Episode 21 Homes Under the Hammer

Hello and welcome to the show. People buy property for all reasons.

Sometimes they want to live there or they'll do it up and sell it.

The main concern is getting value for money, but how do you do that?

One way can be to buy your home under the hammer.

-You need to do your homework if you buy at auction.

-And then you could find a diamond in the rough.

So here's a look at the potential moneyspinners that went under the hammer recently.

We return to see the transformation at this Cornish cottage with accommodation on three floors.

How odd!

In Kent, this former care home with planning permission has tons of potential.

There's so much room to play with. I love it.

And this former sweet shop in Porthcawl, South Wales, with a flat above could be a real treat.

Is it a sher-bet for an investment?

All of these properties have been sold at auction and we'll find out who bought them and what they paid

-when they went under the hammer.

-Well, what a lot of property.

'Time now to revisit Millbrook in Cornwall and a property I first saw in August, 2010.'

Today I'm in Cornwall, home of pasties, Cornish cream teas,

a beautiful coastline and home of one particular property.

Three-storey, two-bedroomed house.

Had a guide price of just 70,000 quid, in this cute little village. Let's take a look inside.

'Not many windows, but at least they look fairly new, as does the guttering.

'So that's promising.'

OK.

Polystyrene tiles greet you as you come through the front door, but a reasonably wide corridor.

What's going on here? This is a glass-panelled, what looks to me like a stud partition wall.

I'll have a look at the other side. You might be able to get rid of it.

Stairs up to the bedrooms there and then through - it gets a bit cramped - to the kitchen.

'This is a pleasant surprise. It looks like this kitchen has been only recently installed.

'But it's only on one side of the kitchen and I'm in two minds about the space here.'

I was going to say it's a bit small, but for the size of the property it's not bad.

If you were a bit creative, you could make a nice little space,

although relatively the ceiling does feel quite low.

And then through to the front lounge.

Oh, what?!

Now, look. That ceiling is surprising to say the least.

It would look fantastic in a country house, but in a little cottage? No, I think that needs to go.

The other thing that really needs to go, as I said, is this wall here.

Get rid of the glass and this stud partition, open up the whole thing to create a really nice-sized space.

Actually this place has turned out a surprise. It's not that huge,

but you've got the open fire, big living room and I haven't been upstairs yet. Looking good.

'There's certainly potential here. There's so much wasted space the layout needs a good re-think.

'I wonder if it gets any better upstairs?'

Up onto the first floor and a massive bathroom.

That's a really nice thing to have.

Stairs up to the second floor. Through to the first of the bedrooms

and apart from the ceiling being a bit bowed, it's a nice-sized space

and I love that big fireplace. But...what's this?

How odd! It's like this little anteroom which doesn't do anything.

There's a horrible breeze-block wall. This is only a stud partition, so maybe you could take this out.

And this room then could become either a very big bedroom with an en suite

or maybe two bedrooms. Either way, you're going to need light and ventilation in here.

'Up another flight of stairs to the top of the house and this attic room is a really lovely space,

'but the boxing-in squad have been at it again,

'although there's a lot more light thanks to the roof windows.

'The property sits right on the road with no front garden. Is there any space at the back?'

So at the rear of the property, a bit of a strange arrangement.

This courtyard gives access up to a garden, which is way up there,

but there's also a right of access for the next property through here to access their garden.

But this bit is certainly yours and, within it, look at this.

This is a massive, home made by the look of things, retaining structure

to stop this garden wall here presumably falling down.

Really that needs to be rebuilt, which will probably cost £5,000-£10,000.

What you might want to consider is potentially extending the property

and combing the work you do on that bit there with the much-needed extension.

'Up these steps, there's a great bonus.'

# The view from the top

# Can be oh so...

# ..very lonely... #

Well, there are certainly issues with this property

and it's going to take a lot of time, imagination and money to sort.

But at the end of the day, it is a big house for the money.

So I think there's cash to be made on this one. Let's see who bought it at the auction.

24 is next.

A lot of property. Who's going to say...

60,000? Who'll start me at 60,000?

At 60. Thank you. 62.

62 is against you, stood. 64.

65. At 65.

66. 67.

68. At 68. Sixty...

Seventy? Seventy he's gone to. At seventy.

71.

2. At 72. 73.

Straight back. 73. 74.

75. 76.

77.

78.

And a half.

79.

And a half.

And 80.

At 80 and a half.

82. 82.

83. 83...half.

83 half. 84.

At 84. 85.

85 he says. 85.

85 once. 85 twice. At 85 and done.

Sir, yours.

'That final successful bid of £85,000 was made by Chris and his stepson Gareth.

'Chris and his wife run a ski chalet business in Slovenia, but he used to live in Cornwall so knows it well.

'Gareth's a professional equestrian rider based in Cornwall.

