Episode 12 Homes Under the Hammer

-Welcome to the show.

-Now home is where the heart is, so they say,

but is your heart in buying a home at auction?

Well today, we meet our buyers who put their heart and soul

into buying their home under the hammer.

Buying at auction can be the road to success,

but there can also be risks involved,

so make sure you tread carefully.

Yes, even experienced buyers can make the wrong moves,

so what got people interested at the auctions on today's show?

'This two-bed bungalow in Darlington is not as simple as it looks.'

Is this a bedroom? Is this a lounge? Well...

I don't know!

'In Kent, it may be small,

'but there's more to this odd-shaped plot of land than meets the eye.'

You get plans to build a two-bedroom house.

'And this mid-terrace in Greater Manchester might put a spring in your step.'

It's a bit more bouncy than it could be.

Perfect if you want to hold ballroom dancing competitions.

'All these properties have been sold at auction

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

That's your property, sir.

# Come, come north

# Come north with me. #

'This is Darlington in the north-east of England,

'an area so influenced by the Quaker movement in Victorian times,

'that the local football team is affectionately known as the Quakers.'

The property I'm here to see is about two miles outside Darlington.

But it is on this really busy main road,

so you've got all sorts of trucks and things thundering past,

which isn't a good start. Hopefully it's got double glazing.

But this is the property. It's a two-bedroom bungalow, had a guide price of 90,000 quid.

Let's take a look.

# Here we go, here we go... #

'The thundering trucks could be a problem with no respite, really.

'But this main road means it's very useful for commuters.

'It's also quite close to the town centre,

'with plenty of shops and facilities, schools

'and a good bus route too.'

OK, well, in through the front door and straight away,

nice somebody's stripped wallpaper off for you.

I actually quite like that because at least you can see what you're playing with.

At least they've stripped it off in here.

Bedroom there,

on the front, so you have got a bit of noise from the road there.

Another room here, bedroom, lounge? Not too sure.

Big bay window, so we like that.

Bathroom and loo, a bit small and definitely needs updating.

And this is, I guess, the central part of the bungalow.

Well, that's interesting.

I can't get up there, but it looks like that has been converted

to be some kind of usable space. There's a roof light in there.

I don't know if it meets building regulations. That needs a bit more investigation.

But then through here,

it, er...

..right. Is this a bedroom? Is this a lounge? Well...

I don't know! I say that, because it's got a wardrobe there,

so that equals, um, bedroom.

But it's got this kind of strange bit out here,

which has got this, sort of, nice bit of flat roofy, plasticky stuff over it.

So this is naturally a day room, going out into the garden,

but you wouldn't have a day room off a bedroom,

but that makes that the other bedroom. Well, you know, I'm...

a tad confused with this one.

# Well, I get confused I guess you would be

# So, so am I... #

'Sometimes layouts leave you just a little flummoxed.

'But get your imagination going and you could make some major changes for the better.

'Convert the attic space properly

'and, immediately, you've opened up the options downstairs too.'

It really is surprisingly spacious, this property.

But I still can't figure out quite what all the different rooms are.

For instance, this one here links that bedroomy, loungey bit with the kitchen area.

I guess it could be a dining room. It's not quite big enough because you can't get a table in there.

A room that doesn't disappoint is the kitchen itself.

It's obviously had a bit of money spent on - Oh, hello! -

a bit of money spent on it at some stage.

The units would benefit from being replaced.

But if you're renting it out, put a new cooker here, clean it up a bit

and I think it would be perfectly serviceable.

Lots of light coming in here, so this room at least,

I know exactly what it is.

Thank goodness for that.

# What a, what a, what a what a, what a, what a what a relief... #

'Perhaps that little area could become part of the kitchen

'to make the space bigger as a dining kitchen,

'or maybe that conservatory could be the dining room.

'It's just like one big jigsaw puzzle.

'But perhaps we'll get a clearer view on how to put it together from the outside.'

Well, step out to the rear of the property

and you have got a nice large area.

But out here, you can really see the hotch-potch that's been going on.

The kitchen's built into an extension there,

so that explains why you've got a lower roof

and you've got this little conservatory bit,

which is a different height. Hmm. Whatever.

Reasonable space at the back here, which we like,

and then, looks like there's some kind of large garage...

Wow! A very large garage. A double garage in fact. Almost a triple garage.

So lots of space there too. So...

for what seems on the outside not a massive property,

you at least have got loads and loads of room, which is good news.

# Good news... #

'All things considered, then, a good-sized bungalow,

'with enough space to re-work the quirks of the current layout.

'Time to find out what a local estate agent makes of this property,

'guided at £90,000.'

It needs a bit of work doing to it. It's a little bit dated.

It needs a little bit of improvement.

The kitchen needs attention, general decor needs attention,

but all in all, it's a reasonable property.

'I agree and, once renovated, I think it could be a great retirement or family home.

'But what can it make on the resale market?'

Once renovated to a decent standard, I would say that

the property's going to be somewhere between £115,000 and £120,000.

'How does that translate into rental terms?'

In the current market, once renovated,

I would suggest that the rental value for this property

would be somewhere round about £550 per calendar month.

Well, despite the slightly quirky layout, I do like this property

and not too much work required to get it sorted out.

And it does of course have the benefit of that fantastic garage at the back,

which you could potentially rent out for a bit of extra cash.

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

We've got this with a price guide

of 90,000 plus. Can I have a bid at 90,000?

85,000.

Gentleman standing, nodding at 85,000.

I've got the one bid at £85,000. Gentleman in the sweater at 85,000.

