Episode 61 Homes Under the Hammer

Hello and welcome to the show.

Buying property can have its highs and lows

and it's not always as easy as it seems, especially if you get stuck in a dreaded chain.

But you can eliminate that part altogether

by purchasing at a property auction.

Well, there are all sorts of properties coming up at the auctions these days.

Their buyers have huge amounts of plans and budgets for them.

So let's see what inspired the buyers on today's show.

This Pembrokeshire cafe

and first-floor flat could serve up a treat faster than you think.

I don't think it would take much to get this thing back on track.

I can't help banging on about this London house.

Uh-oh! Yes!

This needs to change back here because look - this is the kitchen!

And in Stoke-on-Trent,

the upstairs of this mid-terrace is a traditional two up two down.

But in the kitchen, something you don't see that often.

All of these properties went to auction and we'll find out

who bought them and what they paid when they went under the hammer.

You've bought it, sir. Well done.

It's time to take the sea air

and now I'm in the coastal town of Goodwick in Pembrokeshire.

Goodwick is a former fishing port.

Now very popular with tourists,

especially due to its close proximity to nearby Fishguard.

The property I'm here to see is a really interesting opportunity.

It's this former restaurant.

Had a guide price of 95,000 quid, let's take a look.

The bright blue exterior is certainly eye-catching.

# I'm going back some day

# Come what may to blue bayou... #

But it's obvious that, at least on the outside,

a bit of maintenance work will be needed here.

Ah! Nice bit of trellising!

Great in the garden,

not sure about the interior design of a restaurant,

but anyway, what have we got?

Basically you get a small little anteroom there and then

this main area here which would have been where the main number of seats I imagine was.

Apparently when it was open about 30 people would be able to eat in here.

In terms of interior design, if you forgive the trellising,

actually it's not bad! I like this stonewalling effect

and it doesn't seem to be in too bad condition.

Through this way, stairs up to the flat up there

and then more stairs to the downstairs offering.

Through to what would have been the main kitchen for the restaurant.

Sad to see that a lot of the equipment has been taken out

because it's not exactly cheap to replace,

but if you're looking for this kind of opportunity

I don't think it would take much to get this thing back on track.

There's plenty of space in this three-storey property

with a flat upstairs and a lower ground floor.

So far there's not been anything to give me the blues.

# Every once in a while I get the blues... #

Downstairs, you've got the ladies and gents loo,

which is already in place, which is good,

and then this area here which I think would be either an extra seating area

or possibly storage, and another storage room further that way.

More of a concern to me right now

is the fact the moment you walk in here...it smells of damp.

I always say use all your senses when you visit a property.

Your eyes, your ears and your nose.

You can smell it straight away, and sure enough you don't have to go very far

to see some major issues going on here. Oh, my word!

That wall in the corner completely sopping wet,

and if you look outside you can see we are actually below street level here.

So this needs sorting out.

It's going to need some specialist damp proofing on this,

tanking, water, runaway systems or whatever.

Get that sorted and then it's a really nice extra space,

especially as you've got then access out to the back,

which could be a little patio area.

The blue theme continues out the back of this property

that was guided at £95,000. There's an added bonus out here as well.

One of the things which you'd really like for a property such as a restaurant is good parking.

The bad news is there's none at the front.

The good news is, however, that there is this free car park at the back,

and even better there's its own little access to it here. Fantastic.

As far as a good business goes, I'm seeing all the right ingredients.

It's just that some of them are past their sell-by date.

But this property is not just for business.

It has residential accommodation on the first floor.

So, upstairs and you've got a little flat.

It's a really nice added bonus, this.

One large sitting room area here, one bedroom there,

and then a bathroom and loo there.

One thing it hasn't got is a kitchen

but I suppose the reasoning being is, if you've got the restaurant downstairs,

you're never going to be short of food, are you?

It would be ideal for someone who maybe wanted to run the restaurant and live here.

I think the problems are if you want to rent it out separately

because it doesn't have a separate access so that's not going to happen.

So, what to do with this former restaurant?

Open it up once more to serve food or apply for a change of use

to turn it into a different business such as an office,

or how about converting it completely to residential?

What would a local estate agent recommend?

My opinion, I would think the local authority would not encourage

an application to return the property to full residential

and they'd like to have a commercial and residential mix.

The message is loud and clear - best to keep it as a business.

So, once done up with a working restaurant,

what could the property be worth?

If the business is up and running as a successful restaurant,

I would anticipate the market would react in the region

of 150,000 for the building and the business.

And if you did it up and let it as a business premises?

I would imagine a property in its refurbished condition

would fetch a rental for the commercial and residential together in the region of £8,000 a year.

A canny buyer would also bear in mind that there's a proposed

development for a marina in Fishguard harbour with residential development,

a promenade and a visitors centre, so potentially plenty of customers.

Well, this former restaurant provides a veritable feast of options.

You could keep it as a restaurant or a cafe,

you could open it up as maybe offices or estate agents,

it wouldn't be hard to get planning permission change of use for that.

It's all down to whoever bought it.

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

Onto lot number 18.

It's a traditional three-storey restaurant premises.

With the first floor you have the owner's accommodation.

I've got a proxy bid on this one, ladies and gentlemen.

I'm going to get things moving at 94,000. 94,000 my proxy is in.

