Episode 14 Homes Under the Hammer

Hello. Whether you buy property as a place to live or as an investment, make sure you've bought wisely.

It's difficult to find, but you want value for money.

And one place you might find that is at the auction.

From run-down flats to all sorts of gorgeous sprawling mansions,

-there is plenty on offer in an auction room.

-So what properties inspired the buyers

to part with their cash on today's show? Let's find out.

I'm turned on by this Fulham flat.

It suddenly sounded really sexy AND I think round here you would get your money back, whatever that cost.

This double property in Dover has a serious downside upstairs.

This is probably the worst bathroom I've been in for this show.

And in Northumberland some things are heading south in this semi.

Not good at all.

Good, good, good. Bad, bad, bad.

All these properties were sold at auction. We'll find out who bought them and what they paid

-when they went under the hammer.

-Sold.

Well, today I'm in fashionable Fulham, part of south-west London.

It hasn't always been fashionable. In the 18th century it was known as a place for gambling and debauchery.

It's cleaned up its act and it's now extremely desirable.

Celebrities, the well-to-do, whoever. Lots of outdoor cafes, good transport links into town,

a very popular place to live.

# I am a roving gambler... #

'Hopefully, today's lot won't turn out to be too much of a gamble.

'Only a short stroll from the hub of Fulham with all its amenities,

'there are plenty of lovely Victorian properties.'

Well, this is a normally quiet street in this very fashionable area,

but some major building work is going on at the end there.

That is good news. The whole area is having money poured into it, but it's already extremely desirable.

Therefore, this flat - guide price at £295,000 for a two-bed ground floor -

around these parts it could be a bit of a snip.

'The facade is quite grand, albeit a little faded.

'I wonder if the interior of this ground-floor flat will be grand or grim.'

Well, that's not particularly pleasant. Straight into a wall and a very cramped corridor there

down that way. But turning right when you come through the door

brings you to the front of the property and what a lovely room - big, high ceilings,

lots of detailing still intact, this lovely bay window.

And this has obviously been the main sort of living room.

In fact, this is the only kitchen, if that's what you want to call it, in the property. Not ideal.

But you can see the potential. Obviously there was an open fire at some point.

And you've got the space. Something tells me it's going to go downhill from here on in, though.

'And not least with the layout. That room at the front is a good size and full of potential,

'but turn left when you come in the door

'and there's a very narrow corridor with a bedroom on the right.

'Round a sharp corner, there's the bathroom and another bedroom at the end.

'It's all a bit tight, a bit tired and has made me feel rather claustrophobic.'

# Let's go outside There's something beautiful to see

# Go outside Where there's room to breathe... #

Well, come out to the rear and you've got two things that are absolutely at a premium

for London houses. One is a bit of garden space. That's really great news.

Second, the potential for some kind of extension. If you look next door,

you can see how people make the most of what they've got.

This house has an extension on the top, out the back, all over.

And that is good news. You could increase the square footage of this flat dramatically

and get rid of that slightly unpleasant interior.

You won't get rid of the flightpath, but everything else is great.

'The more potential I see here, the more I like this place.

'Unfortunately, something I can't get down to see today is the basement.

'That could be another area worth exploring for extension possibilities.

'So let's stay focused on what I think could be done with the back here.'

Let's just really get a flavour of the difference that might make.

For a start, you'd really increase the feeling of openness of the flat.

You'd get rid of this wall and this little box.

You'd open the whole thing out. When you walk down that corridor,

you'd just see the kitchen and out into the garden.

I'm talking about completely taking out this wall here, putting in a huge set of sliding doors,

open-plan kitchen. Lots of light, air, glass.

It suddenly sounds really sexy. And I think you'd get your money back for whatever it cost, within reason.

Particularly if you managed to bag this pad for anywhere near the £295,000 guide price.

We asked an estate agent who knows this area and these properties well

to tell us what he'd recommend for this place.

In the front of the property

is where I'd house the two bedrooms. I'd make sure it was two doubles and a master bathroom.

So he and I are both thinking along the same lines about the layout,

but what about the all-important financial considerations?

With the property extended and rearranged, how much could it sell or let for?

With the property developed out, with an extension done, kitchen fully-developed to the rear,

and the basement developed into a laundry room and bathroom, I think the value would be £650,000.

You heard him right. That's over double the guide price.

Would it also see a healthy rental return?

I believe the rent would be £2,275 per calendar month.

Well, it's a flat with huge amounts of potential.

It's in the right kind of area and I think at that guide price could make somebody a lot of money.

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

Right, Lot 40 is a ground-floor flat. Who'd like to kick off on this?

280 down here. 285.

290. 300.

305.

Understandably, this lot was in high demand. We rejoin the bidding at £400,000.

400. 405.

410.

415. Yes? 411.

412?

Yes, 412?

Ungh!