87 anywhere else?

87, gentleman seated. 87.

89? It's against you, it's the gentleman sitting.

89 bid. 91.

90? 90 bid.

91. You're shaking your head now. Are you sure?

I'm going to sell it, last chance, to the gentleman in the white shirt.

I'm going to sell at 90,000. I'm selling once at 90,

for the second time at £90,000,

sold to the gentleman seated in the white shirt at £90,000.

'That successful bidder was Chris,

'who got it for bang on the guide price of £90,000.

'He's a kitchen renovator and property developer.

'He'll do the work with the help of his son, Sam.

'I met up with the duo to see how they plan to make the most of this two-bedroom bungalow.'

# Small things, mama Big things one day come... #

-Chris and Sam, lovely to meet you.

-Hi.

-Congratulations. Tell me why you wanted to buy the bungalow.

It's in a really good area.

I think it's a really solid, well-maintained house.

I think bungalows are pretty good for resale and for renting as well.

In addition to that, I've got the opportunity to steal a garage,

which will help me with my business.

Great. What do you mean steal the garage?

I think I can split the garage, keep the smaller garage

and leave a decent-sized garage for the house.

I'm going to reconfigure it out there

so there's no impact from my garage on the property that remains.

Oh, right. And then, you'll use it for storing what?

-It's a lock-up for my kitchen business which I have.

-Oh, OK.

I currently rent a lock-up, which costs me around £600 a year.

So I'm thinking, if I can save that,

steal the garage and have an added capital benefit as well.

Sam, what's your involvement in all this?

Well, we're a father-son duo, basically.

I graduated from university in June

and I've just come home and I'm earning my keep

and doing bits and pieces. Nothing too technical,

but stripping walls and ripping up carpets and that sort of thing.

-Right.

-Just general dogsbody work, to be honest.

-What did you do at university?

-I did a finance degree.

A finance degree? OK, so are you handling the purse strings?

-Er, no.

-No.

THEY LAUGH

-Do you enjoy the practical side of all this, compared to university?

-I do, to be honest with you.

I got a bit fed up with uni by the end.

I've got a job lined up down in London, an accountancy job,

but I'm enjoying just sort of working.

-It's nice having your dad as your boss as well.

-Good.

-You get time off to play golf...

-You get to play golf?

Bits and pieces.

'I have a sneaky suspicion there's going to be so much work to do here

'that he'll be very lucky to fit in any golf practice at all.'

# Bye-bye, birdie... #

So what was it about this house you particularly like?

It's the position.

Harrogate Hill is a good area.

Bungalows are very popular.

Easier to sell, easier to rent,

um, and it's a good, solid house.

There's some upgrading to do but there's nothing major,

there's no horrible major works to do.

The roof's reasonably sound, the windows have been done.

So it's a lot of cosmetic changes. New kitchen.

New bathroom, we'll do the carpets, decor, the usual stuff,

-knock through to the kitchen.

-Right, get rid of that...?

Yes, the funny little "no room" which doesn't really do anything.

-And that will form part of the kitchen?

-Yes, a kitchen diner.

Now can you tell me which room is which,

because I got very confused when I saw the house?

You've absolutely hit the nail on the head, it's a good question, that.

If you look along here, and I've done my homework, I've wandered along,

there's quite a few houses have this room as a bedroom.

But an awful lot have it as the living room.

So I'm going to try and do it in such a way that people can choose.

So I've got a fireplace lined up

and I'll put in a gas supply for a fire to either there or in the other room

so I'm going to leave it open for people to choose.

'The idea of leaving the rooms on the ground floor as versatile spaces

'greatly increases the appeal of this property and is a good one.

'Now, about the loft room, what's the plan for that?'

We'll put a loft ladder in there, proper loft ladder, decorate it, re-carpet it,

again, put heating up there, make good the wall at the end

and possibly take the chimney breast out

for proper space. It can't be defined as

a proper bedroom, but at least it's a useful hobby room or occasional room.

-And it's got the roof light up there as well, hasn't it?

-Yes, it's a good space.

'So what about the budget?

'What does Chris expect all this is going to cost them?'

I'm looking at about £15,000 all in with legals

and possible re-sale costs as well.

-Right.

-There or thereabouts.

-OK.

-Does that sound OK from a planner's point of view?

-Sounds about fine.

I'll do the calculations later.

Brilliant and what about timescale?

I would hope that we'll get it done in about six to eight weeks.

-Right, does that sound feasible?

-I think so.

-I don't think there's too much work to do.

-I'll remind you of that.

THEY LAUGH

'Six to eight weeks is a relatively quick turnaround,

'but Sam seems undaunted,

'although his words may come back to haunt him

'if his dad has anything to do with it.

'So, when the work is finished, what are the plans for this place?'

I think it's to sell, is the ideal, the ideal option.

But we've got the fall-back of renting it if we need to,

cos it's in a good area and the bungalows rent well,

so if we don't get what we want, we'll rent it.

Great. Well, we look forward to seeing how you get on.

Congratulations.

-Thank you.

-Good luck to you both and we'll be back in a few months.

-Fantastic.

-Thank you.

Well, I think Chris has done well with this bungalow

and, with the help of son Sam,

they should be able to get it restored and rejuvenated within that budget.

You can find out how they got on transforming this place later in the show.

'For the next lot that went under the hammer,

'I journey to Kent to a town called Gillingham.

'It's a popular area with great transport connections

'and affordable property.'

Today, I'm here to see a triangular site with a single lock-up garage,

all for the guide price of £25-£30,000.

