0:00:02 > 0:00:04Bricks and mortar have always been a solid investment.
0:00:04 > 0:00:06But in these challenging times,
0:00:06 > 0:00:08you have to make sure that your purchases
0:00:08 > 0:00:12don't fall down around your ears, taking your bank balance with them!
0:00:12 > 0:00:16That's right, so do your research, check your finances
0:00:16 > 0:00:20and you never know, you may find a real bargain in the auction rooms.
0:00:45 > 0:00:49Many buyers have their own special tactics at auction.
0:00:49 > 0:00:52Some sit at the front, others hide at the back,
0:00:52 > 0:00:56while some choose to remain completely anonymous and bid on the telephone.
0:00:56 > 0:00:58Whether it's a wink or a wave, the result's the same,
0:00:58 > 0:01:02so let's see what went under the hammer on today's show.
0:01:03 > 0:01:06There are some intriguing architectural features
0:01:06 > 0:01:10at this mid-terrace in Newcastle Upon Tyne.
0:01:10 > 0:01:12They are called corbels.
0:01:13 > 0:01:18This South Wales hotel makes quite a first impression.
0:01:18 > 0:01:22The smell of damp in here is horrendous!
0:01:23 > 0:01:28And in Derby, this bungalow is showing its age.
0:01:28 > 0:01:32A good old 1960s serving hatch!
0:01:32 > 0:01:33Marvellous!
0:01:34 > 0:01:36All these properties are being sold at auction.
0:01:36 > 0:01:41We'll find out who bought them and what they paid for them when they went under the hammer.
0:01:41 > 0:01:43Sold at 129.
0:01:46 > 0:01:49Today, I'm in the North East of England
0:01:49 > 0:01:52and a suburb of Newcastle Upon Tyne called Heaton.
0:01:52 > 0:01:55There are good transport links to the city centre, only two miles away,
0:01:55 > 0:01:59and rental properties are in high demand around here.
0:02:01 > 0:02:04Heaton offers a bit more value for money
0:02:04 > 0:02:07than nearby areas such as Jesmond,
0:02:07 > 0:02:10and yet it's still close to the universities
0:02:10 > 0:02:12of both Newcastle and Northumbria.
0:02:13 > 0:02:15The street itself,
0:02:15 > 0:02:19being so wide and lined with beautiful Victorian terraces,
0:02:19 > 0:02:22makes it all feel rather grand.
0:02:22 > 0:02:24With its guide price of 180,000-plus,
0:02:24 > 0:02:29I'm hoping it's just as grand inside.
0:02:31 > 0:02:34Oh, wow! We like that!
0:02:34 > 0:02:39The moment you come through the front door, you're greeted by this huge great hallway -
0:02:39 > 0:02:44stripped floors, nice clean cream-coloured walls.
0:02:44 > 0:02:47It's a great start. A few features there...
0:02:47 > 0:02:51Now, here's an interesting fact. They are called corbels.
0:02:51 > 0:02:53It's not just a piece of plasterwork.
0:02:53 > 0:02:56I guess in the classic definition of what they are,
0:02:56 > 0:02:59it's actually supporting the weight above it.
0:02:59 > 0:03:04They might only be mock supports, but that's what they're called.
0:03:04 > 0:03:05Your lesson for the day!
0:03:05 > 0:03:09So much for those who think watching TV isn't educational.
0:03:09 > 0:03:14The other lesson here is that not all auction properties are a nightmare.
0:03:14 > 0:03:17The front room is lovely and a decent size,
0:03:17 > 0:03:19with lots of light.
0:03:19 > 0:03:22Next door, there's a dining room, again all clean and fresh,
0:03:22 > 0:03:25with those lovely floorboards.
0:03:25 > 0:03:29So far, this seems too good to be true.
0:03:30 > 0:03:34So through to the kitchen. Slightly disappointing.
0:03:34 > 0:03:36A good-size room,
0:03:36 > 0:03:40but clearly not the most expensive units in the world.
0:03:40 > 0:03:45But replace them with something a bit more snazzy, or replace maybe the work surface,
0:03:45 > 0:03:49put some tiling in, you'd definitely change the look and feel in here.
0:03:49 > 0:03:52In terms of space to play with, it's good,
0:03:52 > 0:03:54and that's just the downstairs.
0:03:54 > 0:03:57Great start!
0:03:57 > 0:04:00There's also a handy utility room at the back of the house,
0:04:00 > 0:04:03while outside there's a yard.
0:04:03 > 0:04:07It's not exactly easy on the eye, but that's a minor quibble.
0:04:07 > 0:04:11Back inside, and upstairs there are four perfectly presentable bedrooms,
0:04:11 > 0:04:16two at the front, one large and one small,
0:04:16 > 0:04:18with a third in the middle,
0:04:18 > 0:04:20and the final bedroom at the back.
0:04:20 > 0:04:23Along the landing, there's plumbing aplenty, with a family bathroom,
0:04:23 > 0:04:26a separate toilet and a shower room.
0:04:27 > 0:04:29This is a great house -
0:04:29 > 0:04:32lots of space for family bedrooms, play rooms
0:04:32 > 0:04:34and no fighting for the bathroom in the morning.
0:04:34 > 0:04:38So this would be a lovely family home,
0:04:38 > 0:04:41but in case you haven't guessed it already,
0:04:41 > 0:04:44the way to maximise this as an investment
0:04:44 > 0:04:46would be to use it as an HMO -
0:04:46 > 0:04:49a house of multiple occupation.
0:04:49 > 0:04:52The rules and regulations regarding that vary,
0:04:52 > 0:04:55depending on which part of the country you live in,
0:04:55 > 0:05:00the numbers of rooms and number of floors you'd need before you need to be licensed,
0:05:00 > 0:05:02but you'd still have to follow various criteria,
0:05:02 > 0:05:04such as the amount of bathrooms,
0:05:04 > 0:05:07the number of fridges and things like that.
0:05:07 > 0:05:11You'd also have to look at things like fire escapes and a fire alarm.
0:05:11 > 0:05:15Another thing to consider is if you're applying for a mortgage,
0:05:15 > 0:05:19because some mortgage companies don't like individual tenancy agreements per room.
0:05:19 > 0:05:21Lots to consider, but get it right
0:05:21 > 0:05:25and this thing could be an absolute money-spinner!
0:05:25 > 0:05:28# You spin me right round Baby, right round
0:05:28 > 0:05:33# Like a record, baby Right round, round, round #
0:05:34 > 0:05:38Turning the back room into a bedroom would give you five let-able rooms,
0:05:38 > 0:05:40with a shared sitting room and kitchen.
0:05:40 > 0:05:42As the house is in good order,
0:05:42 > 0:05:46the only costs could be complying with the regulations.
0:05:46 > 0:05:49Once you've established what the rent's going to be,
0:05:49 > 0:05:52I think you'll be in the money and back to your roots.
0:05:53 > 0:05:58That looks like damage caused by a tree.
0:05:58 > 0:06:01To my mind, that, I think, is an ash.
0:06:01 > 0:06:05But look at the damage it's created with this concrete here.
0:06:05 > 0:06:09What I'm concerned about is not only what you can see, but what you can't see.
0:06:09 > 0:06:11Have those roots gone into the drains?
0:06:11 > 0:06:15Have they affected the foundations of the property?
0:06:15 > 0:06:18That isn't good.
0:06:18 > 0:06:22Dig down into any property, no matter how apparently great,
0:06:22 > 0:06:25and you always seem to find something.
0:06:25 > 0:06:30I'd definitely want to get to the root of this problem before I bought it at auction.
0:06:30 > 0:06:33But that guide price of £180,000-plus
0:06:33 > 0:06:35still looks attractive to me.
0:06:35 > 0:06:39We asked a local estate agent for her thoughts on it.
0:06:39 > 0:06:41It's a lovely period property.
0:06:41 > 0:06:43The size of the rooms are great
0:06:43 > 0:06:47and I think the high ceilings, as well, are lovely.
0:06:47 > 0:06:50We both like this house and its condition.
0:06:50 > 0:06:54But say it was titivated and made more family-friendly,
0:06:54 > 0:06:58would there be any profit to be made by selling it on?
0:06:58 > 0:07:01I think once the property is renovated with a new kitchen and bathroom,
0:07:01 > 0:07:06the property could achieve £210,000.
0:07:06 > 0:07:09My instinct says that due to the location,
0:07:09 > 0:07:12this is a great student rental opportunity.
0:07:12 > 0:07:17What kind of returns could this house make if five bedrooms were let?
0:07:18 > 0:07:21For a student let for this property,
0:07:21 > 0:07:24I think we could achieve £60 to £65
0:07:24 > 0:07:27per room, per week.
0:07:27 > 0:07:31Five rooms at £60 a week, that's £1,200 a month.
0:07:31 > 0:07:36If you got it for anything like that £180,000-plus guide price,
0:07:36 > 0:07:39that could mean a yield of around eight percent.
