Episode 43 Homes Under the Hammer

-Welcome to the programme.

-Buying a property can be a long process,

but not when you buy at auction.

Imagine having the keys to your dream property in less than a month, depending on where you buy.

Sound too good to be true? Not if you buy your home under the hammer.

Sometimes buying at auction can be a bit of a gamble, but not if you do your research first.

So are today's buyers on a winning streak? Here's what they bought.

'This Grade Two listed cottage in Devon leaves me speechless.'

Uhhh...

Wow! 'Well, almost.'

'In Kent, this lovely Victorian cottage seems to have lost some of its charm.'

They've tried to make this look and feel like it's a new house.

'And is the reason this three-bed house in Stoke has a low guide price the bathroom or the kitchen?'

No, something a bit more serious.

'All these properties have been sold at auction. We'll find out

'who bought them when they went under the hammer.'

Your lot, madam.

I'm in Crediton in Devon.

The town is divided into two parts - the east, or old part, and the west, or new part.

Sadly, that came about because a large portion of the town was destroyed by a fire in 1743,

but luckily for us, the property I'm here to see is in the old part.

# Darling, won't you meet me

# In the old part of town? #

Crediton is a popular Devon market town.

Property prices are a bit cheaper here than nearby Exeter, seven miles away,

making Crediton attractive to first-time buyers and families.

And here it is, a character, Grade Two listed, one-bedroomed, mid-terrace cottage.

Now, I know that ten years ago, this place sold for £50,500.

The guide price at auction was 55 to 65.

Even given the current downturn in the property market, that sounds like it could be a bargain.

However, the clue might be the description in the auction catalogue

which says, "It's a renovation project." How bad can it be?

Hmm...

Pretty bad.

Gosh, well, um...

It's not what I expected. This is not your common or garden mid-terrace, that's for sure.

Look at these floorboards and these...

Look at these beams!

That is oak. It looks like it's had woodworm in its time,

but how much character can a small, little place possibly have?

Let's try and describe this.

It's got solid stone walls, judging by the depth of that reveal there.

You've got this front area here with a wooden floor and probably some kind of cellar underneath there,

then this sort of amazingly characterful bit of step leading to the rear of the property

where you've got this sort of, I don't know, amazing wood-burning cooker,

more beams set into the plaster.

Uhhh...

Wow!

# Speechless, speechless

# That's how you make me feel... #

It feels like you're stepping back in time with this cottage.

There's no central heating, there's just a dirt floor at the back

and at the moment, it feels rather dark and cramped.

Surprisingly, upstairs, there seems to be more space than there is downstairs.

You've got a fairly decent-sized loo and bathroom there,

a little set of stairs which leads up to an attic area up there

and then this is your one bedroom, but the fact that somebody has stripped away the ceiling in here,

it gives it a real feeling of... I never thought I'd use this word, but space.

Now, what would I do?

Straight away, I'm thinking maybe you could create a sort of open-plan, mezzanine floor there,

galleried perhaps, looking down on to this area?

Create a bit of an extra bedroom there if you like, but not one that's separated out.

And you've got yourself one heck of a charming property here, really.

Yes, lots of work, yes, it's Grade Two listed, so you'll have to get approval for all sorts of things,

but worth it? Oh, I think so!

On second glance, I don't think there's enough ceiling height to make the attic a second bedroom

and the attic stairs are too steep to meet building regulations.

Also, you'd need to put in a roof light, something the Listed Building Officers might not be happy with.

Well, at the rear of the property, the challenge is... They don't get any less to be honest.

This is actually the rear door of the house. That little window, that's it.

The rest of the stuff in this courtyard is other's people property.

This is a shared courtyard, so you have access out the back,

but when it comes to things like party walls, doing renovation work and not upsetting the neighbours,

when it comes to just defining, when it comes to being a solicitor, who owns what,

it's a nightmare!

# Yeah, welcome to my nightmare Yea-eah... #

So there are many calculations and a lot of work to do to this listed freehold cottage.

With no kitchen in place, it's not going to be mortgageable either.

But what is a nightmare and best avoided for one person can be a dream investment for another,

especially at that relatively low guide price of 55,000 to 65,000.

What does a local estate agent make of it?

With it being Grade Two listed,

there will be a need to speak to the conservation department,

making sure that all works do comply.

Structurally, we don't know. That would need to be looked at, but certainly a lot of work to be done.

Once renovated, what could this let for?

The rental income you could achieve once the house was finished

would be between £475 per calendar month and maybe up to £550 per calendar month.

And once done up to a good standard, what could it sell for?

I do think it would be between £110,000 to £125,000.

Let's be realistic. The fact it's falling to pieces inside will cause you problems.

The fact it's Grade Two listed will cause you problems.

No space on the road to stick a skip will cause you problems. I don't care. I love it!

And I'm sure somebody loved it when it went under the hammer.

Charming, mid-terrace, Grade Two listed house.