'I met up with them to find out why they'd jumped for this property at the auction.'

-Good to meet you both.

-And you.

-Congratulations. Tell me why you wanted it.

It was actually quite a spur of the moment thing.

Gareth has got a property which he's just sold in Plymouth

and we thought we'd go to an auction to see what was available and how he could stretch his money.

I was supposed to be demonstrating it, but we bought it.

Right. And whose money is it?

Mine, really.

So Chris took you along to the auction to show you the ropes and spent your money?

-Yeah.

-So you hadn't been to see it.

-No, other than I looked at the auction particulars.

-Do you want to reconsider who you ask for advice?

-I might do! I was pre-warned by my mum

before I left.

So tell me more about what you do when you're not doing this?

-Well, I ride horses for a living and compete.

-Tell me more.

A variety of things. Show jumping, eventing.

Aiming obviously to go on further and continue that as my career, really.

'Chris is just as active, running his skiing holiday business,

'so he's well used to organising. No sloping off for him.

'But will he and his show jumping stepson Gareth have a clear round with this property?

'Or fall at the first fence?' So what's the plan

for the property? Tell me what you're going to do.

On the top floor, hoping to change it into two bedrooms.

And then make an en suite for the master bedroom

and open-plan this slightly. Basically, modernise the whole thing.

-The property needs a few more windows at the front.

-Yes. The house next door is an identical copy

and it's got two small windows directly above the front door.

We hope to get permission to put two windows to marry those next door.

'So Chris helped Gareth select this property to invest his money in.

'It certainly looks like a cottage with potential, but there could be major structural issues outside.'

Let's talk about the retaining wall. A bit of a problem. What are your plans?

We've had a survey done and the structure which has been put in place at the moment

is supporting the wall quite well. So the urgency has been taken away.

The lady who owned it before us had a quote to rebuild the wall about four years ago for £10,000.

But before we make a decision, we want to decide if we'd extend the back of the house

and utilise the new supporting wall as part of the house extension, or just keep the courtyard there.

-What kind of budget have you set aside for doing the work?

-Up to about £30,000 at the moment.

-And timescale?

-Hoping to have it done in six months or as soon as we can get it before then.

-The plan is to be ready for next spring.

-'Well, that was in August, 2010,

'and when we first returned 11½ months later, it was still very much work in progress.

'But the house had been stripped back to the bone and you could see a four-bedroom home emerging.

'But there was still quite a bit to do.'

Quite a lot. We've gone into an interesting adventure!

We thought we were buying something we could quite quickly get into

but the makeover we were going to do was more difficult. We had rotten floors and a lot of woodworm.

We ended up gutting the whole building, rebuilding a few walls, but we've fallen in love with it.

# Love is the sweetest thing... #

'Chris's show jumping stepson Gareth had trotted off to work nearer London

'and although Gareth was still doing his bit, Chris had taken the reins on this one.

'The overgrown wilderness of a garden was starting to look the part

'and the good news is that the shored-up wall outside the back door hasn't required much work.'

When we first came here, it was all shored up.

There were lots of beams everywhere.

When you look at the wall, it looks bowed, but from the top it's fairly straight and stands reasonably.

We've taken a lot of stuff away and found an old fireplace here, which we'll turn into a barbecue.

'So has Chris been cooking on gas since our last visit?

'Stay with us and see how he's finally turned this empty shell into a fabulously feathered nest

'later in the programme.'

# Take a sip of misty water... #

'This is Hoo St Werburgh on the Hoo Peninsula in Kent.

'It's part of the so-called Hundred of Hoo, a Saxon term used to divide up a shire,

'a hundred being enough land to sustain a hundred households.

'The question is will the lot today make someone hundreds if not thousands of pounds?'

So on the way to the property and I've left the village well behind.

It is just fields and farms as far as I can see, so top marks for a rural setting.

But what exactly am I here to see?

Well, it's not a farm, it's not a barn. It's a former care home

and it had a guide price of £290,000-£300,000.

Well, it's huge!

A massive 30 bedrooms, in fact!

So unless you want to be here until midnight, let's get cracking.

# Well, come on, let's go

# Let's go, let's go, little darling

# And tell me that you'll never leave me

# Come on, come on Let's go again... #

'And talking of getting cracking, the property is rather the worse for wear.

'It's huge, but also hugely in need of some serious work.

'The imposing front door is locked, so it's around the back for me to take a deep breath and explore.'

Oh!

I didn't expect this place to be like a palace on the inside,

but it's really in a bad way.

There's a little room here that's smelly and dingy

and there's holes everywhere and there's damp. Pretty much the same in that room.

I know this building was used for some illegal late-night parties.

You can see it's taken a bit of a battering.

A lot of money needs to be spent in here and a lot of work needs done.

'I can't even get into half of the upper floor. It's far too dangerous.

