Episode 5 Homes Under the Hammer

Hello. In today's challenging market,

do you think you could hack it in the world of property?

If you get it right, it can be an exciting way to earn money.

Yes, and it can be even more rewarding

buying your Homes Under The Hammer.

There are tense moments in the auction room.

Who will make the right bid at the right time?

Yes, properties can change people's fortune, for better or worse,

so what inspired the buyers today?

In Kent, first-time developer Tom takes on this terrace.

Could there be trouble ahead?

-What are you worried about with this project?

-Everything.

And in Carlisle,

what is it about this one-bedroom flat that's giving me nightmares?

HE YELPS

These properties have been sold at auction.

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

when they went under the hammer.

Now, to a former industrial town on the Kent coast.

Chatham is well-known for its maritime connections,

and it was the business and industry that grew from its busy docks

that once upon a time made this place affluent.

Modern times have proven tougher, and despite being in the South East,

property prices here are still resolutely low.

Roads like this are a clear reminder of Chatham's industrial past.

Now, the terraces just seem to go on for miles, and would have

housed dockyard workers when Chatham was buzzing with industry.

Today, the houses are at the lower end of the scale,

but they still make very decent homes.

Now, the one I'm here to see is this.

It's got three bedrooms and it had a guide price of 75-85,000,

and it sits at the top of a very steep hill.

Exactly as I expected,

on the inside, you've got a great space, here.

I don't think this is damp, it was probably a bit of condensation,

because this is an external wall, so nothing to worry about there.

Could have a look and see if you've got

a nice little fireplace under there, but a really good room.

And then, you've got the stairs leading to three bedrooms,

and a second reception room.

Now, I can see straight away - sofa here, sofa there,

or great big table. You can have all the kids having dinner.

It's really big enough to do anything you want in this room,

which is good.

You've got a door which leads out to the garden, and the kitchen.

Now, the good news is, it's not in bad nick.

You could actually leave it as it is.

Sadly though, the boiler's gone, so you'd have to factor that into it.

The boiler was, in fact, stolen from the property,

and replacing it means extra expense for any potential buyer.

You know, you've got the bathroom right at the back,

and there's enough space in between to,

sort of, differentiate between the two areas.

So it's a great property, I really like it,

but I'd like to check out the rooms upstairs.

What have we got? Well, the bedroom at the front is a good size,

as is the second, but the bad news is that to get to the third bedroom,

well, you have to go through this one,

and that third room is an extension, which means it has a lower ceiling.

So there are gardens, and then there are gardens.

Now, I was expecting to see a yard out here,

but actually, it's not quite that.

But, you know, could you make use of it?

Well, you've got a little terrace area, here,

which you could sit outside, have a little barbecue,

more steps, little grass areas here,

more steps... Maybe you could do something there.

You certainly won't be playing cricket and rounders out the back,

that's for sure. And you've got to climb up here,

and you've got a little grassed area here.

You've got fantastic views over Chatham, but this is

the type of garden that's been taken to a whole other level.

Phew.

So what does a local estate agent think of this property,

guided at 75-85,000?

I'd expect you to get around about 100, possibly slightly more,

but then that would be competing against

probably better properties in the area.

The maximum you'd achieve per calendar month

on a rental property here would be £600.

They're not hard properties to rent.

A solid standard terrace

that would rent as soon as it's renovated,

just what plenty of people are after,

so let's see who bid at the auction.

Three-bedroom terraced house for improvement,

it's got gas heating, double glazing

and vacant possession.

£80,000, can I say? Give me 75, then.

75? 75 bid, I have.

80, I'm looking for. At 80, do I see?

At 80, I'm bid. 85 is against you.

85, do I say?

At £80,000, then, I've got.

2, anywhere else? 82, I'm obliged.

84, now, do I say?

84, back to you, sir.

86, it's against you.

86, if you wish. Are we all...?

86 bid. 88, now, if you like.

At 86,000, 88? No?

At £86,000, standing at the back, 88, I want.

Are we all done at £86,000?

I will sell for the first time.

£86,000, standing at the back, for the second time.

Third and final time, at £86,000, are we sure we're all done?

86,000, and the number, please.