Five, 95, thank you. Proxy bid, 96. Seven, 97,000.

97. My proxy bids 98. 98,000.

98,000, I have. 99, thank you. The proxy is out.

It's on you, madam, at 99,000. I can sell at 99. Any advance?

Sir? Be quick. Madam, I'm going to sell it to you if this... No?

OK, madam, it's yours. 99,000.

And a sigh of relief from Jenny, who made the successful bid of £99,000.

She was at the auction with her husband, Gwilym.

They both work in Goodwick.

Gwilym works at the local dock and Jenny is a cook and waitress

so no prizes for guessing what she wanted with the restaurant.

I met them back at the property to find out more.

# I'll meet you at the blue cafe... #

Jenny, Gwilym, great to meet you both. And you. Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

Well, something I've been thinking about for quite a few years really.

It's been on the market for about three years.

It's been a bit of a dream and then it went to auction

-and we thought we could go for it.

-The dream being to do what?

-To run a cafe.

-Oh, great!

I've worked in catering for quite a while and thought I could do it myself.

And Gwilym, are you involved in the trade as well?

No, not myself.

I actually work down at the local harbour so I'll help out when I can

-but obviously I won't be available all the time.

-Right.

So do you know about this place?

It isn't here any more as a restaurant or cafe,

does that give you any cause for concern or what?

No, it was personal reasons that they closed it

so I don't think there's anything to worry about. They had a good reputation.

So it was popular while it was open?

-It was, they were very successful with it, yeah.

-Great.

-And what are your plans for it then?

-Sort of tea room, coffee shop, I think.

Lots of nice cakes and nice coffee,

and then a few sort of snacky meals as well.

-Potentially we might think about opening in the evenings.

-Oh, great.

So it's something to work towards in the future.

Jenny and Gwilym have had their eye on this particular place for years.

It first came on the market in 2008, originally for £270,000,

which was way outside their price range.

Even when it didn't sell and the price was dropped to 160,000,

it was still out of their reach, so when it finally came to auction

guided at just 95,000, they thought it was now or never.

What do you think the biggest challenges facing you,

taking it on, you know, yourself are going to be?

I think the biggest challenge around here is the winter months.

It's very seasonal here so the summer, there's plenty of tourism

so that should be all right, and then getting the regular people

to come in in the winter, then by doing things to attract them in,

-like a book club has been suggested quite a few times.

-Oh, right!

I might look at doing things like that for them.

Have you thought of sort of the menus and things like that yet?

Yes, well that's all we've been able to do so far is the menus.

-Give me an idea of the sort of thing.

-Mostly cakes to be honest.

-We're trying to do a lot of cakes.

-What sort of cakes?

The one we had as our wedding cake, lemon and almond polenta cake.

-Oh, nice.

-Quite a popular one, and then all the old favourites,

you know, chocolate cake and Victoria sponge.

# If I knew you were coming I'd have baked a cake

# Baked a cake, baked a cake

# If I knew you were coming I'd have baked a cake

# Howd-ya do, howd-ya do howd-ya do #

So, lots of delicious-sounding cakes planned for this place, but

before they can actually open it as a cafe there's a bit of work to do.

It needs a tidy up throughout, I think.

In here it's not too bad, a lick of paint

and the counter needs to move around a bit I think.

-Then the kitchen needs taking out and redoing.

-New kitchen.

Downstairs there's a bit of damp downstairs that needs looking at.

Hopefully once we've taken care of that we can open the downstairs

-room out into more seating, potentially.

-Oh, great.

What about the flat upstairs?

It's a difficult one because there's no access to it

and there's no kitchen up there

so we might potentially rent it out to a member of staff.

Otherwise it's just going to be an office and maybe a bit of a staffroom,

just somewhere to go and have your lunch.

So what sort of budget have you put aside to do the work?

We've got about 13,000 to do the work, that's for the new kitchen

and all the crockery and everything for the cafe.

We've got lots of help, my dad is a builder

so he's going to do what he can.

I've got help from my side of the family as well.

My father is handy and my younger brother works as a labourer.

So what about timescale for getting it sorted?

-We're aiming for about four weeks.

-To do what?

To do upstairs, definitely, and the kitchen,

and then downstairs we'll work on slowly and get that open for the summer.

-I just can't wait to get started now, get open!

-Brilliant. Good luck!

Thank you very much. I look forward to coming back for a cake!

Well, these are tough times in the economy in general

and that carries through to restaurants and cafes,

but Gwilym and Jenny have certainly got the enthusiasm to make it a success,

and Jenny's cakes sound delicious, but that four-week timescale?

Will they get it open in time? You can find out later in the show.

Walthamstow has made headlines recently,

and for all the right reasons.

It's been named the best place to rent a home in London.

As rental costs in the capital rise to record levels,

a new study has earmarked E17,

claiming it offers the best mix of value and convenience.

That kind of news, well, certainly brightens things up for this part of east London.

How exciting!

# I took the underground, I went eastbound

# I went to Walthamstow... #

The underground will get you to the West End in under 25 minutes,

and Walthamstow village is charming.

With its narrow pathways, historic buildings, boutique shops

and restaurants, you can see why many are tempted to venture out to E17,

and the numbers stack up as well.