'There's been a massive leak through the roof. Unsurprising when it doesn't have any tiles.

'Throughout the rest of the building, it's not much better, with dodgy electrics, smashed windows

'and a lift shaft minus the lift, of course.'

# Highway to the danger zone

# Right into the danger zone... #

'So how do I feel about all of this? Surprisingly chipper, actually.'

So I think we've established we haven't got features, character or style here,

but you have got the space and with that comes scope for development.

Now I'm not going to suggest refurbing this as a care home or a massive hotel

because this lot came with planning permission for nine flats.

Six one-beds, one two-bed and two three-beds, which is brilliant.

That is a lot of units. It's a lot of work and a lot of money to spend for sure,

but potentially a lot of profit.

'The approved plan's well laid-out, getting in as many self-contained units as possible,

'whilst making best use of the great spaces the building has to offer.

'Just take a look at what will be the master three-bedroom apartment off the main entrance.'

With this three-bed, after that rather grand entrance,

you have this wonderfully spacious lounge, but it's not just this space. Go on, get back!

Look - it's all this as well.

This is huge!

And not only that. You've got a lovely garden to look out onto and there's the lake.

Know what I really like about this property? The development hasn't been about carving up

loads of big rooms into small, little pokey flats.

This three-bed property will be fabulous once done.

And there's so much room to play with. I love it.

'If you've got the money to do this place up, well, it really is an interesting opportunity,

'but I'm not just after interesting. I'm also after profitable.

'So what's the best option here? Selling? Renting? Or both?'

OK, let's do some rough maths. Say you managed to sell all the one-beds for £130,000 each.

That should cover your build and purchase costs.

So we're then left with all the others and they should be pure profit.

Sounds tempting, eh?

Now that is a very vague calculation and your spend on the place could be higher,

but it's helpful to look at the profits split up into these nine units.

Would you have to sell them all to see the return you need? How many to break even?

In this tricky market, could you keep hold of just a few to rent out while the market picks up?

Once you've invested your cash in the whole of this building and split it into separate parts,

you must deal with each unit individually

and make sure that the overall investment works for you.

'It's tricky. The market for first-time buyers is sluggish and that's who these are aimed at,

'so if the buyer takes this on and needs to shift all the flats to see a return,

'and aren't interested in buy to lets, it's too much of a risk.

'In my view, this would be handy for a portfolio.

'Sell a few, rent a few, keep ownership of the freehold and you have a solid money maker.

'So with a guide price of £290,000-£300,000

'we asked along a local estate agent to get her opinion.'

This could be

a very exclusive development and community that is created in this area.

'So let's get straight down to it. If the purchasers had to rent some of the units out for a time,

-'what could they expect to achieve?'

-One-bedroom apartments are achieving

around £600 per calendar month.

Two-bedroom apartments around £750 per calendar month.

And three-bedroom apartments up to about £800 per month.

'What's the selling potential for this property once broken down into separate dwellings?'

Currently, in the local market, a one-bedroom apartment will achieve £100,000-£110,000.

A two-bedroom apartment is £120,000-£130,000.

And if there was a three-bedroom apartment in the local market,

£140,000-£150,000 would be tops.

This lot is clearly worth the guide, but only for those with access to the big bucks,

prepared to take a few risks in uncertain times.

But if you're lucky enough to have that spare half a million and the rest,

well, this lot could make you some serious money. Let's see who went for it at the auction.

Lot 14 we go to now. It's a substantial former care home

for conversion into nine residential units. Anyone at 300,000?

290, then, can I say?

280? I'm not going below 280. There's a lot of property for 280,000.

280, I'm on the way. I'm obliged, sir. 280 I have.

285 in the front. Are we all done at 285...? 290. I'm obliged.

292, sitting down. 295, can I say?

295 I've got. And 7 now. 7 do I see?

Are we all done at 295? It's in the room. 295 only, for the first time, then.

295 is against you in the front for the second time.

295 for the third and final time. If we're all done at £295,000.

Wow. What a lot of property for that. Your number, sir, is B460. Thank you.

'That successful bid of £295,000 was placed

'by friends and business partners Stuart and John. They both have solid backgrounds in finance

'as well as having their own rental portfolios, but this is their first joint venture.'

Guys, congratulations. It's great to meet you both.

-What's the story behind you two wanting to buy this site?

-Well, we've both done developing before,

but on a much smaller scale. We bought small houses, refurbished them. We fancied a bigger project.

We didn't quite plan it as big as this, initially, but we saw it in the auction, viewed it,

went along not really expecting to get it and here we are now!

-And thought, "Damn! What have we done?"

-"We've bought a huge site!"

-Whose idea was it to even think about buying this?

-Yours.

-Was it mine? Yeah, probably was.

What sort of potential can you see here? That's intriguing me.

