0:00:02 > 0:00:04After years in the property business
0:00:04 > 0:00:07Lucy and I realise that what goes up sometimes comes down.
0:00:07 > 0:00:10Everyone knows the market's taken a tumble,
0:00:10 > 0:00:12but it needn't always be bad news.
0:00:12 > 0:00:16If you do your research and you buy at auction,
0:00:16 > 0:00:19you can sometimes bag yourself a bargain.
0:00:45 > 0:00:51Auctions aren't for everyone, but for some people, they are the only way to buy property.
0:00:51 > 0:00:53But they can be nerve-racking.
0:00:53 > 0:00:57At least when the hammer goes down, the property can be yours in weeks.
0:00:57 > 0:01:00Yes. So, let's see what we've found
0:01:00 > 0:01:03by trawling through the auction catalogues for you today.
0:01:04 > 0:01:10'I peruse a plot in Cornwall that could leave someone sitting pretty.'
0:01:10 > 0:01:13I reckon you could end up pretty much doubling your money.
0:01:14 > 0:01:18'Looks can be deceptive at this London two-bed flat.'
0:01:18 > 0:01:23- LAUGHS - This new contemporary door doesn't match the interior of this property.
0:01:24 > 0:01:29'And you'll be spoilt for choice with this mixed-use property in Nottinghamshire.'
0:01:29 > 0:01:34All in all, this property is giving that sense of lots of options.
0:01:36 > 0:01:38'These properties were sold at auction.
0:01:38 > 0:01:43'We'll find out who bought them and what they paid when they went under the hammer.'
0:01:53 > 0:01:58Today, I'm in Daphne Du Maurier country - quite literally.
0:01:58 > 0:02:02This is the hilltop village of Tywardreath in Cornwall.
0:02:02 > 0:02:06The world-famous novelist lived close to here for a while.
0:02:06 > 0:02:12One of her novels was named after this village because, in Cornish,
0:02:12 > 0:02:14Tywardreath means The House On The Strand.
0:02:14 > 0:02:19It was a gripping tale of mediaeval time travel.
0:02:21 > 0:02:24'If you were to travel back to Tywardreath in the days of yore,
0:02:24 > 0:02:28'you'd have needed a boat because, until the end of the 18th century,
0:02:28 > 0:02:31'much of this land would have been under the sea.
0:02:31 > 0:02:34'This was a bustling natural harbour but over time
0:02:34 > 0:02:37'the sea retreated leaving dry land.'
0:02:40 > 0:02:46And that's what I'm here to see - a plot of land at a guide price of £70,000 to £100,000.
0:02:46 > 0:02:48It's just through this gate.
0:02:50 > 0:02:53We're on the outskirts of the village,
0:02:53 > 0:02:57by the side of this fairly busy road, so good communications
0:02:57 > 0:02:59and good location.
0:02:59 > 0:03:03The plot itself, well, this is it. Lots of pampas grass and primroses.
0:03:03 > 0:03:06When it comes to being a building plot, what am I looking for?
0:03:06 > 0:03:09Something flat - it doesn't tick that box.
0:03:09 > 0:03:15Somewhere which could have good connections to services like sewerage, electricity and gas.
0:03:15 > 0:03:17Well, that needs to be investigated.
0:03:17 > 0:03:21But in terms of location? Fantastic!
0:03:23 > 0:03:25# Primrose Lane
0:03:26 > 0:03:29# Life's a holiday on Primrose Lane
0:03:29 > 0:03:32# Just a holiday on Primrose Lane
0:03:33 > 0:03:35# With you... #
0:03:35 > 0:03:38'It's nice to wander around a plot
0:03:38 > 0:03:41'that's been untouched and dormant for a while.
0:03:41 > 0:03:44'With its overgrown foliage and wild flowers
0:03:44 > 0:03:47'it has become a haven for local wildlife.
0:03:47 > 0:03:52'I think the rural setting and proximity to the Cornish coastline,
0:03:52 > 0:03:56'as well as the amenities of St Austell, 15 minutes' drive away,
0:03:56 > 0:03:58'make this a prime spot.'
0:04:01 > 0:04:05Even in these tough economic times, especially in the building world,
0:04:05 > 0:04:09good plots of land are still highly in demand.
0:04:09 > 0:04:12This particular plot has another ace up its sleeve.
0:04:12 > 0:04:17It's already got full planning permission for two houses.
0:04:17 > 0:04:21Suddenly, that guide price is sounding very attractive, indeed.
0:04:23 > 0:04:25'For the person who bought this plot
0:04:25 > 0:04:28'for anything close to the guide price of 70,000 to 100,000
0:04:28 > 0:04:33'and has the means and know-how, it could be a fantastic opportunity.
0:04:33 > 0:04:36'The plans are for two semis with four bedrooms.
0:04:36 > 0:04:38'They're pretty big houses.
0:04:38 > 0:04:40'Is that right for the market here?
0:04:40 > 0:04:46'We asked a local property expert for his opinion.'
0:04:46 > 0:04:49The planning consent for two four-bedroom semi-detached houses,
0:04:49 > 0:04:51is going to be the most profitable way
0:04:51 > 0:04:54for a builder-developer to continue with that scheme.
0:04:54 > 0:04:57However, if it is sold to the owner-occupier,
0:04:57 > 0:05:01they may well envisage building their dream family home.
0:05:01 > 0:05:06'So, the two semis have planning permission and could be profitable.