Guide price here is 55 to 60. To start at 50,000 would be very nice.

Straight away at 50. And 1? 50,000.

51 I'm looking for... 51. And 52?

And 52,000. And 53?

53. And 54? 54. And 55...

56. 56,000. 57, yeah?

57. 58? 58,000. 59 now?

I'll take a half if it helps you. Yeah, 58 and a half. 59 now?

£59,000. 60 for knockout?

It's with you at £59,000. Any advance on 59?

Are we sure we're all done at £59,000?

Are we quite sure we're all done?

It's sold to you, £59,000.

# You bought it, you bought it... #

'That final bid of 59,000 came from Devon-based Charlotte.

'She works part-time in a primary school

'and is mum to George and Lily.

'While the kids played, I found out more about her plans for this, her first property investment.'

-Charlotte...

-Hi.

-Congratulations.

-Thank you.

-Wow! It's not your average house, is it?

-No, no. I wasn't expecting to buy it, but I'm glad I have.

-What do you mean?

-I'd never been to an auction before and I was only going along to see what happened.

But the bidding carried on and whizzed up and then came to a point and stopped just under my limit.

-Oh.

-So I put my hand up, knowing that if anybody else bid, that was me out, and nobody did.

'That is how it works at auctions.

'If you put your hand up, you've got to be prepared for the fact you might buy it.

'Charlotte had viewed this cottage before the auction, but was in fact more interested in another,

'but the low guide price for this one just proved too tempting.'

-Have you done anything like this before?

-Not on my own.

I've done up an old cob farmhouse before and my parents have been in property renovation for a while.

-But this is your first renovation project?

-It is.

-And your first auction purchase?

-Yes.

The expression "in at the deep end" springs to mind.

A little bit, but at least I haven't got to do any ripping out in there. It's all done for me.

-Blank canvas.

-Looking on the bright side.

Tell me what you're going to do with it, how you're going to sort it out.

I'm not doing any major works in there. I want to leave the layout as it is.

I'll put a ceiling back in the bedroom, just board that out.

There is a second staircase up to the attic, so it would be an attic room,

-but not an official second bedroom.

-But you will open up the attic room?

-Yes.

New kitchen, obviously.

Where is it going to go?

The kitchen will fit in at the front there. I've already worked out we can squeeze everything in.

One of the amazing things is all the wooden beams.

-Will you retain those as much as possible?

-Yes. They have already been treated for woodworm.

It's all pretty sound in there. Structurally, it's fairly safe.

'Charlotte has got a substantial budget of up to £20,000, including legal fees,

'and a sensible timescale of six months.

'She plans to do as much of the work herself as possible, bringing in trades for the skilled jobs.

'She's also got two willing helpers in her children George and Lily, as I discovered.'

-Lily, George, what do you think of the house?

-It's good.

We still think there needs work to be done.

-Right.

-It needs work done, but it's a nice house.

-So tell me what you're going to do.

-We are going to do quite a lot.

We get to use a lot of tools, which will be quite fun.

Lily, what are you going to do?

Well, I might just help with putting some slate in the living room floor.

She'll probably do a lot of the painting because girls are better at that.

I'm better at the heavy jobs like lifting all the stones and digging out.

# I can help

# I've got two strong arms

# I can help... #

Well, for Charlotte's first auction purchase

and first property renovation project,

she could have chosen something slightly easier.

Still, like me, she fell in love with the place and who can blame her?

Hopefully, it'll all turn out all right.

You can find out a little later in the show.

This is Cranbrook, a gorgeous little town in Kent, half an hour from Royal Tunbridge Wells.

Like many towns around the country, it used to have a train station

and the property I'm here to see, just outside Cranbrook,

owes its existence to the heady days of steam trains and branch lines.

Back in the Victorian era, for every person who was excited about train travel,

there were others who were sceptical about the noisy, dirty machines belching out smoke

and so Cranbrook station ended up here in Hartley,

a more isolated location, an impractical couple of miles down the road.

It served a purpose for a number of years before sadly closing in the early 1960s

and the property I'm here to see is a little piece of that industrial past,

a railway worker's cottage in this lovely little terrace

with three bedrooms and a guide price of 100,000 to 110,000.

# Skip to my Lou, my darling... #

If I've got a spring in my step,

it's because the cottage itself looks a treat from the outside,

but that lane I've just come down is full of potholes and in a really bad way.

More on that later. Let's see what this place has to offer inside.

First impressions are good.

Clean, magnolia walls, new ceilings.

Sadly, there's no features in here.

It feels as though they've tried to make this look and feel like it's a new house.

There could have been a few fireplaces dotted around.

You can see here there's storage heaters.

My guess is, because this house is so far down that lane,

there isn't any gas mains here to connect up to,

so I think that will put some people off.

Quite a small kitchen, although there is the potential to go across.

You could expand that, even open it out and bring it into this little room,

but above all, I've got to say, not a bad start.