Now, it gets quite exciting,

because you get much, much more than just this piece of grass here.

You get plans to build a two-bedroom house.

# Tra-la-la-la-la-la-la Triangle

# Tra-la-la-la-la-la-la Triangle... #

'The surrounding area is largely residential, so it seems odd that

'this triangular bit of land hasn't been utilised before.

'Well, it's because this used to be the garden

'of the next-door property.

'Once this garage has been demolished,

'there will be quite a sizeable plot.'

I've got the plans here. It's all quite exciting stuff.

I've got to say, it does really look nice. You can imagine what it will look like from the roadside.

It's funny, because the house that was once end-of-terrace will now become a terraced property.

We've got the floor space inside

and it's actually just as I would like it,

really does have a good flow to it.

You've got the kitchen, the dining area and the living room.

There's a downstairs loo and, currently, there's a little shower room there,

which does offer something else to a buyer.

Bit of a downside for me,

it doesn't really have a garden, just sort of...

a little back yard area and a bit of lawn to the side of the property.

So, for me, that's a bit of a negative.

'It's great to think that this plot of land that went to auction,

'guided at 25-30,000,

'will soon be made use of and a new property built here.'

# The sky is the limit now... #

'The lack of a garden here,

'because this used to be the garden, isn't ideal.

'But any developer thinking about resubmitting plans

'for possibly two flats

'needs to be aware that a former planning application for flats was rejected.

'So, I think you're best to stick with the accepted plans for a house.'

This is an incredible investment opportunity

because this building plot is in a really strong rental area.

So, once you've built your house, who's your target market?

Students. You're 10 minutes away from the University.

Doctors and nurses. There's a hospital just around the corner.

And commuters. Gillingham train station is just a short walk away.

'And if you need access to London for meetings or social events,

'you can be there in under 50 minutes.

'To find out a bit more about the options here,

'we invited a local estate agent to take a look around.'

# Tra-la-la-la-la-la-la Triangle... #

'So what does he think of this triangular piece of land

'that was guided at 25-30,000?'

It's a very small plot.

The planning permission I've seen is for a small two-bedroom house.

The only problem with that is it doesn't seem to have a particularly large garden.

I don't think it would necessarily put people off,

but it would just restrict the size of the market that it'll appeal to.

'Remembering that guide price of 25-30,000,

'and added build costs of around 50 grand,

'is it a good investment for the resale market?'

I'd put this property on the market for £110-£115,000.

'What income could a two-bedroom house generate?'

# The sky is the limit... #

Two-bedroom house in this area would rent for approximately

£575-£600 per calendar month.

OK, so the only negative for me is the small garden.

The plans that come with the lot are fantastic.

You're in close proximity to the train station,

you're near a university, so you're almost guaranteed tenants.

Let's see who is interested in this lot when we go to auction.

Lot 57 is the land at Gillingham. Start me where you will.

Start me at 20 if you like.

At 20,000 for a plot.

20,000. 20,000.

I'm on the way at 20. It's with you at £20,000.

£22,000 if you like.

22 sitting down in a fresh place.

And four.

24. 24. And six.

26.

And eight. 28. 28.

I'll take seven if it helps you. Seven in a fresh place.

28 is against you.

29 if you like. At 29.

29. And 30. At 30. At 30.

And one.

31 I've got. And two now. Two now if you like. 32.

And three.

At £32,000 to the gentleman sitting down. 33. It's back with you.

And four. Nearly.

34. 34. And five.

Still worth it. 35,000.

And six. 36.

36. At 36.

And seven. 37.

At £36,000 I've got then for the first time.

At £36,000 for the second.

Third and final time.

BANGS HAMMER

Sold for £36,000.

'That final winning bid of 36,000

'was made by husband and wife Mark and Shirley.

'I met them, along with their daughter, Isabelle,

'back at the plot of land.

'Mark used to work as a graphic designer...

'..but 7½ years ago left his job in the printing industry

'to start his own building company.

'Shirley's involved with the administrative side of the business as well.

'Although they built their own house,

'this will be their first investment property.

'I wanted to hear how they felt about taking this project on.'

-Guys, congratulations. It's great to meet you today.

-Thank you.

£36,000 you paid at auction.

-Yup.

-That's right.

-Were you happy with that price?

It was the top end of where we wanted to go.

-We wouldn't have gone any higher than that.

-No.

We wanted 35 and we just thought we had one more chance,

see what happens when we were there.

So, guys, how did you stumble across this little triangle?

Tell me the story.

Well, we get the auction catalogue, saw it before it had planning permission,

thought about it, decided not to go for it.

Two months later, it came up again WITH planning permission,

so we thought we'd go for it this time.

We went to the auction and we were successful.

Initially, we wanted just something that we can get cracking on

straight away and get built and then release our capital back to us.

# Tra-la-la-la-la-la-la Triangle... #

'The fact that this auction lot came WITH planning permission

'was a HUGE bonus for the couple.

'It was a prime reason for purchasing the land

'and they're well equipped to take on this build.'

Yeah, we run our own property maintenance business,

which we started seven years ago.

About 18 months, 2 years ago,

we took the decision to buy a plot of land for ourselves

and built our own environmentally-friendly house.

Following that, business has been good to us,

and it's given us more experience.

Building the house has given us the experience.

And we decided that we can do this sort of project

alongside running the business.

So, Mark, what did you do before building?

I ran a printer's in Croydon.

Having left college, I became a graphic designer,

saw how the industry was changing,

got into the management side of the print,

still using my background, and then got quite disillusioned with it

and completely jumped ship.