0:07:40 > 0:07:43Well, I think this is a really good property
0:07:43 > 0:07:46and delivering a lot more bangs for your buck
0:07:46 > 0:07:48than you would get in some nearby areas.
0:07:48 > 0:07:53A money-spinner, too, then. Let's see who agreed when it went under the hammer.
0:07:58 > 0:08:00A four-bedroom mid-terraced property
0:08:00 > 0:08:03in an established residential location.
0:08:03 > 0:08:05Can I ask for 180?
0:08:05 > 0:08:07How about 170?
0:08:07 > 0:08:11I'll take 160. I won't go below that. I need 160,000 to start.
0:08:11 > 0:08:16Do I have 160 anywhere? 160, gentleman on the back wall.
0:08:16 > 0:08:18162 anywhere else?
0:08:18 > 0:08:21162, the lady with the blond hair, at 162.
0:08:21 > 0:08:24164. 164 bid.
0:08:24 > 0:08:26166? 166.
0:08:26 > 0:08:29168. 170.
0:08:29 > 0:08:32I'll take one if it'll help. One bid. 169.
0:08:32 > 0:08:35I'll take one. 170. 171.
0:08:35 > 0:08:40No? I'm on the back wall at 170,000. Gentleman in the black shirt at 170,000.
0:08:40 > 0:08:44I'll take one anywhere else. I'm here and selling at 170,000.
0:08:44 > 0:08:47It's going once at 170. It's your last chance.
0:08:47 > 0:08:51I'm going for the second time at 170,000.
0:08:51 > 0:08:57Sold to the gentleman on the back wall at £170,000.
0:08:57 > 0:09:01The successful bidder who got the lot for £170,000,
0:09:01 > 0:09:0410,000 below the guide price, was Paul.
0:09:05 > 0:09:07He lives in Newcastle
0:09:07 > 0:09:11and, along with his wife Joanne, owns and manages six properties.
0:09:11 > 0:09:15I met him at the house to hear what he has planned for it.
0:09:15 > 0:09:17- Paul, congratulations.- Thank you.
0:09:17 > 0:09:21- It's a great house.- Lovely, yes. - Tell me why you wanted to buy it.
0:09:21 > 0:09:27Development-wise, we've got one further up the street and one further down the street,
0:09:27 > 0:09:30and this one came up in auction
0:09:30 > 0:09:32and we thought, "We need this house."
0:09:32 > 0:09:34To do what with?
0:09:34 > 0:09:38We're going to strip out the bathrooms and the kitchen
0:09:38 > 0:09:42and we're going to go high-end, with room-only lets as a shared five-bed house.
0:09:42 > 0:09:43Right. Fantastic.
0:09:43 > 0:09:46Tell me more about you and the market round here.
0:09:46 > 0:09:50Well, round here's mostly students, as you can tell by this property.
0:09:50 > 0:09:53That's what it's been let out for previously.
0:09:53 > 0:09:56But we're trying to get ahead of the game
0:09:56 > 0:09:59and get more rent and more yield by going higher end
0:09:59 > 0:10:03on getting professionals in on a room-only basis,
0:10:03 > 0:10:07and then they share the lounge and kitchen and bathrooms together.
0:10:07 > 0:10:11Paul thinks that by raising the spec and appealing to young professionals,
0:10:11 > 0:10:15he can get roughly £320 per room, per month.
0:10:15 > 0:10:19That's £80 more per room than if he lets to students.
0:10:19 > 0:10:23I reckon he might've chosen just the right house for that job.
0:10:23 > 0:10:25It's a gorgeous house.
0:10:25 > 0:10:27We're going to try and be sympathetic,
0:10:27 > 0:10:32as we're going to do it as a layout where we get five beds to let out,
0:10:32 > 0:10:37but if we want to resell it, it's going to look like a good family home.
0:10:37 > 0:10:42It's not going to look like an investment property that's been chopped out.
0:10:42 > 0:10:46How are you going to manage that delicate balancing act?
0:10:46 > 0:10:50Well, I think we're going to re-map where all the bathrooms are and the layout
0:10:50 > 0:10:53to increase the size and add an additional bathroom.
0:10:53 > 0:10:58- Oh, right.- We don't like to have more than two bedrooms per bathroom in a house...- Right.
0:10:58 > 0:11:01..because otherwise nobody can get in.
0:11:01 > 0:11:03That's the way we like to do the layout.
0:11:03 > 0:11:06- So, keeping the same number of bedrooms?- Yes.
0:11:06 > 0:11:10We've done plans. We know what it'll cost to get this done as a five-bed,
0:11:10 > 0:11:14with two bath and two toilets upstairs.
0:11:14 > 0:11:17We also had someone in. We're getting plans done out the backyard
0:11:17 > 0:11:20for a single-floor extension for another bedroom and bathroom.
0:11:20 > 0:11:22Gosh! Really maximising what you've got.
0:11:22 > 0:11:28Yes, so you get a six-bed out of it, with a small extension on the back. That'll increase the yield.
0:11:28 > 0:11:32Paul has big plans here. Apart from upgrading the kitchen,
0:11:32 > 0:11:34he also plans to reinstate the fireplaces
0:11:34 > 0:11:38and, sadly for me, carpet over those beautiful floorboards
0:11:38 > 0:11:41to reduce any possible noise issues.
0:11:41 > 0:11:43When it comes to redecoration,
0:11:43 > 0:11:47there shouldn't be any problems choosing the right colour scheme
0:11:47 > 0:11:51because Paul and his wife Joanne have several other businesses,
0:11:51 > 0:11:54one of them is a chemical manufacturing company
0:11:54 > 0:11:57which makes, guess what...
0:11:57 > 0:12:02- We make colour testers...- OK. - ..that you can buy in the DIY shop.
0:12:02 > 0:12:05- Colour testers?- Sorry, the little tester pots you buy
0:12:05 > 0:12:08when you want to change the colour on your wall.
0:12:08 > 0:12:10- Oh, right!- We actually make them.
0:12:10 > 0:12:12- Oh, right! OK!- Someone's got to!
0:12:12 > 0:12:18# So you can colour my world With sunshine yellow each day
0:12:18 > 0:12:24# Oh, you can colour my world With happiness all the way
0:12:24 > 0:12:28# Just colour my world #
0:12:28 > 0:12:30Paul is certainly nailing his colours to the mast
0:12:30 > 0:12:33when it comes to investing in properties.
0:12:33 > 0:12:35But with hopes of adding an extension
0:12:35 > 0:12:39and with that high-end interior he has planned,
0:12:39 > 0:12:42I just hope he hasn't painted himself into a corner
0:12:42 > 0:12:45when it comes to the cost of this renovation.
0:12:45 > 0:12:47Our budget for the internals -
0:12:47 > 0:12:49the new bathrooms, the new kitchen and utility room -
0:12:49 > 0:12:54- are £28,000 to £35,000 approximately.- Wow.
0:12:54 > 0:12:56I think the max for the extension,
0:12:56 > 0:12:59- we're hoping it's going to be no more than 18.- Right.
0:12:59 > 0:13:03- So ploughing a lot of money in just to reap some good returns?- Yes.
0:13:03 > 0:13:06- Congratulations. Good luck with it. - Indeed.
0:13:06 > 0:13:10Sorry to see the floorboards go, but I look forward to seeing the transformation.
0:13:10 > 0:13:12It'll be great.
0:13:12 > 0:13:17So Paul with some very clear ideas what he's going to do with this place,
0:13:17 > 0:13:19going for the high end.
0:13:19 > 0:13:21Is it the right thing to do?
0:13:21 > 0:13:25Will he be painting the town red when it's finished?
0:13:25 > 0:13:28You can find out later in the show.
0:13:33 > 0:13:36The town of Pontypridd in the South Wales Valleys
0:13:36 > 0:13:39has always been a popular stop-off point for tourists
0:13:39 > 0:13:43and is currently enjoying some regeneration.
0:13:44 > 0:13:46A couple of miles up the road and we're in Cilfynydd,
0:13:46 > 0:13:51a typical Valleys village, surrounded by spectacular hills.
0:13:51 > 0:13:55And what do we have to see? Well, are you sitting comfortably,
0:13:55 > 0:14:00because it's this gigantic enormous wedding cake of a building here,
0:14:00 > 0:14:02a former hotel and pub.
0:14:02 > 0:14:08It had a guide price of £45,000 for all this.
0:14:08 > 0:14:10Can you believe it? I need a lie down.
0:14:10 > 0:14:14At least there are plenty of bedrooms to choose from.
0:14:14 > 0:14:20This pink palace of a hotel and pub is more Vegas than Valleys.
0:14:20 > 0:14:22It was closed in early 2012
0:14:22 > 0:14:24and since then,
0:14:24 > 0:14:28well, it's heart-breaking to see what's become of it.
0:14:31 > 0:14:33# Since my baby left me
0:14:33 > 0:14:36# I've found a new place to dwell
0:14:36 > 0:14:38# It's down at the end Of Lonely Street
0:14:38 > 0:14:42# In this Heartbreak Hotel #
0:14:44 > 0:14:46Oh, my goodness!