The cottage used to belong to a housing association which explains the modern, serviceable look,

so reinstating a few period features here and there wouldn't go amiss.

Up the stairs and there are two good-sized double bedrooms

and a bathroom which also could do with a spruce-up.

Then upstairs again to the crowning glory -

another great-sized double room with lovely views.

Add in the decent-sized, if a tad overgrown, garden

and I reckon you've got a lot of property for that 100,000 to 110,000 guide price.

So I love this cottage,

I love the guide price, but I'm less keen on this lane.

OK, so you could argue it's a very rural location

and some people may think it's nice not to arrive home on a piece of Tarmacked road.

But this lane is bumpy, look. There's potholes.

It would be very impractical in the harsh winters we've been having over the last few years.

But worse than that, even if you are ready with your four by four

and you love the idea of off-roading to get home, legally, you can't

as the owner of the property doesn't actually have right of way along this track.

Now, some of the houses do, but our lot doesn't. Bizarre!

And since it's a bridleway, unless you're walking or you're riding your horse home after work,

I would get this legal quirk sorted and fast.

I would be trotting straight off to see a solicitor to get the access issue sorted out.

If you don't, it could come back to bite you when you try and sell the cottage on.

We asked an estate agent to tell us what he makes of the cottage,

muddy, holey lane and all.

I think it's a good property.

I think it's got a lot of potential. It's a great spot

and it's got more accommodation than I thought when I drove up.

What about the access issues?

It depends, actually, if there's a legal problem with maintenance, if you have to spend money on the lane.

But if you spent the right money, it would be improved.

Fair enough, but at the moment, you can't legally drive up it in your car, let alone maintain it.

So what could the cottage sell for, once renovated?

Without too much spent on it, it could well be worth 175,000.

How about as a rental?

In good condition,

I would have thought £550, £600 a month.

This old station worker's cottage is an extremely exciting lot -

a Victorian house in a very desirable, rural location with a low, low guide price.

I can't wait to see who spotted this at the auction.

What are you going to say for this one to start me?

Coming in at £100,000? £100,000 I'm looking for.

Give me 90 then? 90,000?

£90,000, right in the middle. 92 I want. 92 bid, I've got on my right.

94 to the original bidder. And 6 now? 96. And 8 if you like?

98 I have. Put it up to 100?

99 I'm bid. Now 100.

And 101 if you like?

101 do I see? 1, I've got.

And 2. 102. And 3?

No? At £102,000 bid, I've got. And 3 I'm looking for now...

At 102 then on the back line for the first time...

102 for the second time...

Third and final time at £102,000 bid, all done?

Sold at 102 and it's D201. Thank you.

'That successful bid of 102,000 came from Matt.

'Matt and his dad Peter live locally. And like father, like son, they're both carpenters.'

# I'm on the top of the world, looking

# Down on creation and the only explanation I can find... #

'I met the two of them back at the cottage

'to see what this chippy off the old block has in store for it.'

Matt and Peter, lovely to meet you both today.

-And you, Lucy.

-I'd like to call this house "bargain of the century".

-It's pretty good. I quite like this one.

-£102,000? What's the story behind you wanting to bid for this?

I really like the area and there was the two of them, this one and next door, I was going to go for.

At the last minute, the finances fell through,

so I ended up getting this one at what I thought to be a bargain price

and yeah, it really paid off.

Matt's your son. Peter, what will your involvement be and what has it been?

I've guided him through his life so far, so...

No, he's his own man.

We've got a bit of finance involved in the property, like,

but it's mainly Matt's project,

so he'll be doing the majority of the work.

-Do you still live at home?

-I do, actually.

Dad owns a farm, so it's a bit like a playground for me. I've got a load of space to do as and what I please.

So it makes sense to stay there, really.

-You're not silly!

-Not silly at all.

'It sounds as though Matt has his head screwed on.

'He has recently sold one property and plans to build up a portfolio and rent them out.

'And this cottage, well, settling on it was plain sailing.'

I like this one in particular cos I sold my other one and that was a Victorian house as well.

This is built within the same five years of that one.

I really like the build of Victorian houses. They look good, they're built well.

It's in a nice country location, so there's not really anything that's a downside on it. I love it.

It doesn't have that much character, considering it's Victorian.

-No.

-It seems as though somebody has come in and tried to make it look and feel like a new build.

Yeah, very much so with the very neutral colours, the bland doors, and all the double glazing, the UPVC.

Yeah, it takes the edge off it.

We was hoping to introduce a bit of hardwood, give it a bit of character.

Guys, that's your thing, isn't it?

-It's what we do.

-If you had a wish list, what would you like to do to this to give it some character?

Perhaps open the doorway behind you,

perhaps we could enlarge that.

Hardwood hand-rails, newel posts.

And of course, reopen the fireplace in the other room, put a new fireplace in.

Just make it a lot more character than it is now.

