0:00:02 > 0:00:06- Hello and welcome.- The price of property goes down as well as up.
0:00:06 > 0:00:12- So it pays to buy at the right price.- And one way is by buying your home under the hammer.
0:00:37 > 0:00:43If you're sitting at home thinking you'd like to buy at auction, now might be a good time to start.
0:00:43 > 0:00:48But the market is always changing, so you have to judge the right time.
0:00:48 > 0:00:54- On today's show, three bidders have already put their money on the line. - And here is what they bought.
0:00:55 > 0:00:59I'm visiting a site near Grimsby where the plot thickens.
0:00:59 > 0:01:04It's attractive, it's got planning permission, it's simple. Or is it?
0:01:05 > 0:01:10I want to unlock the potential of this two-sided property in Kent.
0:01:10 > 0:01:14Look at the amount of keys to all the rooms!
0:01:14 > 0:01:19And in Shropshire, might I have unearthed a precious pad?
0:01:19 > 0:01:25Allegedly, it was the inspiration for Tolkien's Lord of the Rings and Middle Earth.
0:01:26 > 0:01:32All these properties were sold at auction. We'll find out who bought them and what they paid for them
0:01:32 > 0:01:34when they went under the hammer.
0:01:38 > 0:01:43I'm just 20 minutes from Grimsby in South Killingholme.
0:01:43 > 0:01:50The landscape is dominated by its power station and oil refineries, both a major source of employment.
0:01:50 > 0:01:53# When I ask around
0:01:53 > 0:01:58# No one's calling you a liar Because no smoke without fire. #
0:02:02 > 0:02:08This was at one time a rural area, which explains the odd farm-style house,
0:02:08 > 0:02:13but I'm here to see a plot with an attractive price tag.
0:02:13 > 0:02:20More good news - the plot of land has planning permission for building four two-bedroom houses.
0:02:20 > 0:02:24And at a guide price of just 75,000 quid.
0:02:24 > 0:02:30'£75,000 doesn't seem like much with the plans already passed and for four properties.
0:02:30 > 0:02:33'It's definitely worth a look.'
0:02:33 > 0:02:37At first glance, it's not a huge plot to get those four houses on,
0:02:37 > 0:02:43but it is at least flat and in an established residential area,
0:02:43 > 0:02:47there's likely to be easy access to electricity, sewerage etc,
0:02:47 > 0:02:51which can really keep your development costs down.
0:02:51 > 0:02:55It's also not badly located. You've got playing fields that way.
0:02:55 > 0:03:00In the distance, there is the refinery and industrial stuff,
0:03:00 > 0:03:04but it's far enough away. You can hear it and occasionally smell it,
0:03:04 > 0:03:07but overall it's not bad.
0:03:07 > 0:03:11# No, it's not love
0:03:11 > 0:03:16# But it's not bad... #
0:03:16 > 0:03:21'This isn't bad at all and seems like a great opportunity for not much outlay,
0:03:21 > 0:03:26'but everything hinges on just how saleable those houses would be.'
0:03:26 > 0:03:31So handily I have the plans that have been passed and these are they.
0:03:31 > 0:03:35Really making the most of what is not a huge plot.
0:03:35 > 0:03:41But it does have access onto that road, so what we've got basically is a row of mini terraces.
0:03:41 > 0:03:45One, two, three, four. Layout, fairly simple.
0:03:45 > 0:03:49Lounge, dining room, kitchen downstairs with a WC.
0:03:49 > 0:03:57Then upstairs just two bedrooms, a bathroom. And one at the end accommodates the dogleg in the plot.
0:03:57 > 0:04:02Not huge. Each one managing to be about 800 square foot in total.
0:04:02 > 0:04:05Perfectly adequate starter homes.
0:04:05 > 0:04:10Not exactly huge, but with the best chance of selling in this area.
0:04:10 > 0:04:15# Build a home Cos I never want to know
0:04:15 > 0:04:19# What it is to be alone No, not again... #
0:04:19 > 0:04:23This looks like a good little development of four linked homes,
0:04:23 > 0:04:30each with a garden and off-street parking. The site, if it goes for anything like the guide price,
0:04:30 > 0:04:34would be a great starting point. Let's tot up the sums.
0:04:36 > 0:04:43Assuming you spend approximately a third of the end value on the plot of land itself
0:04:43 > 0:04:45then you could be quids in here.
0:04:45 > 0:04:50Let's say the properties will sell for around £90,000 each
0:04:50 > 0:04:56and it costs you around £50,000 each to build them. That gives you a gross development profit
0:04:56 > 0:05:00of around £85,000. But is it really going to be that easy?
0:05:00 > 0:05:06To answer that question you really need to take a close look at the area and that market.
0:05:06 > 0:05:11# Take a look at me now
0:05:11 > 0:05:15# There's just an empty space
0:05:16 > 0:05:20# And you coming back to me is against the odds
0:05:20 > 0:05:25# And that's what I've got to face... #
0:05:27 > 0:05:34Now it looks like we're out of the recession and oil and petrol prices are rising,
0:05:34 > 0:05:40but that doesn't necessarily filter down to the people who make it in factories like the one behind me.
0:05:40 > 0:05:46So like many other parts of the country, this area has suffered and there is high unemployment.
0:05:46 > 0:05:52So with banks and building societies demanding so much deposit for new-build houses
0:05:52 > 0:05:56and any other property and unemployment in the area,
0:05:56 > 0:06:03is this the time to be considering building on a plot of land? You may need a Plan B.
0:06:04 > 0:06:11It's all about supply and demand and perhaps this is not the best time for first-time buyers
0:06:11 > 0:06:16without sizeable deposits. Whoever buys this may need to consider holding on to the land
0:06:16 > 0:06:21for a while before building. Or build and consider the rental route.
0:06:21 > 0:06:28On the face of it, the guide price of £75,000 might seem like a terrific bargain, but is it?
0:06:30 > 0:06:33We asked a local estate agent for his thoughts
0:06:33 > 0:06:36and the four two-bedroom houses.
0:06:36 > 0:06:38I think it's a good idea
0:06:38 > 0:06:44to put four properties on that plot. It lends itself well to two-bedroom properties.
0:06:44 > 0:06:49I don't think they've overmaximised the plot potential.
0:06:49 > 0:06:53So what could the rental be for these four new-builds?
0:06:53 > 0:07:00I think these properties would rent well. You're looking approximately at £450 per calendar month each.
0:07:02 > 0:07:08- What if they were sold on? - I think if you were to resell them in current market conditions,
0:07:08 > 0:07:12you'd be looking between £85,000 and £95,000 per property.
0:07:12 > 0:07:16Well, this is a nice enough little plot of land.
0:07:16 > 0:07:21It's attractive, it's got planning permission, it's simple. Or is it?
0:07:21 > 0:07:26It all depends on whether or not you're able to sell what you might build on it.
0:07:26 > 0:07:29Still, if the price is right, there may well be money to be made.
0:07:29 > 0:07:34Let's see who fancied it when it went under the hammer.
0:07:34 > 0:07:38Guided at £75,000 for this.
0:07:38 > 0:07:41Start me at £60,000 for this lot.
0:07:41 > 0:07:4360,000?
0:07:43 > 0:07:4655 if you like. 55 I have.
0:07:46 > 0:07:48At £55,000. 56.
0:07:48 > 0:07:5056. 57.
0:07:50 > 0:07:5258. 59.
0:07:52 > 0:07:5460. 61.
0:07:54 > 0:07:5762. 63.