411, with you. First time. Second time.

Third and last time. All done? Well done. 411. Sold.

That successful £411,000 bid - a whopping £116,000 over the guide price -

was made by Purdy.

She's a successful businesswoman who brought her faithful companion, Max,

to have a good sniff around while she and I had a chat.

-Purdy, great to meet you. Congratulations.

-Thank you.

-A bit over the guide price, then.

-Yes, I got a bit competitive.

-Always bad at an auction!

-I just wanted to win. I'm not a competitive person.

-Right...

-But I really wanted it.

-Right. Clearly. How much did you set your budget at before you went in?

380.

-Ow!

-It's fine. I really want to live here. It's going to be my home.

-So it ticked all the boxes.

-Yes. It was worth fighting for.

-Worth £411,000?

I've got the money. I've just sold my flat, so I was able to just do it. This is what I was looking for.

-So do you put a price on that?

-Not a pure investment decision.

-I will have to be careful about how much I spend doing it up and it needs a lot of work.

-OK.

-So tell me about you.

-I had a business, which was selling cashmere in Mongolia.

-Cashmere?

-I had a factory in Mongolia and I sold that,

which has left me with a little pot to buy my property.

But this place will need more than mere cash.

It requires a lot of planning and hard graft. Purdy's going to have to steel herself

for a lot of seriously stressful building work if it's to be a fabulous home for her and Max.

What are your plans for this?

Because you've got the garden area at the back, I am planning to turn that whole area into sliding doors,

living/kitchen area to the garden.

-This is going to be my bedroom.

-OK.

-Because it's a nice, quiet road, I can sleep here

with not too much disturbance. Where we're standing now there will be an en suite bathroom.

Then I'll move this corridor back so it's slightly wider. It's very pokey and narrow.

And the cellar downstairs is an absolute treasure trove of extraordinary old LPs

and Victorian furniture. I'm going to turn that into a fabulous bathroom.

-So just a bathroom downstairs? Just that?

-Yes, it'll be fabulous.

The stairs are very steep. I'll make them much more shallow so they'll take up a lot of space.

It'll be a storage and utility area behind the stairs, then one very indulgent place to wallow.

-Wow!

-Obviously, I want interconnectivity, wi-fi and all that going on.

-In your bathroom?

-Everything.

-In the bath?

-I wallow.

-Right. And send emails?

-Bubbles, wine...the lot.

-Oh, OK.

-My little batcave.

Holy ablutions, Batman! Purdy has solved the riddle of the layout

and it looks like she's going to give it some boom! Boom! Pow! She hopes to move in in four months.

She has two very handy sidekicks and that's as well as Max.

The structural engineer she has did a similar job on the adjoining property

and her builder is a good friend she's worked with before.

There's an extension, new kitchen/diner, underfloor heating, stairs to dig out, walls to move -

the list goes on and sounds expensive.

So what is the budget for that little lot?

Yes, my builder and I don't seem able to meet on this, as ever.

-I have said my budget is about £60,000.

-OK.

-And he has just fallen over laughing.

-He should know.

-We will negotiate when he gets back from his honeymoon. He'll be in a good mood!

-Great. I can't wait.

-Looking forward to it.

-Yes, we will be back. Good luck.

-Thank you! We're going to need it!

Oh, dear. Purdy got that dreadful thing, auction fever, and got competitive at the wrong time.

She spent more than she anticipated. However, I still think she got this for a bit of a deal.

I love the ideas she's got. How will she get on?

And will she negotiate the builders down to her budget? Find out later in the show.

Think of Dover and you might immediately think of ferries, White Cliffs and a castle,

but you might not think of a seaside location with cheap investment opportunities.

The property I'm here to see is right in Dover itself on this busy main road through town.

Unsurprisingly, it's not a house, although it does have a residential unit upstairs.

In fact, it's this former cafe which looks at the moment like it's brewed its last.

But with a guide price of just £45,000-£50,000,

it's worth seeing if it could serve up a decent investment opportunity.

Well, it's nice to come in off that noisy street.

First impressions, it's in a bit of a mess and it does smell of damp.

You can see that water has been pouring through here.

You've got the ceiling on the floor. That needs looked at.

But you got quite a nice big space, big window with loads of light.

All your tables and chairs would be here and then you've got stairs up to the second level,

which is a bit cramped. But the really odd thing is look where the counter is.

You can't even see your customers walking in through the door.

I would definitely think about rearranging the space. Artex everywhere.

As it stands, I wouldn't fancy having my bacon bap and cuppa in this cafe.

# Strange brew Killin' what's inside of you... #

That loo needs a revamp. At least, though, the kitchen is in good order.

With a thorough clean, it could be ready to serve up some hot grub.

'And a good place to enjoy that would be this rear courtyard.

'Some whitewash on the walls, a little afternoon sun and who wouldn't enjoy lunch here?