As you can see from the building, it is a massive project,

but the potential as you can see from the reservoir nearby - it's a really nice rural position.

I think potentially it could be beautiful. Lots of scope. There are nice high ceilings.

Everything about it lends itself to a great, sympathetic development.

'So will they stick with the proposed plans or do they have other ideas?'

We're looking at doing a slight amendment.

-Depending on how complex it is.

-We've got six one-beds here,

one two-bed and two three-beds,

but we could actually convert that to having five two-beds by going into the roofspace.

OK.

-So we're looking at that option.

-If we have to go back to full planning, have to submit plans,

wait 3-6 months, appeals and so forth... If it's straightforward,

we'll see if we can do an amendment to it and go into the attic space.

I'm really glad you've said that because something did worry me

about so many one-bedroom flats. It really is a limited market,

one person wanting to buy a flat here in the middle of nowhere. You're very wise to do that.

'That sounds like a really smart way of doing things and with each two-bed going up into the loft space

'the pair plan to make them feel more like houses, each with their own front door.

'Still, in the current tougher market they'll need to sprinkle a little magic on the development

'to make sure they reap the rewards. But luckily there's someone on hand with a few tricks up his sleeve.'

-John, you have an interesting hobby?

-That would probably be the magic.

-Do you really do magic tricks?

-Yes.

-Go on! Show me one!

-A quick one.

-Go on. Don't saw me in half.

-I won't saw you in half. It's tempting, but I won't.

-Thank you!

-We're here really to make some money on the project.

-Absolutely.

-So what I sometimes do is I take five bits of paper. OK?

-As you can see, they're just five bits of paper, yeah?

-Yeah.

-Four, five. You mentioned money.

-Yes.

-And what would be quite nice with money...er, with paper

is to turn it into money. So if you just watch. If I flick it...

it turns into one, two, three, four, five bits of money.

-That is amazing! Can I have a look at that money?

-No!

-If he could do that, we wouldn't have bought this!

-So if I'm hard up any time...

-You can just turn paper into money.

You have got no worries at all, Stuart! Stick with him!

'Well, if Stuart and John take the proposed eight months they expect it will take to finish this job,

'perfecting that trick on a much larger scale, then they could be in line for a pretty decent profit.'

Is there anything worrying you about having bought this? You've got the plans, the finance...

-The budget!

-Is the money the big worrying factor here?

With a project this size, it's got to be. Until you rip it out, you don't know what horrors are there.

So the budget has got to be the biggest concern.

-Hopefully, we've budgeted roughly...

-Cautiously!

-Come on, tell me!

-I can't tell you!

-I need to know! I can't let you go until I know.

Roughly, ballpark, what do you think you're going to be spending on this to turn it into...

-Including the grounds, the whole thing...

-I'll let you say this.

Well, we have been a bit over-cautious, I think, upfront.

-We're thinking about 350-400.

-So you think you'll spend £400,000 on this to really turn it around.

Stuart and John, it has been such a delight meeting you both today and great fun. Good luck.

-Thank you.

-I can't wait to see it. Well done.

-Thanks very much.

-Stuart, John.

So John and Stu have now got the bottle to do this and they've got great ideas.

I'm so glad they're reducing the number of one-beds, but this is all subject to planning permission.

You've got to make sure this place is really special to attract buyers.

So do the pair have the magic touch? You can find out later on in the show.

'Coming up: in South Wales, I have a kid in a sweet shop moment.'

Imagine how many gobstoppers and sherbet dib-dabs you could get in here.

'Amending the planning permission on this former care home in Kent meant delays for Stuart and John.'

It also blew our budget somewhat.

'But first, in Cornwall let's see if Chris has finally turned this mid-terrace into a family home.'

We've really got a brand-new house.

'Time now to return to Torpoint in Cornwall and this two-bedroom terrace

'which I first visited in August, 2010. Chris, who runs a ski chalet business,

'and his stepson Gareth bought it at auction for £85,000 of Gareth's money.

'When we first went back 11 months later, Chris had taken control of the renovation,

'but it was still work in progress.'

We discovered the makeover was a little more difficult than thought. We had rotten floors, woodworm.

We've ended up gutting the building, rebuilding quite a few walls, but we sort of fell in love with it.

'So 19 months after our first visit, we're back to see if the skiing fan is still in love with the place

'or has he just crashed and burned?

'He hasn't done it in record time, but it looks like Chris can now enjoy

'a well-deserved apres-ski drink.'

Since you were last here, basically we've just about finished the house.

At the last filming, we just had the top of the house finished, or very nearly finished.

Now we've worked our way all the way down through the whole house and we're just about finished.

'The final piece of the jigsaw is finishing the en suite wet room on the top floor,

'but that's pretty small beer compared with what this project has thrown at him.'