0:05:06 > 0:05:08'What could possibly go wrong?'
0:05:09 > 0:05:12# Here comes that sinking feeling #
0:05:12 > 0:05:16There may be one issue with the land and that is, historically,
0:05:16 > 0:05:20the sea used to come lapping up against the border of this property.
0:05:20 > 0:05:25You may have to look at piling the foundations or raising it above the water table level
0:05:25 > 0:05:28to make sure there's no subsidence or movement.
0:05:28 > 0:05:33'Driving concrete or steel fabricated piles into the ground
0:05:33 > 0:05:36'is one way of making the foundations more stable.
0:05:36 > 0:05:40'There are other methods, but they all come at a cost.
0:05:40 > 0:05:42'Suddenly, what looks like a doddle of a build
0:05:42 > 0:05:44'might not be, after all.
0:05:44 > 0:05:47'Some heavy duty homework's required.
0:05:47 > 0:05:49'A good starting point
0:05:49 > 0:05:52'is your Local Authority building control department.
0:05:52 > 0:05:56'They can give you an idea of the typical soil type of the area
0:05:56 > 0:05:59'and what kind of foundations you might need.
0:05:59 > 0:06:01'You could get an engineer to survey the land,
0:06:01 > 0:06:04'which would give you more information.
0:06:04 > 0:06:08'Next, you'd need to get the figures for what building costs might be.
0:06:08 > 0:06:14'Let's find out what returns are likely for the two semis, then we can do the maths.'
0:06:14 > 0:06:16If the buyer continues with the current scheme,
0:06:16 > 0:06:19each four-bedroom semi-detached house
0:06:19 > 0:06:23could be worth in the region of £275,000.
0:06:23 > 0:06:26'And if the houses were to be let?'
0:06:26 > 0:06:32Each four-bedroom semi-detached house could fetch between £700 and £800 per calendar month.
0:06:32 > 0:06:35# Life's a holiday on Primrose Lane... #
0:06:37 > 0:06:40So, do the numbers stack up?
0:06:40 > 0:06:42I think that, almost certainly, they do.
0:06:42 > 0:06:45Buy this plot for around the guide price,
0:06:45 > 0:06:49spend between £80,000 and £120,000 building each property,
0:06:49 > 0:06:53and I reckon you could end up pretty much doubling your money.
0:06:53 > 0:06:57The primroses are beautiful but I think the reality is...
0:06:57 > 0:06:59they're going to go.
0:06:59 > 0:07:03Let's find out who bought this place when it went under the hammer.
0:07:03 > 0:07:05Lot 173.
0:07:05 > 0:07:08It's a development site, planning potential
0:07:08 > 0:07:11for two four-bed houses.
0:07:11 > 0:07:15Lovely site, looking straight out over the little lane.
0:07:15 > 0:07:19It ought to be 80,000, shouldn't it? 80?
0:07:19 > 0:07:23I'm sorely tempted to not go less than 70. 70 somewhere?
0:07:23 > 0:07:2670. Good man. 70 I've got. 70,000 I've got.
0:07:26 > 0:07:30At 70. At 70. At 70.
0:07:30 > 0:07:32At 70 once.
0:07:33 > 0:07:36At 70... two. 72, 72.
0:07:36 > 0:07:3974. At 74.
0:07:39 > 0:07:4376, if you'd like it, sir. 74 on my right. Looking for six.
0:07:43 > 0:07:45At 74 on my right.
0:07:45 > 0:07:48At 74 once.
0:07:48 > 0:07:51At 74 twice.
0:07:51 > 0:07:55At 74,000. Bid's on my right. Sure and done? Here we go.
0:07:55 > 0:07:59At 74 and out. Sir, yours.
0:07:59 > 0:08:02'Although it was their solicitor who did the bidding
0:08:02 > 0:08:05'and paid £74,000,
0:08:05 > 0:08:09'the team who will get their hands dirty are project manager Roger,
0:08:09 > 0:08:13'on the left, and his brother Graham, who's an electrician.'
0:08:13 > 0:08:17# Two brothers, on their way
0:08:17 > 0:08:23# One wore blue and one wore grey... #
0:08:23 > 0:08:25'£74,000 was a great price
0:08:25 > 0:08:30'but these days, finance is hard to find, particularly for plots.'
0:08:30 > 0:08:33- Graham, Roger, good to meet you. - BOTH: Hello.
0:08:33 > 0:08:37Congratulations. Tell me why you wanted to buy this bit of land.
0:08:37 > 0:08:39We've been watching it for a couple of years.
0:08:39 > 0:08:43It was only recently we saw it was going to auction,
0:08:43 > 0:08:47so we thought we'd go along and see what sort of price it'd go.
0:08:47 > 0:08:50- What do you think about the price you paid?- Excellent price.
0:08:50 > 0:08:54- It was the lower end of the estimate.- Yes, 74,000.
0:08:54 > 0:08:58- What do you put that down to? - Current economic climate.
0:08:58 > 0:09:01With the auctions, you need the money when the gavel goes down.
0:09:01 > 0:09:06- How much would you have paid? - We went with a stop mark of 110.
0:09:06 > 0:09:09- Wow!- So, we're quite happy.
0:09:09 > 0:09:13- I bet you had a few celebrations that night!- Too true.
0:09:13 > 0:09:16So that will all go into your profit margin, won't it?
0:09:16 > 0:09:20Into the profit, or it gives us a big contingency fund.