The average house in London is over the £400,000 mark

so you can imagine my delight when I found out the guide for today's auction lot.

It was set at just £185,000.

Now, for the capital, that represents extremely good value.

Outside looks a bit shabby, but for the price it's worth a look.

My first thoughts are, mmm, it's a narrow hallway.

I would like to reinstate this doorway here

and let the light flood through.

You can see this room has already been opened up

but I'm wondering if it might be better to close it up again,

to have a cosy quiet lounge space through here.

And I can see through here. Uh-oh! Yes!

This needs to change back here because look - this is the kitchen!

No, thank you, we would like a nice family space with some doors leading out to the garden.

And, as I suspected, there's a bathroom tacked on out the back.

Disappointing, but it can only get better.

Now let's see if we can squeeze in a bathroom somewhere upstairs.

This is already beginning to seem like a major reconfiguration job.

Moving the bathroom would be my priority.

Those polystyrene tiles definitely need to come off

and the kitchen could be extended at the back using that side return.

# I've got my spine, I've got my orange crush... #

That's probably only worth doing if you were going to live here.

If this is a buy-to-let purchase, then keep your money in your purse.

At the very least, the kitchen does need a refit.

Whatever the future is, it's not this colour!

Upstairs we've got a good-sized bedroom at the back of the property.

Along this corridor we've got the master bedroom to the front,

loads of light coming in, two big windows,

but in here is where I've seen the opportunity and this is where

I get really excited because I really think this is doable.

Obviously you'd have to speak to your builder and plumber

to see if this could work because I know the soil stack is somewhere back there,

but how about putting the bathroom here?

In between this wall and a new wall you're going to put up,

you could have the bath along there, with the shower coming out, toilet, sink.

Then you still have a single bedroom with a window

letting in lots of light.

I think whoever takes this on should seriously think about that.

# Think about it, baby

# Think about it... #

So, a decent reconfiguration is possible in this house.

But there's a lot of work to do.

There's no central heating and the property is very dated.

There are yet more of those polystyrene tiles.

They've just got to go.

And who knows what will be lurking behind them?

But from outside,

you can see that there is potential to extend up as well as out.

And the garden is a real bonus.

For a guide price of around 185,000,

there is great potential here.

We invited a local estate agent to come and have a look around.

It needs a full refurbishment but would the estate agent also

recommend extending the property and would that be money well spent?

There is scope to extend, but really it all comes down to what the

owner wants to do with the property.

If they want to rent it or sell on, I would advise against it.

If they are going to live here, and they need that extra space, then, yes, it is a great investment.

If the house was let in its current configuration,

with three bedrooms and a bathroom downstairs,

how much rental income could it be achieved after a full refurbishment?

Three bedrooms with downstairs bathroom,

probably around £1,350, maybe £1,400 per calendar month.

And a resale valuation after it is done up?

When renovated, we could sell this on for about 250,000.

I think you know how I feel by now. Work within the footprint,

move that bathroom upstairs and rent it out. That is what I would do.

And with a potential 7-8% yield, I think it is no brainer.

Let's see who wanted this one when it went under the hammer.

Move onto lot 18, three-bed, mid-terraced house, Walthamstow.

It's worth 200. If not, you tell me.

175.

We're not going to go below 175. 175.

176.

176. 177. 178.

179. 180. 181.

182.

183. 184.

185. 186.

187. 188.

189. 190.

190. 191. 192.

Is that five? 195? Not taking... 195.

196. 197.

198. 199.

198, down here. Anyone else?

At £198,000.

First time, second time. Third and last time. If you are all done.

Sold, 198.

Hidden away from our view

but making the successful bid of 198,000 was Ghulam.

He works for the local council, so knows the area very well.

He's also been developing property on the side for the last

two years so he's no novice.

Still, we all need support when taking on a large project

and luckily his daughter Hina is on hand to help out here.

I met them both at the house to find out what they had planned.

-Congratulations.

-Thank you very much.

I want to know the story and why you wanted to buy this property.

There are a number of reasons.

One is to build a pension portfolio, it is

the primary reason to invest in the property.

There is a lovely park down the road for the children to play.

It is a sought after area for the families to rent.

I have a local connection because I work around the corner with the local authority.

And my family member Hina has property around the corner.

-You know this area well.

-Yeah, a few months ago,

we bought another property three roads down and we refurbished that

and we have rented that out to a very good family. We are familiar with the area.

They bought the house as a cash purchase

and were delighted with the £198,000 they paid.

They plan to refurbish and then let it out,

so how involved will Hina and Ghulam be in the project?

I work full-time and I have two young kids, so I am definitely in an

advisory capacity, so I will do the budget management behind the scenes.

I get engaged with the builders because it's the same builders I used for some of my own projects.

Ghulam, are you going to be overseeing this project? How often will you be here?

Since I work round the corner, in my full-time job, I will be coming

here every lunchtime and intend to spend the day.

I've got visions of you trotting round with your packed lunch.

-Is that right?

-That is correct. Absolutely. I'll be having my lunch here at the property.

# And at a quarter to three, your friends say oh, my, me,

# Whatever you just had for lunch agrees with you

# Lunch hour, lunch hour, how do you find time to eat? #

No chance of an extended lunch hour for the builders then.

So what have they got planned here?