'But how does the rest of the flat look?'

So upstairs we have two rooms.

It's a little oddly laid out at the moment.

You've got a rather large room here. I'm not sure what it's used for.

Is it a lounge? A bedroom? Little corridor here. The stairs should have opened up

into this room and it's all just a little wobbly. The floors are a bit crooked.

It's terribly dated, as you can see.

You've got the boiler in here. I'm not sure what it'd be used for.

I was rather hoping to find a kitchen or a bathroom, or both!

So I'm hoping that up this little incey staircase, well, they'll be up there.

I'm going to continue my exploration. It's ever so narrow.

This is not the easiest of staircases to climb. ..Oh, no!

What an awful bathroom! This is probably the worst bathroom I've been in on this show

and I have seen a lot of bathrooms. You would not want a bath up here.

Holes in the wall... It's not been painted, sloping ceilings. It just feels so cramped.

There's a little black hole through there with no window, so there's no kitchen, there's this -

if you'd like to call it a bathroom. It needs a clever architect,

but terribly disappointing.

Still, positive face on, there is a solution here -

install skylights, take the wall out and you have a good-sized bedroom.

And the kitchen and bathroom could go in the rear bedroom downstairs, making it less of a dog's dinner.

On the subject of food, would buying this cafe be a half-baked idea?

You are in the centre of Dover, but you're not actually in a prime central location for the cafe.

The main high street is further down the road and that is where you would stand a greater chance

of getting your lunchtime trade. Even if you do fancy a Panini and a coffee,

where do you put your car? This road is impossible to park on. Look at these yellow lines.

All the footfall is down there. I don't know why the last place closed,

but you've got to ask yourself a good few questions.

So with a guide price of £40,000-£45,000, is it possible

that as an investment this greasy spoon is more likely to win a wooden spoon?

We asked a local estate agent for his thoughts on it.

First impressions - very run-down. It'll cost a lot to do up.

The best option is commercial.

You're probably looking at another estate agent, a solicitor's, an accountant's. Mainly offices.

So a change of usage might be one way of getting it to pay for itself.

You'd need the planning authority to grant permission for a change in its business classing,

but that might make it more attractive to investors. How would the rental returns look?

As a cafe with living space, you could probably ask for £650 a month.

-Would changing its business class mean a higher rent?

-As office space,

you could ask about the same price, £650 per month.

An interesting property with a variety of uses, but which one is the best way to make some money?

It's tricky. Let's see who thought they knew the answer at auction.

Lot number 144, excellent value.

35 to get me going? At £35,000 it would be an absolute steal. 35. I'm on the way. At 35.

At 35. And 38. At £39,000 sitting down.

40 I'm looking for. 40 I've got.

41 in a fresh place.

At 42,000? 42 I've got. And three? 43?

At 42, then, at the back, first time.

42 for the second time. Third and final time.

It's yours, sir, at 42,000.

The final bidder, who got the lot for £42,000, was Darren.

He lives in North Kent and runs a car hire company, while developing properties as a sideline.

To find out if he's bitten off more than he can chew,

I met him to hear his plans.

-Darren, congratulations.

-Thank you.

-There you were, hammer went down and you got the property.

-Yeah.

I didn't set myself a limit. Just gut instinct, really. But I was happy. It was OK.

-That's not what you're supposed to do! Come on!

-I had a look at it a couple of times.

-Good.

-I'd a few figures in mind.

-So you had seen it?

-Yeah.

What are your plans for it?

I've got a couple of choices. I'm not too sure if I'd go fully residential

or have this back as a cafe with accommodation above.

I want to try to work out the figures, the costs involved, and see what's the best return.

If it was back as a cafe, I just want to lease the cafe off and get an income.

It might be that this cafe hasn't served up its last supper,

but Darren hasn't made his mind up. Plan B is to turn the property into two flats.

One thing he has decided is that either option would be much more successful if he shifts the stairs.

-So you'd actually think about moving the staircase completely.

-Yeah.

-And put it against the back wall?

I'll have it against the back wall so you have the option of coming into the cafe

or going up the stairs. Maybe have a hallway or corridor,

-one door into the cafe, one to the living accommodation.

-I think that would be a good idea.

-That would work quite well in terms of a return.

-Yeah. That's what I'm doing it for, not resale.

It's for the income.

# For rent, for rent An empty heart

# Just say the word And you can move right in... #

Getting access to the upstairs flat might be an easy problem to solve,

but attracting tenants needs work.

-That bathroom!

-It's a liability, just getting up there.

-It is!

-How are you going to change that?

-I'll look at moving the bathroom and have more studio accommodation.

I guess before they've used the cooking facilities down here and lived above,

whereas I'd want it self-contained with its own cooking area.

'Darren's got a £30,000 budget for the whole renovation.