0:07:57 > 0:07:5864.
0:07:58 > 0:08:0265. 65. 66.
0:08:02 > 0:08:0567. 68. 69.
0:08:05 > 0:08:0770.
0:08:07 > 0:08:1171. 72. 73.
0:08:11 > 0:08:14At 73. 74. At 74.
0:08:14 > 0:08:1674,500.
0:08:16 > 0:08:21At 75. At 75, against you. I'll take another 500 now, sir.
0:08:21 > 0:08:23At £75,000.
0:08:23 > 0:08:2575,500.
0:08:25 > 0:08:276? 76.
0:08:27 > 0:08:3176,500. £76,500.
0:08:31 > 0:08:34At £76,000. Are you sure?
0:08:34 > 0:08:38At £76,500 once.
0:08:38 > 0:08:40£76,500 twice.
0:08:40 > 0:08:46Third and last time at £76,500.
0:08:46 > 0:08:48Thank you, sir. Your number, please.
0:08:48 > 0:08:54The successful bid of £76,500 came from Mike and his twin brother John,
0:08:54 > 0:08:59who work nearby in Grimsby running their own property development company.
0:08:59 > 0:09:05They work with their other brother Neil and have done several new-builds over the years.
0:09:05 > 0:09:12I met Mike and Neil at the site to find out what attracted them to this auction lot.
0:09:12 > 0:09:18- Mike, Neil, good to meet you both. - Likewise.- Congratulations. Tell me why you wanted to buy the plot.
0:09:18 > 0:09:24We're in the development business and we're always on the lookout for little pockets of land.
0:09:24 > 0:09:29My son brought this to our attention last year. We had our eye on it.
0:09:29 > 0:09:36It slipped through the net a bit, then he notified us that the auction was due and this was included in it.
0:09:36 > 0:09:43- When we originally looked, it was up for £96,000.- Ah!- So in the delay we actually saved £20,000 on it.
0:09:43 > 0:09:48- Fantastic. So what's the deal? You were at the auction. - With our brother.
0:09:48 > 0:09:55- Neil, you're part of the team? - Yes, it's a three-way split. It involves the three brothers.
0:09:55 > 0:10:01- So what was it about the plot you liked?- Just the idea you could start from scratch.
0:10:01 > 0:10:05You get so many older properties and find all sorts of nightmares.
0:10:05 > 0:10:08With this, you start with a blank canvas.
0:10:08 > 0:10:11# You just build me up
0:10:12 > 0:10:15# And then you let me down... #
0:10:18 > 0:10:24This band of brothers are thinking ahead and are prepared to hang on to these planned houses
0:10:24 > 0:10:28in the short term. Even better, they hope to sell a couple to investors
0:10:28 > 0:10:34who have spotted the rental potential. So to give themselves the best shot at a sale,
0:10:34 > 0:10:37how will they make them stand out?
0:10:37 > 0:10:43Quality. Definitely quality. We don't just throw things together. We listen to what customers want.
0:10:43 > 0:10:45We pride ourselves on quality.
0:10:45 > 0:10:51We just built two houses last year for private customers. They went really well.
0:10:51 > 0:10:55Talk me through the numbers and how much it'll cost to do it.
0:10:55 > 0:10:58We've projected some figures of about £200,000
0:10:58 > 0:11:01with a resale figure of about 100.
0:11:01 > 0:11:06So we're hoping to achieve 100 plus profit if we sell them
0:11:06 > 0:11:11- or we rent them at a cost of 270 overall.- Right.- 276.
0:11:11 > 0:11:19- How does the team divide itself? - John and Mike do the joinery. Mike's an ex-building inspector.
0:11:19 > 0:11:25- That's useful.- I'm from an engineering background, so with Mike's son, my nephew,
0:11:25 > 0:11:31- I do all the electrics.- So what's the timescale?- We're looking to get started in the next few weeks.
0:11:31 > 0:11:38And we're confident, weather permitting, that we'll complete it within 6-8 months max.
0:11:38 > 0:11:43# We'll always be blood brothers... #
0:11:43 > 0:11:51The team of siblings have tradespeople they work with regularly to help with the build.
0:11:51 > 0:11:57The only issue they have with the site is a lamppost that needs to be moved before work begins
0:11:57 > 0:12:02and nearby trees that need to be felled. Not major problems and they seem confident
0:12:02 > 0:12:06that this project will go smoothly.
0:12:06 > 0:12:10Well, Mike and Neil and the team certainly have the right idea,
0:12:10 > 0:12:15keeping a tight hold on the budget and it looks like, as I predicted,
0:12:15 > 0:12:21they'll probably sell a couple to developers and rent the other two out. The way to go.
0:12:21 > 0:12:28It means the development will hopefully be a success. Find out how they get on later in the show.
0:12:29 > 0:12:34Chatham in Kent, a low-cost area with an illustrious past.
0:12:34 > 0:12:38I think that is a fair description, but what does that really mean?
0:12:38 > 0:12:42It means times have been tough for Chatham over the past 30 years,
0:12:42 > 0:12:46but what you can't take away from it is the lovely coastal setting,
0:12:46 > 0:12:53a fast train link to London and houses that, for the south east, are very, very cheap.
0:12:53 > 0:13:00'In fact, average house prices in this area are £60,000 cheaper than the national average.
0:13:00 > 0:13:07'That's astonishing given that thanks to the high-speed rail link it's 45 minutes from the capital.
0:13:07 > 0:13:12'I wonder if today's lot has the potential to make a speedy return?'
0:13:12 > 0:13:19A couple of miles from the centre of Chatham on a pleasant residential road. Ex-local authority housing,
0:13:19 > 0:13:24built probably around the 1950s, decent views, mostly semis,
0:13:24 > 0:13:27so what am I here to see?
0:13:27 > 0:13:31Office premises, of course(!) How strange.
0:13:31 > 0:13:34'What I'm looking at is two converted semis
0:13:34 > 0:13:40'on offer as one lot at a guide price of £220,000-£230,000.'
0:13:41 > 0:13:47You know, it feels a bit like a commercial property, but also the hallway to a house.
0:13:47 > 0:13:54A bit odd, but very spacious, solid. Incredibly dated, so you'd need to turn all this around.
0:13:54 > 0:13:59But a great space. You've got a meeting room or lounge area.
0:13:59 > 0:14:02Fantastic views, nice garden.
0:14:02 > 0:14:06Second reception room, a dining room or another meeting room, I suppose.
0:14:06 > 0:14:11And a rather large kitchen, very dated. All the units need replacing.
0:14:11 > 0:14:15But it just goes to show how enormous this place is.
0:14:15 > 0:14:20And to show you, look at the amount of keys to all the rooms.
0:14:23 > 0:14:25I'd better get cracking.
0:14:25 > 0:14:28# I like the way
0:14:28 > 0:14:33# That she unlocks my door
0:14:35 > 0:14:38# She found the key
0:14:38 > 0:14:42# That you threw away... #
0:14:45 > 0:14:49I'd feel like a jailer lugging that set of keys around the place.
0:14:49 > 0:14:53But at least you can be certain the security is pretty well covered
0:14:53 > 0:14:56in this double-sited property.
0:14:56 > 0:15:02Through into the second part of the building and here you have another staircase
0:15:02 > 0:15:09and a lovely big room. Again an office space or sitting room. Does it feel familiar?
0:15:09 > 0:15:14Second reception room. Again, I'm getting a slight sense of deja vu.
0:15:14 > 0:15:19And a rather large kitchen. Now it's very similar to next door.