We intend to build an extension with a view to incorporate

a brand-new kitchen on the back side of the extension will be

a brand-new bathroom and toilet.

We also intend to increase the facilities as well as the value upstairs by creating a WC.

So your plan is to have an extension out the back to put the bathroom in?

-Sure, definitely.

-You're going to have a lot of ground floor space

but my big problem is, you don't have a bathroom upstairs.

But you do have three nice bedrooms up there.

Why have you thought about putting a toilet upstairs?

As a three-bedroom house, it will it will go to a family,

so as a mother, you know you don't want to have to come

downstairs in the middle of the night to take the children to the toilet.

What room were you thinking of putting the toilet in?

We are thinking about the back third bedroom for a small WC.

Now the problem with that is it's going to then leave

the rest of the room in a rather awkward shape.

Have you thought about having a bathroom in between the big

bedroom at the front and the second bedroom?

I think it's a great idea. I think it just depends.

To be honest, I never thought about having it in the second bedroom.

But it seems like an excellent idea.

# Think about it.

# Think about it, baby... #

They wouldn't then need to build an extension

because the kitchen could go where the bathroom and loo are currently.

This father-daughter team have plenty of expertise when it comes to a big undertaking like this.

But how will Hina keep tabs on the budget?

I have definitely got spreadsheets and there is a very large spreadsheet that goes behind every project we do.

-Really?

-Yes. I get dubbed the Spreadsheet Queen by my husband.

But we do, we like to know our numbers

and it's a discipline I learned from my father a very long time ago. Numbers, numbers and numbers.

# You know that the numbers don't lie

# Oh, no, the numbers don't lie... #

They've budgeted 27 to 28,000 for their planned refurbishment

with a 10% contingency, but if they do decide to take my advice and move

the bathroom upstairs, have they any idea of the savings that could make?

Because we use the same builders and we have the spreadsheets,

we do have it costed down to a sort of margin of 10% either way.

Not doing the extension will save on the total build costs.

I think we need to look at your suggestion, rip everything out,

look at the floor space we have left with and see

whether in the first instance that is more viable

and if the extension is still needed, then we will consider that.

Congratulations on this buy. I'm really excited to see what you do.

-Well done.

-Thank you very much.

-Lovely to meet you.

-Likewise.

Ghulam and Hina need to forget their spreadsheets for five minutes

and concentrate on more important issues, the layout.

Will they go with my idea or spend unnecessary money on an extension?

You can join me later in the programme and find out what they do.

'Coming up, in Stoke-on-Trent,

'this mid-terrace property proves hot and steamy.'

Can't stand the heat, you can always have a shower.

We return to London to see the results of Ghulam's working lunches.

Because dad's been here every day, project managing it,

I do not have to have so much of an input.

But first, back in Pembrokeshire, are Jenny

and Gwilym pleased with what they have served up?

We think we've made a nice atmosphere. People react well to it.

Back now to the picturesque holiday coastal town of Goodwick

in Pembrokeshire.

It's a popular holiday resort with lots of summer visitors

all looking for a nice cuppa and something to eat.

# I'll meet you at the blue cafe... #

So when this cafe, with a first-floor flat

and lower ground floor went to auction, local couple Jenny

and Gwilym decided to pay £99,000 for the premises,

hoping to cater for tourists and locals alike.

It's something I've been thinking about for quite a few years really.

It's been on the market for about three years.

It's been a bit of a dream and then it went to auction and we thought we could go for it.

-The dream being to do what?

-To run a cafe.

-Great.

Yes, I've worked in catering for quite a while and thought I can do it myself.

-Gwilym, are you involved in the trade as well?

-No, not myself.

I actually work done at the local harbour. I will help out when I can.

So, what would this couple cook up?

Well, three months later, back in Goodwick,

Jenny and Gwilym have served up quite a change to the cafe.

How appropriate to paint the front and back cream.

The inside has lost the blues as well.

It looks as though cake baker Jenny has risen to the occasion.

The cafe looks so much more inviting.

All that dark wood wasn't everyone's cup of tea.

I'm delighted that's gone. So, where did they start?

We've done quite a lot in this room really.

The main thing I think was all of the dark trellis that was around here

and the wood panel behind really made it quite dark in here.

We've moved the counter around.

It was facing the other way, which didn't seem practical to us at all.

The counter through in the other room,

we have knocked down the stone bar as well because that was making the room quite dark.

And we've painted the beans because they were painted a dark brown,

which just made it really imposing, not very nice.

We think we've made a nice atmosphere.

People seem to react well to it and think that it is a nice place to sit and relax.

They successfully opened just six weeks after our first visit.

And apart from teas and coffees, serve light lunches

and snacks as well.

# I really likes bread and butter I really likes toast and jam... #

The lower ground floor now provides added dining space

and an area for private functions.

But it took a lot of hard work, as Gwilym explains.

The room when we started was very damp, very dark.

The carpet was in an atrocious state.

We have had to rip out the carpet, lay a new tile floor.

We have painted the walls a brighter colour.

We have put a bright pink in the window so hopefully people

will want to come down and relax down here and enjoy the room.

There were toilets and a store already downstairs,

so they've been freshened up.

Back upstairs, at the back of the ground floor, the kitchen has

been kitted out with stainless steel prepping areas and equipment.