0:09:20 > 0:09:25- Comfort zone, cos you don't know what's in the ground. - Tell me about you two.
0:09:25 > 0:09:28We started up a firm last year, 50-50, building houses.
0:09:28 > 0:09:31We built a couple locally and sold those.
0:09:31 > 0:09:34- We've got four that we're building locally this year.- Wow.
0:09:34 > 0:09:41And this plot's come on the market as an extra, really, but the price attracted us.
0:09:41 > 0:09:44- TRAFFIC PASSES - Quite a busy road by the side.
0:09:44 > 0:09:47It is, but it's got a nice aspect
0:09:47 > 0:09:49and the village is a sought-after location.
0:09:49 > 0:09:53The plot itself is great, isn't it? With a steep bank.
0:09:53 > 0:09:57It doesn't make building easy, but the potential for views are great.
0:09:57 > 0:10:00Yeah, but there is a retaining wall we've got to put in.
0:10:00 > 0:10:05And because we're close to what used to be an inlet from the sea,
0:10:05 > 0:10:07we're not sure what's under the ground.
0:10:07 > 0:10:12As with all building, until you get in the ground, you don't know what you'll uncover.
0:10:12 > 0:10:16- What would the worst-case scenario be?- We would have to raft it.
0:10:16 > 0:10:19But we're hopeful it'll be conventional strip foundations.
0:10:19 > 0:10:23'Stand by - another lesson in foundations coming up.
0:10:23 > 0:10:27'Rafting is used on soils like clay or peat.
0:10:27 > 0:10:32'A reinforced concrete raft allows the building to float on the ground.
0:10:32 > 0:10:36'Rafting is an alternative to piling and strip foundations.
0:10:36 > 0:10:38'Pay attention!
0:10:38 > 0:10:42'That's a strip of concrete supporting load-bearing walls.
0:10:42 > 0:10:45'There will be questions later!'
0:10:45 > 0:10:48Tell me the plans for the plot. What exactly are you going to do?
0:10:48 > 0:10:53The existing planning is for two four-bedroom semi-detached houses.
0:10:53 > 0:10:56We'll probably run with those plans.
0:10:56 > 0:11:00I think it took quite a while in planning before
0:11:00 > 0:11:03and I've had experience before with the planners.
0:11:03 > 0:11:06You can waste two and a half years.
0:11:06 > 0:11:08We want to turn this round in the next 12 months.
0:11:08 > 0:11:12'Sticking with the current plans is smart.
0:11:12 > 0:11:15'The plot has various planning requirements, like a retaining wall,
0:11:15 > 0:11:18'terracing and flood prevention.'
0:11:18 > 0:11:22The Environment Agency recently upgraded the flood protection.
0:11:22 > 0:11:26So we've got to bring a finished floor level which is, I think,
0:11:26 > 0:11:281.1 metres above the pavement level.
0:11:28 > 0:11:31- Right. That's the latest guidelines? - Yeah.
0:11:31 > 0:11:34For this to be flooded would be extraordinary!
0:11:34 > 0:11:38It was a tidal inlet only a couple of hundred years ago.
0:11:38 > 0:11:43- It was said you could see the sea standing at the church gate.- Right!
0:11:43 > 0:11:51So...it's not impossible, then, if there is the global warning that they talk about,
0:11:51 > 0:11:53that it could flood again.
0:11:54 > 0:11:57# You can almost
0:11:58 > 0:12:01# See the sea... #
0:12:01 > 0:12:05The feel of the property. Is it in-keeping with the village?
0:12:05 > 0:12:10- Anything traditionally Cornish? - It's going to be a slate roof and stone coins.
0:12:10 > 0:12:15The planning authority wanted a cottagey feel to it.
0:12:15 > 0:12:17So, we will go with their wishes.
0:12:17 > 0:12:21- Who does the work? Who gets their hands dirty?- We divide it.
0:12:21 > 0:12:23Roger does all the project managing.
0:12:23 > 0:12:28I'm an electrician, so I spend all my time on site with other trades.
0:12:28 > 0:12:33The electrician side of things is a big cost and time side of everything.
0:12:33 > 0:12:35The fact that you're doing that is fantastic.
0:12:35 > 0:12:39What kind of figure are you thinking you might be able to sell them for?
0:12:39 > 0:12:42I think we'd sell them for 250, top end.
0:12:42 > 0:12:45We wouldn't get more, because of the Stamp Duty threshold.
0:12:45 > 0:12:50- You're looking at, potentially, over 100,000 profit on each one?- Yeah.
0:12:50 > 0:12:53- Result!- It is. - Realistic timescale for the work?
0:12:54 > 0:12:57With the other commitments we've already got on,
0:12:57 > 0:13:0212 months is where we would see to have this finished and on the market.
0:13:02 > 0:13:04Listen, congratulations.
0:13:04 > 0:13:08Look forward to seeing what you do to this plot!
0:13:08 > 0:13:10All right. Thanks very much.
0:13:10 > 0:13:17Well, Graham and Roger are clearly absolutely delighted with their purchase.
0:13:17 > 0:13:21To get it at that price with those potential profits, who wouldn't be?
0:13:21 > 0:13:26Lots of work to be done. Lots of exciting things to see when we return later in the show.
0:13:29 > 0:13:33'You can't get much more busy, bustling and urban than Battersea.
0:13:38 > 0:13:40'Hugely popular with young professionals,
0:13:40 > 0:13:43'it's full of fashionable shops, great transport links,
0:13:43 > 0:13:47'many green spaces and attractive housing stock.'