0:15:19 > 0:15:25That's because all of this is the mirror image of the property next door.
0:15:25 > 0:15:30These are a pair of semis that have been knocked through. You can see the doorway there.
0:15:30 > 0:15:34I really think these properties should be residential dwellings.
0:15:34 > 0:15:41All you'd need to get is change of use. It's not as if you're taking a shop away from a high street
0:15:41 > 0:15:47or changing the street scene. The big question with this is - would they make you money?
0:15:47 > 0:15:50# It's all about the money... #
0:15:52 > 0:15:59Upstairs is a further rabbit warren of rooms. If you turned this place back into two residential properties
0:15:59 > 0:16:04you'd have three decent-sized bedrooms and an upstairs bathroom apiece.
0:16:04 > 0:16:09Get it right and you'd feel like all your Christmases had come at once.
0:16:09 > 0:16:11Sorry, couldn't resist that one.
0:16:11 > 0:16:15Although it may seem a shame to chop this gorgeous back garden in two,
0:16:15 > 0:16:19each property would still have a good amount of outside space.
0:16:19 > 0:16:22# It's all about the money... #
0:16:25 > 0:16:30Properties on this street vary in value from £115,000 to £160,000
0:16:30 > 0:16:36so you'd need to be sure you factor in a realistic sale price before you go wild with your budget.
0:16:36 > 0:16:42Remember, the guide price here was between £220,000 and £320,000.
0:16:50 > 0:16:54We invited a local estate agent along to give us his opinion
0:16:54 > 0:16:56on its highs and lows.
0:16:57 > 0:16:59Pros?
0:16:59 > 0:17:04They're big houses. Solid houses. You've got nice-sized gardens.
0:17:04 > 0:17:10The cons are you're a long way away from everything. All ex-council houses are nice sizes,
0:17:10 > 0:17:16but you tend to be away from everything and when there are local shops, they tend to close
0:17:16 > 0:17:18because of not getting customers.
0:17:18 > 0:17:23As ever, it's not just the property. It's about location and amenities.
0:17:23 > 0:17:26You should always do your research.
0:17:26 > 0:17:30Also, careful calculations need to be done about what's worth spending.
0:17:30 > 0:17:33What does the estate agent think?
0:17:33 > 0:17:37You could spend anything from £5,000-£15,000,
0:17:37 > 0:17:44depending on how well you want to do it and what you want to achieve. But they'll be sellable, rentable.
0:17:44 > 0:17:47You'll always get a buyer or renter at the right prices.
0:17:47 > 0:17:52Firstly, what would he suggest the buyer could sell these for?
0:17:52 > 0:17:59I would market each property at around £130,000, but I'd expect them to sell at 125.
0:17:59 > 0:18:05Bearing that in mind, would selling be something he'd opt for here or would letting it be better?
0:18:05 > 0:18:12In today's market, I'd try to rent them. It'd be much easier and the actual income would be a lot better.
0:18:12 > 0:18:17I'd be very surprised if it didn't get £700-£750 per calendar month.
0:18:17 > 0:18:23Well, two houses right next door to each other are easier to renovate, which is one big bonus.
0:18:23 > 0:18:28Is it two houses for the price of one? Well, no, it's not,
0:18:28 > 0:18:32but it is a tidy little investment that could generate a decent yield.
0:18:32 > 0:18:35Let's see who went for it.
0:18:36 > 0:18:40Where do you want to start on this? Guided at 220-230.
0:18:40 > 0:18:44£180,000 to start me. 180 I've got. I'm on the way. 180.
0:18:44 > 0:18:47185. And 190 now.
0:18:47 > 0:18:50195 in a fresh place. £200,000 if you like.
0:18:50 > 0:18:54200 I've got. 210 I've got. 215 if you like.
0:18:54 > 0:18:57215. 220.
0:18:57 > 0:19:00225? I thought you were there.
0:19:00 > 0:19:03225? 222 if it helps. 222.
0:19:03 > 0:19:06225 I've got. And 8. 228.
0:19:06 > 0:19:10228. And 30? 230?
0:19:10 > 0:19:12230?
0:19:12 > 0:19:14For the first time at 228.
0:19:14 > 0:19:17For the second time at £228,000.
0:19:17 > 0:19:22Third and final time. You've all had a fair go. Thank you. 228.
0:19:22 > 0:19:28That successful £228,000 bid was made by Anthony.
0:19:28 > 0:19:35He used to work in IT, but more recently he's got into property renovation.
0:19:35 > 0:19:39I met him back at his latest purchase so he could tell me all.
0:19:39 > 0:19:44# Hey there, Anthony boy Why are you in such a rush?
0:19:44 > 0:19:49# The girl she wants to talk to you Look at him, how he blush... #
0:19:49 > 0:19:52- Anthony, congratulations. - Thank you very much.
0:19:52 > 0:19:58- So two properties here!- Yes, indeed. - What are you going to do?- Turn them back into residential properties,
0:19:58 > 0:20:03close the doors up, the doorways, and put them back to two.
0:20:03 > 0:20:08- What was it that took your eye about these properties?- First, it's close to where I live
0:20:08 > 0:20:14and that makes it easy to come and do the work. I'll do most of it myself.
0:20:14 > 0:20:20- You need to get change of use. - Yes, I've put in the planning application to separate them.
0:20:20 > 0:20:27That'll take about eight weeks to come through. That's fine. It's well within the timeframe.
0:20:27 > 0:20:34I've put in the building regulations to make sure the council check it's done to the right standard.
0:20:34 > 0:20:38It also makes it slightly easier for deciding what to do
0:20:38 > 0:20:42because you can do the same in both houses.
0:20:42 > 0:20:46So when you've planned for one, you know how long it'll take.
0:20:46 > 0:20:52- Are you an experienced developer? - In 2010, I was made redundant. I was an IT manager.
0:20:52 > 0:20:54I've been in IT for 21 years.
0:20:54 > 0:20:58It just seemed to me I needed to do something else.
0:20:58 > 0:21:03What did I like doing? What can I do? I do like DIY, basically.
0:21:03 > 0:21:09I've put in lots of bathrooms and kitchens for family and friends, so it seemed natural.
0:21:10 > 0:21:14So not only has he got double the property, but double the experience
0:21:14 > 0:21:19as he's done work on houses before. Coupled with his background as an IT manager,
0:21:19 > 0:21:25you'd expect efficiency and attention to detail. And that's just what we have here.
0:21:25 > 0:21:31He read the legal pack, did his research and was aware that the buyer has to cover the seller's fees
0:21:31 > 0:21:34which amounted to £6,000!
0:21:34 > 0:21:39Ouch! But Anthony wasn't alarmed. He was a man with a plan.
0:21:41 > 0:21:47Generally, I'm just going to do a bit of redecoration, new kitchen, new bathroom,
0:21:47 > 0:21:51replace the sliding door and put a new door in there.
0:21:51 > 0:21:54It's a big commercial giveaway with that big glass door.
0:21:54 > 0:21:58Yeah, that's right. We need to make it look like a residential house.
0:21:58 > 0:22:05- How much are you intending to spend? - I'm going to spend around about £30,000 on the two.
0:22:05 > 0:22:13A £15,000 budget per property and Anthony is hoping to have all the work completed in 14 weeks.
0:22:13 > 0:22:18Then to free him and his capital up to do something else, he plans to sell.
0:22:18 > 0:22:24How much would you like to achieve when you go to sell these properties?
0:22:24 > 0:22:28I've been advised they'd be around about £150,000.
