Episode 38 Homes Under the Hammer

Even with the property market struggling,

those glamorous houses we see in newspapers and magazines,

they still tempt us.

They may have become even more unaffordable for some of us now.

However, if you're trying to bag a bargain and find an interesting property at the same time,

you could do worse than head down to your local auction.

There are a vast array of properties that come up for auction

every month in the UK, from bungalows to flats,

to plots of land ripe for development.

That's right. Whatever you're looking for you can usually find something that fits the bill.

Here are the properties that got our buyers' arms waving

in the auction rooms today.

In Northumberland, this bungalow is trying to start a new trend

with patio doors inside the property.

What on earth is going on here?

In this top floor flat in Fulham, London, I've got a case of cupboard love.

Oh, and a bit of cheeky space to play with in that cupboard!

I think this pet shop with a flat above in Devon is a great bet,

but you better ask the residents.

What do you think?

All these properties are being sold at auction.

We'll find out who bought them and what they paid for them

-when they went Under The Hammer.

-Sir, yours.

This is Cramlington in Northumberland,

just ten miles from Newcastle.

Cramlington is, in fact, a new town laid out in the 1960s,

but today's auction lot has an interesting history,

which predates that by some 50 years.

I'm here about a mile from the centre of Cramlington

to see a semi-detached bungalow that was built around 1910 by the RAF

in connection with a local airship base.

The guide price was a very specific £54,950

and for that there's an added bonus.

You do get a bomb-proof roof.

More on that particular bombshell later.

But it does all look neat and tidy from the outside,

with UPVC double glazing, tick! There's a new door, tick!

Out back, there's plenty of off-street parking under a car port, tick!

And a bit of outside space, too, so that's a...

# Tick, tick, tick, tick, boom

# Yo, are y'all ready for me yet? Pump it up, Chris

# Yo, are y'all ready for me yet? Pump it up, Chris

# Yo, are y'all ready for me yet? Pump it up, Chris

# Well here I go, here I go, here I here I here I go, yo. #

So, what is on offer?

Is it a bombsite or not?

Actually, no not too bad.

There's a dining area over that way

and this nice-sized living room, very dated fireplace,

but actually quite pleasant,

it's an open fire, which is always nice to have.

But then, what on earth is going on here?

You've got this internal divide which is basically made from French doors!

It actually separates that room out from this corridor area here.

You go that way to a loo and bedrooms

and this way through to the kitchen.

Very odd indeed.

The kitchen itself is a really nice size,

loads of space for having a kitchen table in there

so it becomes a living space, as well.

Obviously, you need to replace the unit.

But you've got to go that way to the dining room, excellent.

So far, it's all seen better days.

But a pleasant surprise along the corridor...

..is the bathroom,

and a bedroom, which is not quite as bonny a lass.

Through to the bedroom.

It's interesting because it was described in the auction catalogue

as being a two-bedroom property, so I guess they're classing that dining room,

or what I call the dining room, as the second bedroom,

and you could theoretically have that as a second bedroom.

Or you'll have it as a one-bedroom place and this is your bedroom.

Nice size, got some built in cupboards,

and real nice extra feature,

another one of those lovely, old period fireplaces.

# I will survive Hey, hey... #

At least, I hope it will survive because despite its unusual layout,

I quite like this quirky, little bungalow.

But what about that roof, which was built to survive a World War I bomb blast?

Having heard there was a bomb-proof roof, I couldn't resist having a look.

Sure enough, there are steel reinforcements

and concrete slabs on the roof.

But as a general rule, it is always worth checking

into the roof space of a house when you're looking round it.

Some people carry a set of step ladders for that purpose.

But will a local estate agent be blown away by this bomb-proof bungalow,

which went to auction with a guide price of £54,950.

The house appears

to be of solid construction, fairly well built, quite tough,

and there are some original features which are attractive to some people.

But there's still work to do here.

Could it achieve an earth-shattering rental income?

I think the rent probably would be around £450 a calendar month.

No great shakes there

but could it make an impression on the re-sell market?

If it was to be put into good order we could probably market

the property somewhere like £95-£99,000.

Bungalows do tend to hold their value well and they don't make so many of them any more,

so they are perennially popular.

Despite the layout inside,

I still think this one's a good one to go for.

So, who fancied this place? Let's find out when it went Under The Hammer.

Semi-detached bungalow, corner site, well established residential area.

We've got this in with a price guide of £54,950 plus. Can I ask for 55?

53? Someone want to start me at 50?

-Nobody?

-45.

45 bid left-hand side.

47 right in the centre. 49

51. 51 bid. 53.

It's in the centre at £51,000. 52.

No. It's in the centre at £51,000. Anybody else? I'm in at £51,000.

52 anyone?

51½ gentleman standing in the far corner.

I'll offer half to you as well. 52. 52 bid.

52½. 53. 53½.

54. 54½.

55.

No. Gentleman in the back row at £54,500. I'll take 55.