0:14:46 > 0:14:51The smell of damp in here is horrendous!
0:14:51 > 0:14:53I'm even scared to breathe in.
0:14:53 > 0:14:58This is probably the worst smell I've ever had to smell since I've been doing this programme.
0:14:58 > 0:15:02You can see the damp, you can see the ceilings are falling down.
0:15:02 > 0:15:05I mean, look down here. There's mushrooms growing!
0:15:05 > 0:15:09It's just wet underneath your foot.
0:15:09 > 0:15:14The place is vast. I mean, it's in a terrible, terrible state!
0:15:14 > 0:15:17Look at the ceilings. I mean, when you think about it,
0:15:17 > 0:15:19this is the ground floor
0:15:19 > 0:15:21and I know there are three floors,
0:15:21 > 0:15:24so for this ceiling to have come down,
0:15:24 > 0:15:28the water must've just been pouring through.
0:15:28 > 0:15:30It's just quite a lot to take in.
0:15:30 > 0:15:34# Ooh-ooh, that smell
0:15:35 > 0:15:38# Can't you smell that smell? #
0:15:39 > 0:15:42The furnishings and carpets are ruined.
0:15:42 > 0:15:44They're sodden and rotten.
0:15:44 > 0:15:47But the bar could be salvageable.
0:15:47 > 0:15:51This place is big, though. There's the pub and games area,
0:15:51 > 0:15:54plus a kitchen out back.
0:15:55 > 0:16:00On the first floor is the hotel reception where, rather than a warm welcome,
0:16:00 > 0:16:05I'm greeted with that familiar stale stench of damp.
0:16:05 > 0:16:10There's also the hotel restaurant, function room and dance floor,
0:16:10 > 0:16:13so there's certainly no shortage of space.
0:16:13 > 0:16:17Despite the smell, I'm very excited to be exploring this property.
0:16:17 > 0:16:21But the more I see, the more the harsh realities hit home.
0:16:21 > 0:16:27It's a tough economic climate to be starting up a bar and hotel business.
0:16:27 > 0:16:29Being a publican is a tough business these days,
0:16:29 > 0:16:33with 16 pubs a week closing across the country
0:16:33 > 0:16:36due to diminishing trade and high costs.
0:16:36 > 0:16:37On top of that,
0:16:37 > 0:16:41the premises had its licence revoked before it closed
0:16:41 > 0:16:45so reapplying for that is another hurdle to jump.
0:16:45 > 0:16:49It's quite possible someone could make this business work and turn it around,
0:16:49 > 0:16:54but it's not as simple as "turn on the pumps and see the pounds roll in."
0:16:55 > 0:16:58If a new licence is not approved by the local council,
0:16:58 > 0:17:02the bar may be the only dry thing in here.
0:17:02 > 0:17:05Anyone thinking of trying to reopen this as a hotel
0:17:05 > 0:17:07needs to speak to the council pronto.
0:17:07 > 0:17:10On the floor above are five hotel rooms
0:17:10 > 0:17:12and a two-bedroom apartment,
0:17:12 > 0:17:16previously used as manager's accommodation.
0:17:17 > 0:17:20Now, what to do with this auction lot...
0:17:20 > 0:17:24Returning it to a habitable hotel is one way to go.
0:17:24 > 0:17:29And another is, of course, what about turning this whole place into flats?
0:17:29 > 0:17:34Mm... You could get a sizeable number of units out of this place,
0:17:34 > 0:17:35but they'd be a hard sell
0:17:35 > 0:17:39in an area where houses are cheap and mortgages are hard to come by.
0:17:39 > 0:17:43And rental - I'm not sure it would be worth the time, effort
0:17:43 > 0:17:46and, most importantly, money.
0:17:46 > 0:17:51This is no straightforward renovate-and-rent-out or do-up-and-sell-on.
0:17:51 > 0:17:54This project requires careful consideration.
0:17:54 > 0:17:58But bearing in mind it was guided at £45,000,
0:17:58 > 0:18:02this hotel is a whole lot of property for that price.
0:18:06 > 0:18:08We invited the auctioneer who sold it
0:18:08 > 0:18:11to give his opinion of it.
0:18:11 > 0:18:14A residential redevelopment, in my view,
0:18:14 > 0:18:16is completely unfeasible in today's market conditions.
0:18:16 > 0:18:20The funding is as rare as hen's teeth,
0:18:20 > 0:18:25and I think getting a bank to fund a development
0:18:25 > 0:18:30where the end value of your flats is probably the same,
0:18:30 > 0:18:33if not less, than the average terrace house,
0:18:33 > 0:18:38why would you buy a new flat when you can buy a refurbished house?
0:18:38 > 0:18:40It doesn't make sense.
0:18:40 > 0:18:43What about the hotel bar business?
0:18:43 > 0:18:45What if a property developer did it up
0:18:45 > 0:18:49and rented it out to an experienced publican?
0:18:49 > 0:18:52I think, potentially, if you were to do this properly,
0:18:52 > 0:18:54and by doing this properly
0:18:54 > 0:18:59I mean providing a tenant with a satisfactory rent-free period to get him up and running,
0:18:59 > 0:19:03providing a cheap rent to make business feasible,
0:19:03 > 0:19:08there's no reason why, in two or three years' time, you could produce a good market rent
0:19:08 > 0:19:12which will enhance the capital value of the property.
0:19:12 > 0:19:17Oh, my! Rent-free period? Two or three years' time?
0:19:17 > 0:19:20This is no get-rich-quick scheme, but a long-term investment
0:19:20 > 0:19:24with no guarantee of financial rewards.
0:19:24 > 0:19:31This is a staggeringly large property for the £45,000 guide price,
0:19:31 > 0:19:35and it offers up loads of options, but all with their own issues.
0:19:35 > 0:19:38It doesn't seem like much as an initial investment,
0:19:38 > 0:19:40but whoever takes this place on
0:19:40 > 0:19:42needs to have plenty of cash to splash
0:19:42 > 0:19:45and imagination to make it work.
0:19:45 > 0:19:48Let's see who that was at the auction.
0:19:49 > 0:19:51Moving on to lot number eight,
0:19:51 > 0:19:54the substantial hotel premises in a roadside location.
0:19:54 > 0:19:56Who is going to start me off,
0:19:56 > 0:19:58ladies and gentlemen, at £35,000
0:19:58 > 0:20:01to get things moving?
0:20:01 > 0:20:04Don't be shy. I know you're all here. Thank you. 35,000, sir.
0:20:04 > 0:20:06I'm at the reserve of 35,000.
0:20:06 > 0:20:11If you're interested be quick, because I'm going to sell for 35,000 if I don't see anybody coming.
0:20:11 > 0:20:14Thank you. 36. And seven. Seven.
0:20:14 > 0:20:19Eight. Nine. 40. Thank you. And one.
0:20:19 > 0:20:2141. And two.
0:20:21 > 0:20:2543. Four. Looking for 44 off you. 44. And five.
0:20:25 > 0:20:29Looking for 45 off you, sir? I've got 44 standing at the back.
0:20:29 > 0:20:3345. Thank you. 45. And six.
0:20:33 > 0:20:3645 on you, sir. 45,000, I've got.
0:20:36 > 0:20:39Any advance? I'm going to sell it to this chap here.
0:20:39 > 0:20:42Are you going to give me half? 45 and a half. And six.
0:20:42 > 0:20:4546. Half?
0:20:45 > 0:20:49OK. Back to you at 46,000. 46,000 I've got?
0:20:49 > 0:20:5346,000 I'll sell it at. Be quick. 46,000 I've got.
0:20:53 > 0:20:57Are you sure? Are you all done? 46,000 on you, sir.
0:20:57 > 0:21:02It was David who made that successful bid of 46,000.
0:21:02 > 0:21:04He's an experienced property developer,
0:21:04 > 0:21:08although this will be one of his larger projects.
0:21:08 > 0:21:11Today, he's accompanied by his son Gregory,
0:21:11 > 0:21:14who has recently joined the family business.
0:21:14 > 0:21:17How does David feel about his purchase?
0:21:17 > 0:21:20# Well, I'm tickled pink to think
0:21:20 > 0:21:24# That you are mine #
0:21:24 > 0:21:28David and Gregory, congratulations. You've bought yourself a big pink palace!
0:21:28 > 0:21:32How did you find this and what inspired you?
0:21:32 > 0:21:36Well, we had the catalogue through, and we were looking for a number of properties,
0:21:36 > 0:21:39and we went to view six properties for that particular auction.
0:21:39 > 0:21:41Greg didn't come along to this one.
0:21:41 > 0:21:45What did you think on the viewing day? Was it in this state? Was it worse?
0:21:45 > 0:21:50There was water coming in through the roof. It was raining so water was pouring in,
0:21:50 > 0:21:52but I thought that worked to our advantage
0:21:52 > 0:21:54because a lot of people would've been put off.
0:21:54 > 0:21:57They would've been put off. And also by the stench!