Went from a very good salary to having no job at all.

Remortgaged my house and started my own company

where we just were basically going round,

doing little jobs for people, maybe an hour or two.

And now we're regularly doing projects,

£100,000 size, without any trouble.

Wait a minute! Now, Shirley, tell me about the day he came home and said,

"Right, that's it.

"I'm not interested any more in graphic design.

-"I'm going to jump ship."

-Well, it had gone...

Obviously, it had gone downhill quite a lot.

I could see his attitude towards it was changing.

And then we he come home with this idea...

But, you know, I just have faith in him from that point of view.

And if he wants to do it, there's not a lot I can say about it, really.

It's just something he needs to do, so... That's fine.

I mean, he's... You know, you worked your way up from doing

just the odd jobs to building extensions,

so just let him get on with it, really, Lucy, to be perfectly honest!

-THEY LAUGH

-You're a great wife!

'This project seems tailor-made for these two.

'They've given themselves a budget of 50,000,

'and Mark's confident he can get it built in just nine months.'

Shirley, are you a bit worried about that?

No, not really. He just does it anyway. It's just him.

So, it doesn't really concern me at all.

Having built the other house,

every weekend he was down doing the house,

so it's just part of what he does, really.

There's no point trying to stop him because it won't make any difference!

# Busy man... #

'There's another lady in his life

'who would rather he slowed down and took it a tad easier,

'their 11-year-old daughter, Isabelle.'

So, Isabelle, what do you make of all this?

Your dad is building ANOTHER house!

Well, it's OK, but I don't really want him to work on weekends again

cos last time, he was working on weekends for mainly the whole year.

So, what do you think this house is going to look like when it's up and when it's finished?

-D'you think your dad's going to do a good job?

-Yeah.

-He did on the other house.

-So, thumbs up for daddy?

-Yeah.

And how do you help your dad out?

Well, last time, I clipped the underfloor heating down.

But it didn't exactly work, cos I couldn't push it down hard enough.

'Well, for Isabelle's sake,

'let's hope she's not roped in to such tricky tasks here.

'But bearing in mind the timescale,

'well, Mark may need all the help he can get

'because he's going to be pretty pushed.'

# Busy man... #

'Do they want to change the existing plans?'

Essentially, the drawings will stay almost identical.

We're going to take out the shower that they've put in,

in the cloakroom downstairs, cos it's an unnecessary expense.

Other than that, we're just going to bring one of the walls in off of the boundary.

So, how are you going to find the time

to build a house on this plot here?

-In between your other jobs that you're doing.

-Yeah.

Obviously, he won't be here all the time.

He'll have contractors here, doing things for him.

So, in between doing the other things,

he'll just fill it in, you know, over the next year.

Well, it's been brilliant meeting you today.

I can't wait to hear all about it.

Good luck with this project,

and I want to see a house up here SOON!

-Shirley, lovely to meet you.

-Thank you.

-Mark, thank you.

-Thanks very much.

-Thank you.

-Thanks.

Mark and Shirley have made a savvy purchase here

with their first investment.

Now, my only worry is is that they want to alter the plans,

and sometimes, that CAN throw up a few issues.

Join me later on in the programme,

and you can find out how their first investment purchase goes.

'Coming up, in Greater Manchester,

'will this two-bed mid-terraced house hold any great surprises?'

An exciting cupboard?

No.

'In Gillingham, Kent, the size of this plot may have been tiny,

'but did it give Mark big problems?'

This site became very, very crowded because it was so small.

'But first, in Darlington,

'did father and son, Chris and Sam, see eye-to-eye on their renovation?'

Well, we've had our moments, but yes, we got on really well.

'We're returning to the North East,

'where Chris had purchased this rather puzzling bungalow in Darlington for 90,000.

'He planned to lick the layout into shape with the help of his son, Sam,

'who was approaching the project with a relaxed attitude.'

-I don't think there's too much work to do.

-I'll remind you of that!

THEY LAUGH

'So, was it a case of famous last words for Sam?

'The plan was to restore and renovate the bungalow in 6-8 weeks.

'We returned five weeks after we first met Chris and Sam

'to see how they'd got on.

'Looking good! The house has been overhauled with new decor, carpet,

'electrics and central heating.

'And what Chris referred to as a "funny little no room",

'it's now been knocked through to make a bigger, better and brighter kitchen.'

As you can see, we've done quite a lot of work in the kitchen.

Previously, we had a small dining room here

with a big boiler cupboard which was really a waste of space.

So, we've tried to create a nice large living area,

a dining kitchen, really. We've taken the wall out,

fitted a completely new kitchen with integrated appliances,

levelled the floor, the whole lot.

And we feel it's a lot better area than it was previously.

'And whilst he may have integrated these two rooms together,

'elsewhere, it was more about separation.'

In order to create some storage space for the other kitchen refacing business that we run,

we've taken one of the double garages and kept it for ourselves.

We've blocked up the window and moved the door across

and blocked up inside, and also shifted the electrics across,

so it's a completely separate entity from the house.

We've also landscaped the garden a bit

and made it easily manageable

and a blank canvas for whoever wants to buy the property.

'So, they've turned the bungalow around, inside and out,

'and in just five weeks.

'And what about that room that made me wonder

'whether it was a living room or a bedroom?'

What we've done is we've put the fireplace in in this front room,

but it's not fixed in place, so it could be moved into the other room.

There's an electric spur in this room for an electric fireplace in the same...

in EXACTLY the same spot in the other room.

And equally, under the floorboards,

there's a gas supply if people prefer the gas fire in both rooms.