'10 grand's for the flat, which I think is very tight - it could be easily double -

'and £20,000 to renovate the cafe.

'He hasn't done his sums on the two flats option yet,

'but has set a six-month timescale. I think his heart's set on the cafe option,

'but would it be a viable business?'

It would have customers from the other shops. There is a few.

I've walked down Fulham High Street. There's no traditional cafes. It's coffee bars.

People will come for nice food.

-What do you call a traditional cafe?

-Fry up-type food, really.

-Egg and bacon baps?

-Yeah.

-Greasy cafe.

-Stuff that's bad for you.

-You might even get a free bap if you're lucky!

-Let's hope so.

-Darren, good luck with this. Thank you very much.

-Thank you.

So this place is destined to be a greasy spoon once again. Maybe it's fate.

Darren has a lot of work to do before he can open the doors and get that bacon sizzling.

I hope he'll be able to pull in the punters. Find out if it makes him a good profit later in the show.

Coming up: I'm in Northumberland seeing past the soot in this two-bed semi.

With a bit of time and effort, this could be a really nice place.

In Dover, did Darren discover that twice the properties means twice the profit?

I'm happy with that. It's a good return on the investment.

But first, did Purdy see the funny side of transforming her Fulham flat?

I walk in here every morning and laugh out loud.

We're back in fabulous, fashionable Fulham now. Last time I was here, I met Purdy.

She'd purchased this impressively-sized, two-bed, ground-floor flat

in a Victorian terrace on a quiet road.

She bought it as a home for herself and her dog, Max, and paid £411,000 -

a massive £116,000 over the guide price -

to make sure she secured it.

-A bit over the guide price.

-Yes, I got a bit competitive.

-Always bad.

-I just wanted to win. I'm not a competitive person. I just wanted to win.

Well, was the renovation here a winner? Purdy had a long wish list to make this into her home

and some negotiations on budget to iron out with the builder.

We're here, 16 weeks after I first met her,

to see if she has made this place absolutely fabulous.

# Glamorous

# Glamorous, glamorous

# Glamorous

# Glamorous

# Glamorous, glamorous

# Glamorous... #

As per her original plan, Purdy has turned the front room into the main bedroom

with an en suite where the kitchen was.

The second bedroom is in the same spot and used to face the garden. It looks much better than it did.

To comply with building regulations, it now has an entrance

into a small light well as out the back now houses that huge extended living space.

What was a boxed-in bathroom, bedroom and some dead space as the side of the property

is now a simply stunning kitchen, dining and living area, leading out onto the garden.

This room has a whole new wall with steel supporting the new glass doors.

We have new flooring, underfloor heating, whole new ceiling, soundproofed,

new electric, whole new living area. I love the way that you can see the garden

and sit and watch television at the same time. You can actually watch television from the garden.

Very fancy! Somewhere else Purdy wanted to make indulgent was the basement,

which we couldn't even get down to last time. How does that look now?

# G-L-A-M-O-R-OUS... #

Well, she did say she wanted a big space to relax with her bubbles and bubbly.

If you remember what it did look like, it was a coal hole. Nobody had been down there.

I had to tank it and soundproof it so it's not as big as I thought, but it's still luxurious.

We also managed to fit in a utility area, which I'm really pleased with so it's not up here.

A separate downstairs utility area is a great addition and Purdy's definitely put the feel-good factor

into this Fulham flat.

I am so happy. I walk in here every morning and laugh out loud.

It's exactly how I wanted it to be, if not better.

The transformation here has been fantastic, right down to the finer details,

from the cornicing in the bedroom to the embedded shelves in the hall.

This is a really smart solution to opening up that claustrophobic corridor

and was a compromise that had to be found for structural reasons.

The renovation was a huge undertaking and Purdy's seen it at very close quarters.

I moved in about a month after we started the build, much to my builder's horror.

I had a bed, a mattress, the dog, a sleeping bag.

I would go and do my teeth in the local fast food restaurant.

The builders would arrive and roll their eyes.

There were also raised eyebrows when it came to her budget.

In terms of the budget, I'm pretty close. I didn't stick to it.

A lot of extra money has gone on soundproofing, but my builder was very tolerant.

He thought I was going to have to spend £100,000. I thought fifty, plus a bit more.

We've managed to meet in the middle. I've come, in total, to just under £500,000

and that includes all the furnishings and everything you can see.

She spent around £7,000 on new furnishings, making the total for the property plus the work

£493,000. So a little over budget.

But how about that three-month timescale?

We started exactly three months ago today. The first hammer went in.

I have had to push the builders quite hard,

but they've been amazing, I can't thank them enough.

I think they really helped push it because I was living here.

With the job complete, Purdy and Max can not only just live here, but begin to enjoy it.

I really love what she's done to this place,

but what might local estate agents reckon?

We invited a couple along to find out.

My first impressions are very good. The style here is excellent.