'Sounds promising. Let's hope that Peter can keep his son's feet on the ground here

'because Matt went to town on his last renovation.

'He planned to keep it for a long time, but ended up selling it sooner than he had expected.'

So are you going to learn from your previous mistake?

Yeah, the last one I invested heavily in and really went to town on it

cos I thought I was going to keep it for 20 years, but in the end, I had it for five years

and then let her go.

I fancy doing another project. I like the project side of things.

This one's cheap enough, I can buy it, keep it and I plan to buy the others at a later stage,

so I've got my projects, yet I still get to retain this one.

Hold on. Are you planning on buying this whole row of terraces?

In an ideal world, yeah.

'Well, good on Matt for aiming high, but he's starting off quite modestly with a 10,000 budget

'and a one-to-two-month schedule to bring the cottage up to scratch,

'but there is still one muddy issue that could be a stumbling block - that lane and all those potholes.'

The main thing came down to the access. We read through the legal packs, viewed it a couple of times,

and just went to town on that side. The only thing is the access.

Hopefully, by the time we're done, everything will be smoothed out.

-But you would be trespassing if you came down this road?

-With a vehicle, I would be.

If I come on a horse, because it's a byway, I'm allowed to come by horse.

And I think there's even something in there by boat.

I bet you your new owners or tenants will not turn up on horseback or even on a bike!

You don't know, the way the euro's going. We might all be on horseback!

You have bought this with a bit of a risk attached. That's why it went to auction.

My advice would be to get on the case, get all the paperwork you need

and if you get all those ticks in the right boxes,

for £102,000, you would have done incredibly well on this property.

Yeah, I really do. The solicitors have no problem.

They see it being a bit of a walk in the park, to be honest, so I can't see it being too much of a problem.

It'll be interesting to see what you do. Good luck with it.

-Thank you.

-Lovely to meet you, Peter.

-And you, Lucy.

-Good luck.

-Cheers.

-Thanks.

So Matt wants to get his teeth into a new project and a great project this is too if you ask me.

That lane is a real worry when you come to sell,

but clear up the muddy access issues and this house could be a genuine bargain.

Find out how it goes and if he owns more of the lane later in the show.

'Coming up, with a history of mining in the area, it's best to tread carefully in this Stoke house.'

The house could be sitting right on the top of it.

'In Kent, did Matt and Peter get competitive with their carpentry during the renovation?'

He's catching me up. I don't know if I'm getting worse or he's getting better.

'But first in Devon, has work on Charlotte's two-bed cottage taken longer than expected?'

Working on my own, it has taken a lot longer.

'Let's make our way back to Crediton in Devon

'and this centuries-old Grade Two listed cottage.

'Inside, you might have expected a little rural charm,

'but unfortunately, it was more run-down than rustic.

'The one-bedroom property had a guide price of between £55,000 and £65,000.

'It was purchased at auction by Charlotte for 59,000.

'She works part-time at a local school and is mum to Lily and George.

'This was to be her first investment property development.'

-This is your first renovation project and your first auction purchase?

-Yes.

-The expression "in at the deep end" springs to mind.

-A little bit.

But at least I haven't got to do any ripping out in there.

Charlotte planned to carry out the majority of the work herself

with some small helping hands from George and Lily.

But this little cottage was a steep learning curve for Charlotte.

Nearly eight and a half months later, we're back.

# But there's a first time for everything

# Since you said goodby-y-ye

# There's not much of anything

# I haven't tri-i-ied... #

It's progressed slower than I hoped it would, but it has been a big learning curve.

I'm pleased I'm getting to a stage where every day I spend here, I can see a difference at the end of it,

so I'm on the final bit.

She is slowly but surely bringing this cottage back to life.

I've been doing an awful lot of work myself.

I've had electricians, plumbers and a plasterer in,

but beyond that, all the work I've done has been me.

# She's a hard-working woman

# If you only knew... #

This has been no quick lick of paint makeover. It's been hard labour.

Trying to put the ceiling joists in, just me by myself,

it would have been quite a quick job if I had somebody holding the other end of the timbers,

but working on my own, it has taken a lot longer.

# What I like about that woman, she won't quit until the job is through... #

Charlotte has done the renovations when not working or caring for her children.

And so far, I'm really impressed. What about the bedroom without the ceiling?

It seems she has taken that in her stride too.

This is the room probably with the biggest change because, if you recall, there was no ceiling in here.

You were looking up to the underside of the slate tiles.

So, putting the ceiling in, stripping all the wallpaper off, redecorating,

I'm really pleased with the size of the room, now it's all cleared out.

I just need a carpet in here and this one's nearly finished.

Charlotte decided not to go through building regulations

to convert the mezzanine level in the roof space,

but to keep things simple and use it as a handy storage area.

I love the texture and rolling lines of the plasterwork

and how Charlotte has kept the odd little treasure from the original property.