55 bid. 55½.

Sorry? £55,750. 56?

What's 250?

56 bid gone. 56 bid.

£56,250?

No?

I can't quarter it again. £56,250. No?

I'm in the centre at £56,000.

Anything further on 56?

No? £56,250 is back in.

56½? No?

I'm at £56,250.

You don't want to try again? Anybody else? I'm at £56,250.

It's just below at £56,250.

It's close, but unfortunately just below.

So, the lot failed to reach its reserve at the auction,

but the former RAF bungalow didn't crash and burn there.

It was snapped up afterwards for £59,000

by local lass Sandra and her husband, Barry.

Barry drives heavy goods vehicles and Sandra works in accounts.

This was their very first time at auction.

-Sandra, Barry, good to meet you both.

-Hiya.

-Congratulations.

Sandra, tell me, why did you want to buy this house?

We'd seen it, but we thought it would go for a lot more than it did at the auction,

so we just went to the auction by chance.

But we like the area, it's very quiet and it's a lovely bungalow,

just the right size, really, to live in it.

But this isn't for Barry and Sandra to live in, no, no, no.

Having recently done up one property, they see the bungalow as a buy-to-let investment.

'They plan to go on and build up something of a portfolio.'

Tell me about you two, how long have you been together for?

-23 years.

-23, yeah.

How did you meet?

-Barry was a doorman.

-I was a doorman in Newcastle.

-A doorman?

-In a nightclub?

-Yeah. She was giving us loads of lip.

I was on a girls' night out, so...

And she was giving you lots of lip?

-Loads of it, plenty.

-Can you remember what you said to him?

-You don't want to know.

-He said some rotten things to me but I eventually

told him that he was good looking, so that sealed the deal.

Then she took her sunglasses off and jumped backwards.

LAUGHTER

# That's really saying something

# Bop-bop, shoo-be-do-wah

# Bop-bop, shoo-be-do-wah... #

23 years later and Sandra and Barry are starting to think about

making their hard-earned cash work even harder for them.

So, they've sashayed their way on to the buy-to-let market.

What are the plans for the place?

Get it sorted, it's basically cosmetic

and I think it's let straight away, anyway.

Somebody come to see it the other day and loved it.

There's a kitchen to go in, bits and pieces,

and as far as I'm concerned, it's gone.

-You've already got someone lined up to rent it?

-Yeah.

That's got to spur you on a bit, hasn't it?

Yeah, it's nice...

What are you going to do to the place?

New kitchen, full redec,

quite a bit of plastering cos the walls are poor.

We were going to take these out but the tenant moving in

wanted them left in, so...we'll just leave them.

It is a quirky layout, isn't it?

With these internal patio doors. Are you going to address that or not?

I don't think there's any need. Basically, if I move in, yes,

but not at the minute, no.

I think it's just to keep the warmth in for the winter,

because the glass is so cold, and it makes a passageway.

But initially if we were living in it then we would

take this wall out and make it more spacious for the living room.

-But you're not going to bother doing that?

-Not at the moment, no.

Barry and Sandra are super organised and plan to get the work done

in just four weeks because their tenant is chomping at the bit to move in.

Their team is ready to start straight away

and they have a modest budget of £5-10,000 to make the house comfortable.

-What next for you two, then?

-Just move onwards, I think.

Once this is done, find another one, and crack on.

Congratulations, lovely to meet you both, good luck with it and look forward to seeing how you get on.

-Thank you.

-Cheers.

Things really have turned out pretty well for Sandra and Barry.

Somebody already lined up to rent the place out.

Of course, that does put the pressure on getting those renovations done in time.

How will they get on? You can find out later in the show.

SW6 is one of the prime postcodes in London.

Two premiership football clubs, period properties

and pucker penthouses. It would seem to have it all.

But if I told you that you could still pick up a bargain in SW6,

would you believe me?

Well, welcome to Sands End.

Just around the corner from those impressive penthouse apartments

is the property I'm here to see.

It's a more traditional street, with lines of Victorian terraces,

a fraction of the height of the new builds and a fraction of the price.

So, while a one-bed in a modern block goes for around £600,000,

I am here to see a one-bed which had a guide price of £245,000.

Between you and me, I know which one I'd prefer.

# You're just too good to be true

# Can't take my eyes off of you... #

Did you know Frankie Valli was a Fulham fan? No, me neither.

But that's by the by.

We're here to look at this top floor,

three-roomed flat in a really lovely terrace.

The road outside does get quite busy but fingers crossed

there are enough plus points inside to make up for that.

# I love you, baby, and if it's quite all right

# I need you baby... #

I really do like these split-level flats. You get the feeling of space.

You've got lots of rooms up there,

loads of light coming in that skylight,

so a very positive start for me.

The bathroom just off the corridor... Oh!

And a bit of cheeky space to play with in that cupboard.

I'd like to knock all this through,

you could really open up that bathroom area. But my!