0:21:57 > 0:22:00I mean, it really does smell!
0:22:00 > 0:22:03Hopefully, we'll get people in to start cleaning the pub within a couple of days.
0:22:03 > 0:22:06The carpets are absolutely sodden at the moment,
0:22:06 > 0:22:08there's mould growing everywhere,
0:22:08 > 0:22:11the furniture's absorbed the water that's been coming through,
0:22:11 > 0:22:14so hopefully, by the time you come back,
0:22:14 > 0:22:17it'll be a lot cleaner and a lot sweeter-smelling.
0:22:17 > 0:22:20- Gregory...- Yes.- When you saw this place for the first time,
0:22:20 > 0:22:24- did you think your dad had gone mad? - A little bit! I knew he didn't pay that much for it.
0:22:24 > 0:22:28I walked in and I was like, "Wow!" I couldn't believe how big it was. It was amazing.
0:22:28 > 0:22:32"Wow"? Well, that's one three-letter word.
0:22:32 > 0:22:35Others could be "yuk" and "run".
0:22:35 > 0:22:39That water coming in would've had me heading for the Welsh Hills.
0:22:39 > 0:22:42The lead has been stolen from the roof,
0:22:42 > 0:22:44which has caused the deluge.
0:22:44 > 0:22:47David sounded optimistic about drying it out.
0:22:47 > 0:22:50He must have his rose-tinted specs on.
0:22:50 > 0:22:53The big question for me is, what are you going to do with it?
0:22:53 > 0:22:58Plan A would be that we turn it back into a pub.
0:22:58 > 0:23:02If we can find somebody that's willing to rent the place from us,
0:23:02 > 0:23:04then look to bring food in and then the hotel side of things,
0:23:04 > 0:23:07get the function room open upstairs,
0:23:07 > 0:23:10get weddings, anniversaries, that sort of thing in, into the place.
0:23:10 > 0:23:15If it doesn't work as a venue, what we'd like to think is Plan B,
0:23:15 > 0:23:19we could get planning permission and build some flats here.
0:23:19 > 0:23:21David does know the local market
0:23:21 > 0:23:26and seems confident that the residential apartments are a good backup plan.
0:23:26 > 0:23:28I hope he's right.
0:23:28 > 0:23:32- Do you work together as a father-and-son team? - It's quite a new thing, actually.
0:23:32 > 0:23:37It only started this year, but Greg now works with me on a Tuesday and a Friday,
0:23:37 > 0:23:38so he's in two days a week.
0:23:38 > 0:23:42He's done agricultural college, which has got no connection at all with us,
0:23:42 > 0:23:47but his mum and I decided that he would go out and do whatever he wanted to do for a few years
0:23:47 > 0:23:51and then we'd try and tie him into the property side of the business,
0:23:51 > 0:23:53and that's really what we're trying to do.
0:23:53 > 0:23:55How's it working out for you?
0:23:55 > 0:23:58It's a different world to what I've known and I love it.
0:23:58 > 0:24:02- Are you learning a lot from your dad? - A lot. I've done a Landlord's Accreditation course, as well,
0:24:02 > 0:24:06so things like that really does open your mind to it
0:24:06 > 0:24:08and teaches you a few different things.
0:24:08 > 0:24:12This is one big exciting project. Thank you so much for talking to me.
0:24:12 > 0:24:17- Good luck with this.- Thanks, Lucy. - Thank you.- Thank you. - Gregory, Thank you.- Cheers.
0:24:18 > 0:24:22David and Gregory have a monster project here.
0:24:22 > 0:24:26I think the least of their worries is getting the carpets clean!
0:24:26 > 0:24:30I really, really hope they find someone with the vision to make this venture work
0:24:30 > 0:24:35because I would love to think this could be a busy, bustling boozer once again.
0:24:35 > 0:24:38You can find out if that happens later on in the programme.
0:24:39 > 0:24:42Coming up, this two-bedroom bungalow in Derby
0:24:42 > 0:24:45is in serious need of updating.
0:24:45 > 0:24:48It's almost straight out of a museum, isn't it?
0:24:49 > 0:24:52In this damp-ridden hotel in South Wales,
0:24:52 > 0:24:55things now smell a lot better.
0:24:55 > 0:24:59Since we stripped everything out and we put all new back in, the smell has just gone.
0:25:00 > 0:25:03But first, in Newcastle Upon Tyne,
0:25:03 > 0:25:06it's good news for Paul's mid-terrace.
0:25:06 > 0:25:09We've got tenants moved in before it was finished.
0:25:13 > 0:25:16We head back now to Heaton in Newcastle,
0:25:16 > 0:25:19where earlier we saw this four-bedroom terraced house
0:25:19 > 0:25:22that wasn't shabby, grubby or rundown.
0:25:22 > 0:25:26In fact, it was nice, bright and spick-and-span.
0:25:26 > 0:25:29I reckoned you could move straight in as a family home,
0:25:29 > 0:25:34or with a few tweaks, make it a house of multiple occupancy for the student market.
0:25:34 > 0:25:37But Paul had other ideas.
0:25:37 > 0:25:41He and his wife Joanne already have some other business interests,
0:25:41 > 0:25:45including a chemical manufacturing company, making paint pot samples,
0:25:45 > 0:25:48as well as their property portfolio
0:25:48 > 0:25:52that includes two other houses on the same street as this latest purchase,
0:25:52 > 0:25:55so Paul knows the area and the market.
0:25:55 > 0:25:57Around here's mostly students on the let side.
0:25:57 > 0:26:00We're trying to get ahead of the game
0:26:00 > 0:26:03and get more yield by going high-end on getting professionals in.
0:26:03 > 0:26:08Converting the rear reception room into a bedroom and adding an extension on the back,
0:26:08 > 0:26:13Paul planned to turn this place into a six-bedroom house in three to four months,
0:26:13 > 0:26:16all on a budget of £53,000.
0:26:16 > 0:26:19So when we return seven months later,
0:26:19 > 0:26:21has he managed to turn this place into,
0:26:21 > 0:26:25well, more than a tester pot of gold?
0:26:40 > 0:26:44With the beautiful living room and this excellent kitchen,
0:26:44 > 0:26:48Paul has so far achieved an amazing look to the property -
0:26:48 > 0:26:50modern, tasteful
0:26:50 > 0:26:52and with a fantastic finish all round.
0:26:52 > 0:26:55I hardly miss those exposed floorboards!
0:26:55 > 0:27:00And Paul has added that extra dimension to the house.
0:27:01 > 0:27:05This is the new extension to the house. It's split into two rooms.
0:27:05 > 0:27:10We put the bathroom at this end, with a double shower, WC and a sink,
0:27:10 > 0:27:12and then there'll be a walkway through to the back bedroom,
0:27:12 > 0:27:15a double bedroom, with a couple of windows in.
0:27:15 > 0:27:19We put a skylight in the bathroom so that natural light comes in.
0:27:19 > 0:27:21This is at the back of the house,
0:27:21 > 0:27:24so whoever gets this room is going to be on their own
0:27:24 > 0:27:26and it's a nice, private environment.
0:27:26 > 0:27:29Hopefully, it'll be finished in two to three weeks.
0:27:29 > 0:27:32Paul has also changed that rear reception room into a bedroom,
0:27:32 > 0:27:36with gorgeous decor and cool furnishings.
0:27:36 > 0:27:39Upstairs, Paul has applied the same style
0:27:39 > 0:27:42to the four bedrooms.
0:27:47 > 0:27:50In addition to the quality of these rooms,
0:27:50 > 0:27:53the loos and shower rooms don't disappoint either.
0:27:53 > 0:27:57There was originally a very small bathroom within this bedroom,
0:27:57 > 0:27:59which you got access via the landing.
0:27:59 > 0:28:01We've blocked that off, moved across
0:28:01 > 0:28:05and stole the space from this side where there was some small cupboards
0:28:05 > 0:28:08and built this bathroom in place of it, which is a bit larger.
0:28:12 > 0:28:17We've done this on the front. On the back, we've increased the size of the family bathroom
0:28:17 > 0:28:19and stole space again from the landing.
0:28:19 > 0:28:24The layout is not much different to what it was. All we've done is added this small bathroom on.
0:28:24 > 0:28:28There's no real other difference. It's still a wide landing, so I'm quite happy with it.
0:28:28 > 0:28:32The original loo has also had a top-notch makeover.
0:28:32 > 0:28:36So when the extension's complete, this will be a six-bedroom home,
0:28:36 > 0:28:40with three bathrooms and a loo, too. Perfect for the rental market.
0:28:40 > 0:28:43Paul project-managed the renovation,
0:28:43 > 0:28:45leaving the works to his team of builders.
0:28:45 > 0:28:49The property is already starting to pay its way.
0:28:49 > 0:28:52We've actually got tenants moved in before it was finished.
0:28:52 > 0:28:56They were quite happy to move in before we'd finished the property.
0:28:56 > 0:29:01But if that's what they want to do, they're paying the rent, we're not going to say no.