They paid £99,000 for the property,

which included a flat on the first floor.

But the options up there are limited.

We haven't touched the flat upstairs. We're not going to rent it out.

There is no kitchen up there and there is no access.

We're just using it mainly as a staffroom and a bit of storage.

Who's done all the hard graft here?

Me and Gwil were here every day for about six weeks

and my dad was here pretty much every day with us as well,

helping us a lot. He is a builder by trade. He's been really helpful.

Jenny does all the cooking as well as working in the cafe.

They have employed a full-time waitress,

plus part-time help for the busy summer period.

Gwilym works shifts at the docks,

but spends as much of his spare time as he can helping Jenny in the cafe.

So has she sorted him out a uniform?

Yes.

Um... It's the same as the rest of the girls who work here.

Black trousers, black T-shirt

and then I have got a lovely pink apron to wear.

So... It's not so bad.

# It's crazy, I know

# It's just one of those things

# I wanna be tied to your apron strings... #

But with all the wet weather, have they had many day-trippers coming in?

We've seen a few holidaymakers,

but mostly it's local people coming in and having a look at

what we've done and supporting us, which is really great.

# I like a nice cup of tea in the morning

# For to start the day, you will see... #

The exterior has been smartened up but Jenny and Gwilym

haven't had time to get this area ready for customers yet,

although it is looking much better.

All the blue paint that was on the outside made it look very cold

and very dark.

When we came to take away the menu box to give it a bit of a refit, half the paint came with it.

The couple had set a budget of £13,000

but how much has it cost to plate up this dish of the day?

The budget, we did go slightly over budget,

about 2,000 over budget,

which brought us up to about 15 grand.

That increasing the budget included the purchase of fixtures,

fittings, crockery and the like.

With the £99,000 they paid for it at auction,

that takes their total investment to £114,000.

We invited two local property experts along to see

if they could put some icing on the cake with their opinions.

People want to see something that is bright,

clean and enticing from the pavement.

And I think that it ticks all those boxes.

They have made the kerb appeal quite interesting

to catch the trade that's coming through from the pedestrian area.

When you enter, it's very homely and inviting to come in and sit down.

They need to pick up on the seasonal trade when it's there because that's

the cream, the bread-and-butter will be the 12 months of the year trade from the locals.

The business premises would have to be let as a whole

because you're unable to let the flat separate to the commercial

accommodation, as it's not self-contained.

I feel that in the current market,

it would be fetching in the region of around £12-£13,000 per annum.

The rental that they should be looking for is about £8,000 per year.

Those commercial rents will generate a yield of between seven and 11%.

Could Jenny be tempted to let the cafe?

Maybe. Ask me again in a couple of months.

We'll see how stressed I am then.

What about an estimated sale valuation for the cafe

with flat above?

Commercial premises are always valued in relation

to their annual turnover, which in this case has yet to be established.

I would value the property at between 110 and £115,000.

The business in the current market would

sell in the region of £175,000-£185,000.

A bit of a margin between the two.

But it is still more than we paid for it. So yes, quite happy with that.

So for Jenny and Gwilym after their first year they'll be able

to get a more accurate idea of the value.

For the moment, there is some guesswork involved, not least

because selling businesses in the current climate can be tricky.

But how does Jenny feel about the whole venture now?

Is it the icing on the cake she hoped it would be?

It's a lot of hard work but I think it is worth doing in the end

because it's a satisfying feeling, especially knowing you've

renovated it all yourself and it's all entirely yours.

It's a good feeling.

I'm in Burslem,

one of the six towns that together form the city of Stoke-on-Trent.

Oatcakes are a local speciality and it is also the home of Port Vale FC.

The question is, will the property I'm here to see be a top scorer or

will it need extra time to get fit?

Just a mile from all that Burslem has to offer is the property

I am here to see.

And this is it. And a terrific guide price of £25,000.

Good looks aplenty. The house isn't too bad either.

So what's it like inside?

OK, very standard layout.

Straight through the front door and you've got your living room.

Straight through the front door and the first thing I noticed, down here, this is not good.

Wow! Look at that. A very bad case of damp

on that front wall.

That's probably rising damp or it could be leakage around the window.

Oh, my goodness. It's there as well. That's not good.

All the walls in here seem to be showing some serious signs of damp.

That's going to basically have to be hacked off to a metre,

replaced with damp repellent plaster,

but first of all, you've got to find out exactly what is causing it.

Anyway, through there, into the rear sitting room area. A fireplace.

The one in there is quite pleasant. This is very typical of that era.

If you like it, great, if you don't, rip it out.

And then through to the kitchen.

Very classic layout. It's in need of updating, definitely.

And then through to the only loo in the property.

Not ideal, but around these parts, it's kind of expected.

No need necessarily to go to the trouble of moving it upstairs.

But in the kitchen, something you don't see that often.

If you can't stand the heat, well in this case,

if you can't stand the heat, you could always have a shower.

Now, a shower in the kitchen is never going to win the design

layout award of the year, so the kitchen will need a complete refit.

But the issues with this place have only just begun because with

this store room and loo, I'm afraid, that's it, the lot -

the total bathroom facilities for the whole house.

# What do you do in the bath? #

Well, nothing in this property.

The guide price of £25,000 may have seduced you,

as might have the good looks outside.