So, it's completely flexible for somebody to choose where they want to be, really.

'Making the property as flexible as possible

'is a great way to raise its appeal to whoever's going to move in.

'So, it wasn't just down here that Chris and Sam had that in mind.

'They've also tidied the loft.

I think, really, we've created a room that people can use

for a variety of options,

possibly as a study, a hobby room,

maybe an occasional guest room sort of thing.

It isn't technically a bedroom

because we've just really tidied up what was already there.

But it's got loads of scope.

'Sam is about to head off on his travels,

'but hopefully not because working with Dad caused any friction.'

Well, we've had our moments, but yes, we got on really well.

He's been a good help for me,

but he's not going to be much help in South America, is he?

HE LAUGHS

I'll be back for a few months between, sort of, moving down to London.

So I think, hopefully, ideally,

he'll have another property on the go then

that I can get into and do a similar sort of job.

'So, father-son relationship still intact.

'What else helped make this project go SO smoothly?

I think it really helped, having good trades people around you, to be honest.

We use the same group of fellas to come in on most of our properties that we do,

and you build up a rapport with them and it sort of...

It helps. It means you're not changing over people all the time,

and you can guarantee a good finish on the house out of them.

Yup. That's very true.

'Chris had set a budget of £15,000.

'Did he manage to keep to THAT?'

I think we're pretty much there, to be quite honest.

I'm still waiting on some final bills,

but I think we're looking at a spend of about £14,000,

which is really more or less where we said we were going to be.

So, we've won some, we've lost some.

We've made some savings, but spent some more.

So, yeah. We're about on budget.

'So, has keeping within budget and all their hard work paid off?

'We invited two local estate agents to the property

'to cast their eyes over its new look.'

I think there's a great improvement in the property since I saw it last.

There's been a grand refurbishment done.

The kitchen-breakfast room is particularly appealing.

So, all in all, I think it's a very good job.

I think it's absolutely fantastic. Good standard that he's done it too.

High quality. Obviously, nice internally. Good presentation.

'So, first impressions are impressive.

'But let's talk money.

'Chris paid £90,000 at the auction for the bungalow,

'and, with £14,000 spent here,

'his total outlay is 104,000. If he WAS to rent it out,

'what could he charge per calendar month?'

In the current rental market,

I would anticipate an income of around about

£550 per calendar month.

I would place this on the market at £550 per calendar month.

I think that sounds about right. That's what I would have expected.

I've got other properties of a similar nature around the area

and that's the sort of mark that we're at.

So, yeah, yeah. That's good. That's where I thought it would be.

'At that price, the rental yield here

'would be healthy at just over 6%.

'But the plan for this property is to sell.

'What would these estate agents put it on the resale market for,

'bearing in mind the total spend here of 104,000?'

If the property was placed on the open market for sale,

I would suggest an asking price of somewhere around £130,000.

I'd place on the market at £130,000.

I think that's good. That's great. It's slightly more than I expected,

to be honest, so I'll be very pleased with that.

'A £130,000 sale price would give Chris a £26,000 profit

'on his £104,000 outlay

'minus tax and selling expenses.

'This project HAS been a real success story.

'So, we can't leave without asking if they've any tips

'for anyone heading to the auctions.'

Go in with your eyes open.

Make sure you do your homework.

Certainly, check out the property as much as you can in advance of buying it

because then there's no nasty shocks.

'And Sam?'

Not particularly. I think he's the man in the know, so we'll let him give the advice.

That's a first! THEY LAUGH

'I'm in Ashton-under-Lyne in Tameside, Greater Manchester.

'This town has held markets for over 700 years,

'and there are still over 150 outside stalls open seven days a week.'

# The market's free... #

'Being only six miles east of Manchester city centre,

'and with good transport links,

'this is a busy old town with a bright future.

'I've come just over a mile out of Ashton town centre

'to a largely residential area to see this solid-looking property

'on a pleasant, quiet, if somewhat rainy today, road.'

Well, it's pretty lousy weather, so I'll keep this brief.

I'm here to see a mid-terraced property with a guide price of 42,000 quid.

So, what have we got?

Well, first things first, I like the fact it's got a porch.

Really great way to keep the noise and the cold from outside out of the lounge

because this is a fairly classic configuration,

straight through the door into your living room area, basically.

I could do something with that.

At the moment, bit of an old, tired fireplace and that gas fire,

but make something there, so the moment you walk through the door,

you think, "Oh, this place is a bit different." But while I'm here,

when you do walk through the door, the floor...

What's going on there?

I'm a bit concerned, because it's a bit more bouncy than it could be.

Perfect if you want to hold some ballroom dancing competition,

but other than that, not brilliant.

Yes, maybe the joists need to be checked out.

Some damp, perhaps, causing a problem there.

But through there, into the kitchen. An exciting cupboard?

No. Just a cupboard you can put things in.

But through to the kitchen, as I said, and a good-sized space.

Nice high ceilings. VERY old units. This all needs to be replaced.

But what a difference a bit of thought,

imagination, and oh yes, a bit of money,

could make to this property straight away.

'On closer inspection of the living room,

'it may be that the bounce is caused by some badly laid wooden flooring.

'If that's the case, this problem could have a simple solution.

'Upstairs, there's a good-sized double bedroom

'at the front of the house. But it comes with some mould on the wall,

'which is a sign of damp, of course.

'At the back of the house, there's another double bedroom

'with a similar problem.'

Well, there's damp in there as well.

It's significant that both bits of damp are below the windows there.

So, it could be frames, rot and water,

pounding down the window and in through the frames,

or the windowsill cracked.