Now this is what you call a big kitchen! And we're in London, so imagine!

Look at all this space, it's incredible.

You could change these units, they're very dated.

But I like the way you could have your breakfast bar here.

Sit down and eat, bit of a negative though, big beautiful window,

but the other side of that is a busy main road,

lots of juggernauts haring past at all hours of the night and the day.

But behind that building is the river.

You've got your pluses and minuses.

By London standards, this is a great kitchen, so a really good start.

Beyond the massive kitchen, this flat gets better.

Upstairs is a really good sized double bedroom, a large sitting room

with a lovely bay window looking out onto the quieter side street.

Beside that, a single/box room.

So, what is this flat? A one-bed?

A one and a half-bed? Two-bed? Or could it be even more?

This is a big flat. Really, too big as a one-bed.

But is it big enough to get a proper second bedroom in there?

I think that would be a little bit tight.

The best way to convert it into a two-bedder

and make some decent cash is to do a loft conversion,

as plenty of other people have done in this area.

And there seem to be a number of ways in which you can lay these conversions out.

Some put a bedroom and an ensuite up there,

some, a couple of bedrooms, and I've even seen one or two laid out

with a nice big kitchen-diner in the loft. Interesting.

But before you get too excited about layouts,

you have to buy the loft space first.

Yes, buy it!

Because although you're on the top floor, the vendors still own the freehold

and with that, the roof space itself,

and that could cost you big time.

I know of a property where it cost the owners £30,000 to buy the loft space.

But if the purchaser can buy the loft space from the freeholder

it would transform this flat and life it into a whole new price bracket.

We asked along a local estate agent

to see what he makes of the property.

First, what about the area, Sands End?

I think the area's a very safe bet. It's in Zone 2,

it's an excellent part of London,

I think it's probably one of the rare,

last places left for serious capital growth.

That's what I like to hear.

What about the flat with its guide price of £245,000?

Obviously, it needs a little bit of work, it's good proportions,

it's good light, it's well located, fantastic development property.

What might be the best way forward, here?

I think the maximum potential would be to extend into the loft.

The current market would dictate that you aim for a very opulent two-bedroom.

It is possible to make three bedrooms out of these

but we've achieved phenomenal prices in the two-bedroom market

because the buyers at present are very affluent.

They have a high net worth and therefore they are wanting what they want,

and you should appeal to that market.

What could it sell for as a swish two-bed flat?

If the right money was spent on the property,

I have evidence to support a price of £600,000.

And rental income?

As a two-bedroom property, I would look to achieve £2,150 per calendar month.

This property is a bit of a double whammy.

A flat with scope to extend in an area that's increasing

in value and desirability. Of course it's not all simple.

You have to buy that loft space first.

But I still reckon at the right price,

this was a good one to go for at the auction.

Shall I kick off on this? Er...

250?

250. 255.

260. 265.

270.

275.

280.

285. 290.

295.

300.

305.

310. 315.

Or, 311. 311? 311 anywhere?

311. 312.

313.

If not, 312, first time, second time 313...

314.

315, new spot. 316.

317. 318.

319.

318 first time, second time,

third and last time.

319. Another spot.

320. 321, madam.

322.

Fulham, you can't go wrong in Fulham.

323.

323. 322.

First time, second time,

third and last time, if you're done.

Sold 322.

That successful bid of £322,000 came from Jamie, a local estate agent,

who attended the auction with his business partner.

Now, Jamie has appeared on this programme before,

wearing his estate agent's hat,

but you may recognise him from somewhere else.

# Strange

# I've seen that face before... #

-Jamie, it's lovely to meet you.

-Very nice to meet you as well.

Now, I know I know that face and I know where from.

-Absolutely, The Apprentice.

-Tell me all about it.

Amazing experience, really, the whole thing, very intense.

Very, very difficult. People now come up to me, "Was it that difficult?"

Absolutely, but times it by ten. Difficult but brilliant all the same.

You've got back to work, you're back into property, you've been a busy boy, recently.

Yeah, absolutely.

My whole life and career has been in property, sales, lettings,

which I'm still doing, got my own agency,

but also now doing a bit of property development, as well.

On the front end and back end.

How many years have you been involved in property?

I started property when I was 15 years old as a Saturday boy.

-Did you?

-Yea, yeah.

So I can now say, 16 years.

I don't look old enough to have been in property for 16 years!

-Are you that old?

-Yeah, 31.

And anything else that's taken a lot of your time, recently?

Yeah, my beautiful wife gave birth to our baby son ten weeks ago.

New business, new family, full on. Very, very busy at the moment.

Busy as he is, Jamie's not shirking from making a difference to this flat.

Oh, no, he's going large on this one.

It's pretty much a first floor flat, slightly split-levelled.

Two bedrooms, more like one and a half bedrooms,

but where the real value is going to be is adding square footage.

Going into the loft.

We've put in some big plans to go into the loft and we're going to get it.