0:29:01 > 0:29:04So we have three tenants in already and another three to get in.
0:29:04 > 0:29:08Paul's hoping that the rental market for young professionals
0:29:08 > 0:29:12will make this a long-term, big-time earner for him and his wife Joanne.
0:29:12 > 0:29:16And talking of time, other business projects delayed the start,
0:29:16 > 0:29:21but the renovation was completed in four months, as planned.
0:29:21 > 0:29:23But how did his anticipated spend
0:29:23 > 0:29:27of £53,000 on the extension and refurbishment cope?
0:29:27 > 0:29:32Overall, it'll cost about £38,000 for the refurb,
0:29:32 > 0:29:35and the extension has come in on budget at 15.
0:29:35 > 0:29:38It's no surprise that Paul has achieved this on budget,
0:29:38 > 0:29:42as he already has two properties on this street done to a similar level.
0:29:42 > 0:29:45But for him, the best part is still to come.
0:29:45 > 0:29:48The last bit is when I put the numbers on the door.
0:29:48 > 0:29:52That's when I know I've done my job, it's finished and you move on.
0:29:53 > 0:29:55Time to find out from two local estate agents
0:29:55 > 0:29:58if Paul has worked his numbers out correctly.
0:29:58 > 0:30:04We begin with the estate agent who saw the house before work began.
0:30:04 > 0:30:08It's a fantastic house. It's amazing. I love what he's done.
0:30:08 > 0:30:11Personally, I didn't think it needed a great deal done to it beforehand,
0:30:11 > 0:30:16but the extension to the back with the vaulted ceiling,
0:30:16 > 0:30:18using that outside space,
0:30:18 > 0:30:20I'm very impressed.
0:30:22 > 0:30:24It's in really, really good condition.
0:30:24 > 0:30:27The standard of finish is exceptionally high.
0:30:27 > 0:30:30Very good quality. I particularly like the bathrooms,
0:30:30 > 0:30:32the work that he's done in there.
0:30:32 > 0:30:35Paul bought the house for £170,000.
0:30:35 > 0:30:39Add on his renovation costs of £53,000,
0:30:39 > 0:30:42and he's so far spent a total of £223,000.
0:30:42 > 0:30:44With tenants already in, though,
0:30:44 > 0:30:48is he getting the best out of this house?
0:30:48 > 0:30:52I think he should be asking 400 to 410 pounds
0:30:52 > 0:30:54per room, per calendar month.
0:30:54 > 0:30:58I would recommend marketing the property at £375 to £400
0:30:58 > 0:31:00per room, per calendar month.
0:31:00 > 0:31:05We're getting £430 a room for the three we've already let,
0:31:05 > 0:31:09and we see no problem in getting 430 for the other three.
0:31:09 > 0:31:13If Paul manages to get that for all six bedrooms,
0:31:13 > 0:31:16he'll have an annual rental income of just under £31,000.
0:31:16 > 0:31:20That would mean a whopping yield of around 14 percent.
0:31:20 > 0:31:23For Paul, this is a long-term investment,
0:31:23 > 0:31:26but if he did decide to sell on,
0:31:26 > 0:31:32the estate agents reckon he could achieve a figure of between 220 and 230,000 pounds,
0:31:32 > 0:31:35which would give him a £7,000 profit.
0:31:35 > 0:31:38With renting it out easily outgunning the resell figures,
0:31:38 > 0:31:42it's no wonder that he sees the future in lettings.
0:31:42 > 0:31:45And he already knows where to make his next purchase.
0:31:45 > 0:31:49Basically, to buy more of the same of this.
0:31:49 > 0:31:53The format's all set up. We've done two exactly like this now,
0:31:53 > 0:31:56so moving forward, just keep doing the same thing.
0:31:56 > 0:31:59If we change, we'll hit issues that we didn't know about before
0:31:59 > 0:32:01so we're all for an easy life!
0:32:05 > 0:32:08Today, I'm in Derby in the East Midlands,
0:32:08 > 0:32:13a city known for its rapid growth during the Industrial Revolution.
0:32:13 > 0:32:18Well, at the height of that time, when the city was getting very overcrowded,
0:32:18 > 0:32:23the more affluent members of Derby society moved to the suburbs
0:32:23 > 0:32:27to places like Mickleover and Littleover here.
0:32:28 > 0:32:32And Littleover is just a little over two miles from Derby City Centre,
0:32:32 > 0:32:34ideal for a quick commute!
0:32:34 > 0:32:37There are also plenty of useful amenities
0:32:37 > 0:32:41in the shopping area known as Littleover Village.
0:32:41 > 0:32:45Well, not far from the schools and the village,
0:32:45 > 0:32:48with its shops, pubs and restaurants,
0:32:48 > 0:32:50is the property I'm here to see.
0:32:50 > 0:32:55It's this. It's a two-bedroom detached bungalow.
0:32:55 > 0:32:58At a guide price of £100,000,
0:32:58 > 0:33:01it looks pretty good from the outside.
0:33:02 > 0:33:05Yes, this looks well-maintained from the outside.
0:33:05 > 0:33:07The pointing looks good and the roof seems OK.
0:33:07 > 0:33:10Of course, in this lovely dry weather,
0:33:10 > 0:33:12you can't tell if the guttering is up to scratch,
0:33:12 > 0:33:16but it all appears pretty promising so far.
0:33:18 > 0:33:21So, what kind of layout does this particular bungalow have?
0:33:21 > 0:33:23Well, actually fairly standard.
0:33:23 > 0:33:25Into a little entrance area here
0:33:25 > 0:33:29and then all the rooms lead off from here.
0:33:29 > 0:33:34Two bedrooms at the front of the property, half-decent size, a bathroom here.
0:33:34 > 0:33:37You've then got your main living area here.
0:33:37 > 0:33:39So pretty standard, all in all.
0:33:39 > 0:33:43This room, though, I think has great potential.
0:33:43 > 0:33:45Lovely little feature here -
0:33:45 > 0:33:49a good old 1960s serving hatch!
0:33:49 > 0:33:51Marvellous!
0:33:51 > 0:33:54Now, you may not want to keep that, probably not,
0:33:54 > 0:33:56but it gives me an idea about opening that up,
0:33:56 > 0:34:00maybe even considering some kind of extension perhaps.
0:34:00 > 0:34:02At the very least,
0:34:02 > 0:34:06put some lovely big sliding patio doors in here,
0:34:06 > 0:34:09you've then got the living room area opening out onto the garden,
0:34:09 > 0:34:11and that would be lovely.
0:34:11 > 0:34:17# Oh, wouldn't it be lovely? #
0:34:17 > 0:34:21I really do like the layout of this property, I think it works well,
0:34:21 > 0:34:23but opening up the kitchen and living room to the garden
0:34:23 > 0:34:27would add a whole new dimension to this bungalow.
0:34:27 > 0:34:32# Oh, wouldn't it be lovely? #
0:34:33 > 0:34:35There's an added feature through the back,
0:34:35 > 0:34:38a time machine of sorts.
0:34:38 > 0:34:41The kitchen is...
0:34:41 > 0:34:44Well, it's almost straight out of a museum, isn't it?
0:34:44 > 0:34:47This is probably untouched
0:34:47 > 0:34:49since it was first put in in the 1960s.
0:34:49 > 0:34:52It's, er, an absolute classic.
0:34:52 > 0:34:54The good news is, there is a reasonable amount of space.
0:34:54 > 0:34:57I like the fact that you've got lots of windows.
0:34:57 > 0:35:01As I said, one of the things you might want to do is knock through there.
0:35:01 > 0:35:05But all in all, it's a good-sized space.
0:35:05 > 0:35:06Just wrong era!
0:35:06 > 0:35:10# Flower power will grow and grow
0:35:10 > 0:35:13# Flower power, let the people know
0:35:13 > 0:35:15# There's peace on earth
0:35:15 > 0:35:18# We'll love until the end #
0:35:18 > 0:35:20If you're a fan of vintage,
0:35:20 > 0:35:23this decor is definitely up your street.
0:35:23 > 0:35:26I reckon most people would want to modernise it
0:35:26 > 0:35:29and whoever bought it will certainly need to get the wiring looked at
0:35:29 > 0:35:31and brought into the right century!
0:35:31 > 0:35:35But one thing that'll never date is a lovely garden
0:35:35 > 0:35:37and that's exactly what this place has.
0:35:37 > 0:35:39Look at the size of the garden!
0:35:39 > 0:35:44You've got this bit here, with a flowerbed, a greenhouse and more grass over there.
0:35:44 > 0:35:47Absolutely marvellous. What isn't good news is this...
0:35:47 > 0:35:49It's a garage
0:35:49 > 0:35:55and you don't have to be a rocket scientist to figure out it's made of asbestos.
0:35:55 > 0:35:57So that needs to go.
0:35:57 > 0:36:00It needs to be taken away by a specialist firm
0:36:00 > 0:36:03because obviously, it is definitely a health risk.