The doors, like the rest of the woodwork, will look stunning scrubbed and sanded as she intends.

She had a £20,000 budget, so has she managed to stay within that?

So far I've spent just over 10,000.

There's still a few bills to come in, but I'm pretty confident I'm going to come in under a budget.

I think my budget was quite high

because I included in that the purchase of all my tools.

I had no tools. I had a hammer and a screwdriver when I started this,

so I've amassed more of a collection now.

Charlotte has no foreseeable further big outlays

as she has already purchased the kitchen units which are still to be fitted.

Add her spend so far of just over £10,000 to her purchase price of £59,000

and Charlotte's likely to have a total investment of around £70,000 once she's finished.

What about her kids? Did they lend a hand?

They haven't been down here as much as they originally hoped.

But they did come down on Saturday and paint the bathroom wall so they have done their bit now.

And a great job they made of it, too.

We asked two local estate agents for their opinion on this cottage.

It's a really nice little cottage. Lots of character to it.

Lots of exposed beams and timbers.

Obviously downstairs is a little small,

but the upstairs is nice and the bathroom.

The things I like are the original stonework and a lot of exposed woodwork within the property,

which all add extra detail to it.

When the renovation's complete, how much could this property achieve on the rental market?

It's likely to rent for £550 per calendar month.

I believe a realistic and achievable rental figure for the house would be £500-£550 per calendar month.

Those valuations, if realised, would give Charlotte a rental yield of between 8½% and 9½%.

However, she intends to sell the cottage when complete,

so bearing in mind her total investment of around £70,000,

what sale valuation would the estate agents give?

The marketing price would be between £100,000 and £110,000.

We'd probably market the property at about £110,000 and would achieve probably £100,000-£105,000.

That's a potential pre-tax profit of between £30,000 and £40,000, minus the usual selling expenses.

-Is Charlotte happy with that?

-That's very good.

Really pleased with those valuations.

Charlotte was a property developing novice when she started this renovation,

but I'm sure the skills she's learnt will stand her in good stead for future projects.

I really admire the determination and optimism she's retained throughout the process,

but will she be so hard on herself next time round?

Perhaps the next property I buy will be redecoration and a new kitchen and bathroom.

And not quite such a major project as this.

But I've learnt a lot of lessons along the way and I still really love this little house.

I'm in Stoke on Trent in Staffordshire,

famous for its ceramic heritage.

But it's also the birthplace of Reginald Mitchell, who designed the Spitfire,

the plane which helped win the Battle of Britain. The city have erected a statue in his honour

and quite rightly so.

So let's hope today's property is also a high flyer.

The property I'm here to see sounds really interesting.

It's a three-bedroom mid-terrace.

What's interesting is the guide price - £29,000.

Now, similar properties around these parts have sold recently for around £50,000,

so what's the catch? Let's find out.

Double-glazed front door, double-glazed throughout. Good news.

Fairly standard layout. Through the front door up to your bedrooms. Three bedrooms, as I said.

Nothing untoward yet. Into your front living room area.

It's nice that you've got a door in-between the front door and this.

A feature fireplace. You'd probably want to replace that with something a little 2012.

Then through to the rear of the property is a kitchen and, yes, it's used, isn't it?

Very well used.

Yes, a bit of money spent in here, that would be money well spent.

One slight downside. Off there is the only loo and bathroom in the property.

So is that the reason why it's so cheap? No. The kitchen?

Nope.

Something a bit more serious because the legal pack contains information on the mining report.

This whole area of Stoke on Trent obviously has a history of mining

and it's really important if you're buying a house in this area that you check out that mining report.

It turns out that there is a mineshaft in this vicinity and the house could be on top of it.

Now that may not concern you, but it would certainly concern somebody who was going to lend money on it,

like a mortgage. So you'd basically have to buy this place with cash.

And if you only found out at the auction or after you'd bought it, it could be a real problem.

Now I think we should move swiftly on.

Yes, I'm going to have to tread carefully around this house,

though not as carefully as any future purchaser will have to, considering that mining report.

But putting that huge sticking point to one side, the property as it goes has a good layout.

'Upstairs, there are three standard-sized bedrooms.

'And could you move that bathroom upstairs? Well, perhaps not, 'unless you want to lose a bedroom.

'So it's best to keep it on the ground floor. What has the back garden got to offer?'

So great excitement as you come out of the rear of the property and this lean-to affair.

And then the garden... but there's something in the way. This brick building is right here.

It means it's terribly cramped so this has to go.

Oh, yes.

'Really, this block of bricks is the stumbling block to a good view to the garden. So get rid of it,

'have a general tidy up and you could create a pleasant little space out the back.

'So with that low guide price explained by the mining in the area,

'what does a local estate agent think are the prospects here?'

Stoke on Trent is a mining area and we do understand that there are two mine entries

within quite close proximity, which can affect mortgageability and the eventual sell-on price.

How would a negative mining report affect the resale value?