0:22:28 > 0:22:34Yeah. £150,000 is quite optimistic. I know it's very varied along this street.
0:22:34 > 0:22:40Well, one sold in 2010 across the road for 160 and it's smaller with a smaller garden.
0:22:40 > 0:22:46The only thing extra it has is parking, but both of these properties have space for parking,
0:22:46 > 0:22:49so the buyer could add a garage.
0:22:49 > 0:22:55- So you feel very positive about it? - Yeah, I don't think it's going to be too much of a problem.
0:22:55 > 0:23:01- Any chance you might keep them and rent them?- Only if they don't achieve the right sort of money
0:23:01 > 0:23:09or they don't sell. But we'll just wait and see. My initial response is to get them sold, do something else.
0:23:09 > 0:23:13- So is this your big, new, future career?- I wouldn't say that.
0:23:13 > 0:23:18- I probably will go back to the IT because that's where I have experience.- Really?
0:23:18 > 0:23:24See how these ones do. If they do OK, then I can take a bit of time and decide what to do next.
0:23:25 > 0:23:32But I've got a few years left to work and I need to make sure I'm making some sort of living.
0:23:32 > 0:23:38The other benefit of it is every time I do a property I lose about a stone and a half!
0:23:38 > 0:23:44That doesn't happen to me! Good luck. I cannot wait to see it and I hope you get the permissions.
0:23:44 > 0:23:46- Thank you.- Thank you very much.
0:23:46 > 0:23:52So developing feels like a natural step for Anthony. Maybe he's found his calling.
0:23:52 > 0:23:58I'll be interested to see how these houses turn out, but I'm a little bit worried the instant profit
0:23:58 > 0:24:04may not be quite there. You can find out if that's the case, if he heads back into IT
0:24:04 > 0:24:07and if he loses 1½ stone later in the show.
0:24:08 > 0:24:13Coming up: I'm in Shropshire checking out a very small one-bed.
0:24:13 > 0:24:17That is pretty much it. What do you expect? It's a one-bedroom flat.
0:24:18 > 0:24:25In Kent, did Anthony learn a few lessons about timing when taking on two properties?
0:24:25 > 0:24:29There are things that take a bit longer than you think.
0:24:29 > 0:24:36- But first, did the plot turn grim near Grimsby?- The bank who originally agreed to support us
0:24:36 > 0:24:39at the 11th hour decided not to.
0:24:40 > 0:24:48We're back in South Killingholme near Grimsby, where three brothers made a bid to build on this plot.
0:24:48 > 0:24:53On auction day, John and Mike purchased the site for £76,500.
0:24:53 > 0:24:56Brother Neil completed the trio.
0:24:57 > 0:25:01# To build a home With pictures on the wall... #
0:25:01 > 0:25:08The land was in an established residential area, so access to utilities did not present problems.
0:25:08 > 0:25:15The only downside was that the site was in the shadow of an industrial plant.
0:25:15 > 0:25:22They wanted to build four linked two-bedroom houses on the site, which had planning permission.
0:25:22 > 0:25:27Not only did they have the plan down pat, they also had a plan of action.
0:25:27 > 0:25:30So what was it that you liked?
0:25:30 > 0:25:37The idea of starting from scratch. You get so many old properties with all sorts of nightmares.
0:25:37 > 0:25:41With this, you start from a blank canvas.
0:25:41 > 0:25:43# This is the industry... #
0:25:43 > 0:25:46So this is a dream team when it comes to building,
0:25:46 > 0:25:51but a dream can become a nightmare if you don't stick to the original plans.
0:25:51 > 0:25:55The three brothers bought the land for £76,500.
0:25:55 > 0:26:01They planned to spend a total of £200,000 constructing the four houses
0:26:01 > 0:26:04and expected it to take 6-8 months.
0:26:04 > 0:26:10We've come back a whopping two years and five months later to see if it's houses or holes in the ground
0:26:10 > 0:26:15for these brothers and what took them so long anyway?
0:26:15 > 0:26:20# If I could build my whole world around you, darling
0:26:20 > 0:26:22# First I'd put heaven by your side
0:26:22 > 0:26:27# Pretty flowers would grow wherever you walked, honey
0:26:27 > 0:26:33- # And over your head would be the bluest sky... # - Finally, it's houses, not weeds!
0:26:33 > 0:26:38The four two-bedroom houses are mostly ready for sale or let.
0:26:38 > 0:26:43It's been a long, hard slog, but they have got there at last.
0:26:43 > 0:26:49As we bought the project as a complete package, it included the plans,
0:26:49 > 0:26:52so we were unable to make any changes to the design.
0:26:52 > 0:26:59The four houses are identical, apart from the end of the row, with a slightly different layout.
0:26:59 > 0:27:05On the ground floor, there's a well-proportioned living room with stairs to the upper floor.
0:27:05 > 0:27:10The kitchen is light and airy with direct access to the rear garden.
0:27:10 > 0:27:14There's also a useful downstairs loo.
0:27:14 > 0:27:21Upstairs, there are two double bedrooms - front and back - with a bathroom in-between.
0:27:21 > 0:27:26The quality is evident in the fixtures and fittings throughout
0:27:26 > 0:27:29and that's no accident.
0:27:30 > 0:27:34We always imagine ourselves living in these houses that we build,
0:27:34 > 0:27:39so we decided to upgrade the specification and standard.
0:27:39 > 0:27:43We don't feel it necessary to sacrifice quality for profit.
0:27:47 > 0:27:53But this was a project with architects' drawings and full planning permission in place.
0:27:53 > 0:27:59It should have taken six months, but instead it took nearly two and a half years!
0:27:59 > 0:28:02The biggest challenge was financial.
0:28:02 > 0:28:07The banks who agreed to support it at the eleventh hour decided not to.
0:28:07 > 0:28:12It was a national decision, not just directed at ourselves.
0:28:12 > 0:28:18But this band of brothers were not going to let the small issue of funding stop this development.
0:28:18 > 0:28:25We came up with a successful outfit based in Doncaster who put us in touch with local businessmen
0:28:25 > 0:28:32who support developments such as ours for people such as us who were let down by the banks.
0:28:32 > 0:28:39The siblings bought the plot of land for 76,500 and their construction costs have climbed to 230,000.
0:28:39 > 0:28:45That makes their total investment £306,500 for all four houses.
0:28:45 > 0:28:51Will their high quality specification compensate for the delays and the overspend?
0:28:53 > 0:28:57We invited two local estate agents along to hear their opinions.
0:28:57 > 0:29:01First, the one who saw the site before the build.
0:29:01 > 0:29:04The builders have done an excellent standard of finish here
0:29:04 > 0:29:09I'm really surprised at the quality of the fixtures and fittings
0:29:09 > 0:29:13with the bathrooms and kitchens. Overall, very impressed with the level of finish.
0:29:13 > 0:29:18I'm really impressed with the appearance of the development.
0:29:18 > 0:29:22The four houses have made a really good impact on the street scene.
0:29:22 > 0:29:24I really like the layout of the houses.
0:29:24 > 0:29:31They are quite spacious which is quite different from a lot of new-build houses in the area.
0:29:31 > 0:29:37I like the fact they've got the off-road parking. They have field views to the rear which is excellent
0:29:37 > 0:29:42They would appeal to young families with the garden spaces to the rear.
0:29:42 > 0:29:48What could each property achieve if they were sold separately?
0:29:48 > 0:29:52I think each individual property should be marketed at £105,000
0:29:52 > 0:29:56to achieve approximately £100,000 in this more difficult market.