There's a great attention to detail,

lovely period features. I think the work is fantastic.

The owner of this property has done an absolutely outstanding job.

It is an absolute delight to see such a high quality finish.

Beautiful, stunning. I'd love to live here myself.

Purdy has purchased this place for herself and Max to live in,

not to sell or let.

However, both estate agents felt the property could let for £2,400 per calendar month

which would yield just shy of 6%.

I, for one, am curious to hear if she'd make a decent profit on her near £500,000 investment

if she were to consider selling.

I would put this property on the market for £599,950

and I would expect to obtain offers very close to asking price, if not the asking price.

If this property were to come to the market, I would expect it to sell for £595,000.

That's great. I'm not intending to sell, so it's not as important

as if I had done it with development in mind,

but I'm delighted that I haven't overspent the value of the property.

She sure didn't and could even make over £100,000 profit if she sold it.

But not even that is going to entice Purdy to move away any time soon.

This is the home I've always dreamt of for Max and me.

It feels calm, I feel safe. It's cosy. There's space for me to entertain my friends.

And I wouldn't want it any other way.

Right on the stunning Northumberland coast, 13 miles north-east of Newcastle upon Tyne,

lies the historic port town of Blyth.

# I won't be your port in a storm

# Just somebody there keeping you warm

# I won't be your port in a storm

# I want nothing at all... #

Its port is a major industry here,

handling 1.5 million tonnes of cargo every year.

The shipment of paper and pulp from Scandinavia flows through here

to supply the newspaper industries of Scotland and England,

but just look at the fabulous South Beach.

A property here has to be worth a look,

even though on the day I visited, the weather had turned just a little...

soggy?

So, what was on offer at the auction?

Well, for a very attractive guide price of £15,000-plus,

a two-bedroomed, end of terrace house.

Agh! Well, let's hope that the state of the property inside is better than the weather.

Nice, big staircase leading up to the bedrooms and stuff

and then into a really good-sized room.

Now, decoration-wise, it needs a bit of sorting out,

but strip the floorboards and new wallpaper and paint the ceiling and stuff

and this would be a really lovely room.

Look at the size of the ceilings!

It's not a huge space, but because you've got these huge ceilings,

it really actually feels really, really nice.

However, that was the good bit. The bad bit is back here.

Nice bit of under-stairs cupboard

and then that complete disaster of a kitchen!

When I say it's a kitchen, it's just got that one unit in there. Not good at all.

So, good, good, good, bad, bad, bad.

# It doesn't matter if she's good or bad, it doesn't matter if she's good or bad

# It doesn't matter if she's good or bad, it doesn't matter if she's good or bad... #

But some hard graft could turn the bad and good to great.

There's obvious evidence of fire damage here, but that's not the only reason the kitchen feels so gloomy.

Apart from that small skylight, there are no windows in here.

It looks like there may have been one at one time, but it has since been bricked up.

You'd really want to open that up again and let the light flood in here if you can.

And there's another reason for the low lighting downstairs.

Now, I am a huge fan of trees in the right place

and that most definitely is not the right place.

Right outside the front window is this very large sycamore.

Not only does it block light into the lounge here,

much more worrying is that its roots will be doing all sorts of untold damage to the foundations,

the drainage, the sewage, who knows?

It's not just a case of getting rid of it either

because once you've chopped the tree down, the roots then maybe carry on growing,

but at the very least will decay and that can cause all sorts of problems with subsidence,

so get a specialist in to sort that out and it is something which worries me.

# My baby, she say she don't want me to leave her

# I say, hold on, woman, I got tree-top fever... #

Trimming that tree would give you a tiny front yard

because on the subject of the downsides here,

there's no outside space to the rear,

so not a property for garden lovers.

Let's find out what's up upstairs.

So, not surprisingly, the square footage on the first floor here isn't massive,

but you can squeeze in pretty much what you need - two bedrooms,

a very small one there and a half-decent-sized one there,

and then a loo. It's not in the best condition, but at least it is in the right place as in upstairs.

Money needs to be spent, but like downstairs, I think with a bit of time and effort,

this could be a really nice place.

So, plenty to do here, but with that £15,000-plus guide price,

this would have been a tempting prospect at the auction.

We asked a local property expert for her opinion.

This property is in need of full modernisation.

It's been severely neglected over the years.

Any purchaser would need to consider renewing the bathroom suite, kitchen

and full decoration throughout.

Once you've done all the work, bearing in mind the current market and the area,

what might you sell the house on for?

Once this property has been fully renovated, I would recommend an asking price of £65,000.

So, a potentially profitable property if you opted to do it up and sell it,

but what about letting the place out?

This should achieve around £395 a calendar month in rent.

Well, clearly, work to be done to sort this place out, but I think it would be worth it.

My biggest concern is the tree, but get rid of that and it's a very interesting property.