That final bid of £86,000 was made by Tom, who's a builder

and already got his hands, well, rather full.

MUSIC: Daddy Cool by Boney M

# Daddy, Daddy Cool Daddy, Daddy Cool... #

This is his first investment project,

and he's hoping to turn this property around rather quickly,

and get it back on the open market.

And why did you decide to go down the auction route?

-Erm, well, I'm a fan of the show, you know...

-Yay!

Obviously, seemed...just a good way to use a bit of money.

You know, we've done it on loan, so obviously,

it's a case of get moving and turn it around as quick as possible.

So, with the purchase price of 86,000,

and a budget of nine to ten grand, there's only one thing on my mind.

Where's your profit?

Erm, I've got no expectations of making a huge amount on my first go.

-I do want to make, hopefully, at least 10,000, maybe.

-OK.

So, you know, if I can keep things relatively cheap,

I do think there's a potential to make, hopefully, around ten.

With his own building skills,

and the help of his plasterer brother,

he's hoping to save money and get this project done in two months.

What are you going to do to really turn this place around?

So really, I think, it's just make a bit of a selling point of this area.

Remove this wall, make a nice, sort of, kitchen-diner.

Erm, you know, the rest of the house, it'll be a case of neatening it up.

Magnolia walls, you know, blank carpets...

Nice blank canvas for someone to put their stamp on it, really.

What are you worried about with this project?

A lot of it's going to be new to me, but it's nice to get your hands dirty

and then have a look at the end result,

so I think I'm really looking forward to just, sort of,

sitting back at the end of it

and, you know, just, being happy with what, you know, I might achieve.

Now, I know you are going to be busy,

cos I've met little Charlie today,

-and I know your fiancee has gone back part-time to work.

-Yeah.

How are you going to fit it all in,

and what do you think Charlie's going to make of all this?

Well, he's going to have to see a little bit less of me,

maybe on Sundays especially, but no, I'm going to be doing a lot

and I've also got my cricket on a Saturday to think about,

so it's going to definitely be a seven-day week...

well, for the next couple of months, at least.

-Tom, it's been lovely meeting you.

-And you.

-Good luck,

-and I can't wait to see what you do here.

-Thanks.

-Well done.

-Cheers.

Tom has a great property here, but it's a classic rental,

and I'm worried, well, instant profit might be hard to find.

See what he decides later on in the programme.

Carlisle Castle, this imposing medieval building,

is set in the border town of Carlisle,

and has seen much strife among the peoples of either side.

Personally, I don't think there'll ever be a war

between England and Scotland again.

Mind you, you never know, and if things did kick off,

they'd probably start here in Carlisle,

a Roman garrison town built to defend Hadrian's Wall,

until this castle was built by King Henry I, around 900 years ago.

Well, before battle commences, I'm going to go and seek shelter.

Now, I don't know about you,

but I've always quite liked the word "bijou",

erm, unless, that is,

it's forming part of the description of a property,

when generally, it's just another word for small.

Well, in this instance,

small but perfectly formed is what I'm here to see -

a one-bedroom flat, at a guide price of £35,000 plus.

It shouldn't take us too long to look around.

Hmm.

Looks all right.

Living room over that way, but facing you

when you come in through the front door is the kitchen,

and it's quite a nice size.

Just units down one side of the room,

which I think works quite well. It gives you a chance to

have a kitchen table over there.

Yeah, it's nice. For the size of the flat, it's brilliant.

Through this way, and a bit, sort of, a...

jiggery-pokery going on, here.

We've got the bathroom - oh, wait, actually,

it's a toilet with a shower in it - back there.

A bit of storage, there, and then through to the one bedroom.

Yeah, it's good.

MUSIC: C'Est Si Bon by Louis Armstrong

# Mmm, c'est si bon Lovers say that in France... #

C'est bon, indeed, and the bedroom isn't too petit, either.

There are rather a lot of doors in this back area,

and maybe there could be some streamlining, but overall,

the rooms are all a good size, if not particularly fashionable.

There are signs of damp here and there,

but I don't think they're too bothersome.

Well, it's already shaping up to be a pretty good flat for the money,

so you're not necessarily expecting much outside space,

but the good news is you have actually got some.