0:29:56 > 0:30:02I would anticipate that each house would sell for around £100,000 in today's market.
0:30:04 > 0:30:08That makes a total sale value of £400,000,
0:30:08 > 0:30:14meaning a profit of 93,500, minus the usual taxes and expenses.
0:30:14 > 0:30:16That sounds good advice.
0:30:16 > 0:30:21We have already been offered 110 which we're considering at the moment,
0:30:21 > 0:30:23so not too far away.
0:30:23 > 0:30:26What about the rental market in this area?
0:30:26 > 0:30:30I think if these properties were coming to the rental market,
0:30:30 > 0:30:33they should be offered at £495 per calendar month.
0:30:33 > 0:30:37In the current climate, the rental market is extremely buoyant
0:30:37 > 0:30:44and I would recommend a rental figure of around £475 to £495 per calendar month.
0:30:44 > 0:30:50That's not too bad. We've already sought advice in this regard and we've been given a figure of 500
0:30:50 > 0:30:54so that's what we'll settle for and that's what we've got at the moment.
0:30:56 > 0:30:58# Once bitten, twice shy, babe... #
0:30:58 > 0:31:04It's been a long haul for the trio, so is it a case of once bitten, twice shy
0:31:04 > 0:31:06or would they do it all again?
0:31:06 > 0:31:11We've got some other land for six dwellings that we could start building on,
0:31:11 > 0:31:17but we're looking long-term and we've seen some other land which has a lot more dwellings to be put up,
0:31:17 > 0:31:21so we're seeking the finance to commence that project.
0:31:27 > 0:31:32Close to the beautiful World Heritage Site of Ironbridge Gorge
0:31:32 > 0:31:34is the Shropshire town of Telford.
0:31:34 > 0:31:39Officially designated a "new town", it was built in the 1960s and '70s
0:31:39 > 0:31:42in a former coal-mining area.
0:31:42 > 0:31:46It was named after Thomas Telford, the world-famous civil engineer
0:31:46 > 0:31:50and one of the fathers of the Industrial Revolution.
0:31:50 > 0:31:56The town has all the amenities you would expect of somewhere purpose-built in the last 50 years.
0:31:56 > 0:32:00The property I'm here to see is just a couple of miles from the town centre.
0:32:02 > 0:32:10Well, amongst other things, Telford is the location of The Wrekin, the smallest mountain in England.
0:32:10 > 0:32:13Apparently, from the top, you can see 15 counties
0:32:13 > 0:32:19and allegedly, it was the inspiration for Tolkien's Lord Of The Rings and Middle Earth.
0:32:21 > 0:32:27Well, this might be Middle England, not Middle Earth, but I too have a quest.
0:32:27 > 0:32:31That's to find promising properties and I think I might have just found one.
0:32:31 > 0:32:37Well, these 1970s flats have certainly got a lot going for them in terms of location -
0:32:37 > 0:32:41great transport links, probably quite easy to maintain
0:32:41 > 0:32:47and the property I'm here to see is a ground floor flat at a guide price of 30,000 quid. Let's take a look.
0:32:48 > 0:32:52The area outside the flat seems fairly well kept.
0:32:52 > 0:32:54That's a promising sign,
0:32:54 > 0:32:59although you'd need to factor any communal ground maintenance fee into your costings.
0:32:59 > 0:33:05Off-road parking is a definite plus and the entrance to the flat itself has disabled access.
0:33:05 > 0:33:08All of that adds to the desirability factor.
0:33:09 > 0:33:13So I wouldn't expect too much. It is just a one-bedroom flat.
0:33:13 > 0:33:15But what are we going to find?
0:33:15 > 0:33:18Toilet there with a bath, which is good.
0:33:18 > 0:33:23Down this little corridor, you've got your one bedroom there,
0:33:23 > 0:33:27your living room there and then into the kitchen. That is pretty much it.
0:33:27 > 0:33:30What did you expect? It's a one-bedroom flat.
0:33:30 > 0:33:34But in terms of condition, the kitchen lets it down somewhat.
0:33:34 > 0:33:40It needs cleaning up. If you were renting this place out, you could possibly get away with it as it is,
0:33:40 > 0:33:45but new kitchen units don't cost a fortune these days, so spend a little bit of money in here,
0:33:45 > 0:33:52maybe think about taking down that rather strange and interesting wall and you give the flat a little lift.
0:33:52 > 0:33:55I mean, small but perfectly formed is what it is.
0:33:55 > 0:33:59# I could use a little love right now... #
0:34:00 > 0:34:03Hmm, this place is rather compact and bijou,
0:34:03 > 0:34:08but really it just needs a bit of love and attention to bring it up to standard.
0:34:08 > 0:34:12Upgrading the kitchen is a must, as is checking the electrics.
0:34:12 > 0:34:18It will need to be redecorated throughout, though with new tiling and flooring in the bathroom,
0:34:18 > 0:34:23with a bit of elbow grease, the existing suite might suffice.
0:34:25 > 0:34:31One reason why ground floor flats are popular is that they often come with their own outdoor space
0:34:31 > 0:34:35and this flat is no exception. There's no direct access.
0:34:35 > 0:34:41You have to come into the communal area and then out through the door, but it is your space.
0:34:41 > 0:34:45The flat isn't big, but this makes a big difference, so big tick.
0:34:45 > 0:34:50The garden space may not be massive and it's a shame you don't have direct access,
0:34:50 > 0:34:53but any outside space is a bonus.
0:34:53 > 0:34:56So, for what was a guide price of £30,000,
0:34:56 > 0:35:00it seems to me that this flat could be a wise investment.
0:35:01 > 0:35:04But what would a local property expert think?
0:35:04 > 0:35:07We asked one to brave the pouring rain...
0:35:09 > 0:35:13# Why does it always rain on me...?
0:35:13 > 0:35:16..and give us his opinion on the place.
0:35:17 > 0:35:21Positive side to the property, it's on the ground floor,
0:35:21 > 0:35:25so somebody that can't manage the stairs can access the ground floor.
0:35:25 > 0:35:31The downside to this property, I would say if you're an investor and buying this to let out,
0:35:31 > 0:35:35what you tend to find is tenants normally change relatively quickly,
0:35:35 > 0:35:41so after six months, you'll probably need to get a new tenant as people move on to something bigger,
0:35:41 > 0:35:47whereas some of the larger properties, two and three-bedroom houses, tenants stay a bit longer.
0:35:47 > 0:35:51Well, you can't do anything about its size.
0:35:51 > 0:35:57If it's going to have a fast turnover of tenants, you don't want to be refitting the flat every time.
0:35:57 > 0:36:03Even if you bought it for anywhere near the £30,000 guide price, that would eat into any profit.
0:36:06 > 0:36:10What kind of returns are likely on a small flat like this?
0:36:10 > 0:36:13If this property was to be refurbished,
0:36:13 > 0:36:17I would suggest an asking price of between £33,000 and £35,000.
0:36:17 > 0:36:21If it was brought up to a decent rental standard,
0:36:21 > 0:36:24I would suggest a rental price of £375 per calendar month.
0:36:24 > 0:36:28This flat might be small, but as a buy-to-let investment,
0:36:28 > 0:36:32it could generate a pretty healthy annual yield.
0:36:32 > 0:36:35Clearly, a bit of work needed to sort this one out,
0:36:35 > 0:36:39but ground floor flats are always popular and a good location to boot.
0:36:39 > 0:36:43Let's see who fancied it when it went under the hammer.