0:36:03 > 0:36:08The risk comes from the volume of asbestos fibres in man-made materials
0:36:08 > 0:36:12like this cement, which can cause serious lung conditions.
0:36:12 > 0:36:16If the asbestos is undisturbed and not damaged in any way,
0:36:16 > 0:36:19it shouldn't do you any harm, so you could leave it.
0:36:19 > 0:36:21But the garage will degrade over time
0:36:21 > 0:36:25so if you keep it, you need to monitor it.
0:36:25 > 0:36:27Getting rid of it might be costly,
0:36:27 > 0:36:30but it is a job that needs to be done safely
0:36:30 > 0:36:34and the asbestos disposed of according to the regulations.
0:36:34 > 0:36:38Then you could maybe get the deck chair out.
0:36:40 > 0:36:43I like this bungalow, guided at £100,000,
0:36:43 > 0:36:45but would it be worth spending money on?
0:36:45 > 0:36:49We asked the auctioneer who sold it for his thoughts.
0:36:52 > 0:36:55Everything is dated. But structurally, it's sound -
0:36:55 > 0:36:59it's water-tight, there doesn't appear to be rising damp -
0:36:59 > 0:37:02so you're not going to spend a lot of money on it
0:37:02 > 0:37:05but you can transform it fairly readily.
0:37:05 > 0:37:09What would that work add in resale value?
0:37:09 > 0:37:13If it's renovated, possibly with a conservatory on the back,
0:37:13 > 0:37:16I think you could probably get its value
0:37:16 > 0:37:19up to about 155, 160,000 pounds.
0:37:19 > 0:37:23What if the owner decided to let it?
0:37:23 > 0:37:25Rental value when renovated,
0:37:25 > 0:37:29I would think would be between £500 and £525 per calendar month.
0:37:30 > 0:37:32Well, it's a lovely residential area
0:37:32 > 0:37:36and bungalows like this are perennially popular.
0:37:36 > 0:37:40Yes, there's stuff to be done, but I reckon this was a very popular lot
0:37:40 > 0:37:42when it went under the hammer.
0:37:42 > 0:37:45Detached bungalow, two double bedrooms,
0:37:45 > 0:37:47driveway and garage.
0:37:47 > 0:37:50Scope for upgrading and improvement. 98 to start me.
0:37:50 > 0:37:5498. 95.
0:37:54 > 0:37:5595. Got you. Thank you.
0:37:55 > 0:38:01£95,000. 95,000. 96, someone else? 96 is bid.
0:38:01 > 0:38:0396. 97?
0:38:03 > 0:38:0797. 98. 99.
0:38:07 > 0:38:09100.
0:38:09 > 0:38:11101. 102.
0:38:11 > 0:38:17This auction lot went quite slowly, so we rejoin the action a little further down the line
0:38:17 > 0:38:21when the bidding reached £116,000.
0:38:21 > 0:38:24116,000.
0:38:24 > 0:38:26And 500? 500.
0:38:26 > 0:38:30117? 117.
0:38:30 > 0:38:31500.
0:38:31 > 0:38:33118?
0:38:33 > 0:38:35118.
0:38:35 > 0:38:38118? 500?
0:38:38 > 0:38:40119?
0:38:40 > 0:38:43119? 500?
0:38:44 > 0:38:47At 119,000, once...
0:38:47 > 0:38:49Now 500.
0:38:49 > 0:38:52120? 120.
0:38:52 > 0:38:55120. Is that certain?
0:38:55 > 0:38:59120,000, once, twice, third time...
0:38:59 > 0:39:02You've got it. 120. Well done.
0:39:02 > 0:39:07Well, they got there in the end! That final successful bid of £120,000
0:39:07 > 0:39:10came from husband and wife Sean and Cheryl.
0:39:15 > 0:39:19Sean's a self-employed builder and Cheryl is his company secretary.
0:39:19 > 0:39:23They've been married 24 years and have three kids.
0:39:23 > 0:39:27Don't worry - they aren't going to try and fit them all into this groovy 1960s bungalow.
0:39:27 > 0:39:30They've bought it as an investment.
0:39:30 > 0:39:34Let's meet them and find out if they're going to turn this Swinging '60s decor
0:39:34 > 0:39:37into something a little easier on the eye.
0:39:37 > 0:39:41- Cheryl, Sean, lovely to meet you both. Congratulations.- Thank you.
0:39:41 > 0:39:44Tell me why you wanted to buy the bungalow.
0:39:44 > 0:39:47Well, initially, it was Cheryl's mum and dad,
0:39:47 > 0:39:51- they were looking for a bungalow for their later years.- Right.
0:39:51 > 0:39:55They asked me to come up to give them a few pointers about what needed doing
0:39:55 > 0:39:58and they decided it was too much for them.
0:39:58 > 0:40:01- Oh!- You know, with the work that needed doing,
0:40:01 > 0:40:03I just thought I'd take a punt at it.
0:40:03 > 0:40:06I went to the auction and I ended up with it!
0:40:06 > 0:40:10So, you started out with no intention whatsoever of buying a bungalow?
0:40:10 > 0:40:12- No! - THEY LAUGH
0:40:13 > 0:40:15Talk about impulsive!
0:40:15 > 0:40:18It's not every day that you leave the house and come back with another.
0:40:18 > 0:40:23So, what was it about this place that made them bid at the auction?
0:40:25 > 0:40:29I liked the size of the garden, the layout. It's a nice area.
0:40:29 > 0:40:32- We only live a five-minute walk away.- Really?
0:40:32 > 0:40:36So it's quite convenient, if we get spare time, to come and do work on the house.
0:40:36 > 0:40:39- So, have you told your mum and dad that you've bought it, then?- Yes!
0:40:39 > 0:40:42- What did they... - THEY LAUGH
0:40:42 > 0:40:45- What did they say? - They're pleased about it!
0:40:45 > 0:40:47But as Sean said,
0:40:47 > 0:40:50the garden was too large for them to be handling
0:40:50 > 0:40:55and there was too much for them to foresee what it would look like in the future,
0:40:55 > 0:40:58so they're going to look elsewhere.
0:40:58 > 0:41:02Is there any possibility that, when you've done it up and they come back and see it,
0:41:02 > 0:41:05- they might change their mind? - There's always that possibility!
0:41:05 > 0:41:07We'll have to wait and see.
0:41:07 > 0:41:10- Tell me what you're going to do. - A complete rewire,
0:41:10 > 0:41:15all the plumbing's going to have to be done again, new boiler, new kitchen, new bathroom,
0:41:15 > 0:41:21and I think I'm going to be making this into another bedroom to make it a three-bedroom
0:41:21 > 0:41:25and extending out that way four metres, hopefully.
0:41:25 > 0:41:30- So, you wouldn't need planning permission?- Not for four metres, no. Anything above.- Right.
0:41:30 > 0:41:34That's a good idea. So then it would become a three-bedroom bungalow. Mm.
0:41:34 > 0:41:36With a view to what - renting it or selling it?
0:41:36 > 0:41:40I think what I'll do first is put it on the market
0:41:40 > 0:41:44and see what sort of, you know, what comes back.
0:41:44 > 0:41:46If it doesn't come off,
0:41:46 > 0:41:48- I'll hopefully rent it.- Right.
0:41:48 > 0:41:51And what will your involvement be, Cheryl?
0:41:51 > 0:41:55Erm, making cups of tea, probably!
0:41:55 > 0:41:58Well, that will save on the catering costs
0:41:58 > 0:42:02which, any builder will testify, is the crucial part of any job!
0:42:02 > 0:42:05I just hope she remembers the biscuits.
0:42:05 > 0:42:08As he's a builder, Sean's going to handle most of the work himself,
0:42:08 > 0:42:12but they are going to call in a specialist to get rid of that asbestos garage.
0:42:12 > 0:42:17How much have they got in mind to spend here?
0:42:17 > 0:42:22Initially, I thought ten, 12,000 for just the kitchen, the bathroom and the electrics and that,
0:42:22 > 0:42:24but if I am going to extend it,
0:42:24 > 0:42:28- obviously there's a bit more costings there.- Mm.
0:42:28 > 0:42:32I've got to wait for my architect to come back and let me know what we can do
0:42:32 > 0:42:35and work out how much it's going to cost.
0:42:35 > 0:42:38I think, with making it a three-bedroomed, it might sell quicker.
0:42:38 > 0:42:41What's the sort of timescale for getting it sorted?
0:42:41 > 0:42:44Hopefully about six months.
0:42:44 > 0:42:48- Congratulations.- BOTH: Thank you. - Good luck with it.
0:42:48 > 0:42:50I look forward to seeing how you get on.
0:42:50 > 0:42:53Well, they didn't intend to purchase it,
0:42:53 > 0:42:58but I think Cheryl and Sean are fairly pleased with this bungalow.
0:42:58 > 0:43:01Good ideas in terms of the extension.
0:43:01 > 0:43:03They must keep an eye on that budget
0:43:03 > 0:43:08to make sure they don't drive it above the ceiling price of properties around here.
0:43:08 > 0:43:11You can find out how they get on later in the show.