On the basis that the property may not be mortgageable,

I would advise the ceiling price would be in the region of £45,000-£50,000.

If the mining report was positive and the property mortgageable, what would the value be then?

We can see resale value in the region of £60,000-£65,000.

What could the place let for?

Rental income for this property would be in the region of £400 per calendar month.

Well, potentially double-digit returns on the rental,

but you've got to overcome that whole issue of the mining report.

And if you stumbled into the auction and didn't read the legal pack, and then tried to get a mortgage,

you would be in big trouble. So hopefully whoever bought it did read the legal pack.

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

Lot 56. What's this? 25?

Can we start it at 20? 20 bid, seated at the back. £20,000.

21, anywhere? At 20,000. 21.

22.

23. 24, sir? 24.

25.

26. 27.

28. 29.

30.

30 and a half.

31. 31 and a half.

32? 32.

No? At 32,000. Still on the back row at £32,000.

All done now? First time at 32, then.

32 and a half. 33, sir?

Yep. 33.

Sure? You're out? OK, 33. Not going to linger. For the first time.

33,000 for the second time. Third and final time, £33,000. Your lot, sir.

-Well done.

-It was Shaz who bought this lot for £33,000.

His parents bid on his behalf as he couldn't make it to the auction.

Shaz is 22 years old and in his second year at Manchester Business School

studying Business Management. Property developing is a sideline venture for him and his family.

I met him back at his purchase to find out what he planned for it.

-Shaz, good to meet you.

-And you.

-Congratulations. Tell me why you wanted this place.

We've got other properties around this area

-and we thought this would add value to our existing portfolio.

-Great.

-Why have you invested around here?

-Tenants are pretty easy to find

and with the price that we've paid, hopefully the work we will do, it's going to net a good yield.

-So is this a family business?

-Yes.

-How long have you been doing it?

-My father's done it a good few years

-and hopefully I can follow in his footsteps.

-In terms of your involvement?

-A few years as well.

'Well, Shaz is nothing if not busy. Not only is he studying,

'but he also finds time to manage a fast food outlet and run a marketing company.

'I hope he actually has time to get this place sorted out.'

There's quite a lot of things to be done. We'll have the kitchen redone.

All paint, paper, everywhere decoration, sort out the garden.

New slabs in the front. We'll do the bathroom as well.

The property just requires a bit of love and affection.

-So it'll get that. Now there is a bit of an issue regarding the mines.

-Yes.

-What do you know about that?

-We found there's two mineshafts pretty much directly under it.

-Ooh!

-Yeah, exactly.

So hopefully we shall be all right. I was thinking... We only took the keys yesterday.

So tomorrow I'm going to ring the solicitor and see if we can get an interpretive report

from the Coal Authority and if it's been capped off in the proper way

we might be able to remortgage it or, if we go to sell the property, someone else can get a mortgage.

-Were you aware of the issues before you bought it?

-To be honest, no.

-Eeew!

-But it was OK because, if the worst comes to the worst, we'll end up renting it out.

If I'm getting a 10%-12% yield, I'm happy.

-But had you been relying on getting mortgage finance...

-Yes, had we.

-..you'd have been in a pickle.

Yes, in a bit of a bother. But hopefully we had the resources to get it, so we're fine.

-I wouldn't buy from auction if I was relying on that.

-Do you think that's why you got a fairly decent price?

Exactly, yeah. We were, I think, another £2,000 I would have gone, but nothing more than that.

I think it's worth what we paid and if we can stick to our budget we'll be all right.

-So how much are you going to spend sorting it out?

-Hopefully, we're looking to spend £6,000-£8,000

and that includes quite a lot of work. We won't do anything cheap.

We'll make sure we stick to good quality. It's happy faces we like to see when tenants are moving in.

# Shiny happy people holding hands

-#

-Shiny happy people holding hands

# Shiny happy people laughing... #

And Shaz will be smiling if he manages to turn this property round in four weeks.

What he does may depend on the mining report.

If it's positive and the mines have been capped, then Shaz may sell on, if someone makes him a good offer.

Otherwise it will join his portfolio of rental properties, but whatever he decides

will be run past his parents because his hard work ethic and the decisions he makes in life

-are inspired by them.

-My father said, "You've two choices - work hard now and relax later in life

"or relax now, do what your friends are doing, and have a hard life later on working all the time."

-So I thought I'd pick the first option.

-Great. How's it going?

-Yeah, it's all right. Hopefully we'll see what happens.

-Good advice.

What's next on the agenda for you?

Hopefully we'll be back in the auction and see what happens. Or if there's anything privately.

-Brilliant. Congratulations. Good luck with it.

-Thanks, Martin.

Cheers. Thank you.

Well, Shaz getting some good advice from his dad there.

In terms of this property, well, yes, £6,000-£8,000 is tight,

but the biggest thing by far is that whole mining report issue.

You stand here very gingerly wondering will it be here when we come back.