0:13:49 > 0:13:52The property I'm here to see is a bit of a puzzler.
0:13:52 > 0:13:58It's a two-bedroom flat with a guide price of 250,000,
0:13:58 > 0:14:00in need of modernisation.
0:14:00 > 0:14:06So, years of experience tell me I'm expecting something dingy and dated.
0:14:06 > 0:14:10Uh-uh! Look at the block. It looks brand spanking new.
0:14:10 > 0:14:15In fact, under that cladding there's a 1950s ex Local Authority building
0:14:15 > 0:14:20which recently received a facelift Hollywood would be proud of.
0:14:20 > 0:14:22Amazing!
0:14:22 > 0:14:27'If you look across the road, you can see what it looked like before.'
0:14:27 > 0:14:31# Everybody comes to Hollywood
0:14:31 > 0:14:35# They want to make it in the neighbourhood... #
0:14:35 > 0:14:39'There's nothing wrong with honest but rugged red brick,
0:14:39 > 0:14:42'but this new version has been honed and hammered
0:14:42 > 0:14:45'into a star of the future.'
0:14:45 > 0:14:50- LAUGHS - This new shiny contemporary door doesn't match the interior!
0:14:50 > 0:14:53Looks like it hasn't been painted in years!
0:14:53 > 0:14:57But what an incredible space! I love this hallway.
0:14:57 > 0:15:01You've got a generous kitchen - for London.
0:15:01 > 0:15:05Once you've installed the new kitchen, that will look amazing.
0:15:05 > 0:15:07And a really nice lounge area.
0:15:07 > 0:15:10What would I do with these doors? I'm not sure.
0:15:10 > 0:15:14Perhaps upgrade the glass, paint it some muted tones,
0:15:14 > 0:15:18some nice ironmongery, big chunky silver door handles.
0:15:18 > 0:15:20Could be quite a statement piece.
0:15:20 > 0:15:23New windows overlooking a little garden.
0:15:23 > 0:15:26I love this flat. It's got a fantastic feel to it.
0:15:26 > 0:15:30For a central London location, it's a great space.
0:15:31 > 0:15:39# This is the modern world... #
0:15:39 > 0:15:43'I'm sure the look was once very contemporary and modern,
0:15:43 > 0:15:46'but times change and so must this leasehold flat.
0:15:46 > 0:15:50'Put down some wooden flooring, modernise that fireplace
0:15:50 > 0:15:53'and make the most of the layout.
0:15:54 > 0:15:58'That feeling of space continues in the bedroom at the front.
0:15:58 > 0:16:00'It's a good-sized double.
0:16:02 > 0:16:07'The second bedroom opposite the front door is no tiny single either.
0:16:07 > 0:16:11'It all goes a bit pear-shaped when we get to the bathroom.
0:16:11 > 0:16:15'This is one room that strikes me as small for modern living.
0:16:15 > 0:16:20'Where the flat does win points for London is the outside space.'
0:16:21 > 0:16:24Yes, it's overlooked. Yes, it's not very big.
0:16:24 > 0:16:28But this little patch of grass adds 50 grand to the value of this place.
0:16:28 > 0:16:31That is some expensive lawn!
0:16:36 > 0:16:38'Yup, that's it - all of it.
0:16:38 > 0:16:41'And, no, the grass isn't made of gold.
0:16:41 > 0:16:46'For London buyers, this private outside space is worth its weight in the stuff.
0:16:46 > 0:16:52'Around the back is the communal area, which is well presented and maintained.
0:16:52 > 0:16:57'This really is a bit of a star, but is it one I'd want to sign up?
0:16:57 > 0:17:01'Unfortunately, that's not as straightforward as it may seem.'
0:17:01 > 0:17:03Why unfortunately?
0:17:03 > 0:17:09Well, as an investor, I'd have wanted to have bought before the work was carried out.
0:17:09 > 0:17:12Snapped up a bargain and then, bingo!
0:17:12 > 0:17:17Suddenly, you're sitting pretty with a property people are queuing around the block for.
0:17:17 > 0:17:19And the value?
0:17:19 > 0:17:26On the open market, this facade would add 40 grand to the price of the flat just like that,
0:17:26 > 0:17:28without you having to lift a finger.
0:17:28 > 0:17:31Ooh! I hate feeling like I've missed out.
0:17:32 > 0:17:34# Oh, did I miss again?
0:17:35 > 0:17:38# I bet I missed again, o-oh... #
0:17:38 > 0:17:43'This facelift's no freebie. It states clearly in the legal pack
0:17:43 > 0:17:47'that the new owner is liable for a percentage of the cost of that work.
0:17:47 > 0:17:51'It may pale into insignificance against the amount of value added,
0:17:51 > 0:17:55'but it does need to be factored into the equation.
0:17:56 > 0:18:01'What does a local property expert make of this flat that was guided
0:18:01 > 0:18:03'at 250,000?'
0:18:03 > 0:18:08From the outside, very smart, very presentable, very modern and incredibly desirable.
0:18:08 > 0:18:13Inside, as it stands, the property does need modernising throughout.
0:18:13 > 0:18:16It's very spacious, good-sized double bedrooms
0:18:16 > 0:18:19and a decent garden as well, so fantastic potential.
0:18:21 > 0:18:27'If the inside of the flat was renovated to a Hollywood A-lister standard like the outside,
0:18:27 > 0:18:30'what effect could that have on its resale value?'