But there are some serious challenges with this place,

like where to wash or go to the loo.

Creating a bathroom upstairs isn't practical as space is

extremely limited.

There are just two bedrooms.

The good news is that they've both retained

most of their original features.

They are lovely rooms to restore, so that's got me really excited

and is the first bit of welcome news so far.

But what's the solution for the very restricted bathroom facilities?

Time to investigate out the back.

At the rear of the property, you can see the extensions that have

been built over time and also the potential to possibly extend

even further because at least if that bathroom was a bit bigger,

you wouldn't particularly mind that it was downstairs.

Yes, it seems that this is the obvious place to have a

proper bathroom.

The question is, is it a bathroom made from the loo

and the coal store or a new extension?

This could be starting to get very costly,

even with that guide price of £25,000.

We asked a local property expert for his opinion.

For modernisation, basically, it needs to be done,

obviously the kitchen, bathroom windows, heating.

There are signs of damp with the property.

And the major real expense is going to be the extension to the rear

to provide a bathroom.

# Tap turns on the water, see the waters flow... #

So it looks like a full-on refurbishment and while we're

piling on the bad news, there's also the mining legacy to consider too.

Lucy and I always recommend you tread very carefully where

there may be mines.

A report says the property does have a mine

entry recorded within 20 metres of its boundary.

So the estate agent recommends an interpretive report done,

which is more detailed. But assuming the report's positive

and the property is fully refurbished with a new

bathroom installed, how much rental income could the house generate?

After renovation, you would be able to let this

property in the region of £400-£450 per calendar month.

At the guide price of £25,000, that's a yield of over 19%.

Even allowing for the cost of refurbishment,

there's a very good rental return here. What about resale?

After renovation, I would suggest a figure in the region of £65,000.

Well, the house does require a bit of sorting out,

especially fixing the bathroom.

It's in an ex-mining area, so you definitely want a mining report

but if it's clear of mine shafts and you've got the cash to put in,

it could be a great little earner.

A potential double digit yield. You can't argue with that.

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

Lot 52. Mid-terrace, needs fully modernising.

Accommodation all as subscribed.

Lot 52. 20,000 to start me.

20 bid, standing left. £20,000. At £20,000.

21, can I see? At 20,000. 21.

22? 22. 23. 24. 25. 26.

New bid at 27. Back in, £28,000. 29.

30? 30.

Do you want to go 500, sir? 30,500.

New bid at 31.

Shaking the head. 31,000. Bid's here.

£31,000. Another 500 anywhere else?

New bid at 31,500.

32?

No. 31,500, gentleman in blue.

Got him? 31,500. All done now.

It's your bid, sir. 32.

32,500, it will cost you now. 32,500.

33? No. 32,500. Standing right.

32,500. First time.

32,500, second time.

Third and final time. Your bid, sir. 32,500.

You have bought it, sir. Well done.

That happy bidder who paid £32,500 was a fellow Martin.

Until recently, he ran a company that took control of repairing

properties after they had suffered major fires and floods.

# We were holding back the flood, they said we'd never dance again... #

He's dabbled in property since the age of 19 and recently

decided to make developing a more full-time enterprise.

I went back to the house to meet him

and find out his plans for the place.

-Martin, great to meet you.

-Nice to meet you.

-Congratulations.

-Thank you.

You've got yourself a little terrace.

Tell me why you wanted to buy it.

Basically, my work that I was doing, I had finished,

looking for another job, couldn't get the work I wanted

and I decided to go back to what I have done in the past.

Right. What kind of work were you doing?

I was the director of a company that dealt with all the major fire and floods in the UK.

-But this is something you have done in the past.

-Yes.

I have done 5 up before. I have got 13 to rent out.

All in Nottingham. I have moved up here with work.

I'm up here and I thought I may as well stay here,

-the property is a lot cheaper.

-Right. So why this particular house?

The house itself, I thought, was fairly solid.

It is old-fashioned, but as a whole, pretty sound.

I thought, that is what I will go for. And it's the right money.

Need to spend some money on it but in the long-term, rent it out, and maybe sell it in the future.

What are you going to do to sort it out?

It needs new damp proofing, new windows, basically a full strip out.

Re-plaster, most of it will have to be redone.

New kitchen, I have been speaking to the council,

they're going to sort out the building regulations out the back.

We need a proper bathroom. All it is a toilet and a coal store.

Make it all into one and extend it, so it is a big enough bathroom.

-And the shower in the kitchen?

-I might keep that!

Put it in another house.

-It's a classic.

-Beautiful!

'I think he's joking.'

# Shower your love on me... #

Well, I'm delighted Martin plans to extend

and make the most of this terrace.

I think it deserves it. How much has he set aside for the work?

About 15 or 16 to put it right. That sort of cost.

I'm going to do some of it myself.

-I've got tradesmen that have, from Derby.

-What is the timescale?

-Six to eight weeks.

-What about financing this?

I have paid cash for it. I was going to put the money into a car,

but I thought I'd be sensible for a change and do this.

I have just bought a van instead.

'Sensible!

'Much better to invest your cash into something that's going to see a return.

'I like a nice car to but property is generally the safer bet.

'Given that Martin manages the properties himself,

'he hasn't got time to be haring around in a luxury motor.'