You can find out later in the show.

Now time has passed, let's see what has happened to those properties.

-Are we confident they will look brand-new or at least radically different?

-Let's find out!

We return to Cranbrook in Kent now where earlier this Victorian cottage sold at auction for £102,000.

It was bought by Matt, a carpenter, along with his father, Peter, also a chippy.

He planned to give the place a major overhaul.

Despite everything being presentable, it lacked one important ingredient - charm.

Somebody's tried to make it look and feel like a new-build.

-Very much so. Very neutral colours, the bland doors.

-Yeah.

It takes the edge off it. We'll introduce some hardwood.

Just make it a lot more character than it is now.

The property was formerly a railway worker's cottage, so Matt and Peter planned to steam in

and get this place back on track in two months. But it was 6½ months later when we returned

to see if they'd done a first-class renovation or had hit the buffers.

Well, the property is looking very good from the outside

with a new drive, but how is it shaping up inside?

What an incredible difference!

No longer bland and boring, but gorgeous and grand.

We met up with Matt and Peter who took us through the big changes.

The kitchen used to be in a small room tucked away,

but now we've brought it out, integrated it into the rest of the house, nice and open-plan.

It was quite small, but now where the kitchen was we have the shower room and downstairs WC.

And next to it, the utility. Back here, we've opened it up, lost the Artex off the ceiling.

We've put the cornice up. We've used hardwood for the worktops, the skirting.

Open the doors and you've got a nice family room flowing through.

Everything's worked out pretty nice. The floors keep the continuity throughout, inside and outside.

So I'm really impressed.

And there's more to be impressed by upstairs.

The main bedroom was decorated and renovated in soft, neutral tones. Look at those gorgeous floorboards!

And it's been given a new fireplace, a very attractive focal point.

Meanwhile, the small bedroom and bathroom have both been renovated to a good standard.

And at the top, the loft room has been stripped out, insulated and brought up to fire regulations.

On top of that, it also looks pretty good, too.

Everything's trying to keep that Victorian feel flowing through

because it was a very good era, they built things very well and it works.

-If we can bring that back, all the better.

-I'd say you've been successful!

But what really stands out for me is the quality and finish of the woodwork.

Matt and Peter's carpentry skills have added an extra layer of craftsmanship.

We introduced quite a bit of hardwood. The skirting and handrail and the double doors and that.

I reckon it shows the place up quite nice.

But it's not just the inside that's been given a new lease of life.

-The outside also has its own particular charm.

-I really like the garden.

Keeping the Victorian feel, cottage garden. It's not much to work with,

but it was so bad that anything that was done made it look better.

I like this room, actually. It's nice and cosy.

You can see yourself sitting here with the log fire going,

a few books and a glass of port. Feet up. It would be quite cosy.

It's bee a great job all round, but there's still one nagging issue -

-the right of access to the front door.

-This property didn't come in the title deeds with access

because it's a bridle way, so what we've done is get a piece of legal documentation

that allows us to still use it. If there are any problems, they can take hold of it from their side.

Matt now feels confident that this will sort out any future problems with the owners of the lane.

Their two-month schedule overran by 4½ months, but that was down to being involved in another job.

The house itself was completed in 3½ months

with plasterers called in to do the entire house and electricians when needed.

Matt did 90% of the work with Peter chipping in and Mum painting.

Still, with the future of the property undecided and Matt's determination to do a top-notch job,

time wasn't a consideration.

-The same can't be said for the ten grand budget.

-We've gone over that.

We're probably up around the 22 mark, 23, including the labourers and all the legal fees.

It's gone over, but I'm still happy we got a better product at the end.

Add that possible outlay of £23,000 to their £102,000 purchase price

and Matt's total spend is around £125,000, all included.

But is it money well spent?

Time to ask two local estate agents what they think of Matt and Peter's hard work.

I can't believe it. They've done a fantastic job.

Inside and out. Brilliant.

My first impressions of this property are really good. They've done a terrific job.

It's full of character. It's a delightful property.

But would the possible returns and profit delight Matt?

Bearing in mind his total investment of around £125,000, what could a resale achieve?

I would expect to achieve somewhere between £170,000 and £180,000.

We'd expect to achieve in the region of £175,000. Maybe more, maybe £180,000.

I think that's about right. A little low, but about right. Not too far off, really.

Those valuations of between £170,000 and £180,000 could see a potential pre-tax profit,

minus expenses, of around £45,000-£55,000.

But would the rental returns be a better bet?

If I were to seek a tenant for this property,

I would expect them to pay in the region of £750-£800 per calendar month.

Rental, I would have thought... £750, £800 a month.

Those rental valuations could give Matt an attractive annual yield of 7%-8%.

Not bad. And the future for this place? Well, having worked so hard on it, Matt's decided

to move in for the next few months before deciding what to do next.

One thing's for sure - Matt and Peter will be working together,

though who will be the boss is open to debate.