-You're so confident.

-We're going to get it.

-Too confident?

What if you don't get it? Have you got a plan B to fall back on?

There's always plan B, plan A is going to be going into the loft,

two rooms upstairs, about 1,500-1,600 square foot. Big plans,

probably doubling its size.

That would be plan A, brilliant.

Plan B, only one room upstairs.

If these plans are rejected then we should be able to get one room upstairs.

Plan C would be to renovate and sell,

and plan D would be renovate and rent.

Jamie's plan A is pretty ambitious.

Two big new bedrooms in the loft space,

the existing kitchen becomes a bedroom. The current sitting room

becomes the kitchen/living room, and the box room stays as it is.

Sounds great, but I think we might have overlooked something rather important.

You say you have the loft but you don't actually own the loft.

-I don't own the loft.

-Tell me more, because that frightens me

and I know it frightens a world of people because you don't know

-how much you're going to have to pay for the loft space.

-Absolutely.

Listen, when you buy in auction you have small time to due diligence,

but then you buy it on the proviso that you can buy the loft area and you can extend.

We have experience in buying the loft space in the past

so we know the process and we feel comfortable doing it.

How much do you reckon you'll have to fork out for that loft space?

-I reckon £12,000.

-I'm going to tell you a little story.

I know somebody that ended up forking out £30,000 for their loft space.

Negotiate. Everyone knows I can negotiate.

Negotiate, negotiate, negotiate.

This wannabe apprentice sure if fired up over the task ahead.

Jamie plans to spend £50,000 on the building work,

£20-25,000 on fitting the flat out,

plus his estimated £12,00 to buy the loft space.

So, with his total budget around the £87,000 mark,

Jamie's not holding back. There's planning permission still to get,

but he will give his builders four to five months to finish the work.

-Jamie, it's been so lovely meeting you.

-Very nice meeting you, as well.

I'm excited about this project

-and are you glad how things have turned out?

-Love it.

-Love it.

-Well done, brilliant.

-Thank you.

New business, new family, new developments. Oh, full on!

But I think that's how Jamie likes it.

And he's being sensible with plans A, B, C and D,

in case the risk doesn't return the necessary rewards.

Find out if this former Apprentice

wins big on this Sands End flat later on in the show.

Coming up in Devon,

this pet shop with flat above looks a solid investment.

That's over 8% yield? Nothing too slimy about that.

It seems all's well with Jamie's renovation

in this split-level flat in South West London.

We buy well, we renovate well and we sell well.

But first, in Northumberland

Sandra and Barry are making things neat and tidy.

There's still a few snagging bits to do and then it's finished.

'Back now to Cramlington in Northumberland

'to check on progress at this bomb-proof, semi-detached bungalow,

'which Barry and Sandra bought at auction for £59,000.

'HGV driver and former doorman, Barry,

'was quite clear about their plans for the property.'

It's basically cosmetic.

Somebody come to see it the other day and loved it,

as far as I'm concerned it's gone.

-You've already got somebody lined up to rent it?

-Yeah.

-That's got to spur you on a bit, hasn't it?

-Yeah.

And spur them on it did, with a budget of between £5-£10,000

and a four week timescale, it was all systems go.

Just four weeks and two days after our first visit,

we're back to see if Sandra and Barry have put their heart and soul

into this northern property.

# Like a sound you hear that lingers in your ear

# But you can't forget from sundown to sunset, now, now

# California soul

# California soul. #

Bearing in mind it's a mere four weeks since our first visit,

Barry and Sandra have made a pretty good job of this one.

Basically, we've got into place ceilings, walls,

we had a good decorator and he's put stuff right.

It was in a bit of a state when we first got it,

but it's getting there.

There's a few snagging bits to do and then it's finished.

The biggest changes are in the former dining room,

which is now more clearly a bedroom.

We took the door out between the kitchen and the dining room

to make the dining room a bedroom.

Barry took the gas fire out and the fireplace.

We had to take it right back to the brick and that was replastered.

And the kitchen itself is transformed.

We took the whole kitchen out, replastered the ceiling,

took the door out there, put all new units in, all new electrics,

made enough room so you can have a kitchen/diner,

as opposed to having a separate dining room.

As well as a new fence all the way around the property,

former doorman Barry has been busy outside the back door.

Basically, out here there was a car port where I'm standing,

which was flexing in the wind, which was pulling the wall down.

So, we took that down, got it all strengthened.

All the gutters taken off, the soffits painted up cos they were OK.

Painted the bottom end and flagstoned

this little bit to tidy it up.

And that's what it is today.

Barry and Sandra felt they were let down by their plasterer,

and although their painter saved the day for them,

they went slightly over their four week timescale

with just a bit of snagging still to sort out.

The couple did a lot of the work themselves, so what has that done for their £5-10,000 budget?

With solicitor's fees it's gone to £6,600.

That's pretty impressive.