0:43:14 > 0:43:18Well, the time has come, let's go back and find out how our buyers have got on.
0:43:18 > 0:43:20Let's see how they're doing.
0:43:20 > 0:43:23It's time to return to this hotel and bar
0:43:23 > 0:43:25near Pontypridd in South Wales,
0:43:25 > 0:43:30which had a guide price of £45,000.
0:43:31 > 0:43:34It was once a thriving business,
0:43:34 > 0:43:38but now it was just teeming with the severe stench of damp.
0:43:38 > 0:43:44Intent on restoring this local landmark to its former glory
0:43:44 > 0:43:47were property developer David and his son Gregory.
0:43:47 > 0:43:50They paid £46,000 for it at auction
0:43:50 > 0:43:55and hoped it could once again attract tourists and village residents.
0:43:55 > 0:43:59However, just before the hotel closed its doors for the last time,
0:43:59 > 0:44:03it'd lost its licence to sell alcohol.
0:44:03 > 0:44:07There was no guarantee a new one would be granted this time round.
0:44:07 > 0:44:10But David and Gregory had options.
0:44:10 > 0:44:16Plan A would be that we try and get the place going again as a good pub,
0:44:16 > 0:44:19then look to bring food in and then the hotel side of things.
0:44:19 > 0:44:22If it doesn't work as a venue - Plan B -
0:44:22 > 0:44:26we could get planning permission and build some flats here.
0:44:27 > 0:44:29This pink palace had lots its lustre,
0:44:29 > 0:44:33so let's hope it's not still down in the dumps.
0:44:33 > 0:44:37# Blue hotel
0:44:39 > 0:44:44# On a lonely highway #
0:44:44 > 0:44:47We're back one year later
0:44:47 > 0:44:52to find out if David and Gregory have plumped for Plan A or Plan B.
0:44:52 > 0:44:55There's not much change on the outside
0:44:55 > 0:44:58so let's take a look inside.
0:45:08 > 0:45:11It's Plan A all the way.
0:45:11 > 0:45:16The father-and-son developing duo did get the alcohol licence for the hotel from the council,
0:45:16 > 0:45:19so it won't be long until pints are being pulled
0:45:19 > 0:45:22behind the bar.
0:45:22 > 0:45:26David's away, but Gregory's here to give us the lowdown.
0:45:26 > 0:45:29In the beginning, there was a lot of water ingress.
0:45:29 > 0:45:33The first thing we did was put the roof on, cleaned the inside
0:45:33 > 0:45:37and then new carpets throughout, new electrics, new lighting,
0:45:37 > 0:45:40a massive redecoration program's gone under way
0:45:40 > 0:45:44and it's just looking a lot different.
0:45:44 > 0:45:49It's looking a lot better and smelling a lot better, too!
0:45:49 > 0:45:51There was a bad smell.
0:45:51 > 0:45:54When I was clearing it, definitely the smell got worse!
0:45:54 > 0:45:59But since we stripped everything out and put all new back in, the smell has just gone.
0:45:59 > 0:46:03# The way you smell so sweet
0:46:03 > 0:46:08# You know you could've been Some perfume #
0:46:09 > 0:46:13On the first floor was the hotel restaurant and function room
0:46:13 > 0:46:15and it was in a sorry state.
0:46:16 > 0:46:20Now it feels much lighter and brighter.
0:46:20 > 0:46:23We've had a new ceiling put in, a new floor has gone down, as well.
0:46:23 > 0:46:25The decoration is changing also -
0:46:25 > 0:46:27a lot lighter colours -
0:46:27 > 0:46:29because the main events that we want to go on are weddings,
0:46:29 > 0:46:32so obviously quite open and a nice feel about it.
0:46:32 > 0:46:34We're about 50 percent complete,
0:46:34 > 0:46:39so another couple of weeks now and hopefully things should be ready to go up there
0:46:39 > 0:46:41and we'll be able to have our first event.
0:46:41 > 0:46:44Two weeks? Wow!
0:46:44 > 0:46:47The renovation of the hotel only began three months ago,
0:46:47 > 0:46:50as Gregory and his dad David were waiting
0:46:50 > 0:46:54until they had the alcohol licence from the council.
0:46:54 > 0:47:00Their team of tradesmen have made impressively quick work of it so far.
0:47:00 > 0:47:04The priority was given to getting the bar and function suite ready,
0:47:04 > 0:47:08so work is yet to begin on the five hotel rooms on the top floor.
0:47:08 > 0:47:12Originally, David estimated the total renovation cost
0:47:12 > 0:47:15to be between 50 and 60,000.
0:47:15 > 0:47:17So, how much have they spent?
0:47:17 > 0:47:21So far, we've spent just under 30,000,
0:47:21 > 0:47:23but by the time we finish with the five letting rooms,
0:47:23 > 0:47:27it should be about £40,000 spent on the building.
0:47:27 > 0:47:32Father and son have certainly worked at keeping their renovation costs down.
0:47:32 > 0:47:35Add the £40,000 projected spend
0:47:35 > 0:47:39to the original auction purchase price of £46,000
0:47:39 > 0:47:44and they'll have invested a total of £86,000.
0:47:45 > 0:47:48Even though this has been Gregory's first property development
0:47:48 > 0:47:50since joining his dad and the family business,
0:47:50 > 0:47:56the responsibility for project managing the renovation has fallen on his shoulders.
0:47:56 > 0:47:59It would appear he's making his dad proud.
0:47:59 > 0:48:01My father's been away for quite some time,
0:48:01 > 0:48:04so I've been managing things while he's been away.
0:48:04 > 0:48:06And it's...
0:48:06 > 0:48:10It's a lot more than I thought has gone on here! I wasn't expecting it to be this much.
0:48:10 > 0:48:14It's my first project on my own. We've done a couple of projects since this, which I've completed.
0:48:14 > 0:48:17This one isn't quite complete yet, but, er,
0:48:17 > 0:48:19it's looking good so far.
0:48:19 > 0:48:23David are Gregory are not publicans, they're property developers,
0:48:23 > 0:48:26so they've found a tenant who will rent the premises
0:48:26 > 0:48:29and run the bar and function suite.
0:48:32 > 0:48:37So, is it time for the father-and-son team to get the pink fizz out?
0:48:37 > 0:48:39We asked two local property experts
0:48:39 > 0:48:43for their thoughts on the work so far.
0:48:43 > 0:48:45What a lot of property for the money.
0:48:45 > 0:48:47Amazing! An amazing space!
0:48:47 > 0:48:50They've done a really good job with the work.
0:48:50 > 0:48:52It's in keeping with the age of the building
0:48:52 > 0:48:55and it's very sympathetically done. It looks really good.
0:48:55 > 0:49:00It's an absolutely fantastic building. It's a great size. Erm...
0:49:00 > 0:49:03It offers lots of opportunities.
0:49:03 > 0:49:06It could be a good viable business.
0:49:06 > 0:49:09Well, they seem impressed so far,
0:49:09 > 0:49:13but will this investment of £86,000 be rewarded with bubbles
0:49:13 > 0:49:15or bounced out of the bar?
0:49:15 > 0:49:18What do they think it would make if resold as it is?
0:49:18 > 0:49:20This is a very difficult question.
0:49:20 > 0:49:23There are so many pubs for sale in South Wales,
0:49:23 > 0:49:25over 150.
0:49:25 > 0:49:31As it stands, I would probably put a value of about 90 to 150,000 on it.
0:49:31 > 0:49:34When it's completed and it's earning revenue,
0:49:34 > 0:49:37that's a different story.
0:49:37 > 0:49:41Once fully renovated, I think the property could resale for about 50,000.
0:49:41 > 0:49:43I don't think there is much profit to be made
0:49:43 > 0:49:47because there are a lot of large similar properties within the Valleys areas.
0:49:47 > 0:49:52Those valuations mean either a profit of 64,000
0:49:52 > 0:49:55or a loss of 36,000.
0:49:55 > 0:50:01The estate agents have wildly differing views on the prospects for the property's current value.
0:50:01 > 0:50:06The higher valuation was given because the estate agent believes the licence adds significant value,
0:50:06 > 0:50:09making it more desirable for rental.
0:50:09 > 0:50:13The only thing that's really certain is the uncertainty
0:50:13 > 0:50:15in this economic climate.
0:50:15 > 0:50:17What could it be leased for?
0:50:17 > 0:50:20Lease-wise, I think the first people that come in
0:50:20 > 0:50:22wouldn't pay more than £30,000 a year.
0:50:22 > 0:50:24If I was to rent this property out,
0:50:24 > 0:50:28I would look to achieve between nine and 10,000 per annum.
0:50:28 > 0:50:32Those differing values represent just how volatile the market is.
0:50:32 > 0:50:37However, the good news is that this father-and-son team already have a tenant.
0:50:37 > 0:50:40So, what did they manage to get?
0:50:40 > 0:50:44I think the values were quite good. I agree with the higher valuation,
0:50:44 > 0:50:47purely because we are renting it out for 26,000 per annum.