The biggest job really would have been contending with all the floors, which were rotten,

and having to gut the whole inside and rebuild it. We're really got a brand-new house in old walls.

'I reckon it's all been well worth the wait, with the ground floor transformed

'into a really welcoming space.'

Basically, we had to reconfigure this whole ground floor area.

We ended up with a kitchen which had two entrances that we didn't need.

So we removed one of those and ended up creating a lovely large living space.

I'm absolutely delighted with the end result.

'New windows at the front of the house turned two little box rooms into much more useful areas.

'Just remember that to call them bedrooms you'd have to comply with building regulations,

'but the two main bedrooms look great.

'Outside, the addition of a summer house in the garden makes the perfect spot to enjoy the views.

'And for good measure, the wonky wall outside the back door has been strengthened,

'which has allowed Chris to create yet more outside space.'

This is one of the areas I am really very pleased with. We were worried about the retaining wall,

which is very happily standing here. What we've now done is put an RSJ in underneath the floor here.

We decided instead of using the patio at the bottom with the barbecue area,

we brought the patio a little higher to give us a lovely place to enjoy a gin and tonic.

'Make mine a British pint of beer, Chris.

'Gareth is working in London, so couldn't come down for the filming,

'but he's been in touch regularly about progress.

'So let's get down to the nitty gritty. How much has all this cost?'

We set off with the idea we might be able to do a quick turnaround at about £30,000.

Then obviously as things changed we realised we'd spend a lot more,

but we've been lucky in the end to spend just over £47,000.

When you consider what we've got it's actually very good.

'The plan is to sell the house on as soon as possible,

'so Gareth may see a return on his initial outlay before too long.

'On top of the purchase price of £85,000, Chris's spend of £47,000

'will bring the total here to £132,000.

'We asked two local estate agents for their take on the property.'

It's deceptively spacious.

A lot more space than I first realised. Lots of character features

and it's very conveniently located to the village and shops.

The finish is to a high standard and they've kept the original features with a very cosy feel.

'The estate agents agree that the house could rent out for £575-£600 per calendar month,

'which would be a yield of between 5% and 5½%.

'But selling is Chris and Gareth's preferred option, so what should the renovated property fetch

'bearing in mind the total investment here of £132,000?'

I would put this on the market today for a figure in the region of £185,000.

The guide price of this property would be £184,950.

I think delighted, really. That's what it's on the market for.

It's very nice to have that opinion reaffirmed by two agents.

We're hoping to get very close to that £184,950 if we possibly can.

'If they do sell for around £185,000 Chris and Gareth are looking at a pre-tax profit

'in the region of £53,000, which will do nicely, thank you very much.

'How has Chris enjoyed the process of turning this property around?'

For me it's been just one great adventure. I thoroughly enjoyed it.

It's had its ups and downs, but that's what makes it much more fun. Looking forward to the next one.

This is Porthcawl, a seaside resort between Swansea and Cardiff.

Plans are afoot to revitalise its waterfront and although it's not as popular as it used to be

during the British beach holiday heyday, it's a lovely location to set up home.

Well, just a mile from the sea front is the property I'm here to see.

70,000 quid and a very interesting opportunity.

It's this former sweet shop

with some residential accommodation above. Big question is: is it a sher-bet for an investment?

Oh, wow! I didn't expect that!

Absolutely huge space behind the fairly small frontage.

Can you imagine how many gobstoppers, fruit salads, blackjacks and sherbet dib-dabs

you could get in here? Gosh. Well, there you go. Basically, one huge space.

Goes from the front all the way to the back. This main area is a bit of a state.

It gets fairly dark and dismal and dingy as you go towards the back,

but in terms of square footage commercially very potentially attractive space. There is a lot.

And that is good news.

# Sweets for my sweet Sugar for my honey

# I'll never ever let you go... #

Being an old sweet shop means that this property has A1 usage,

so you could put any other business that falls into the same class here.

You could also change it to A2 without any planning permission,

which means you could turn this into offices, for example.

But whatever you do, it's going to need a lot of work to bring it up to standard.

And there's more upstairs.

Upstairs here is a one-bedroom flat and half-decent it is as well.

Kitchen towards the back there, a bathroom there, your one bedroom

and then down this little corridor/landing to your living room area.

It's actually in pretty good nick and in terms of size, big thumbs up.

And I do like the fact that this is a mixed use property. Commercial downstairs, this flat here.

It gives you lots of options. I think restore this for sure. The big question is about downstairs.

# Lollipop, lollipop... #

If you have the right approach here, you could have this property licked.

# Lollipop, lollipop... #

You could turn it into another flat downstairs or even convert the whole lot into a three-bedroom house.

# Oh, lolly, lollipop... #

What does the auctioneer who sold it think of this lot, guided at £70,000?

Does he have a sweet tooth or does it leave a sour taste? Let's find out.