Sandra and Barry have spend a total of £65,600 on the property,

including their purchase price of £59,000.

We asked along two local estate agents

to hear their thoughts on the renovation.

The property is done to a really good high standard.

They've kept some original features

with the cove and the lodge skirting, and the two fireplaces.

They've done a reasonable job,

compared to the original state it's much improved.

While Barry and Sandra have already let the bungalow,

what do the experts think it might fetch on the resale market?

I think if we were putting this on the market at the moment

we'd probably ask for something between £80,000 and £85,000,

and hopefully achieve something at tops £70-£80,000.

I would value this property at £85,000.

Well, I'm pleased at that cos I would have thought

-it would be around £70-75,000.

-Especially in this climate.

-I'm pleased with that. Exceptionally pleased with it.

-Yes, very good.

In fact, it's going up for sale.

I think your tenant might have something to say about that, Barry.

But if they did sell at £80-£85,000,

Barry and Sandra would be looking at a pre-tax profit of between

£14,400 and £19,400 which is pretty good for a month's work.

What do the experts think the bungalow could fetch on the rental market?

In this current market the rental would be £450 per calendar month.

I think with this one on the market at the moment something

approaching £500 a calendar month.

It's about where we were, we're getting £495 for it

so it's about right.

Renting the bungalow out for £495 per month would give

Sandra and Barry a well deserved yield of just over 9%,

so what's next for this pair?

On to the next one.

Move on to the next one now

and see what comes up onto the auctions, auction sites.

I've got estate agents ringing us all the time with properties,

it's choosing the right one, you know.

We'll get there.

I'm in Torquay in Devon, famed for its sandy beaches,

mild climate and Torbay palms.

The property I'm here to see is a couple of miles inland.

Well up for auction with a guide price of £120-130,000

was a shop with a flat above it.

Now, the shop's currently tenanted

but we've got permission to have a look round and if you don't like things

that creep, crawl, slime and slither...

look away.

Well, as you can see this place is let out as a pet shop

selling a variety of reptiles, snakes and fish

and a fantastic collection it is, too.

But what's really interesting is the rent.

£11,000 a year and there's a ten year lease in place.

So if you got this for around about the guide price, that's over

an 8% yield, nothing too slimy about that.

So, with a tenant and lease in situ you don't have to do anything

with this part of the building.

But there's more to this property than just these business premises.

You also get a three-bedroom flat and it's up these stairs round the back.

Well, judging from the outside, we've got a few problems going on.

That is really ancient guttering, it's obviously been leaking,

all the fascias and soffits have gone, that's not good,

let's hope it's better inside.

Well, first thing you have to get is a new door,

that's not very good, is it?

And straight away, look, dreadful signs of damp,

probably caused by that gutter.

Just a simple bit of plastic guttering in good condition

would have saved all that.

But it looks like a half decent flat in terms of size.

Through the front door a little corridor,

off into your first bedroom here, and again look at that, not good at all.

All along this front wall

are really bad signs of damp.

Still, not too big a problem to sort out. Let's carry on.

Unfortunately there are signs of damp throughout this flat.

No room escapes.

The bathroom suite looks OK but the flooring and the tiles will definitely need changing.

Across the corridor of this two-storey property that went

to auction guided at £120-130,000,

the large bedrooms are a decent size.

But again, there are more signs of damp.

Bedroom three, like the rest of the flat,

will need a complete refurbishment.

I like the kitchen, it's a fair size and really light.

It could make a great room once the units have been replaced.

Look at this, a really nice-sized lounge.

I know the flat isn't in the best of conditions but there's

a lot of space and it certainly feels like a lovely place to live.

Lots of light through the windows, bit of noise from the road,

perhaps, but all in all, I really like it,

and don't forget, you've already got the income from the shop downstairs.

Any money you get from rental here is just a bonus.

But would it be easy to let out this flat?

We invited a local estate agent to look around.

So, what's the verdict here?

The flat itself is actually quite spacious.

There are obviously one or two issues that need to be put right.

There are some major damp issues from the looks of things which need to be sorted out.

The gutters need to be replaced.

I certainly would recommend that the vendor not spend too much on refurbishment.

The bathroom suite is actually not too bad

so maybe some retiling and just a cheap kitchen.

After refurbishment, how much rent could be earned here?

Once renovated to a reasonable standard I'd probably expect

to achieve between £450 and £475 per calendar month.

And if you could separate the flat from the business,

what sort of valuation could it fetch?

I would recommend putting it onto the market at between £70-£75,000.

Well the thing with this one is not to get too distracted

by the amazing reptiles, just look at the numbers.

You've got a long term tenant here paying you a good rent

and the bonus of the flat upstairs.

A great, solid investment. What do you think?

Let's see what happened when it went under the hammer.

165 is next.

This lot came up towards the end of the day but there was still

plenty of interest in the retail unit with a flat above.

So, £100,000.

One I've got, at 100. At one.