Definitely needs to be checked out.

And if those are windows replaced,

you may well cure the problem at the same time.

While I am up here, though, good news.

A decent-sized bathroom.

The bathroom suite, I think, could definitely do with replacing.

It would freshen that up in there, make it look a bit more modern.

But it's where it should be - upstairs. It's a good size.

So that's good. And it hasn't taken away from the size of the bedroom.

So, this is really good news.

'This house has great potential

'and most of the work that needs doing is just cosmetic.

'There's something that needs to be done in every room,

'but not a mountain to climb in terms of a renovation project.

'With its guide price of £42,000, was it an attractive auction lot?

'We asked a local estate agent for his thoughts on it.'

First impressions are it doesn't need a huge amount doing to it.

Obviously, nothing that short of £10,000 wouldn't put right.

'How would that £10,000 budget be best spent?'

I think really, it's obviously going to have to be repainted,

the wiring will need to be looked at,

I would definitely put a new kitchen in it and a new bathroom.

'I would be sure to add new windows to that list.

'But once the work's complete, how much could this place be worth?

I think you would put the property on the market

for round about £70,000.

You would probably get offers in round about £65,000.

'What about renting it out?'

The rental, per calendar month on this property,

I think you would easily achieve £450 per calendar month.

Well, if you were starting out

in the world of property developing and renovation,

I think this would be the perfect property to cut your teeth on.

There's stuff that needs to be done, but nothing too daunting.

And I think you could learn a lot as you progress through the damp,

the kitchen, the bathroom, the dodgy floor, blah, blah.

No, seriously, it'll be one to go for. Let's see who agreed when it went under the hammer.

Right, lot 19. We've got a guide on this for 42.

I've got a bid at £42,000 already. At 42,000 I have, do I see 43 now?

42 I have, 43 I'll take. At 43 I have now, at 43,000, do I see 44?

At 44, do I have now? At 43½ if it helps.

At 43½, then. At 43½, do I see 44?

At 44,000, your bid at £44,000. 44½. 45, then, at £45,000.

45½. 46, may I say?

At 46, 46½, 46½, 47? No.

At 46,500, then, seated, for the first time.

At 46,500 for the second time.

We all done at £46,500? That's yours,

your paddle is 157.

That final £46,500 bid was made by local businessman, Mohammed.

He met me back at the house with his full-time employee, Zafir.

I was keen to find out what their plans were for this pleasant pad.

-Mohammed, Zafir, lovely to meet you both.

-Hi.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

I went to the auction to buy another property which

I was interested in, and I was a little bit late to get that property.

No! What do you mean, late?

The property was, like, lot number one or two, I think it was.

By the time I got to the auction, the property was already sold.

-You missed it?

-Yes.

-That's the thing with auctions, you see!

Then I was also looking at this one as well and it was

going for a good price, reasonable price, for a two-bedroom property.

At the moment, the market price is about 60,000 average

in this area for two bedrooms.

So, I kept about £10,000 margin to find the money to do up the property.

And I've had no chance to look around this property,

I just bought it out of the blue.

-So, you hadn't seen it?

-No.

-Inside or outside.

-No, nothing at all.

-Had you read the legal pack?

-Yes.

-What, on the day?

-On the day.

On the day.

'Being late for the auction wasn't an ideal start for the project,

'but I think Mohammed has been quite lucky with this purchase.

'He buys a few properties like this a year, does them up

'and sells them on, making around £5,000-£7,000 profit each time.

'But Mohammed is a busy man,

'and that's where employing Zafir comes in.'

So, Zafir, what's your role in all of this?

I'm the project manager for this house,

specially for looking after this one.

We are going to skim all this property

and put in some new doors and windows and everything.

-I'm looking after the project.

-Right, so you're going to be physically doing the work as well?

-No, I'm not!

-So, you've worked together before?

Yes, he's working for me as a store manager on my other business,

which is my main business.

-Which is what?

-Petrol retail.

-OK. So you've got a petrol station.

-Yes.

-Or two. Around here?

-Just round the corner. Further down the road.

Property and petrol, you've picked some tough industries!

Yeah, obviously, it's a good time to get in as well, you see.

And it will give you good returns.

'So Mohammed isn't scared off by a challenge.

'Between managing his petrol stations and this project,

'it sounds like Zafir is following suit.

'It's just as well, because this property does come with a problem or two.'

Now, a couple of things I did notice upstairs.

Both the windows, front and back, lots of damp.

Any ideas how you're going to sort that out?

The damp's coming in because the window shrouds are broken

and the rainwater is coming in.

So, once they replace the window for UPVC,

so it will be stopped.

Then the builder is going to re-skim that area. The whole room.

So, that will get that sorted. Good.

And what about the kitchen and bathroom?

The kitchen is in good shape, you know,

but he is going to clean it, give a good wipe and do a gloss paint on it,

to make sure it looks nice and new.

OK. What about the bathroom?

The bathroom, he's going to redo it and also,

the wall is going to be re-skimmed and the ceiling will be re-skimmed.

And what about the sanitary ware?

I think the toilet will be changed, but the bath will stay.

Is that because it will save a bit of money?

Just to save a bit of money, obviously.

So, I'm trying to stay within my budget as well.

-What's the budget for the work?

-We are aiming for £5,000-£6,000.

-£5,000-£6,000?

-Yes.

-Including new windows?

-Yes.

-And central heating?

-Yes.

-Skimming throughout.

-Yes.

-And repainting.

-Yes.

And redoing the bathroom

and sorting out the kitchen in a very time-consuming manner!