0:18:30 > 0:18:35Once renovated, I would suggest £475,000 to £500,000.
0:18:35 > 0:18:37'And if rented out?'
0:18:37 > 0:18:43For rental, once renovated, it would achieve between £1,800 and £2,000 per calendar month.'
0:18:43 > 0:18:45You can't judge a book by its cover.
0:18:45 > 0:18:49I think this flat has huge potential
0:18:49 > 0:18:53in an area that's always extremely popular, with prices to match.
0:18:53 > 0:18:55Let's find out who went for it at the auction.
0:18:55 > 0:19:01Lot one, a purpose-built two-bed flat, sought-after location,
0:19:01 > 0:19:05just round the corner from Clapham Junction shops and so on.
0:19:05 > 0:19:07Anyone kick off 250?
0:19:08 > 0:19:12She just beat you. 250. 255? 260?
0:19:12 > 0:19:15265? 270? 275?
0:19:15 > 0:19:20280? 285? 290? 295? 300?
0:19:20 > 0:19:23305? 310? 315?
0:19:23 > 0:19:28320? Coming to you. You're 320. 325?
0:19:29 > 0:19:32325? Madam, with you. 325.
0:19:32 > 0:19:35330? 335?
0:19:36 > 0:19:39335. 340? 345?
0:19:41 > 0:19:44350? 355?
0:19:45 > 0:19:48355, new spot. 360...?
0:19:48 > 0:19:51'It was a popular lot on auction day.
0:19:51 > 0:19:54'We rejoin the bidding at 400,000.'
0:19:54 > 0:19:56400? 400, back in.
0:19:56 > 0:19:59401? 401. 402?
0:19:59 > 0:20:01403?
0:20:01 > 0:20:03404?
0:20:04 > 0:20:07405? 406?
0:20:07 > 0:20:10If not, 405. Anyone else?
0:20:10 > 0:20:13It's with you. 405. First time.
0:20:13 > 0:20:16Second time. Third and last time...
0:20:16 > 0:20:19Sold, 405. Well done, madam.
0:20:19 > 0:20:24'The successful bidder in blue, partly hidden from view, was Stephanie.
0:20:25 > 0:20:30'She's retired, but does have a part-time job teaching English as a foreign language
0:20:30 > 0:20:32'and sometimes resides in France.
0:20:32 > 0:20:40'She clearly felt this place spoke to her, paying 155,000 over the guide price to bag it.'
0:20:40 > 0:20:44- Stephanie, congratulations. - Thank you.- I really like this flat.
0:20:44 > 0:20:48It's got an amazing spacious feel to it in such a central location.
0:20:48 > 0:20:52- Glad you think so.- Tell me what led you to this property.
0:20:52 > 0:20:55Well, I have been looking for at least six months,
0:20:55 > 0:21:00through the traditional way, through the letting agents, estate agents.
0:21:00 > 0:21:05I wanted a ground floor flat with a little garden
0:21:05 > 0:21:07and decent sized rooms.
0:21:07 > 0:21:10It's really been difficult, in my price range, to find it.
0:21:10 > 0:21:15So I thought I'd look in the auctions. It's the first time and a bit scary.
0:21:15 > 0:21:18Do you feel you've got the flat that's right for you?
0:21:18 > 0:21:23I'll only know that for sure when it's been refurbed, but I think so.
0:21:23 > 0:21:25Fingers crossed.
0:21:25 > 0:21:29- Your ultimate plan is to let this out or to sell it on?- To let it.
0:21:29 > 0:21:33Because I want to improve my semi-retired income.
0:21:33 > 0:21:39Possibly, after a year or six months, I might consider selling it.
0:21:39 > 0:21:41Stephanie, tell me a little about yourself.
0:21:41 > 0:21:47- Well, I live on a houseboat in Chelsea.- Wow! - That was built ages ago.
0:21:47 > 0:21:49What is it like living on a houseboat?
0:21:49 > 0:21:53The nice thing is that it's a bit more like being in the country.
0:21:53 > 0:21:58You're on the river and you've got wildlife around you.
0:21:58 > 0:22:03It's quite quiet and it's rather special. You've got a lot of sky as well.
0:22:03 > 0:22:08'How lovely. What a way to live, especially in London.'
0:22:08 > 0:22:11# Took a trip on a houseboat
0:22:11 > 0:22:14# It's fun, you and me... #
0:22:16 > 0:22:21'Less lovely was the 7,000 Stephanie had to pay to the freeholder
0:22:21 > 0:22:24'towards the exterior refurbishment of this property.
0:22:24 > 0:22:26'Ouch!
0:22:27 > 0:22:35'Added to her £405,000 purchase price, Stephanie's total investment so far is 412 grand.
0:22:35 > 0:22:38'That's before she's done any work to it.'
0:22:39 > 0:22:41I've got to rewire.
0:22:41 > 0:22:45I'm moving a badly placed gas combi boiler into a cupboard.
0:22:45 > 0:22:48I'm going to completely redo the kitchen and make it nice,
0:22:48 > 0:22:52including a dishwasher and everything like that.
0:22:52 > 0:22:58I might put a breakfast bar in. I was going to ask you whether that might be attractive or not bother.
0:22:58 > 0:23:00You always lose a bit of storage.
0:23:00 > 0:23:05But it's just so worthwhile to be able to sit down, have a sandwich in your kitchen.
0:23:05 > 0:23:08- That's what I thought. Do you think so?- Definitely.