# Sweeter than candy on a stick... #

Well, my initial impressions

of the property are that it smacks as a residential redevelopment opportunity.

A former shop on the ground floor with accommodation above.

My best suggestion to any purchaser would be to either sub-divide into two flats

or to turn back to a three-bedroom house.

So what would the property with its auction guide price of £75,000 be worth

if it was split into flats? Or made into a whole house?

Sale values, for a one-bedroom flat between £65,000 and £75,000.

For a two-bedroom flat, you're looking at £80,000-£90,000.

For a three-bedroomed house, I believe you'd be looking at a sales value

in the region of £150,000-£165,000.

So what does the future have in store for this former sweet shop?

Will it be residential properties? Will it be converted into flats, houses?

Or maybe opened up as a shop again?

Only one way to find out. Let's go to the auction.

Who's going to start me off at 65,000?

Thank you. 65. 65,000.

Looking for 66. 66, seated. 67.

Any advance on 67,000? 68.

68 is bid. 68. And 9.

A half. Half is bid. And 70 I'm looking for.

70 is bid, thank you. Any advance on 70? 70 and a half.

Looking for 1. Thank you.

1 and a half. 2. 2 and a half. 3.

3 and a half. 4. 4 and a half. 5.

5 and a half. 6. 6 and a half. 7.

7 and a half. 8. 8 and a half. 9.

9 and a half. 80. Take me in ones. 1.

2. 3. 4.

5. 6.

7. 8? 87 on you, sir. At 87,000.

Don't see any advance on 87. I'm going to sell at 87.

87,000?

87,000. Sir...32. Thank you.

The bidding was so frantic that it was hard to catch the successful bidder, who paid £87,000.

But here he is - Evrawg.

He's a local who runs his own building company and also has several other properties.

I caught up with him at the latest addition to his portfolio.

-Lovely to meet you. Congratulations.

-Thank you.

-You bought a sweet shop!

-Ex!

-No sweets left, unfortunately.

-Yeah, yeah.

-Why did you want to buy it?

-The intention is to turn it back into two flats.

That's the intention. There's a flat upstairs presently.

I'll convert this to a two-bed flat.

-Do you remember it as a sweet shop? Did you ever come in?

-Many times.

-A long time ago!

-No! Was it a proper old-fashioned sweet shop?

-Sweet shop, newsagent.

-A bit of a sad loss to the community.

-It is, but another one's opened up the road.

-Ah, OK.

-What about you?

-I'm a builder by trade.

-That's useful.

-It is in this game, for sure.

And I work locally most of the time. But this is an investment for myself privately, not through work.

-OK. So is the idea to convert them for something to rent out?

-It is.

-It is, yes.

-And why not buy an existing house that you could convert into flats?

When I looked at this in the auction, it had lapsed planning permission. It's been accepted once

for planning. In fact, it lapsed shortly before I purchased it.

So I'm liaising with the local authority at the moment as some of the work has already started.

-Right.

-So, in effect, the planning should still stand.

-And what are they saying about that?

-Not yes or no.

# Love is like candy on a shelf... #

'Let's hope the council does say yes. It would certainly be a sweet turn of events

'to avoid going through the planning again and continue with the conversion that's been started.'

# Just help yourself to my lips To my arms

# Just say the word and they are yours... #

So tell me what the process is to convert this back to two flats?

Well, construct an entrance at the front here to separate two entrances.

This will be the lounge in here.

There will be two bedrooms and a bathroom there. Kitchen where it is.

And upstairs then I'm going to split the front room up to form a smaller bedroom,

so that becomes a two-bedroom flat.

-What's the conversion cost?

-£20,000. There's a lot of work down here.

-Right. And that's with you doing most of it yourself?

-Yes.

I'll have sub-contractors in for the plumbing. It has to be gas safe. And the electrician.

That's got to be done by sub-contractors and certificated.

-So what's the timescale?

-Em, about 12 weeks.

-Including the planning?

Well, I'm presuming the planning will still stand. I'm hoping.

The planning... Well, that's the plan. I'm thinking positive that the planning still stands!

-Good stuff. Well, congratulations.

-Thank you.

-Good luck with it. Look forward to seeing it.

-Thanks.

Well, how will Evrawg get on converting this former sweet shop into two flats?

It all depends on getting that all-important planning permission.

Will he be enjoying the sweet smell of success? Find out later.

-Well, it's been some time now since we saw those properties.

-Has it been money well spent?

Let's go back and find out.

Back now to the Hoo Peninsula in Kent where this former care home with planning permission for 9 flats

sold at auction for £295,000. The home had lain derelict for a number of years,

so it really was in a pretty bad state.

However, undeterred by the task ahead of them,

friends and part-time property developers John and Stuart went for it

and John had a trick up his sleeve to help make this one work.