-Right, OK!

-We'll try!

-We'll try.

That's our target, when we start the work, this is an old property,

it is possible there's something else needs doing,

when you start digging up the walls or the ceiling

or something like that, but this is our budget, we will see how it goes.

So, you've been given an impossibly low budget for your first project to manage!

Make sure you don't take the rap if it goes over budget, won't you?

No, it will be all right, I believe.

Because I have contacted the builders and everything,

-and I think I can manage.

-Wow!

'I really did think the house would benefit from a new kitchen

'and bathroom, but Mohammed is determined to turn it round

'in just two to three weeks within that tight £5,000-£6,000 budget.

'And despite a potentially good rental yield for this area,

'he plans to sell it on.'

It's a good return on your investment, isn't it?

Are you not tempted to keep it and rent it out?

Don't like people, you know, ringing up, toilets not working or something.

You're sitting in your home,

you get a phone call from your tenant, that's a bit hard to do that.

Listen, congratulations and good luck,

we'll come back in a few weeks' time and see how you got on.

-Thank you very much.

-Thank you very much.

Well, I do think that Mohammed is giving Zafir an almost

impossible task to bring this place into a state of loveliness

on a budget of just £5,000-£6,000 and in just two to three weeks.

Still, you never know!

You can find out how they get on later in the show.

Getting your property for the right price is the first step to success.

But the next stage is just as important.

Sticking to timescales and budgets is the only way to maximise profit.

Let's see how our buyers are progressing.

'Earlier in the programme, we were in Gillingham in Kent,

'where Mark and his wife Shirley had bought

'this tiny, triangular plot of land for £36,000.

'It had planning permission to build a two-bedroom house.

'Mark had set up his own building company 7½ years ago

'and Shirley helps out doing the paperwork for the business.

'The couple had built their own house in the past.'

About 18 months, two years ago, we took the decision to buy a plot

of land for ourselves and built our own environmentally-friendly house.

Following that, the experience of building the house has given us

the experience and we have decided that we can do this

sort of project alongside running the business.

Well, one year later, we've come back to Gillingham.

And the three-sided plot of land now has a house on it.

It continues the line of buildings on the road

and fits in incredibly well.

There's no off-street parking,

so it's a case of first-come, first-served on the road.

Inside, the property is surprisingly spacious.

The large living room runs the length of the house

and opens out onto the main outside space.

Whilst the fabulous new kitchen opens out onto a smaller,

separate paved area at the back.

-So, how did Mark decide on the design?

-The kitchen, I just

wanted to keep it nice and simple and clean lined,

room for a dining table over by the window.

I just wanted to keep an open plan feel to it and keep it nice and airy.

Mark retained the plans that had been

approved for the two-bedroom house.

The only change he made was to remove a shower

from the downstairs cloakroom, something he felt was unnecessary.

Upstairs, there are two bedrooms.

The rear bedroom has one window, but the one nearest

the front is dual aspect and lets in a lot of light.

The bathroom has a modern white suite and a shower over the bath.

The house has utilised the plot very well.

Outside, the two wedge-shaped pieces of the plot that remain

have been put to good use.

The garden has come out a lot better than I had anticipated.

I've paved both of them from a maintenance issue.

For the size of plot that it was, I'm very pleased with it.

'Were there any issues with building

'on such a limited construction site?'

When we were digging out and having bricks and things delivered,

the site became very, very crowded, because it was so small.

But we did just about manage to stay within our boundary,

although it was very close to the edge.

'Every centimetre of the plot has been used here.'

The one thing that came as a little bit of a surprise and an expense

I wasn't expecting, was that I had to put on photovoltaic panels,

which generate their own electricity, all as part of the new building regs,

which was an additional cost that I hadn't budgeted for.

That cost me an additional £2,500 and we were able

to install them ourselves and then get them commissioned.

'What effect did that have on the construction costs?

'Did he manage to keep to his initial budget of 50,000?'

I've ended up spending 58,000, which is more realistic.

'Mark's building business has been very busy on other projects,

'but whenever there's been some slack time,

'he's sent his team of builders here to continue building this house.

'So, what about Mark himself? Has he been on site much?'

I haven't spent very much time on the project myself at all.

Probably only 15, 18 days.

'What's the plan for the house now it's finished?'

I'm intending to, hopefully, if the rental values are right,

to get a buy-to-let mortgage on it, rent it out,

and keep it for our long-term future.

Mark paid £36,000 for the plot of land with planning permission

and spent £58,000 building the house.

He reckons his total for the land and build costs comes in at 95,000.

But how much will it be worth now?

Time to get some local advice from two estate agents.

First of all, I'm just amazed at the building

that's been put up here. It's truly amazing.

I couldn't have imagined something like this going on.

I think the property's very nice and it's been done

to a very good standard and, um, should sell

-or rent very easily.

-I expected to see

a fairly ordinary two-bedroom house with really not a lot of flair.

And really, the owners have created the exact opposite.

I like the fact that he's kept two good-sized bedrooms

rather than try to compromise with the space and get three bedrooms,

one of which could be a box room.

'So is the house worth more than the 95,000 that Mark's invested here?'

I would look to market this property for £125,000.

I'd expect to sell this house for approximately £130,000.

'Well, those valuations would generate Mark a gross profit

'of between 30 and 35,000, before the usual selling expenses.'

Better than I had thought, to be honest. Yeah, I'm pleased with that.

'So, is Mark now tempted to sell?'

No, I think rental is probably the right choice.

'Right, let's check out the income potential here.'