0:23:08 > 0:23:11It isn't an elderly thing, then? It's a convenience thing.
0:23:11 > 0:23:16- It's not an elderly thing! I'm quite keen on little tables.- Exactly.
0:23:16 > 0:23:20The biggest table you can get in there without it looking too big will be the thing to do.
0:23:21 > 0:23:26'Stephanie has a budget of around 16,000 - that's not a great deal,
0:23:26 > 0:23:30'considering she'll need to change both the kitchen and bathroom
0:23:30 > 0:23:32'and fit all the appliances.
0:23:32 > 0:23:36'She's currently getting quotes from two contracting companies
0:23:36 > 0:23:39'and hopes to have it all done in a month.'
0:23:39 > 0:23:45- Are you going to enjoy this?- I think I shall, when I've got over the, "Ugh! What can we do with this?"
0:23:45 > 0:23:49And I can see it beginning to take shape the way I want it.
0:23:49 > 0:23:51Stephanie, I can't wait to see what you do here.
0:23:51 > 0:23:56- Congratulations and good luck with the project. - Thank you very much, Lucy.
0:23:57 > 0:24:04Stephanie has a fabulous flat and a marvellous opportunity to add value and transform this place.
0:24:04 > 0:24:07I can't wait to see how she gets on.
0:24:07 > 0:24:09Join me later in the programme to find out.
0:24:10 > 0:24:14'Coming up, I'll view this mixed-use property in Nottinghamshire,
0:24:14 > 0:24:16'once I've decided how to make my entrance.'
0:24:16 > 0:24:19House way? Shop way?
0:24:20 > 0:24:25'In London, we find out if Stephanie's big spend left her smiling.'
0:24:25 > 0:24:30It's been worth the extra expense, the careful planning and rejigging. I'm delighted with it.
0:24:32 > 0:24:37'First, did the earth move for Roger and Graham on this Cornish plot?'
0:24:37 > 0:24:40We moved out about 2,000 tonnes of soil.
0:24:45 > 0:24:49'We return to Cornwall now, the hilltop village of Tywardreath.
0:24:49 > 0:24:54'In Cornish, that translates to House On The Strand.
0:24:54 > 0:24:58'Developer brothers Roger and Graham paid £74,000 for this land,
0:24:58 > 0:25:02'which came with planning permission for two four-bedroom semis.
0:25:02 > 0:25:06'They knew the area pretty well, but they also knew the problems
0:25:06 > 0:25:11'that might lurk under the ground of this primrose-covered plot.'
0:25:11 > 0:25:14We're close to what used to be an inlet from the sea.
0:25:14 > 0:25:20As with all building, until you get in the ground, you don't know what you're going to uncover.
0:25:20 > 0:25:23'Electrician Graham lives 25 miles away.
0:25:23 > 0:25:28'Last year, the brothers went 50-50 on a joint building company.
0:25:28 > 0:25:32'They've built and sold two houses and have four more they're building,
0:25:32 > 0:25:34'plus the two they're going to build here.'
0:25:34 > 0:25:40- Who actually gets their hands dirty? - Roger does all the project managing.
0:25:40 > 0:25:44I'm an electrician so I spend all my time on site with the other trades.
0:25:44 > 0:25:47What's the projected build costs?
0:25:47 > 0:25:51- We're looking at about 200,000. - For the both?- For the both.
0:25:51 > 0:25:55'The brothers had a timescale of 12 months for the project.
0:25:55 > 0:26:00'We're back just two weeks shy of that, so not bad going at all.
0:26:01 > 0:26:04'This pair of semis is now built!
0:26:06 > 0:26:10'There's a nod to the Cornish cottage feel with slate roofing
0:26:10 > 0:26:13'and stone details.
0:26:13 > 0:26:18'The house on the right is finished and already on the market.
0:26:20 > 0:26:23'Inside, this is very much a contemporary home.
0:26:23 > 0:26:26'Take it away, Roger.'
0:26:26 > 0:26:30We put in a reasonably modern kitchen with a gloss finish
0:26:30 > 0:26:33and the soft closes,
0:26:33 > 0:26:37even though the property is a cottagey sort of style.
0:26:37 > 0:26:40We've left it without the appliances.
0:26:40 > 0:26:45In a sale negotiation, we could add the American freezer, washing machine and dishwasher.
0:26:45 > 0:26:48This is one area where we changed the plan slightly.
0:26:48 > 0:26:51We brought the downstairs cloakroom underneath the stairs
0:26:51 > 0:26:55rather than leaving it across the front aspect window,
0:26:55 > 0:26:59which we thought was a big improvement to the original plan.
0:27:00 > 0:27:03'Upstairs, there are three bedrooms.
0:27:04 > 0:27:07'The master one has an en suite.
0:27:08 > 0:27:11'Plus this family bathroom.
0:27:12 > 0:27:15'What roles did the brothers take on the project?'
0:27:15 > 0:27:20I'm an electrician by trade, so I did all the first and second fix.
0:27:20 > 0:27:22Roger project managed it, so he's there every day.
0:27:24 > 0:27:28'The first job Roger had to undertake before building could start
0:27:28 > 0:27:31'was checking out the condition of the ground.'
0:27:31 > 0:27:33Because of the slope of the site
0:27:33 > 0:27:38and also planning obligations to stay above the flood plain,
0:27:38 > 0:27:40we moved out about 2,000 tonnes of soil
0:27:40 > 0:27:43just to get down to the level for the foundation.
