:54:56 > 0:54:58The presentation's good.
0:54:58 > 0:54:59The property is leasehold.
0:54:59 > 0:55:04I think I would be a little bit worried about that on a resale.
0:55:04 > 0:55:08Assuming it's got a long lease and a nominal ground rent, it shouldn't have a major effect.
0:55:08 > 0:55:11The first impression when I walked in was nice and bright.
0:55:11 > 0:55:14Finish so far is good.
0:55:14 > 0:55:18The skirtings need finishing off and there's a few other bits that need doing.
0:55:18 > 0:55:21The second bedroom has been compromised by the bathroom
0:55:21 > 0:55:23but I do think the kitchen has made up for it.
0:55:23 > 0:55:27So it's thumbs up from them. Let's get down to the numbers.
0:55:27 > 0:55:32Remember the total spend so far has been around 87,500.
0:55:32 > 0:55:34What could it sell for?
0:55:34 > 0:55:39I would suggest this was put on the market at offers in the region of £120,000.
0:55:39 > 0:55:46I would put this house on the market at between 120 and £125,000.
0:55:46 > 0:55:50Right, OK, that's OK. We can live with that.
0:55:51 > 0:55:56That's a potential profit of between 32,500 and 37,500,
0:55:56 > 0:55:59minus the usual taxes and expenses.
0:56:00 > 0:56:02What about the rental?
0:56:02 > 0:56:09I would put this on the rental market at a price range of £575 to £600 a calendar month.
0:56:09 > 0:56:13Rental wise, per calendar month, something in the region of £575 a month.
0:56:13 > 0:56:20I have got somebody for 625 that's interested, a couple of parties.
0:56:20 > 0:56:23Hopefully, that's what I'll get.
0:56:26 > 0:56:33If Rachel was to achieve £625 a month that would represent a great return on her investment.
0:56:35 > 0:56:39So, is she satisfied with how it's all gone overall?
0:56:39 > 0:56:43It's been hard work but I'm quite pleased with the timescales
0:56:43 > 0:56:47that we've achieved it in as well, which is good.
0:56:47 > 0:56:48We've done it quite quickly.
0:56:48 > 0:56:52In four months we've really gutted the place and made it look how it looks now.
0:56:52 > 0:56:58I'm pleased we've done it and the hard work pays off.
0:57:00 > 0:57:06That's it for now, join us next time as we follow more people buying their homes under the hammer.
0:57:06 > 0:57:09- Look forward to seeing you then. - Goodbye.- Goodbye.
0:57:31 > 0:57:33Subtitles by Red Bee Media Ltd