Six-month lease, I always say to people, if they ever want to

buy the house, to give them some incentive, that they can buy at

the end of say a year, and generally they look after them better.

I have sold four or five houses in the past.

-Next for you, back to the auctions?

-Hopefully go back to the auction next month to try and buy another one.

I want to try and keep doing a rolling thing, one a month.

-Congratulations. Good to meet you.

-Nice to meet you.

-I look forward to seeing how you get on.

-Brilliant, thank you.

So, classy sports car or property empire in Stoke-on-Trent?

Well, Martin opted for the latter. It is probably a sensible choice.

But one property a month, that's ambitious.

If he gets it right though, he can have the houses and the sports car.

You can find out how he gets on later in the show.

It's been a while now since we last saw those purchasers.

Do you think they've been racing through the work?

Or have the projects ground to a complete halt? Let's go back and find out.

# I went underground, I went eastbound, I went to Walthamstow... #

Walthamstow in east London is a popular commuter location.

The tube to central London takes just under 25 minutes

and the area has a pleasant villagey feel.

Ghulam had bought this three-bed terrace for 198,000 to add

to his family's buy to let portfolio.

He is a contracts and commission officer with the local authority.

He is due to retire soon

and will then concentrate on property developing.

Daughter Hina's a mum with two children.

She and her husband are building their own buy to let portfolio.

On this project,

she intended to work with builders that she'd worked with before.

They planned to extend up the back to create a new bathroom and kitchen

diner, but I had tried to convince them to put the bathroom upstairs.

Have you thought about having a bathroom in between the big

bedroom at the front and the second bedroom?

To be honest, I never thought about having it in the second bedroom.

But it seems like an excellent idea.

'Well, just seven weeks later, back in Walthamstow,

'the house is finished.

'It's changed from '60s mellow yellow to white. Much better.

'I'm glad to see that door has been put back in the front room.

'This is how the house was laid out, with the front room

'accessed off the hall and a wall between this and the backroom.

'I'm also pleased to see that the glass partition

'and orange kitchen have gone and instead, we have a defined room.

'It looks like Ghulam and Hina have heeded my advice.

'There is now a stunning kitchen where the downstairs bathroom

'had been. But no extension.

'Every centimetre of the original footprint has been put to

'good use and what a great result!'

There used to be a tiny kitchen here, which we have removed.

And we built a brand-new kitchen where

there used to be a bathroom and toilet.

We have brand-new cabinets, brand-new tiling.

And we have put a couple of new windows with a view to the garden.

That's a bonus.

'All three windows have been replaced and the back door.

'And just look at the garden they've uncovered.

'That's going to be a great attraction.

'So no extension or bathroom downstairs.

'I'm getting a great feeling that upstairs, they might have taken my advice.'

You could have the bath along there, with a shower coming out,

toilet, sink.

'And here it is, just as I imagined,

'between the large bedroom and the one next door.

'The measurements were right

because there is still a decent single out the back.

'And the large double bedroom at the front hasn't been affected.

'So is Hina happy now the bathroom's been relocated upstairs?'

I think it's worked out really well.

I was worried initially that it would be a little bit small.

But I think you got just about enough space to make it

work as a functioning family bathroom.

The advice we had from Lucy was an excellent idea.

We sat down with the builder and it was unanimously agreed.

'With the loo going in the bathroom,

'it's meant that bedroom three has remained the same size.

'A team of workers re-skimmed every wall, installed fire doors,

'rewired the house and put in central heating.

'And with Ghulam nipping round from his office with his packed

'lunch to keep his eye on things everyday,

'all this work has taken just seven weeks.'

I have been her a few times but because dad's been here every day, project managing it, I've not had

to have so much of an input in terms of the day-to-day project management.

'They had set a budget of 27 to 28,000 with a 10% contingency.

'With no extension to build, how have the numbers stacked up?'

In terms of budget, obviously, we saved between five

and £7,000 for not building the extension.

At the end of the project,

the actual budget has come to just under 21K.

'With the £190,000 they paid at auction,

'that takes their total investment here to 219,000.

They've already got a tenant lined up.

'So now it's time to hear the thoughts of two local

'property experts. What do they think of the refurbishment?'

I think the standard of work here is very good.

The refurbishment that they have done is of a very good standard.

Bringing the bathroom upstairs is a very good idea.

People prefer a first-floor bathroom.

Downstairs bathrooms can be a put off,

so if you have got it upstairs and you have still got enough living

space, it's going to get you much better prices.

It's good to have the kitchen and the dining room in one area.

It's a fresh-look kitchen. It allows people to communicate as well.

'How much rental income could this house achieve?'

We will rent this property at £1,250 per calendar month.

I would expect it to achieve between 1,300 and £1,400 per calendar month.

Those rental valuations would generate

a yield of between 6% and 7.5%.

We had expected between 1,250 and 1,300.

Anything over 1,300 is excellent, even better.

What about the resale valuation?

Could it be more than the 219,000 they've invested?

If I put it up for sale, I would market the property at £275,000

and expect to achieve £270,000.

If we were to market this property for sale,

it would go between 300 and £310,000.

That top figure of 310,000 would give a profit of £91,000

before taxes and expenses.

While the lower figure of 270,000 would mean a profit of 51 grand.

What do they think of that?

I think that 270 is probably the more realistic.