0:36:45 > 0:36:50Lot 65 is a one-bedroom, leasehold, ground floor apartment.
0:36:50 > 0:36:54Yes, it does require modernising. So lot 65... Can we start it at 15? 15 bid.
0:36:54 > 0:36:57At £15,000.
0:36:57 > 0:37:01At £15,000. 16, can I say now? 16, thank you.
0:37:01 > 0:37:04At 16. 17? 17. 18.
0:37:04 > 0:37:0719. 20. 21.
0:37:07 > 0:37:1022.
0:37:10 > 0:37:12£23,000. 24.
0:37:12 > 0:37:1425.
0:37:14 > 0:37:17£25,000 seated second row.
0:37:17 > 0:37:20£25,000. 26 anywhere else?
0:37:20 > 0:37:24At £25,000 then for the first time.
0:37:24 > 0:37:27At £25,000 for the second time.
0:37:28 > 0:37:31Third and final time, £25,000...
0:37:31 > 0:37:33You bought it. Well done.
0:37:33 > 0:37:37'So, for £25,000, £5,000 below the guide price,
0:37:37 > 0:37:43'the successful bidder for this one-bedroom flat was 22-year-old Steph.
0:37:43 > 0:37:48'She's in the final year of a Business and Economics degree and lives in Telford.'
0:37:48 > 0:37:51# So you're living by numbers
0:37:52 > 0:37:55# And numbers you answer to... #
0:37:55 > 0:38:01'I met her back at the flat to find out why she thought the numbers added up on this property.'
0:38:01 > 0:38:07- Steph, lovely to meet you. - Lovely to meet you too.- How are you? - I'm OK. Ish.- Why "ish"?
0:38:07 > 0:38:10I bought a flat. Other than that, everything's cool.
0:38:10 > 0:38:14- It's quite a nice flat. - Pleasantly surprised, yes. - Why did you want to buy it?
0:38:14 > 0:38:20Well, I've had some money for a while that I've been looking for an investment opportunity,
0:38:20 > 0:38:25but I didn't think I would be able to buy a property for a good few years yet.
0:38:25 > 0:38:30- And I was at the auction and this came up at the right price.- Right.
0:38:30 > 0:38:34- First property purchase then?- Yeah. - For you to live in or to rent out?
0:38:34 > 0:38:37- I'm hoping to rent out.- OK.- Yeah.
0:38:37 > 0:38:40I'm hoping to start a portfolio if I can.
0:38:40 > 0:38:47'Steph is living at home with her parents and is hoping not only to build up a portfolio of properties,
0:38:47 > 0:38:50'but perhaps make it her career path,
0:38:50 > 0:38:56'so this flat represents that all-important first step in that direction.'
0:38:56 > 0:38:58Why Telford and why this property?
0:38:58 > 0:39:04I live in Telford, so locality was the main reason, and this property, purely price.
0:39:04 > 0:39:07It should deliver a reasonable return on your investment
0:39:07 > 0:39:10and not a whole shed-load of stuff to do to get it sorted.
0:39:10 > 0:39:15- Pleasantly surprised, considering I hadn't seen it prior.- Ah!- Sorry.
0:39:15 > 0:39:17Yeah. Apart from that.
0:39:17 > 0:39:19Why hadn't you seen it prior?
0:39:19 > 0:39:22I wasn't expecting to buy it at the auction,
0:39:22 > 0:39:26then a hand, not my hand, Dad's hand crept up for me.
0:39:26 > 0:39:28Oh, it did, did it?
0:39:28 > 0:39:31- It did a little bit. - So you hadn't seen it inside?- No.
0:39:31 > 0:39:37- Had you seen it from the outside? - No. I'd seen a picture in the catalogue.- That's all right then(!)
0:39:37 > 0:39:40But it wasn't even this flat. It was of this block, but over there
0:39:40 > 0:39:43- so not quite.- Wow!
0:39:43 > 0:39:45So...legal pack?
0:39:45 > 0:39:47Legal pack? Not so much.
0:39:47 > 0:39:51- Steph!- Sorry. It wasn't completely blind though.
0:39:51 > 0:39:57How much more blind can it get? You hadn't seen it, you hadn't read the legal pack.
0:39:57 > 0:40:04I was looking at one on the same estate about a few months ago, prior to buying this one.
0:40:04 > 0:40:07- I read the legal pack for that one. - Oh!- It's the same seller.
0:40:07 > 0:40:10So I knew the area, such as mining and...
0:40:10 > 0:40:13So it wasn't as blind. Ish.
0:40:14 > 0:40:18What about things like community charge or your maintenance charge?
0:40:18 > 0:40:22Yeah, because they were in the same one and I was also aware in that pack
0:40:22 > 0:40:28that they'll be regenerating these flats which I'll have to fork out for in the next five years.
0:40:28 > 0:40:31Any idea what that charge is going to be?
0:40:31 > 0:40:34- Just over 15,000 for the whole block - OK.- Between six of us.
0:40:34 > 0:40:38So it's not too bad. About £2,500.
0:40:38 > 0:40:41- But it could have caught you out. - Had I not known, yeah.
0:40:41 > 0:40:47'So it wasn't totally a step into the unknown, but still not really the approach I'd recommend,
0:40:47 > 0:40:50'especially since every property is different.
0:40:50 > 0:40:57'However, I think in this case Steph has been lucky and uncovered a pretty decent deal.'
0:40:57 > 0:41:02- What will you do to it? - We'll replace the kitchen, tiling in the bathroom, sprucing up,
0:41:02 > 0:41:05just making it more desirable on the rental market.
0:41:05 > 0:41:11- How involved are you going to get with the renovation? - Very. I'm happy mucking in.
0:41:11 > 0:41:15I'm going to do all the decorating. I'm hoping to learn how to tile.
0:41:15 > 0:41:18That's going to be my new skill that I'll acquire.
0:41:18 > 0:41:24- Great.- But anything that professionals need to do, electrics, I can't do myself,
0:41:24 > 0:41:26so I'll get other people in for those.
0:41:26 > 0:41:29What kind of budget have you set aside?
0:41:29 > 0:41:341,500, I'm thinking. If I have to spend more, I have to spend more, but no more than 2,000.
0:41:34 > 0:41:391,500 quid, including replacing the kitchen, it's going to be a bit tight, isn't it?
0:41:39 > 0:41:43- We'll make it work. - How?- Elbow grease.
0:41:43 > 0:41:46Right. And kitchen units?
0:41:46 > 0:41:49- I've already purchased those. - How much did they cost?
0:41:49 > 0:41:54The whole kitchen was £500, including a double oven and a hob. They're only six months old.
0:41:54 > 0:41:59- Well done. So that gives you 1,000 quid just about to do everything else?- Yeah.
0:41:59 > 0:42:06- What kind of timescale?- I'm hoping it's 12 weeks. I'm not rushing it, but I'd like to learn along the way.
0:42:06 > 0:42:09- Who's giving you a bit of a guiding hand?- Family, friends.
0:42:09 > 0:42:14They've happily offered their services which I'm going to snap up.
0:42:14 > 0:42:19- Good luck and I look forward to seeing how you get on.- Thank you.
0:42:20 > 0:42:26Well, the flat may be small, but it's a great start for Steph's property portfolio
0:42:26 > 0:42:31and she seems really excited about sorting it out. Great stuff.
0:42:31 > 0:42:33You can see how she gets on later in the show.
0:42:36 > 0:42:42They say time is a great healer, but it can also be the enemy if you're up against a deadline.