0:27:43 > 0:27:47'The brothers knew they had to satisfy planning obligations.
0:27:47 > 0:27:51'The other big question was what kind of foundations would they need?
0:27:51 > 0:27:53'Would it be piling, rafting
0:27:53 > 0:27:58'or the more straightforward strip foundation work?'
0:27:58 > 0:28:00Fortunately, conventional foundations were OK.
0:28:00 > 0:28:05Till you get to that point where you've got your slab, anything could happen.
0:28:05 > 0:28:06'And it has.
0:28:06 > 0:28:10'The steep slope needed some brains to make it work,
0:28:10 > 0:28:14'so the garden is terraced and a huge retaining wall built.
0:28:14 > 0:28:16'At what cost?'
0:28:16 > 0:28:19It cost us about 20,000 to do the dig
0:28:19 > 0:28:23and put the retaining walls around the site.
0:28:23 > 0:28:26'So far, Roger and Graham have spent 12 months on the build,
0:28:26 > 0:28:30'as they've also been building two other properties at the same time.
0:28:30 > 0:28:33'How much more work is still required here?'
0:28:33 > 0:28:37This house is finished. It's on the market.
0:28:37 > 0:28:39The other house exterior's all finished.
0:28:39 > 0:28:42The interior needs to be first and second fixed.
0:28:42 > 0:28:46Six weeks, two months, that'll be on the market as well.
0:28:46 > 0:28:50'They had set a build cost for both houses of £200,000.
0:28:50 > 0:28:52'How's that fared?'
0:28:52 > 0:28:56It's looking like we're going to be pretty much on budget.
0:28:56 > 0:28:58We're at 174,000 at the moment.
0:28:58 > 0:29:02We've got a shell to finish on the house next door.
0:29:02 > 0:29:06That will bring us in to pretty much spot on the 200,000.
0:29:06 > 0:29:09'With the £74,000 they paid for the plot at auction,
0:29:09 > 0:29:14'that will bring their total investment to £274,000.
0:29:15 > 0:29:18'That was a tricky site.
0:29:18 > 0:29:21'The terracing feels a bit of a compromise.
0:29:21 > 0:29:23'What do two experts make of it?'
0:29:23 > 0:29:27They're very attractive houses, got great kerb appeal
0:29:27 > 0:29:29and sit nicely amongst the neighbouring homes.
0:29:29 > 0:29:32I was wondering how they were going
0:29:32 > 0:29:35to make it look not too steep at the back.
0:29:35 > 0:29:38They've done well. They've stepped it nicely.
0:29:38 > 0:29:43It'll be lawn and there'll be a shed in due course. That's a clever bit.
0:29:43 > 0:29:46It's not steep. It's really done well.
0:29:46 > 0:29:49Terracing it does make some useful areas,
0:29:49 > 0:29:54although I'm not entirely convinced it's best for very small children,
0:29:54 > 0:29:57unless there's a bit more landscaping.
0:29:57 > 0:30:00'Graham and Roger want to sell and move on to another development.
0:30:00 > 0:30:03'How much rental income could the properties generate?'
0:30:03 > 0:30:09I'd expect to be renting the properties out around £700, £750 per calendar month.
0:30:09 > 0:30:13Rental per calendar month, you're looking around £775.
0:30:13 > 0:30:18'If both houses were let, they could produce a yield of over 6%.'
0:30:18 > 0:30:21Yeah, yeah. That's...very good.
0:30:21 > 0:30:26That'd be a good return on the investment we made but that's not what we're going to do.
0:30:26 > 0:30:28'No, selling is the plan.
0:30:28 > 0:30:31'So, how much could each house be worth?'
0:30:31 > 0:30:37I would value these houses somewhere between £230,000 and £235,000.
0:30:37 > 0:30:43I'd expect the properties to sell for between £225,000 and £235,000.
0:30:43 > 0:30:47'If both houses sold for 235,000,
0:30:47 > 0:30:52'that would make a total of £470,000.
0:30:52 > 0:30:56'For Roger and Graham, that would mean a profit of 196,000
0:30:56 > 0:30:58'minus the usual tax and expenses.
0:30:58 > 0:31:00'Are they happy with that?'
0:31:00 > 0:31:04Yeah. Initially, we had a slightly higher valuation,
0:31:04 > 0:31:08but that was a little optimistic and that's a realistic price.
0:31:08 > 0:31:12'The brothers look like they'll be rewarded for spotting the potential of this plot
0:31:12 > 0:31:15'and not being deterred by the history of high tides.'
0:31:16 > 0:31:21It's been fantastic. Not all of them are like this.
0:31:21 > 0:31:23None of them are like it, normally,
0:31:23 > 0:31:26but I think that's a reflection of the state of the market.
0:31:26 > 0:31:30It's very difficult to get the finance and complete a build.
0:31:30 > 0:31:33That's why the site went for the price it went for.
0:31:35 > 0:31:40# I'm a su-undial... #
0:31:40 > 0:31:45'This is the Nottinghamshire market town of Sutton-in-Ashfield,
0:31:45 > 0:31:49'home to this, the largest sundial in Europe.
0:31:49 > 0:31:53'Could it be a sign that today's lot is a sunny proposition?'
0:31:54 > 0:31:58So, what am I here to see? Bit of an interesting one, this one.
0:31:58 > 0:32:02Here I am in this largely residential area.