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

So, lot number one, can I ask for £15,000 to start me anywhere?

10,000? I'll start at 10. Front row, £10,000 bid.

Gentleman standing on the left-hand side at £11,000. Lady at 12,000.

13. 14. 15.

16. 17. 18.

19. 20. 21.

22. 23.

24. 25. 26.

New bidder at 27,000. 28.

New bidder at 29,000 behind. 30? 30 bid. 31.

32 standing. 33.

34.

35. 36? 36 bid.

It's your last chance. It's going once at 36, second time at £36,000...

Sold to the gentleman on the left.

'That successful, last-second bid of £36,000 came from seasoned property developer and bidder Stephen.

'He has a rental portfolio of 40 properties,

'many of them bought at auction.

'However, this time, he was doing someone else's bidding.'

-Stephen, great to meet you.

-Pleased to meet you, Martin.

So that was a bit of a busy auction then.

-It certainly was.

-But you weren't actually buying this place for you?

No, I was buying it for some friends of mine, Carol and Brian.

-Why did they want to buy it?

-Because it's actually attached to their house next door.

-So they literally live...

-They literally live right through that wall.

-Why weren't they there?

-They were there, hidden behind me.

-Why were you doing the bidding on their behalf?

-Because I've done many previous auctions.

They asked for my advice and experience,

could I go along and oversee the project? I said, "Yeah, no problem."

So why were they so keen to buy this then?

At first, I thought they would probably want to knock through and just add to their own property,

but they've already got five bedrooms, they don't need any more, the kids have gone,

and I just said you could get a landlord that could put anybody in here,

so it would be in their interest to buy this property.

'Brian and Carol are now in control of what happens to the house they're attached to,

'regardless of whether they sell or let.

'This is their first development investment, so Stephen's expertise will be invaluable.

'Did the auction go exactly as he wanted?'

-As a landlord for 20 years, not really.

-Why?

-You always want the property that little bit cheaper.

But at the end of the day, it was Brian's money.

I asked him how far he wanted to go.

He gave me a figure of 35,000.

I always wait to the death at these auctions,

wait until the dogfight's finished, then just step in

and that was it, 36,000, we got it.

-So you went 1,000 over his budget?

-Correct.

-Did you ask him for his approval?

-No.

He could have punched you in the back of the chair.

A sharp dig in the back would have stopped us from bidding any more.

-So what do you think of the house?

-A lot of work to be done. It's small, compact.

But I'm sure it'll all come good, eventually.

-Are you going to be involved in the renovation at all?

-I certainly am.

I'll be overseeing the project. I haven't got any trade or skill,

but with 20 years' experience as a landlord, I've obviously got many good contacts.

-Right.

-Many good tradesmen.

So I've already got the prices in and everything, the schedule worked out

and I'm just chewing at the bit to get started.

'With a budget from Brian of 12,000 to 15,000

'and a projected timescale of three months to get the place ship-shape and ready to let,

'I'm not surprised Stephen wants to get cracking and use his wealth of experience

'to make this a success for his pal of over 20 years.'

Tell me what you're going to do to the place.

My thought would be to maintain it as a two-bedroom house.

As you can see, the two bedrooms are pretty small,

so Brian and his wife are quite happy for it to be a one-bedroom house,

so the plan up till now...

I've had an architect draw some plans for the upper floor

to take down all the stud walls

and then possibly make a decent-sized bathroom,

a single shower, bath and possibly just the one bedroom.

We're going to lose that big hallway which has taken up a lot of space,

but the architect said to me today that it's crying out to still be a two-bedroom house,

which... It's not my decision for that.

Right.

Will you argue the case?

A little bit simply because, as a landlord,

a two-bedroom house is better to rent out than a one-bedroom house,

but they're going to be quite fussy who they rent out to

and that's their prerogative, it's up to them.

I'll just put my thoughts forward and let them decide.

Congratulations. They're lucky to have you as a friend.

-We look forward to seeing how you get on.

-Yes.

-Good luck with it.

-Thank you.

Well, how wonderful it is to have friends like Stephen

and I do think that he has given Brian and Carol the right advice in terms of buying this place

because if you're not in control of it, you never know what might happen to it

and when it's so close, it's a good feeling of security to know that you are sort of in charge.

Find out what happens later in the show.

The clock's been ticking and the work should have started on those properties.

Have the piles of bricks and bags of cement gone and has the paint dried on the walls? Let's find out.

'We now return to Kent and the town of Dover where, earlier,

'we saw this tired-looking cafe and, above it, this one-bed flat.

'Both had seen better days. The flat was in a miserable state

'and the cafe had closed after 70 years in business.'

# Strange brew killin' what's inside of you... #

'But none of that put off Darren who bought the two units for 42,000.

'He runs a car hire company and dabbles in property as a side line,

'but whether the cafe would be on the main course remained to be seen.'