This little courtyard area here, some plants,

some hanging baskets, that'd really make this rather pleasant.

And on top of that, you've also got access, or shared access,

to this little bit of, well, scrubland at the moment.

That could be a decent garden, as well.

So just two added bonuses... Yeah, it's good news.

Is there anything else that could be done

to make this more of a dream pad?

Well, it is a bit difficult to see how you could really

reconfigure the space, in here.

I mean, maybe knock down some of these walls,

that wall there, make it a bigger kitchen

that you just walk straight into off the road.

I mean, you could go completely over the top

and take this wall out,

to give a huge great living-kitchen-dining...

everything area, if you like.

I mean, there's so many options, yeah...

Alternatively, of course, you could pretty much just leave it as it is.

Actually, it's quite cosy as it is.

Very cosy.

MUSIC: All I Have To Do Is Dream by The Everly Brothers

# Dream Dream, dream, dream... #

Too many doors.

Ooh! Too many doors. Too many doors.

Too many doors!

Oh, a bit of damp, oh.

Too many doors!

I've got to find the way out. Too many doors!

HE YELPS

HE COUGHS

Phew, it was just a dream. Phew.

We invited a local property expert

to cast his eye over this leasehold flat,

guided at £35,000 plus.

First impressions, I'm walking round,

I think it's very nice. One-bedroom ground-floor flat.

It all seems to be in good order, just could do with a new kitchen,

and maybe a little bit of upgrading and decorating, really.

And how much did he think it could be worth on the rental market?

A property like this, if it was on the rental market,

should achieve around £350 per calendar month.

And on the sale side?

Once fully renovated,

this property should achieve around £55,000 on the open market.

So who fancied this bijou corner flat when it went to the auctions?

Well, I'm pretty sure it wouldn't have given anyone there nightmares.

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

£35,000, last quoted guide, who's here for this?

35? Thought not.

At £25,000?

25, here. At 25, I'm bid.

At 25, in once.

26, 27,

28, 29.

29, I've got. 30.

31, 32, 33,

34, 35, 36.

Thinking about it. With you, sir, at £35,000.

We're in the market, we're here to sell.

£35,000, first time.

35, second time.

You're out. £35,000, then.

Third and final time, all done, all out.

Selling away, then, to you, sir.

Congratulations.

The hammer fell on the guide price of 35,000,

a bid placed by Brian and his wife Joanne.

Brian owns a skip company, and Joanne owns a nursery.

It was she who I met back at the property,

to find out more about their choice to purchase this pad.

-Joanne, good to meet you.

-Yes, nice to meet you too, Martin.

-Congratulations.

-Thank you.

-Good little flat, actually.

Yeah, lovely, it is, it's really nice.

Tell me why you wanted to buy it.

It's an investment purchase between myself and my husband

and we're looking at renting the property in the future.

Right, so what were you looking for? What was your criteria?

Something that was easy to maintain

and didn't need too much work done on it, needs to meet

-a quick turn over and get the tenant in.

-Right.

Well, you certainly ticked all the boxes here, I think.

Bit of damp here and there that you're going to sort out.

I think the main plan is the damp

and I think the kitchen floor actually needs to be lifted

and the plasterwork taken off in the kitchen

and then re-laid and replastered and decorated again.

-And then some paint, presumably?

-Yup, decorate each of the rooms.

I think a lot of it's wallpaper that you can paint on top of,

so we'll be looking at touching that up and freshening it up

in the bedroom and the living room and what have you.

-OK, what's the budget?

-Mm, 2,000 to 2,500.

-Oh, wow.

Leave the bathroom as it is, then?

Yes, I don't think we'd get a bath in there, I think we'll just stick with

the shower that's currently there which looks to be in good condition.

So, yeah, yeah.

That budget does sound small but there's not a great deal

to do here beyond the cosmetic, so long as those damp patches

in the kitchen, especially, aren't signs of anything too sinister.

Joanne and her husband will be bringing in experts to do

that part of the work

but are also planning on being very hands-on themselves

and want to get the flat shipshape in 4 to 6 weeks for it then

to go up for rent as a furnished let.