0:42:42 > 0:42:47- So what has happened to those properties? - Let's go back and find out.
0:42:47 > 0:42:52We return to Chatham in Kent now where, earlier, I met Anthony.
0:42:52 > 0:42:59He spent £228,000 at an auction on this, what looked like two standard semis.
0:42:59 > 0:43:05But it was being sold as one lot as it had been converted too and used as office space.
0:43:06 > 0:43:12Anthony had previously worked in IT, but was now making headway in property renovation.
0:43:13 > 0:43:19- So is this your big, new future career?- I wouldn't say that. I will probably at some point go back to IT
0:43:19 > 0:43:22- That's what I've got huge experience of.- Really?- Yeah.
0:43:22 > 0:43:28I'll see how these ones do and if they do OK, I can take a bit of time and decide what to do next.
0:43:28 > 0:43:33The other benefit of it is every time I do a property, I lose about a stone and a half.
0:43:33 > 0:43:36That doesn't happen to me. That's not fair!
0:43:37 > 0:43:42Well, let's hope this renovation has been worth the, um...WAIT
0:43:42 > 0:43:44as we're back five months later
0:43:44 > 0:43:49to see if Anthony found splitting this property in two again twice as nice or double trouble.
0:44:07 > 0:44:12The left-hand side of the property is certainly feeling a lot more like a home now
0:44:12 > 0:44:16as not only did Anthony split the properties into two,
0:44:16 > 0:44:19but has renovated and redecorated throughout.
0:44:20 > 0:44:24Is the right-hand house looking just as swell?
0:44:40 > 0:44:44What was one large and rather cluttered office space
0:44:44 > 0:44:49is now two separate and really lovely homes inside and out.
0:44:52 > 0:44:58Outside, we've put in new deckings, new patio doors, re-laid turf here
0:44:58 > 0:45:03and made an allotment area over there where we had two greenhouses previously and a shed
0:45:03 > 0:45:08which we've given to charity because most people don't really want something like that.
0:45:08 > 0:45:12We've also separated the property with a nice, new fence
0:45:12 > 0:45:18and put another deck and patio window on the other side, so both houses have a similar look and feel.
0:45:18 > 0:45:24Anthony has clearly put a lot of time, thought and effort into this project. The results are fantastic.
0:45:24 > 0:45:27His original timescale was 14 weeks
0:45:27 > 0:45:33and that has only been pushed slightly to 16 to get both completed.
0:45:33 > 0:45:39Now both properties are finished, is he tempted to stick with renovation, rather than IT management?
0:45:40 > 0:45:44I haven't really decided. I really do this as an investment.
0:45:44 > 0:45:48If the opportunity arises, I will do another one of these.
0:45:48 > 0:45:52If I see a good job, I'll apply for it. Luckily, I'm in a position to do that.
0:45:52 > 0:45:58# Well, I'm a lucky man
0:45:58 > 0:46:05# With fire in my hands... #
0:46:07 > 0:46:11But there was one area where Anthony found he wasn't in luck.
0:46:11 > 0:46:14Although the practical task of dividing the property was easy,
0:46:14 > 0:46:19dealing with the paperwork and red tape around changing its use back to residential
0:46:19 > 0:46:22wasn't quite so straightforward.
0:46:22 > 0:46:27The split of use and the subsequent work with building regulations and things like that
0:46:27 > 0:46:31is a lot more work than I imagined it would be.
0:46:31 > 0:46:36You have to be aware of that when you go and buy a house at auction for this sort of purpose.
0:46:36 > 0:46:40There are things that might be a bit of a challenge and take a bit longer.
0:46:40 > 0:46:44Wise words indeed, but Anthony doesn't seem to have been too fazed
0:46:44 > 0:46:48and is definitely pleased with the end result here.
0:46:48 > 0:46:51He aimed to spend £30,000 in total on the work.
0:46:51 > 0:46:54How much did it all cost in the end?
0:46:56 > 0:47:02About 29,500. The actual budget worked out exactly as I planned. I didn't use any contingency.
0:47:02 > 0:47:09So he didn't lose a penny from his budget, but did he manage to lose a few pounds?
0:47:09 > 0:47:15I did lose a little bit of weight. I did lose a stone and a half. About three months' physical work.
0:47:15 > 0:47:20It just shows if you do something like that, you will lose weight. It works well for me.
0:47:20 > 0:47:23Oh, jealous! But back to brass tacks.
0:47:23 > 0:47:30With the purchase price of £228,000, plus £6,000 to cover the seller's fees
0:47:30 > 0:47:33and £29,500 on the work,
0:47:33 > 0:47:38Anthony's total outlay here is £263,500.
0:47:39 > 0:47:44We invited two local estate agents to view both properties,
0:47:44 > 0:47:46one of whom is on his second visit.
0:47:46 > 0:47:50They've been done to a very high standard. I looked at them the first time.
0:47:50 > 0:47:52It's surprising how big the rooms are
0:47:52 > 0:47:56now the cupboards aren't here any more. The rooms are lovely sizes.
0:47:56 > 0:47:59The focal selling point of both houses is the gardens.
0:47:59 > 0:48:03The larger plot will appeal to the keen gardening enthusiasts.
0:48:03 > 0:48:06The other one is a little less maintenance.
0:48:06 > 0:48:12As the property on the right has a slightly larger plot, it may be worth more when it comes to selling.
0:48:12 > 0:48:15What would the estate agents market them for?
0:48:18 > 0:48:24I would sell next door for 150,000 and I would sell this one at 155,000 to 160,000.
0:48:24 > 0:48:28Both properties are unique in comparison to what's available in the local area.
0:48:28 > 0:48:33I would aim to achieve 155,000 for one property and 160,000 for the larger plot.
0:48:33 > 0:48:37That's really in line with what I was expecting.
0:48:37 > 0:48:39Yeah, very good.
0:48:39 > 0:48:42Anthony could make a potential pre-tax profit
0:48:42 > 0:48:47of between £41,500 and £56,500 in total here
0:48:47 > 0:48:51and, in fact, has already sold one of them.
0:48:51 > 0:48:56If he were to opt for the rental route on either though, what could that achieve?
0:48:56 > 0:49:03I think they'd rent very easily and I'd be looking to achieve around £800 per month for both properties.
0:49:03 > 0:49:06If he struggles with selling them at the price he needs,
0:49:06 > 0:49:10he would rent them out very easily at between £750 and £795 per month.
0:49:10 > 0:49:13Yeah, that's again the expectation,
0:49:13 > 0:49:18but if I was looking for rental properties, I wouldn't be buying these sort of properties
0:49:18 > 0:49:23because you can get a better return off smaller properties in this area. I'm looking for the sale.
0:49:24 > 0:49:29Not even a yield of around 7% is tempting Anthony towards rental,
0:49:29 > 0:49:33but given the potential profit on selling, I don't blame him.
0:49:33 > 0:49:36Don't you love it when a plan comes together?
0:49:36 > 0:49:41The project's done exactly what I wanted it to. I was on budget with my spend.
0:49:41 > 0:49:44I've already sold one property for the valuations.
0:49:44 > 0:49:50Yes, so it's gone exactly as I wanted which is rare, I suppose, but it worked well for me.
0:49:54 > 0:49:57It was in the Shropshire new town of Telford
0:49:57 > 0:50:03that we first came across a one-bedroom, leasehold ground floor flat with its own garden.
0:50:03 > 0:50:07Although slightly tired, this flat, built in the '70s,
0:50:07 > 0:50:12really only needed a bit of modernisation to get it back up to standard.