If I just flick it like that... it turns into one, two, three, four, five bits of money.

That is amazing!

But the boys were going to need more than sleight of hand here.

Their strategy was to amend the existing planning permission,

go up into the loft space and create more of the more profitable two-bed flats.

The budget for this mammoth undertaking was £350,000-£400,000

and their timescale was just eight months.

Almost exactly 12 months after our visit, we're back

to see if John and Stuart have done something magical with this former care home.

# I never believed in things that I couldn't see

# No magic, it happened to me

# Now I know there can be no doubt

# You can do magic

# You can have anything that you desire

# Magic

# And you know you're the one who can put out the fire... #

Two of the nine units are complete and whilst there's still a lot to do,

the main reason for the delay was the boys made amendments to the planning permission and then some!

What we did, we decided that the original drawings and how they had mapped it out

didn't utilise the space that we had,

particularly in the roof.

So we decided to go back to the architects and maximise the development.

We created, essentially, three three-beds,

three two-beds and three one-beds,

which obviously pushed the development value up,

but also sort of blew our budget somewhat.

So the development now consists of nine houses rather than flats, each with its own front door,

garden area and parking for two cars.

There was a lot of structural work to do. The whole place had to be properly insulated

and they had to install a pump to take waste to the public drains.

All of that has cost so just how much have they spent here?

Well, the original budget was 350, based on what was on the planning,

but with a project this size there's so many variables and you can't really plan

what's going to come at you. So at this moment in time we're working on about 600.

So way over the original budget.

Oh, ouch! That's quite an overspend, but this is a big development at the luxury end of the market.

The guys have done things to a pretty high standard as John demonstrates in one of the houses.

So this is the one-bed unit.

Essentially, what we've got here is a bedroom upstairs with bathroom and toilet.

We've also got a downstairs toilet.

This is very open plan here with wooden floors.

Essentially, what we've done here is kept a modern-day living feel

and because the kitchen can be such a focal point in a property,

we decided to go for high-spec, hand-made, hand-painted units

with a stainless steel oven and hob.

So we think that we've maximised the space as best as possible.

When they finish off the rest of the units to this standard, they'll be very desirable indeed.

They've sold 7 out of the 9 off plan. This house has already turned into the purr-fect home.

The buyers of this property managed to secure it very early on in the build stages,

so what worked out fantastically for them was it allowed them choices to make throughout the process.

In this particular kitchen, the work surfaces are all made of quartz

and the kitchen itself has all been hand-made.

Similarly, all the appliances are all top of the range.

I think the overall kitchen looks absolutely amazing.

Stuart and John hope to have everything finished in two months,

which will be four months behind schedule.

Their total outlay looks like being £895,000,

including the £295,000 purchase price, so they are well over budget,

but don't forget this savvy pair have aimed very high with this.

They amended the planning permission and went all out on higher spec houses for a higher return.

Have they succeeded? What do two local estate agents think?

If I hadn't seen it, I wouldn't have believed it.

This is unique. These are going to appeal to downsizers, couples,

people who want something special, a little bit different.

And here I think you've found it.

Personally, I love the development. I like all the properties.

I like the fact that it's unique,

so they'll have their own driveway, they're out in the country, they have lovely views.

I would expect that they would sell very quickly, even in a very difficult market.

So far, so good, but what about the figures?

What could the three one-bed houses be worth?

I would suggest selling the one-bedroom properties from £125,000

to £135,000.

I would suggest a price guide of £135,000 to £140,000.

And the three two-bed houses?

I would suggest guide prices

of £155,000 to £160,000.

I would suggest that they could be marketed at a price from £170,000 to £190,000.

And what about the three three-bed houses?

The smallest of the three-bedrooms, I would suggest guide pricing

around the £195,000 to £200,000.

The middle-size home, I would suggest around the £220,000 to £225,000.

And then the large one, which is absolutely stunning, around the £250,000 price range.

For the three-bedroom properties, I would suggest marketing them at a price from £260,000

to £270,000.

Wow. So if John and Stuart sell at the top end of those valuations,

I reckon they could be looking at a pre-tax profit of £905,000!

# Oh ho ho, it's magic

# You know... #

-Pretty much bang on, I think.

-I think most of them are pretty much where we put the price at.

So if they're saying that as well, we've got the prices right, haven't we?

The estate agents estimate that renting all the houses out could generate a yield

of between 9.5% and 10.5%

so whichever way you slice it these boys have done well. Very well.

-So what's next?

-If the right project came up,

we probably would work together again, but maybe not to a project of this size.

-I think the smaller ones we'd look to do.

-Yeah, I think so.

Back now to Porthcawl in South Wales

where Evrawg paid £87,000 for this former sweetie shop.