102. 102?

104. At 104. 104.

106.

108. 110. 112.

112.

114.

116.

118, 118, 118.

At 118.

Once. 120. 122. 122.

124. 124.

126. 126. At 126.

128.

130. Hello, right, that was obviously the key point.

130 is the nice lady here who's been pushed up

all the way by one chap, and now two more join in.

But you're in at 130. At 130. On my left it is. Once.

132. 132, 134.

134, 135.

Thank you front row. 135.

136. Someone's listening.

At 136. Here. At 136.

At 136, the lady.

On my left, first, second time. 136. It's going, make no mistake,

the two components at 136.

Madame, it's yours, well done.

That final successful bid of £136,000 was made by Fran, who's based in Torquay.

She's only recently relocated back to Devon from Wales and there's

a good reason why she attended her first auction to buy this property.

# Karma, karma, karma, karma, karma chameleon

# You come and go, you come and go You come and go... #

I met up with her in the flat to find out more.

-Fran, good to meet you.

-And you.

-Congratulations.

-That was an interesting auction purchase, isn't it?

-Hmmm.

Tell me why you wanted to buy the flat and the shop.

Mainly the shop. This is where we buy all our reptile

and snake food, cos I keep reptiles and snakes.

Wow! So you knew about this shop beforehand, did you?

I only live five minutes away so it's the ideal purchase, I thought.

-So, you like the shop so much you decided to buy it?

-That's the one.

What sort of things do you keep?

Royal pythons, bearded dragons, water dragons, chameleons.

-I love chameleons, aren't they great?

-Well, I've got five.

Oh, have you? I love their eyes going all over the place.

I've got five just waiting for a female to go with the other one then I can breed those.

Wow. How big is your biggest snake?

-Oh, the biggest one is our Burmese python.

-Right.

-He's only 18 months old.

-He is going to end up between 18 and 20 feet long.

-18 and 20 feet?!

-Yes.

So what go you into snakes and reptiles?

I've always liked them, and then I met up with somebody

who actually was keeping them and my interest just sort of escalated.

With such an interest in breeding reptiles, it's no wonder Fran

was interested in making this her first investment property.

It's a venture she hopes will benefit her two kids

in the long term, but her primary focus seems to have been the shop.

'She knows the current tenant,

'Sue, who runs it, but of course there's more to this property.'

So was the flat a significant part of the reason for buying it?

-I'm not sure what I'm doing with this part, yet.

-OK.

Sue from the shop might be taking it over and extending the shop up here.

-Oh.

-If she doesn't I'm going to turn it into a really nice three-bed flat and then rent it out.

The current lease is what's known as a repairing lease,

meaning that it's the tenant who is responsible for the repair

and maintenance of the building.

Fran is the freeholder, but she's decided she'll share

the initial renovation costs with the tenant,

because it seems fairer when there's so much work to be done.

Apart from damp and decor, if Sue does decide to extend the shop upstairs

they'll build an internal staircase to connect the two floors.

That's dependent on getting change of use

and building regulations approval from the council, of course.

So, any idea how much this is going to cost to do the restoration

you need to do immediately?

Probably what I'm going to be spending is going to be around the £5000 or £6000 mark.

-Right, and how quickly are you going to get that sorted?

-Within the next month.

-Right.

-And then the budget for any other work, it really depends on what happens?

-Yeah.

Personally, I'd opt to refurbish and let the flat

but then I think Fran's love of all things reptilian

is definitely the main driving force here.

Although Sue is likely to be the tenant for the whole building,

Fran's not bothered about changing the financial terms of the tenancy.

# It's not about the money, money, money

# We don't need your money, money, money

# We just wanna make the world dance

# Forget about the price tag... #

So if you rented it you'd get a few hundred a month

for the flat but are you willing to forego that?

Yes. I'd rather forego that and have somebody in here I know that's not going to wreck it,

and will look after it.

I hope you get free reptile food for life!

I expect so.

-Well, congratulations, it's a surreal end to the story.

-I know.

-I know, amazing.

-Lovely to meet you.

-And you.

-Good luck with it all.

Thank you.

What an amazing turn up for the books!

Fran, a reptile lover and snake owner buys

a reptile, snake and fish shop.

Fantastic.

When we return, will this place be an extension of the shop?

Will there be snakes and things all over the place or will there be a person living in here?

Well, you can find out later in the show.

Well, after some work has been done those properties could be

worth a lot more money.

Have our buyers started, or have there been delays?

Let's go back and find out.

We've come full circle back to Sands End in Fulham, London, to check

on progress at this first-floor, split-level flat.

It was bought at auction for £322,000 by estate agent,

and wannabe Apprentice Jamie and a business partner.

With his 16 years in the property business, Jamie can certainly walk the walk and talk the talk.

He was taking no chances when it came to plans for the flat.

Plan A is going to into the loft, two rooms upstairs,

big plans, probably doubling its size.