So, have you looked into the pros and cons

of furnished versus unfurnished?

I have, I've done my homework on the internet,

I've looked at what's already available in the city.

What difference does it make?

-Maybe about £20 a month.

-Right. Worth the bother, then, or not?

-Yeah.

-Well, congratulations, good luck with it.

-Thank you.

-We look forward to seeing how you get on.

-Thank you, Martin.

Well, I think Joanne's got herself a good little property here

but I'm a little bit concerned about that budget.

£2,000, I hope that's going to be enough.

You can find out how she gets on sorting it out later in the show.

Now, if you want to profit from property, timing is crucial

and it's not always easy to get it right.

Yes, don't let time pass you by. Let's see how today's buyers got on.

We return now to Chatham in Kent to this three-bed terrace

in the middle of a very steep street.

I say three bedroom but the third was off the second, so never ideal.

This house had its ups and downs. With a downstairs loo

and an upwards garden, I thought this could be a great rental

but first-time developer and first-time dad Tom

bought it at auction for 86,000

and planned, after spending a ten-grand budget, to flip it.

Where's your profit?

I do think there's a potential to make hopefully around ten.

Three months later, it's time to find out if Tom has kept to his

plan and if he's going to squeeze any profit out of this project.

Tom, on a friend's advice, decided to move the stairs in order

to create an open-plan living area downstairs.

Which also means the newly fitted kitchen seems

more spacious than before.

Moving the stairs also means Tom has been able to create

a hallway upstairs, therefore making an entrance for the third bedroom.

The two larger bedrooms have been plastered,

painted and brightened up.

The back garden has been tidied...

..and the bathroom, through the kitchen, has also been polished up.

But it's the turning of the stairs

and the third bedroom entrance that makes the most difference here.

OK, so, where I'm standing here was a cupboard which, obviously,

the staircase ended at a different side,

so what we've done is knock away these two walls,

change the staircase around and what that's allowed us

to do now is create separate access to the third bedroom.

We've put this partition wall in here, which has made that bedroom

slightly smaller but still a good-sized double and then,

obviously, the corridor that meets the third bedroom making it

a full three-bed house.

So, what other work has he undertaken here?

Kitchen changed, believe it or not it's a second-hand kitchen.

Found a little online bargain.

Bathroom still got work to do.

Unfortunately the house is 95% complete, so a few little touch-ups.

Garden, a few touch-ups, you know, couldn't really do too much with it

but just a neaten-up out the back and,

yeah, generally that's the job complete.

Tom used professionals to move the stairs and to fit

the supporting joists but, with a little help

from his partner Emma and his cute son Charlie,

he was able to do a lot of the work himself.

However, because he changed his plan, so has his two-month schedule.

It is a fraction over three months. Yeah, three months and, really,

only a few days' work left.

He's done a lot more than he intended.

I'm even more worried that he won't make any profit,

so how much has he spent?

We spent all the money that we needed to and it's at 11,500

so, I'm quite pleased with that.

We probably spent about 6,000 to 7,000 with the whole staircase

changing which has involved, you know,

a gas fee, certifying the steels,

-so there's a lot of cost gone into that.

-Well, that's not too bad, phew!

That means Tom's spent a total of £97,500.

Will these radical changes be enough to make this house rocket

through the £100,000 ceiling price the agent told us about earlier?

Two local property experts came along to give us their opinion.

If the property was up for rental, what could Tom charge?

He could achieve a figure in the region of £750 per calendar month.

I expect it to achieve around £600 to £625 per calendar month.

And if he was to sell on, what would be the valuation?

I would expect it to achieve within the region of £100,000 to £110,000.

I would recommend the price from £115,000 to £125,000.

With the work we've done and the advice I've been given,

I think the higher one... Realistic to start at about 121, 125,

but I think 115's the goal here, so if we can get 115 I'll be very happy.

It's good that Tom is being realistic,

it means he's much more likely to achieve that quick sale he wants,

and 115,000 would give him a profit of 17,500,

minus taxes and fees.

So the gamble of spending more time and money has paid off.

Now, are Tom and baby Charlie game for another project?