# Love is like candy on a shelf... #

With a commercial unit downstairs and a one-bed flat above,

he wanted to convert it to two two-bedroom flats

and planning had previously been approved to do just this, but the permission had just lapsed.

But he was a man of faith.

I'm liaising with the local authority

to see if we can carry on with the planning as some of it has started.

-Right.

-So, in effect, the planning should still stand.

-And what are they saying?

-Not yes or no.

So did the local authority say yes? We're back three and a half months later to see

if the sweet shop has been turned into something a little more savoury.

Outside, the candy pink colour has gone

and inside? The new entrance hall and stairway reveal that there are indeed two flats here now.

Let's take a tour around the ground floor.

Downstairs had been one large open space, which has now been divided with a living room to the front

where previously the shop had been. Into the corridor leading from the living room,

a new bathroom has been installed. From there, a long corridor runs the length of the building

to the kitchen at the rear.

The kitchen is in the existing position, but we reconfigured the entrance, which was the other side.

We got rid of the small entrance lobby by the back door.

And it's really opened the room up and a nice space. Quite pleased.

Halfway along the corridor, two double bedrooms have been created.

He has come up with some great ideas to flood them with natural light

and make them feel extra spacious.

This area here used to be the downstairs toilet.

A bit pokey and a bit low. The roof was this high.

So we've extended the roof up to provide more headroom, put in new windows for more light.

The same goes for the room next door.

The biggest job we had was putting the big steel beam through two rooms

to hold the weight of the upstairs walls.

I'm very pleased with the outcome.

And what of the flat upstairs that's held up by that massive steel beam?

Well, the old kitchen was far from functional, but look at it now.

With all new units and appliances, it's become exactly what a kitchen should be - suitable for cooking in.

He's installed a new central heating system to boot.

The former living room at the front has been divided into two bedrooms,

one single and one double.

The former bedroom is now the living room and decorated in similar neutral tones to the rest.

The bathroom has had a good old scrub. New flooring has helped freshen it up

and although the previous suite remains, thankfully there's a new seat on the toilet. Much comfier.

He's totally transformed this place and made really good use of space.

It certainly seems as though the local council looked on it favourably.

Planning permission was expired a week before I purchased it.

I was in touch with the council. Some of the work had been carried out internally,

which meant it would carry on as extant planning permission,

which meant I didn't have to re-apply. With a few letters to the local authority, that was confirmed.

There was another sweetener when it came to continuing the work of the original architect's plans.

Well, I didn't have a set of drawings, so I looked on the local authority's website,

because they had that planning permission. And I recognised the architect's name, Gerald,

a chap I worked with years ago. I know where he lives,

so I popped round and he had a set of scale plans I could have free, which he already had from before.

So that was a result.

# I should be so lucky So lucky, so lucky

# I should be so lucky... #

But it hasn't all been plain sailing.

I had to get a new gas supply, two new gas supplies. There was no gas.

Additional water supply and a new electric supply.

Quite frustrating dealing with all the phone calls. Press button one, press button two...

You're there for half an hour on the phone, several times for each one. Quite frustrating.

# All this frustration All this frustration... #

He's managed to complete the renovation pretty much on time.

He's spent £20,000-£25,000 on the work, so just a little over his 20 grand estimate.

That takes his total outlay, including the £87,000 purchase price, to around the £110,000 mark.

He wants to rent these flats out, but is that the best way to reap the rewards here?

We invited two local property experts along for their opinions.

Well, it's a massive improvement. He's obviously raised the wall height by a few feet

and put in these big Velux windows

which have made great use of the space. He's done a fantastic job.

I think the properties have been developed to a very high standard.

Perfect either for the sales or the rental market.

So what could be the monthly rental income of the two properties?

I believe you could rent the ground floor flat at a rent of £500 per calendar month

and the first floor flat at £475 per calendar month.

I'd estimate the rental value of the first-floor apartment to be in the region of £475 per calendar month

and the ground floor to be in the region of £500 per calendar month.

The rental figure is roughly what I thought it would be and it's the market price here.

I've already got people interested.

That's very good news as is the potential rental yield of around 10.5%.

But how much value has been added here in terms of the resale market?

Remember, his total investment is around £110,000.

I would estimate the value of the first-floor flat to be in the region of £80,000

and the ground-floor flat to be in the region of £85,000.

I think the ground-floor flat would sell on for £85,000

and the first-floor flat for £80,000.

Those figures would see a potential gross profit of around £55,000 before the usual deductions.

Now that's what I call sweet.

Will it entice him back to the auction room?

I would go back to auction. It was a new experience for me. I've never bought at auction.

But, yeah, I'm pleased with it. I might do it again.

We hope you enjoyed watching and learnt some useful lessons.

We'll see you next time for some more hot properties or maybe some that turn out to be lukewarm.

-Bye bye!

-Goodbye.

Subtitles by Red Bee Media Ltd