Plan B, only one room upstairs.

Plan C will be to just renovate and sell

and Plan D would be renovate and rent.

Sounds like he's covered all the bases there.

Jamie had a total renovation budget of around £87,000,

including an estimated £12,000 to buy the loft space from

the freeholder and a timescale of four to five months to do the work.

We're back seven months later to see

if new dad Jamie has sweetened the blow of being fired by Lord Sugar.

# Woah, oh, sweet child of mine

# Woah, oh-oh Sweet child of mine... #

The first thing to note is that Jamie hasn't gone

up into the loft, but he has made some big changes here.

The former kitchen has been divided up to create

a double bedroom and where the dining area was is now the bathroom.

The old bathroom has been opened up to create an airy, open-plan kitchen.

Up the stairs and the original double bedroom is still there,

but the sitting room and box bedroom have been knocked together to create a lovely bright space.

Pretty sweet in fact.

When we first bought this property there was a long corridor

which was a complete waste of space in this flat,

so we've got rid of the corridor, pushed the bathroom a bit further

back into where the old kitchen was, so now

what we have is a nice open-plan kitchen which doesn't eat into

the main living space, so you can cook and still be involved

with your guests but you've got your own space here.

Inside the kitchen itself, it's all modern, it's all contemporary,

exactly what people want around here, so anything from the soft-closing cabinets to gas cooking,

people love gas cooking round here, and of course your dishwasher.

I personally love this kitchen, it's really airy, it's really bright.

Something we've found which we didn't know was the vaulted ceiling

so actually now what we have is a really high, airy flat

and everyone who walks in here, from the builders to our buyers,

love this area. It's a nice welcome as soon as you come up from the stairs.

What about plan A and plan B and going up into the loft?

First of all we went for the big ask of two rooms upstairs.

We knew that was a big ask and unfortunately that didn't go through,

but that really was pushing the boat out.

We got our usual planning permission of a bedroom

and bathroom upstairs and if the new owner wants to do it,

they can do it and they'll be able to add value to their property as well.

So although they did eventually get permission for an amended plan

to put one en-suite bedroom in the loft space, they decided

to save themselves the time and cost of actually doing the work.

Any future owner will know the permission is in place

and it will be up to them to buy the loft from the freeholder

and convert the attic themselves.

But hold the presses, there's some exciting news.

They've already sold the property to a cash buyer who's keen

to move in as soon as possible.

This project was no different to any others. We buy well, we renovate well and we sell well.

We've done very well on this one.

Well, well, well.

Toing and froing with the planners over the loft conversion

did take several months, but once they got started Jamie's team

were in and out within ten weeks and because he hasn't gone up

into the loft he's only spent £50,000 of his total pot of £87,000.

So, Jamie has spent a total of £372,000 on the flat,

including his purchase price of £322,000. He loves it, we love it.

But what do two local estate agents make of it?

My first impression of the property is the total change.

The finish, the light, the style -

everything is absolutely perfect. Great wood flooring, I love it.

I think the way they've laid the space out,

the floor plan is probably about as well as you can do it.

It's a good balance, all in all, you have got two double bedrooms.

You've got enough living space

and the kitchen is a bit off the living room so a bit fiddly perhaps,

but no big deal, I mean it works pretty well.

So was it a good idea to go straight for resale?

What kind of rental income might the flat achieve?

If this property was on the rental market I could see it achieving £1,700 per calendar month.

If you were renting you'd be looking for maybe £1,600-£1,800 a month.

That would be a yield of between 5%-6%.

Is that enough to tempt Jamie down the rental route?

Absolutely not, it's not in our business model.

Buy, renovate, sell.

Fair enough, so what about those resale valuations?

Bearing in mind the total investment here is £372,000.

If this property was to come on to the market today I could see it fetching no less than £465,000.

For resale I would expect it to achieve

somewhere between £460,000 and £480,000.

That would mean a pre-tax profit before fees

and expenses of between £88,000 and £108,000.

How does that tally with the price Jamie's purchaser paid?

We sold for £465,000 so we knew it was a fair price,

it wasn't a high price, it definitely wasn't a low price.

And they've confirmed exactly what we're doing so yeah, 10/10.

Surely even Lord Sugar would be happy with that?

So, final words, Jamie.

It's all about buying.

You buy well and we sold at market price so perfect, I'm very happy.

Back now to Torquay in Devon where, earlier in the programme, Fran,

who lives locally, paid £136,000 for this three-bedroom flat

plus the commercial property below.

She breeds dogs, reptiles, fish and snakes and knew the shop very well.

Tell me why you wanted to buy the flat with the shop.

Mainly the shop, because this is where we buy all our reptile and snake food from.

Wow! So you knew about this shop beforehand, did you?

I only live five minutes away.

So was the flat a significant part of the reason for buying it?

-I'm not sure what I'm doing with this part yet?

-OK.

Sue from the shop might be taking it over and extending the shop up here.