Erm, yeah, the goal is to sell this and get straight on to the next one,

so can't wait.

BABY GURGLES

We're back in Carlisle, and another first-time investment.

Joanne was also hoping to spend very little renovating

the one-bedroom flat she'd bought with husband Brian for £35,000.

There wasn't much work to be done

but to rent out furnished or not furnished, that was the question.

So have you looked into the pros and cons

of furnished versus unfurnished?

I have, I've done my homework on the internet.

I've looked at what's already available in the city.

-What difference does it make?

-Maybe about £20 a month.

-Right.

-Erm...

-Worth the bother, then, or not?

-Yeah, I think so, definitely, yeah.

And we're now back, three months after I first met Joanne,

to see how it all looks now.

Much better.

Clean, fresh, and simple is the order of the day.

My main concern here was the damp, which was primarily in the kitchen.

So in the kitchen,

we've knocked off the plaster from it to about a metre and a half high,

injected it with the damp-proof course, replastered,

decorated throughout, and new flooring and new appliances.

All sounds simple enough,

but fixing the damp wasn't entirely smooth sailing.

We'd had the decorators come in while we were away on holiday,

and we thought, "Great, the job'll be finished when we get back."

And then, when we came back, it looked as though

somebody had thrown a bucket of water

at the bedroom and the living room walls.

So the damp...it had pushed the damp through into the other rooms,

so we had to start all over again

and knock off the plaster in the bedroom and the living room.

Nightmare, and just goes to show that sometimes

fixing one problem can create another.

In this case, however, it did mean the living room got

a bit more of a makeover than was originally planned.

In the living room,

we've knocked off the plaster to a metre and a half high,

we've injected the damp-proof course right round,

erm, replastered, redecorated,

we've put in a new flooring, and also the new fire.

That used to be an old gas fire

and we've replaced it with the electric fire.

The room has also been furnished,

and although I wasn't convinced that furnishing the property would be

worth it, there's no doubt Joanne has a lovely eye for interior decor.

She and her husband did a lot of the work themselves,

and enlisted family to help out, including daughter Lucy,

who's just putting the finishing touches

on the newly-painted back wall.

The problems with the damp-proofing meant the job has taken three months

rather than the planned four to six weeks,

but how did the £2,500 budget fare?

We've come in at just over 3,000.

With the additional problem of the damp,

and the finished look of the place being so good,

I think a £3,000 spend is pretty impressive,

and added to the £35,000 purchase price at the auction,

the total spent here has been £38,000.

This is planned to be the first of many,

so has Joanne enjoyed the experience?

Yeah, definitely, I think it can become quite addictive, really,

and we're already looking out for other properties that might,

kind of, take our fancy and would benefit from being renovated.

A success, then, in terms of job satisfaction, for sure.

# Something for your mind, your body and your soul. #

We invited two local property experts

to cast their eyes over Joanne's handiwork.

The total cost of the property, including all the work

and the furnishings, was £38,000.

What would these experts market it at sale-wise?

I think the property will achieve in the range of £55,000-£60,000.

If the property came on the market,

it should be advertised in the region of £59,995.

Well, they're both great valuations, yeah, brilliant.

So a potential profit of £22,000 before tax and expenses.

I'd be tempted, but not Joanne.

She and her husband really want to rent this,

and that's the course they're sticking to.

So what rental prices could they demand?

For a one-bedroom ground-floor flat in this location, I should imagine

you would be looking between £350 and £400 per calendar month.

I think the rental market is probably the best way forward for this

property, in the current climate, and it should be able to achieve,

in its condition, at £375 per calendar month.

Great, well, we've pitched it at 380 per calendar month,

so that's kind of in the middle, so I'm happy with that.

That £380 per calendar month would yield a massive 12%,

and I really think Joanne's done a top job

on her first property venture.

So does she have any advice for people who want to

follow in her footsteps?

Obviously, do your homework, look at the legal pack,

visit the property, which I know a lot of people don't actually do,

erm...and...just go for it.

She took the words right out of my mouth.

Well, that's it for now, but we'll have lots more

great stories for you next time on Homes Under The Hammer.

-So make sure you join us then.

-Goodbye.

-Goodbye.