0:50:50 > 0:50:54That gives David and Gregory a whopping yield of just over 30 percent.
0:50:54 > 0:50:56Amazing!
0:51:04 > 0:51:08The renovation of this property, from derelict and damp-ridden to its former glory,
0:51:08 > 0:51:12has been Gregory's first job for the family business,
0:51:12 > 0:51:15and it's great to see how he's thrived on it.
0:51:15 > 0:51:18I would definitely do it again. It's been quite a big undertaking,
0:51:18 > 0:51:22but I've enjoyed it and I'm looking forward to the rest of my future.
0:51:26 > 0:51:27Now it's back to Derby,
0:51:27 > 0:51:33where Sean and Cheryl bought this two-bedroom bungalow for £120,000.
0:51:33 > 0:51:35It had a distinctively vintage feel to it,
0:51:35 > 0:51:37but was a solid little property,
0:51:37 > 0:51:41with room to extend out into that large garden.
0:51:41 > 0:51:44Tell me why you wanted to buy the bungalow.
0:51:44 > 0:51:47Well, initially, it was Cheryl's mum and dad,
0:51:47 > 0:51:51- they were looking for a bungalow for their later years.- Right.
0:51:51 > 0:51:56They asked me to come up to give them a few pointers about what needed doing
0:51:56 > 0:51:58and they decided it was too much for them.
0:51:58 > 0:52:01- Oh!- You know, with the work that needed doing,
0:52:01 > 0:52:04so I just thought I'd take a punt at it.
0:52:04 > 0:52:07I went to the auction and I ended up with it!
0:52:07 > 0:52:11So, you started out with no intention whatsoever of buying a bungalow?
0:52:11 > 0:52:14- No! - THEY LAUGH
0:52:14 > 0:52:16They saw its potential for a profit
0:52:16 > 0:52:20and grabbed the chance to pluck this property from the 1960s
0:52:20 > 0:52:23and make a few pounds while they were at it.
0:52:23 > 0:52:26So let's catch up with them nine months later
0:52:26 > 0:52:29and see how they've got on.
0:52:39 > 0:52:43The headline here is that Sean and Cheryl have extended the bungalow,
0:52:43 > 0:52:46making a lovely big kitchen.
0:52:46 > 0:52:48And by taking a bit of the old sitting room,
0:52:48 > 0:52:52they've created a third bedroom.
0:52:55 > 0:52:58Each room has been redecorated and refloored,
0:52:58 > 0:53:01with windows replaced where necessary.
0:53:03 > 0:53:06The bathroom has all been replaced with a brand-new suite.
0:53:06 > 0:53:08It looks clean, modern and fresh.
0:53:08 > 0:53:12But the main difference is down in the kitchen.
0:53:12 > 0:53:14Top marks to Cheryl
0:53:14 > 0:53:17for helping choose those fixtures and fittings.
0:53:17 > 0:53:19We kept it quite neutral,
0:53:19 > 0:53:22but we had the black tiles in our old house
0:53:22 > 0:53:27and I always thought they looked really effective against the cream units.
0:53:27 > 0:53:32But other than that, we just like to keep it neutral, a nice clean effect.
0:53:33 > 0:53:36It's brighter, cleaner, more modern and much bigger.
0:53:37 > 0:53:41The garden was plenty big enough to accommodate the new extension
0:53:41 > 0:53:45and I'm particularly pleased to see that the old asbestos garage
0:53:45 > 0:53:48is a thing of the past.
0:53:49 > 0:53:51Out here, we've got the patio.
0:53:51 > 0:53:56There was a lot of work involved because we had to raise the grounds to get it level.
0:53:56 > 0:53:59It's worked out really nice. I'm very pleased with it.
0:53:59 > 0:54:03You can sit out here and have a cup of tea in the evening, or a meal even.
0:54:03 > 0:54:07Where I'm stood is where the old asbestos garage was.
0:54:07 > 0:54:10I had to get three professional guys in to remove it.
0:54:10 > 0:54:14But since then, I've had an asbestos training course myself
0:54:14 > 0:54:19and, in future, I'll be able to remove any asbestos garages myself.
0:54:19 > 0:54:23At least that'll save him money on future projects.
0:54:23 > 0:54:26Sean has done most of the work himself, apart from the rewiring,
0:54:26 > 0:54:29which he got a certified electrician to do.
0:54:31 > 0:54:34Cheryl was never going to get involved in the labouring,
0:54:34 > 0:54:36but beyond her ideas for the kitchen,
0:54:36 > 0:54:42has she kept to her promise of providing the workers with tea?
0:54:42 > 0:54:45She has. She's kept us all watered and fed!
0:54:45 > 0:54:50That was one of the biggest jobs - keeping all the lads here when they were here.
0:54:50 > 0:54:53They all appreciated her bacon and egg sandwiches!
0:54:53 > 0:54:58Taking on a project like this can often be the source of arguments for couples.
0:54:58 > 0:55:03So, have there been any argy-bargies between Sean and Cheryl?
0:55:03 > 0:55:06- No, I don't think we've had any disagreements, have we?- No.
0:55:06 > 0:55:10Most of the time, Sean's doing the building work
0:55:10 > 0:55:15and I'm just making drinks and producing catering, so...!
0:55:15 > 0:55:18But, no, I think we've got on quite well, haven't we?
0:55:18 > 0:55:23- We're never together long enough to have an argument, are we? - No! We're far too busy!
0:55:23 > 0:55:28It sounds like a good way of avoiding arguments - keeping out of each other's way!
0:55:28 > 0:55:30Did he manage to get it all done
0:55:30 > 0:55:33in the six months that he thought it would take?
0:55:33 > 0:55:38We didn't actually start it for three or four months because of work commitments,
0:55:38 > 0:55:42so if we had started when we initially come in,
0:55:42 > 0:55:45we probably would've been right on the timescale,
0:55:45 > 0:55:49but because we started later, we got finished later,
0:55:49 > 0:55:52but the timescale of six months was right.
0:55:52 > 0:55:56Sean originally set the budget at 10 to 12,000 pounds
0:55:56 > 0:55:59if he didn't do an extension.
0:55:59 > 0:56:04But he has now managed the whole project for 30,000, which isn't bad at all.
0:56:04 > 0:56:09Now that the work is all complete, it's ready to be put up for resale.
0:56:09 > 0:56:12I've got a viewer this afternoon
0:56:12 > 0:56:14and it's going on the market on Friday.
0:56:14 > 0:56:18Hopefully, once we get a few people inside the door,
0:56:18 > 0:56:20they might snap it up.
0:56:20 > 0:56:24Indeed they might. But how much could they hope to sell it for?
0:56:24 > 0:56:26Let's ask two local property experts
0:56:26 > 0:56:30what they think of the work done and the value they've added.
0:56:30 > 0:56:32I think it's a lovely property.
0:56:32 > 0:56:34It has been refurbished to a high standard.
0:56:34 > 0:56:37Lovely and neutral. It would suit every taste.
0:56:37 > 0:56:40The property has been finished to an exceptionally high standard.
0:56:40 > 0:56:44What catches my eye is the lovely kitchen-diner,
0:56:44 > 0:56:47ideal for maybe someone that's got a family.
0:56:49 > 0:56:52What about that all-important resale value, then?
0:56:52 > 0:56:55Remember, they paid £120,000 at auction
0:56:55 > 0:56:57and £30,000 for the work,
0:56:57 > 0:57:01making a total outlay of £150,000.
0:57:02 > 0:57:05If I were to value this property to go onto the market now,
0:57:05 > 0:57:11I would recommend an asking price of between 185 and 190,000.
0:57:11 > 0:57:14In my opinion, if the property was to be placed on the open market,
0:57:14 > 0:57:17I would suggest an initial asking price of £200,000,
0:57:17 > 0:57:22to achieve in the region of £190,000 to £195,000.
0:57:22 > 0:57:25- That's very good. - Very pleased with that.
0:57:26 > 0:57:29They have every right to be pleased with this.
0:57:29 > 0:57:32That top valuation of 195,000
0:57:32 > 0:57:37would give them a profit of £45,000, minus tax and expenses.
0:57:38 > 0:57:43This was their first time at auction and they hadn't even set out to buy it.
0:57:43 > 0:57:47So, will we be seeing them at an auction again?
0:57:47 > 0:57:50We really want to reinvest the money into another property,
0:57:50 > 0:57:53to hopefully do the same again.
0:57:53 > 0:57:56It's gone really well. We'll have a bit of a rest
0:57:56 > 0:57:59and then, hopefully, we'll go back to auction
0:57:59 > 0:58:02- and start all over again.- Mm.
0:58:05 > 0:58:07That is all we've got time for.
0:58:07 > 0:58:11Yes, we hope we've inspired, stimulated and maybe excited you!
0:58:11 > 0:58:15- Join us next time for more Homes Under The Hammer. - See you then!- Goodbye.
0:58:15 > 0:58:18Subtitles by Red Bee Media Ltd