0:50:12 > 0:50:19That was a pleasant surprise for Steph, a Business and Economics student who lives in Telford.
0:50:19 > 0:50:25She purchased it for £25,000 at an auction with little or almost no study of her subject matter.
0:50:27 > 0:50:33- You hadn't seen it inside?- No.- Had you seen it from the outside?- No. I'd seen a picture in the catalogue.
0:50:33 > 0:50:38- That's all right then(!) - It wasn't completely blind. - How much more blind can it get?
0:50:38 > 0:50:42You hadn't seen it, you hadn't read the legal pack.
0:50:42 > 0:50:48I was looking at one on the same estate about a few months ago, so I read the legal pack for that one.
0:50:48 > 0:50:54- Oh.- It was the same seller, so I knew areas such as mining and...
0:50:54 > 0:50:56So it wasn't as blind. Ish.
0:50:56 > 0:50:59Hmm, Steph, OK. Ish.
0:50:59 > 0:51:05At the ripe young age of 22, Steph has just begun to build her portfolio
0:51:05 > 0:51:08and you have to admire her, even if she is breaking some rules.
0:51:08 > 0:51:12She wasn't daunted by the prospect of hard graft either.
0:51:12 > 0:51:19With the help of family and friends, she was planning to get down to the work and learn some handy skills.
0:51:19 > 0:51:24She was already ahead of the game as she had bought a kitchen from the internet
0:51:24 > 0:51:26for an amazing 500 quid.
0:51:26 > 0:51:31That was a considerable chunk of her £1,500 to £2,000 budget.
0:51:31 > 0:51:35Her hope was that the flat would be ready to rent out in 8 to 12 weeks,
0:51:35 > 0:51:39but she was prepared to take her time if she had to.
0:51:40 > 0:51:46Now, six months later, how did our young portfolio apprentice do?
0:51:47 > 0:51:50# Can you see my vision
0:51:51 > 0:51:55# Of a red-hot summer in white?
0:51:55 > 0:51:58# When love was the feeling
0:51:58 > 0:52:01# With no indecision
0:52:03 > 0:52:06# We were turning that key inside... #
0:52:06 > 0:52:09Along with a redecorated and refreshed lounge,
0:52:09 > 0:52:14the bedroom has also been given a makeover and a new carpet fitted.
0:52:15 > 0:52:20But it was the kitchen that was in greatest need of updating.
0:52:20 > 0:52:24# Can you see my vision...? #
0:52:24 > 0:52:31This is the kitchen. This is my bargain off the internet which cost me £500. Dad fitted it.
0:52:31 > 0:52:36I'm really happy with how it looks. My boyfriend tiled with the metro style of bricks.
0:52:36 > 0:52:39The main issue we had in here was the ceiling.
0:52:39 > 0:52:43We had a leaky ceiling which needed replacing.
0:52:43 > 0:52:49That took a lot longer than we hoped which put back our timescale quite a lot, but I'm happy with the results.
0:52:49 > 0:52:55In fact, it was the problem with the kitchen ceiling, along with having to finish her degree,
0:52:55 > 0:52:59which were the main reasons for her timescale slipping.
0:52:59 > 0:53:05With the kitchen sorted, it was then just a matter of giving the bathroom a new lease of life.
0:53:07 > 0:53:12This is the bathroom. We've kept the suite the same just to keep the costs down,
0:53:12 > 0:53:18but spruced it up with new taps, a shower. It's been re-tiled, floor tiles.
0:53:18 > 0:53:22It's a lot more modern, but without spending the Earth on it.
0:53:22 > 0:53:28Steph was hoping to learn to tile on this project, so is the tiling in the bathroom her handiwork?
0:53:28 > 0:53:32I did end up getting somebody else to tile due to timing
0:53:32 > 0:53:36and the fact that it would have taken me weeks, but maybe next time.
0:53:36 > 0:53:39# Everybody's gotta learn some time
0:53:41 > 0:53:45# Everybody's gotta learn some time... #
0:53:45 > 0:53:49OK, so tiling is a skill for her to learn another time,
0:53:49 > 0:53:54but as this was her first project, what did she learn about property developing?
0:53:54 > 0:53:59This one was always going to be a steep learning curve and it has been,
0:53:59 > 0:54:02steeper than I was possibly anticipating.
0:54:02 > 0:54:06Most of the decorating in here was done by myself.
0:54:06 > 0:54:09I've had help with the bits that I wasn't so good at,
0:54:09 > 0:54:13but I've thoroughly enjoyed it and I've learnt lots in the process,
0:54:13 > 0:54:16so hopefully, the next one will be a bit easier.
0:54:16 > 0:54:20It was a steep learning curve in terms of the practical work,
0:54:20 > 0:54:25but I'm sure with her background, the financial side would have been more straightforward,
0:54:25 > 0:54:30so did she keep to her £1,500 to £2,000 budget?
0:54:32 > 0:54:35We are at the top end. We are at the 2,000 point.
0:54:35 > 0:54:39But I think the money has been well spent in the added extras,
0:54:39 > 0:54:42just to spruce up the place and make it a little bit nicer.
0:54:43 > 0:54:47A £2,000 spend on top of the £25,000 purchase price
0:54:47 > 0:54:53will take her total outlay on the flat to £27,000 without costs or fees.
0:54:53 > 0:54:56So will all this add up to be a healthy investment?
0:54:56 > 0:55:01What do two local estate agents think of her revitalised, one-bedroom flat?
0:55:03 > 0:55:08It's contemporary, light colours, entirely appropriate for the market.
0:55:08 > 0:55:12The changes that have been done to the flat are a very good standard.
0:55:12 > 0:55:14Everything is all very neutral.
0:55:14 > 0:55:18It's nice to see laminate flooring in most of the rooms.
0:55:18 > 0:55:22The kitchen is modern, exactly right for the younger buyer or tenant.
0:55:22 > 0:55:26Steph planned to put the flat on the rental market,
0:55:26 > 0:55:31but how would her £27,000 investment fare if she wanted to sell it?
0:55:31 > 0:55:37If this was to go on the re-sale market, the most you could ask for is around £35,000.
0:55:37 > 0:55:41If the owner decided to sell, they'd be looking around the £30,000 mark.
0:55:41 > 0:55:47That's what I expected. I knew there wasn't any money in it for re-sale. At the moment.
0:55:47 > 0:55:53As Steph says, there's not really much to be made at present on the re-sale market.
0:55:53 > 0:55:58It may be a pre-tax profit of between £3,000 and £8,000,
0:55:58 > 0:56:01but it's rental values that are crucial here.
0:56:01 > 0:56:06To put this on the market for rent, I'd estimate you'd get £375 per calendar month.
0:56:06 > 0:56:11The property should rent fairly easily at about £375 per calendar month.
0:56:11 > 0:56:17That's more than I expected. I based my figures on 350, so that's a bonus, yeah. I'm happy with that.
0:56:18 > 0:56:25£375 a month rental would generate an annual yield above 16%.
0:56:25 > 0:56:30You don't have to be a graduate in Economics to realise that's a pretty high return.
0:56:30 > 0:56:35So how does Steph reflect on her first ever property development?
0:56:35 > 0:56:39I'm pleased with how it's gone and, hopefully, it's the first of many.
0:56:42 > 0:56:47Join us next time for more action from the auction rooms all around the country.
0:56:47 > 0:56:50- Yes, here on Homes Under The Hammer. Goodbye.- Goodbye.