So here we are in the 2000s. Will you turn it back into a cafe? What are your plans?

I've got a couple of choices. I'm not too sure whether to go fully residential with it

or have this back as a caff with accommodation above.

I want to try and work out the figures, the costs involved

and see what the best thing is on a return basis.

If Darren did keep the cafe going, he had a total budget of 30 grand to renovate it, plus the flat above.

He had a six-month schedule for the work

with the cafe hopefully serving its first full English breakfast in three months.

I just hope that when it comes to turning this place around, his eyes weren't bigger than his stomach.

Well, five and a half months later and it looks like Darren has got the cafe up and running.

The shop front hasn't changed, but a lick of paint does make it look a bit more appetising.

And inside...?

What a difference!

The staircase to the upper seating level has been moved

and re-jigging the layout has allowed for more seating on the raised level.

But what's really tickled my taste buds

is the new one-storey extension which houses the kitchen.

Now the owners can see the customers coming in and they can see the food being prepared.

The staircase is now at the side of the restaurant with direct access to the flat above.

That re-jig has meant big changes up here

with the kitchen the first stop.

Where I'm standing now, obviously, is now the kitchen.

It looked like it had been used as a bedroom. It was just a bare room with a fireplace to one side.

We took the chimney out and that enabled the room to be a bit bigger.

We've created a bathroom and an open-plan kitchen now,

built-in oven and hob, new flooring, new tiling.

Just given it a nice, presentable area for a tenant or a purchaser.

Off the kitchen is a new roof terrace,

but you'll also see from here the other big alteration to the flat.

Darren has installed dormer windows and created the room

to transform that awful attic and its bathroom into two spacious bedrooms

with a great view of Dover Castle.

The bathroom is now located just off the kitchen on the floor below.

That just leaves the living room and a straightforward refurbishment for this one.

If only the rest was that simple!

You couldn't see the work required until you started taking it apart.

It's been rewired, re-plumbed, new windows, new doors, a full refurbishment from top to bottom.

The work needed may have been comprehensive, but fortunately, there were no major problems.

Darren project-managed the renovation and the changes made have brought the best out of the flat.

Although that rear courtyard is gone, the new extension has improved the flow of the cafe.

My favourite bit is the cafe side of it.

A lot of people that have previously been in there honestly can't believe it's the same place,

so that in itself is a compliment to me organising it and the workmen doing their work.

But that's not the only reason he likes it.

I can meet my friends down here and have a nice breakfast free of charge. Can't get much better than that!

It looks like Darren's got himself a meal ticket.

# Hey, good-lookin'

# What you got cookin'?

# How's about cookin' somethin' up with me-e-e? #

Another bonus for Darren was that he discovered the flat and cafe

are registered separately with the Land Registry, so it will be easier to sell them individually.

For now, he's happy to let them both. While he is still looking for a tenant for the flat,

the cafe's been leased. Having done his sums, he realised

it was more lucrative to keep the commercial property as such, rather than turn it into a flat.

Talking of cash, how did the £30,000 budget bear up?

In total, for the whole building, it's £42,395,

purely because there was a lot more work here than I noticed at the beginning.

Putting the extra bedroom in has cost a little bit more money,

but the rental return will be better by having two bedrooms.

Add that spend to his purchase price of 42,000

and Darren's total outlay here is just under £84,500.

Time to find out if two local estate agents think this renovation

is just their cup of tea.

The caff looks like it's working well.

The counter has been moved to the back of this shop.

You can see it from the high street.

It's a lot more presentable and open. Looks a lot better.

I think it's a great refurbishment.

The cafe has been very well fitted out

and offers a superb space for trading.

The flat has been very well improved and offers very flexible accommodation.

I particularly like that the flat now has its own entrance

which will really assist with being able to let the two properties separately.

But would the rental figures make Darren happy? First, the cafe.

I would expect the cafe to rent for £500 per calendar month.

The cafe could rent for around £600 to £700 a month.

I get 650 a month for the caff, so I'm happy with that, obviously.

I feel that one of the agents has undervalued it, but the other one was very close.

That would be an annual return of £7,800, but what could the flat achieve if let?

I would expect this flat to rent for £450 per calendar month.

The flat could rent for £470 to £500 a month.

450 or above, I'm happy with, so if the agent thinks I can get nearer 5,

it's a better income, so I'll be happy with that.

Add that possible rental income for the flat of £6,000 per year to the cafe's income

and that could earn Darren a whopping annual yield of around 16%.

The estate agents reckon there's a possible re-sale value of the two properties combined

of between £100,000 and £130,000,

which would mean a profit of between 15,000 and 45,000, minus the usual tax and expenses.

Yeah, I thought it would be about that, 120, 130. I'm happy with that. It's a good return on my investment.

Darren has good reason to be happy with the result and it sounds like the local customers are too.