-Oh!

-If she doesn't, I'm going to turn it into a really nice three-bed flat and then rent it out.

Well, it's now six months later and we meet Fran again.

The appearance of the property has really improved

with new guttering and a repainted front and back.

Inside the flat the layout has totally changed.

Walls have come down and the damp has been sorted because Fran and Sue

are converting it into a new home for reptiles from the shop below.

Space has to be found for a new staircase to accommodate

access from the shop, as Fran explains.

We've actually taken this wall down, this part used to be the kitchen,

that was the lounge, we've opened it up totally.

We've lost a bit of space at the end where we had to run

the staircase but it made it much more spacious and light now.

With many walls removed the new layout of the former flat

is now going to be home to the reptiles from the shop below

and downstairs will house the fish and aquatic equipment.

# Every little fish can swim

# Every little bird can fly... #

Before Fran could change the use for the first floor

she needed permission.

It was commercial use downstairs, residential up here. I had to apply

for change of use which has taken a lot longer to get than we thought.

This former three-bedroom flat has already had a lot of rewiring

ready for the new reptile residence and it's lucky the fish are staying downstairs

because Fran's seen more than enough water up here already.

The damp was absolutely horrendous, it was the wall over here,

it was that wall, that room there, it was just floor to ceiling black.

Basically we stripped it all back pretty much to brickwork

and hopefully, fingers crossed, problem solved.

According to the lease, the tenant is responsible for repair

and maintenance costs but Fran decided she would share

the burden, anticipating putting between £5000-£6000 into the renovation.

She knew that would increase if she decided to keep the three-bedroom flat

as living accommodation, but how much has she spent on the conversion?

I've probably spent about £8,000 on it.

But Sue spent some as well, so we're probably around £15,000.

So including the purchase price, Fran has spent

a total of £144,000 so far.

That will inevitably increase

when the final work is done according to building regulations.

# I don't like spiders and snakes

# And that ain't what it takes to love me... #

So how long will it be before Fran and daughter Rhiannon can get supplies for their pet snake, Fred?

As soon as we get the full planning permission this will all be fitted out and be done,

so we're looking at probably a couple of months, maybe, if that.

Time to hear what two local estate agents think of the conversion

and the financial prospects

for the new commercial property.

Yeah, obviously a bit different to what we were expecting them to do

but I think the major issues were the damp and the guttering

and that has been sorted out and everything looks clean and tidy.

If I was converting upstairs to be an extension to my business

premises downstairs I'd still keep in the back of my head that

one day this is going to be a flat, so I'm going to be thoughtful about where my plumbing's

going to go, where my electrics, where my inter-connecting doors, where my windows are.

At the moment it is going to be used as an extension to the business

which is a great idea, it works for the owners, but in the future

it would be quite easy to turn this back in to a residential flat.

Obviously you'd apply for a change of lease again.

There's quite a large balcony area out the back,

it would be fairly straight forward to build out onto there

so if you're needing more commercial space, or one day when it's a flat you can build out there

and give an extra room or so on, so it's quite a valuable asset.

Fran has spent £144,000 so far but how much do the experts think

the whole property will be worth once the former flat is finished?

Taking into account the work they've done upstairs

and how that's going to look when it's finished

you're probably looking at achieving around £150-£170,000.

If the entirety of the property was being sold on it really

wouldn't make a lot of difference whether it was tenanted

at the regular rate round here or actually if it was empty,

it's still going to make about £160,000, give or take a bit either way.

That valuation range, from £150-£170,000 would produce

a gross profit of between £6,000 and £26,000, minus tax,

expenses and any additional costs to complete the work.

Is she pleased with that?

Yeah. Very.

What commercial income could the property produce

if Fran decided to renegotiate the rent

which stands at around £11,000 a year for the ground floor shop alone?

If we were to rent it out on the commercial market

as a commercial unit with the extension to the business

we're probably looking at achieving around £14,000 per annum.

When upstairs is in apple pie order, as nice as it could possibly be,

you're looking at about £15,000 per annum.

There's a potential yield there of between 9.5-10.5% should Fran choose to raise Sue's rent.

The property experts reckoned that if sold as a separate entity

the first floor flat could achieve between £75-£90,000.

Is that an option Fran might consider?

Well, while Sue's got it I'm happy as it is, but if she wanted

to just have the shop then I would turn it back into a three-bed flat again.

Well, Fran already knew the property before she bought it.

It's one of the places she buys her reptile food

but did she bite off more than she could chew with this venture?

I'd definitely do it again.

It's been really good, a bit hard work at times, bit frustrating

but I would definitely do it again.

Well that's it for today's show,

we'll have plenty more property auction stories for you next time,

some with happy endings, others, hmmm, maybe not so.

And you won't want to miss out so make sure you join us for more

Homes Under The Hammer.

-We'll see you then.

-Goodbye.

-Goodbye.

Subtitles by Red Bee Media Ltd