I think the 300 would be wonderful, but it might be a little on the optimistic side.

Ghulam is planning to add more properties to his pension portfolio and it looks like

father and daughter will continue their working partnership.

After all, They go back a long way!

We started when I was ten, doing market stalls.

Hopefully another 20 or 30 years at least.

We're looking and will hopefully keep doing it for as long as we enjoy it.

Now we're back to Burslem in Staffordshire,

one of the six towns that make up the city of Stoke-on-Trent.

Oatcakes may be the local speciality,

but it was this mid-terrace that attracted Martin.

He paid £32,500 for it to add to his growing buy to let portfolio.

Until recently, he ran a company that

specialised in the repair of properties damaged by fire or flood.

What are you going to do to sort it out?

New damp proofing, new windows, basically a full strip out,

new kitchen, create a proper bathroom,

because all it is is a toilet and a coal store.

-And the shower in the kitchen?

-I don't know.

I might keep that! Put that in another house.

'But the purchase very nearly didn't happen for fan-of-a-van Martin.'

I was going to put the money into a car,

but I thought I'd be sensible for a change and do this.

I've just bought a van instead.

'Well, 11 weeks later, Martin's white van has rolled into town.

'So we can see just what has been achieved.

'There is no missing the new windows and door.

'Inside, the damp under the window has been cured.

'Good to see the fireplace has been retained

'and the house will dry out now with central heating installed.

'In the rear dining room, the fireplace has gone,

'but as Martin explains, his main challenge was the damp issue.'

The biggest problem was the damp in the property.

We had to strip the plaster

and basically it had to be damp proofed, re-skimmed.

It cost a few extra pounds but that's life.

At least the job ain't got to be done again.

# That's life.

# That's what all the people say... #

'That shower in the kitchen is gone.

'And new kitchen units are being installed.

'Behind this temporary door, the former loo

and coal store are being demolished, ready for a bathroom at long last.

'The trouble is the only thing getting wet at the moment is the builder and Martin's not happy.'

# That's life... #

Nightmare. The weather has just held us up so bad.

Whenever we come to start on it, the heavens open.

We are about three weeks before. It has caused a problem

and it means I can't finish the rest of the house inside.

Martin had considered a large extension but decided to

reduce the size so it would fit within permitted development.

It meant he only had to get building regulations, rather than full

planning permission. He decided not to get a mining report.

He feels confident that the houses have lasted this long

and as he's intending to let it,

there won't be any mortgage issues for a potential purchaser.

And although the work at the back of the ground floor has been

delayed, the two upstairs bedrooms are finished.

I'm really pleased he's kept the two fireplaces up here.

They're part of the history of the house.

And as Martin discovered,

there's a great sense of community around here.

# When you've got friends and neighbours

# All the world as a happier place. #

The neighbours have been brilliant, bringing tea and coffee round.

They all knew the old lady of 90 that lived here.

Neighbours Clive and Frances have lived next door for almost 25 years.

Lovely lady, couldn't wish for a nicer neighbour.

It's nice to think what the property has become, even though she has passed away.

It has been restored to a nice condition.

Martin had some tradesmen from Derby to work on the property

and stay over. But has he helped out too?

I've come in on some of the time and then some of the decorating.

Some of the bits and pieces. But I haven't been here all the time.

Martin paid £32,500 at the auction.

So how much has he had to spent so far on the refurbishment?

The original budget of 15, 16,000,

I think it's going to be about 18, 18,500.

But in the long-term,

I hope that comes back in the additional value on the property.

I'm not too worried.

The 18,500 Martin spent takes his total investment here to £51,000.

Time to hear what two local estate agents think of the work.

I think the property, when it's finished,

it will be to a good standard. The bathroom is on its way.

I think the general standard is going to be quite high.

The essential works have been done so far, rewiring, windows,

central heating, kitchen.

I think the period features have been retained, the fireplaces upstairs.

It's always nice to have a bit of a character to a Victorian house.

Martin plans to add the property to his buy to let portfolio,

so how much income could that generate?

I would anticipate a rental income in the region of £400

per calendar month.

Rental figure in today's market,

I suggest around £395 per calendar month.

So is Martin pleased with the rental yield of over 9%?

I was probably hoping for slightly more but once it is fully done,

people will probably appreciate it and pay a bit more.

400 wouldn't be the end of the world.

And the resale valuations?

Will the local estate agents value at higher than

the £51,000 he's invested?

I suggest that we'd market the property at £69,950,

looking to achieve around £65,000.

After renovation is completed, I would anticipate

we would market this property in the region of £70,000.

A gross profit before taxes and expenses of between 14 and £19,000.

Fantastic. Lovely. Quite happy with that.

Neighbours Clive and Frances have had many happy years living here.

And have struck a quite a friendship with Martin and his builders.

The neighbours have been fantastic, bringing tea, coffee.

Can't ask for more. I could almost moving myself.

Made really good friends with them really. It has been nice.

-We shall miss them.

-We will.

Buying property at auction is never static or boring.

You need to know what you're doing and hopefully we can help with that.

Yes, join us next time for more success stories

and cautionary tales from the nation's auction rooms,

-here on Homes Under The hammer.

-Goodbye.

-Goodbye.

Subtitles by Red Bee Media Ltd