When they come in and eat, it's all good feedback from the locals,

so hopefully, they'll continue to come here and the guy will continue to rent it.

We're back in the Northumberland port town of Blyth

where £36,000 bagged this two-bedroom, end of terrace property.

Stephen made the bid and was going to project-manage for his friends Brian and Carol,

once the question over the number of bedrooms had been answered.

Brian and his wife are happy for it to be a one-bedroom house,

but the architect said to me today that it's crying out to still be a two-bedroom house,

which... It's not my decision for that.

Right.

Will you argue the case?

A little bit simply because, as a landlord,

a two-bedroom house is better to rent out than a one-bedroom house.

Once that was resolved, Stephen set to work.

The property had been fire-damaged,

had a huge and overpowering sycamore tree blocking the front windows

and needed a complete overhaul from top to bottom.

We're back to catch up with Stephen 12 weeks on.

I'm not seeing any drawbacks down here.

There are no longer any signs of damp or damage.

Will upstairs follow suit?

The gloom's been banished in the bathroom, but is it a one-bed or two?

Despite some initial debate, they've decided to keep the two bedrooms upstairs

and added a little extra space to each by incorporating some of what was the landing.

And a second bedroom always comes in handy, doesn't it, Stephen?

Well, I suppose, if you get older in life and you have a few fall-outs,

then rather than sleep on the settee, you can always sleep in the single bed in the single room.

Here's hoping there were no fall-outs on this job,

particularly as Stephen has been friends with Carol and Brian for 20 years.

It's been enjoyable because it's handy having Brian next door.

It's their house and their money, so all I did

was to keep asking Brian and his wife Carol their opinion

on certain things that they wanted done or not done,

and basically, the mistake was going into Brian's after lunch

because you always got a glass of wine,

so I managed to just have the one glass, then get back on with the job.

I think the job he's done here is fantastic and just check out the outside now!

That troublesome tree took Stephen, a tree surgeon

and a digger two and a half days to chop down.

Carol and Brian decided a spruce-up was in order,

so they've matched the paintwork and garden wall to their own property.

Inside, the finish isn't just cosmetic.

There's a new damp-proof course, new wiring and the walls have been re-plastered.

New windows include that previously bricked-up kitchen window and a skylight.

The formerly dark kitchen is now much lighter

and Carol and Brian gave Stephen the nod to increase the budget from £12,000 to £15,000 up to £20,000.

It's a lot of money to spend on a house.

It was nice to think that they trusted me to take control and manage the project.

It gives you a nice sense of trust.

It'll only help the relationship between me and Brian and Carol.

They're very pleased with the job.

And they're not the only ones.

We've had plenty of the neighbours passing and commenting on how nice the property looked

and it would enhance the value of their properties, so, as a joke, I said to one of them,

"We've probably increased the value of your properties by about 10,000,"

so when the job's finished, we'll collect 2,000 off each of them towards Brian's costs, I think.

The property cost £36,000 at auction, so added to the £20,000 for the work,

the total outlay here was 56,000.

Can Carol and Brian recover their costs?

We invited two local estate agents to the new and improved house

to hear their thoughts.

The refurbishment of this property has been done to a very good standard.

The kerb appeal, more than anything when you drive up to the property,

that's different from before

with the stonework and, obviously, the new door.

Internally, the work has been done to quite a high standard,

all neutral colours, neutral carpets, new bathroom and fitted kitchen.

I've very impressed. You've got a reasonable-sized lounge,

a nice refurbished kitchen with a hob and oven in, etcetera.

Upstairs has the two bedrooms,

a well-refurbished bathroom and I don't think we'd have too much problems letting it.

Selling it might be slightly different, but renting it out, we shouldn't have too much problems.

The reasoning behind the purchase was for Brian and Carol to be in control of who lived there,

so they have no intention of selling any time soon,

but the estate agents did value it at between 60,000 and 75,000

which would give them a pre-tax profit of between 4,000 and 19,000.

However, the plan here is rental, so what could this two-bed house achieve for that?

I would say between £400 per calendar month and £425 per calendar month.

I would suggest that we rent this property out at a figure of £375 to £400 per calendar month.

I think, on the rental market, they will be happy with 400 to 425.

I think they'll easily achieve that.

Once somebody comes in and sees how well the house has been done, that will attract quite a few people.

£425 per calendar month would mean a whopping yield of over 9%.

Does Stephen think that may encourage Brian and Carol

to get as enthusiastic about property renovation as he is?

I think this opportunity to buy a property next door to them is a one-off.

I don't think they'll ever go back into property investment, not like myself.

I think they'll be happy just to stay happily retired.

Join us next time when we meet more plucky auction buyers trying

to make a killing on property or just to find a place to live.

-We'll see you then. Goodbye.

-Goodbye.

-Goodbye.

Subtitles by Red Bee Media Ltd