I would expect to rent this property for 650 to £675 per calendar month.

The rent per calendar month would be in the region of £700.

700 is certainly a lot more than I thought it would be worth.

I'm pleased with both those figures, but probably will rent out at somewhere between the two.

'So, with a potential yield of between 8%-9% on the horizon,

'how does Mark feel about his new house on the block?'

It's been good. It's run fairly smoothly.

We've had the odd hiccup,

but nothing that we don't anticipate when you're doing a new build.

It's certainly an improvement on the little bit of land that was here before.

And yeah, I'm really proud of what everybody's achieved.

'Back in Ashton-under-Lyne, this two-bedroom mid-terraced house

'went up for auction and Mohammed bought it for £46,500.

'He's a local businessman who owns several petrol stations in the area

'and develops properties as a sideline.

'For this one, he'd recruited his friend and employee, Zafir,

'to project manage the refurbishment work and, rather unintentionally,

'this two-bedroom mid-terrace was to be their first project together.'

I went to the auction obviously to buy another property which I was interested in.

And I was a little bit late to get that property.

No! What do you mean, late?

That property was lot number one or two, I think.

-And by the time I got to the auction, the property was already sold.

-You missed it?!

-Yes!

# I missed again! Uh-huh... #

'So, having missed his intended target,

'he ended up with this two-bedroomed terrace.

'The house was in a sorry state,

'with wallpaper hanging off the walls, signs of damp,

'old windows, a tired kitchen and bathroom, and generally poor decorative order throughout.

'Mohammed had set a budget of just 5,000 to £6,000

'for Zafir to project-manage the changes

'and get the house ready for the resale market.

'Quite a challenge. And as if that wasn't enough,

'he hoped to get the work done in just two to three weeks.

'Well, seven weeks later,

'we're back to find out how the pair have got on.

'On the outside, there are new windows and doors in place.

'And inside?'

Yeah, this is the main living room.

We reskimmed all of this living room and we put the new fireplace,

put the new windows and the main door as well.

They were nasty before, but it's looking nice.

'So there's a big improvement in this room,

'but what about that tired old kitchen?'

There is no big development, we put no time on the kitchen.

We just repainted these cupboards and everything.

We put a lino on the floor. So it's looking nice, it's very good.

'Yeah, the kitchen is a whole lot better.

'It's amazing what a bit of paint and elbow grease does.

'Upstairs, there's a new fitted carpet.

'With the leaking windows replaced, the signs of damp

'have been removed and the bedrooms look much fresher and brighter.

'And the bathroom? Well, as with the kitchen,

'the whole place has been spruced up

'with some cleaning, paintwork, and new flooring.

'But did Zafir meet that two to three week timeline

'that Mohammed had set him?'

It was about a week later than what we were expecting.

-So I think he managed it really well.

-I enjoyed it a lot.

Basically, I learned many things which I didn't know before.

Basically, it's very good.

'So, Zafir has just about met the timescale set by Mohammed.

'But he was just project-managing it.

'The majority of the work was carried out by tradesmen, so to me,

'his biggest, dare I say, almost mission impossible...

'..was to do all the work for that budget of just 5,000-6,000.'

I think we stayed well within the budget.

The initial budget was £5,000 to £6,000.

On top of it, we had to change the fireplace,

put new carpet all the way upstairs and downstairs and the lino.

-But still we managed it within the budget.

-Within the budget.

'Well, for Zafir, it looks like mission complete!'

MUSIC: Theme from "Mission Impossible"

'So, with an original purchase price of £46,500 and a budget

'that worked out at £6,000, plus £2,200 in fees,

'Mohammed has invested just short of £55,000 here.

'He wants to put the place on the resale market,

'but has he done it up to the right standard and made a good investment?

'What do two local property experts think?'

I think they've done a very basic refurbishment on the property,

but it's clean, it's tidy and it's bright.

So, you know, it will probably do for the rental market.

Overall, it looks like it's been fairly basically refurbished.

But in a good, let-able standard. So, pretty reasonable.

If they were going to put the property up for sale,

I think they should possibly have put a new kitchen in

and a new bathroom and just done the finer little bits.

Round the light switches, plug sockets, etc.

It's all a little bit unfinished.

'Those missing finishing touches may mean it could be slow to sell.

'So rental may be Mohammed's best option.'

The achievable rental figures for this property

are currently £400 to £425 per calendar month.

I think a property in this condition would achieve £425 per calendar month.

'A possible rental return of £425 per calendar month

'could give Mohammed a yield of just over 9%. So rental definitely adds up.

'But what about the preferred resale route for his investment of just shy of 55,000?'

If I was to put this property on the market,

I'd be putting it on around £70,000, expecting to receive offers around 60,000.

I think, if you're going to put the property on the market for sale,

I'd put the property on the market for £65,000,

looking for offers round about 60.

Yeah, our price bracket was putting it on the market just above 65,

and we should be getting something between 60 and 65.

'So, Mohammed could be in line for a gross profit of at least £5,000

'before the usual selling expenses.

'If it doesn't sell immediately,

'he will fall back on to the very decent rental option.

'So it seems that arriving at the auction late hasn't worked out badly

'after all and it certainly hasn't put him off.'

We're looking at other properties, so if we get something good

which needs some work needing doing to it, we probably will do it.

And we're looking into a couple of properties

and if we get the deals done, then Zafir will be the project-manager for them too.

Has all this whetted your appetite to buy property at auction?

If so, we'll have lots more interesting opportunities

here on Homes Under The Hammer.

-See you next time.

-Goodbye.

-Goodbye.

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