I say he's catching me up, but I don't know if I'm getting worse or he's getting better.

We'll see.

We head back now to Stoke on Trent and this three-bedroom terraced house,

bought at auction for £33,000 by Shaz.

He's 22 years old and is stepping into the family business of property developing

after some wise advice from his dad.

"You've got two choices - work hard now and relax later on in life,

"or relax now, do what your friends are doing, and have a hard life later on, working all the time."

I thought I'd pick the first option!

Well, Shaz listened and acted. He's also studying at business school and runs a fast-food outlet.

Busy boy! But it's this house that is giving him food for thought.

With a history of mining in the area, the house is directly above two mineshafts.

Shaz was hoping to get a Coal Authority interpretive report to see if they've been capped off.

With plans to get this on the rental market ASAP, we've returned just five weeks later

to see what Shaz has done.

Well, that's a change. The brightly-painted exterior is certainly eye-catching

and the front garden has been given a comprehensive tidy-up.

Inside, the living room has had the fireplace removed and with new decoration

and carpets laid, everything looks more homely.

The kitchen has been totally replaced and with new floor coverings and a breakfast bar,

it appears much fresher.

The bathroom units are the same, but new tiling and redecoration has revitalised it.

So let's hope it's the same in the garden.

We've had a dramatic makeover here in the garden.

The gardeners have done their fantastic magic over here.

We've had new grass put in, new pebbles,

jet washed all the slabs, cut the trees so more sunlight can come in

and this outbuilding - we had the option of removing it, but due to the potential tenants we've had in,

they said they prefer to keep this so they can store their garden equipment, et cetera.

And we've also put a new frame on it as well.

The work out here has improved the garden no end and the brick block is not such an eyesore now.

I never thought I'd say that! Back inside and upstairs, all the bedrooms have had a makeover

with complete redecoration and new carpeting.

Shaz has added feature wallpapers to add colour and contrast to the decor.

With little really wrong with the house and Shaz wanting a quick turnaround,

this renovation has been a mainly cosmetic exercise,

-except for the kitchen.

-It's a second-hand kitchen which I sourced myself on the web.

We got a really good deal. We got quite a lot of worktops with it which I've also used

in other places in the property. It's worked out really well.

# I call it a bargain

# The best I ever had... #

Shaz has already understood a basic rule in property developing - not spending more than necessary.

But what about those mineshafts?

He's already set the wheels in motion to get an interpretive report from the Coal Authority.

If the result is positive, it becomes mortgageable and more attractive on the resale market.

However, for now Shaz is letting the place out.

But either way, the aim here is to make money.

Earning a tidy income will depend on how much the refurbishment cost.

Originally I planned for £6,000-£8,000, with contingencies in case we didn't forecast something.

However, luckily and thank goodness, we have come well within our budget.

We ended up spending £4,500.

That's good news for Shaz. Add the £4,500 spent to his purchase price of £33,000

and his total outlay is £37,500.

The job was actually completed in a cracking four weeks,

but it must have been all hands to the pump and frenetic.

It's a big relief. Everyone involved in this project I'm really proud of,

from the gardener to the tiler and, most importantly,

my project manager who is, coincidentally, my mum.

She's done a fantastic job with her input and making sure everyone is on track with their work.

I'll take them out for a meal!

But will the local property market be equally happy with the result?

We asked two local estate agents

what they thought of Shaz's £37,500 investment.

I think the owner's made quite a good job. New kitchen,

recarpeted. First impression is they've made a good job of it.

It's a nice-sized property. It's got a good layout and flow to it.

It's been decorated very nice, but they could have done a bit more.

Well, Shaz has always had the rental route in mind, so what could the place achieve if let?

I would imagine this could achieve £350 per calendar month.

In its current condition, we'd expect to achieve £350 per month.

That sounds quite reasonable, but luckily I've got a tenant who will be moving in tomorrow morning

and he's agreed £425 per calendar month. Just a touch higher than the estate agents have valued it at.

I'm really happy with that.

That income could give Shaz a whopping annual rental yield of 13.5%,

but bearing in mind that £37,500 total investment, how much might a resale achieve?

I'd place this on the market at around £45,000.

We'd recommend an asking price of £45,000.

The estate agents reckon the presence of the two mineshafts has forced these valuations

of £45,000 as a ceiling price.

But that would still leave Shaz with a potential pre-tax profit of £7,500.

While he is content with that, he knows the most valuable thing here is the experience gained,

-which he's already put to good use.

-Since the last time I bought this property at auction,

I've purchased another one and I'm going into the commercial market.

With the support I've got with my family, I don't think anything can stop me now.

Hopefully, we can pick up more bargains and carry on and grow the portfolio even more.

We'll be back with more auction properties next time.

-We hope we've inspired you and given you an insight into the auction world.

-See you then.

-Goodbye.

Subtitles by Red Bee Media Ltd