0:32:02 > 0:32:05The property was, originally, just a house
0:32:05 > 0:32:09but at some stage in the past, it's been converted into a house
0:32:09 > 0:32:11with a shop on the front of it.
0:32:11 > 0:32:14So, one of those mixed-use opportunities.
0:32:14 > 0:32:17The guide price was 74,000 quid.
0:32:17 > 0:32:20Which way do I go in? House way? Shop way?
0:32:20 > 0:32:23House way? Shop way?
0:32:23 > 0:32:24Let's go for the shop.
0:32:28 > 0:32:30Huh, it's in a bit of a state.
0:32:30 > 0:32:35With commercial units, what we're interested in is the square footage.
0:32:35 > 0:32:39In the past, it's been a neighbourhood shop.
0:32:39 > 0:32:43You've got all these refrigeration units selling soft drinks.
0:32:43 > 0:32:45Lots of shelving!
0:32:45 > 0:32:49If you buy this place, you obviously get all the internals,
0:32:49 > 0:32:54and somebody on one of those auction websites would probably be quite interested in buying this.
0:32:54 > 0:32:56What you might do with it?
0:32:56 > 0:32:59It's got a lot of frontage and parking out the front.
0:32:59 > 0:33:02Is it viable? I don't know. Around here? Maybe.
0:33:02 > 0:33:06Worth doing some research, but a good starting point
0:33:06 > 0:33:10and it looks, I think, worse than it actually is.
0:33:16 > 0:33:20'This part of the property might have been used as a living room once
0:33:20 > 0:33:24'but I understand it's been a shop with the owner living next door
0:33:24 > 0:33:27'since some time in the 1930s.
0:33:27 > 0:33:29'Will it remain on the shelf?'
0:33:30 > 0:33:33For somebody looking to run the shop
0:33:33 > 0:33:38and live in the property at the same time, this place really is ideal.
0:33:38 > 0:33:41It couldn't be much closer linked.
0:33:41 > 0:33:44That's the shop. Small doorway then you're into the house.
0:33:44 > 0:33:49Kitchen clearly in need of some major reworks.
0:33:49 > 0:33:51The floor all over the place.
0:33:51 > 0:33:55But it's not a bad size and that's what you're looking at.
0:33:55 > 0:33:58You're committed to spending a bit of money sorting it out,
0:33:58 > 0:34:03but I think you've got a very good basic property to work with.
0:34:03 > 0:34:07Kitchen there, rear sitting room area, then up to the bedrooms.
0:34:09 > 0:34:14Up here, I like this nice-size landing area.
0:34:14 > 0:34:17Pretty traditional layout. Good sized bathroom.
0:34:17 > 0:34:21It needs sorting out, of course, but at least it's upstairs.
0:34:21 > 0:34:23Good-sized bedroom at the back, box room there,
0:34:23 > 0:34:26then to a reasonable sized double bedroom on the front.
0:34:26 > 0:34:33Another option for this place could be to rent out that shop unit as it is,
0:34:33 > 0:34:36close off the entrance between the shop and kitchen,
0:34:36 > 0:34:41then rent this out as a separate flat - it's a maisonette, really.
0:34:41 > 0:34:43That's another option.
0:34:43 > 0:34:47All in all, this property is giving that sense of lots of options.
0:34:47 > 0:34:50There's plenty of flexibility with the layout.
0:34:50 > 0:34:53It could be turned into two flats, one house
0:34:53 > 0:34:57or stay in its current configuration as a maisonette and shop.
0:34:57 > 0:35:01That would need its own loo facilities at the very least.
0:35:01 > 0:35:04You could run the shop and rent out the flat
0:35:04 > 0:35:06or rent out the shop and live in the flat.
0:35:06 > 0:35:10Options, options everywhere and if you were to keep the business going,
0:35:10 > 0:35:14you could utilise what's on offer outside.
0:35:15 > 0:35:19At the rear of the property, a big pile of rubbish!
0:35:19 > 0:35:22Lots of space, although most of it is concrete.
0:35:22 > 0:35:26You can see that it needs a bit of tender loving care
0:35:26 > 0:35:28to the things like windows and pointing.
0:35:28 > 0:35:32Quite a lot of space. This concrete area. Couple of double garages.
0:35:32 > 0:35:36Lots of little outbuildings and this little area of sort of garden.
0:35:36 > 0:35:39In terms of space, a big tick.
0:35:39 > 0:35:44In terms of the condition it's in, bit of an "uh-uh"!
0:35:44 > 0:35:47'Before you cross this property off your list
0:35:47 > 0:35:50'or give it a big tick, you need to weigh it up.
0:35:50 > 0:35:52'I'm seeing more commercial possibilities.
0:35:52 > 0:35:56'Perhaps a workshop or a builder's yard. There's certainly room.
0:35:56 > 0:35:59'All subject to getting change of use, of course.
0:35:59 > 0:36:02'What does the auctioneer who sold it reckon
0:36:02 > 0:36:04'is the best way forward for this property,
0:36:04 > 0:36:07'guided at £74,000?'
0:36:07 > 0:36:13The property's definitely got potential, in terms of segregating the upper floor accommodation.
0:36:13 > 0:36:15It could easily become a self-contained flat,
0:36:15 > 0:36:18depending on what you wanted to do downstairs.
0:36:18 > 0:36:21If it was made into two flats, that would increase its prospects
0:36:21 > 0:36:23quite significantly.
0:36:23 > 0:36:28They're easier to rent out and you'd derive a better income from them.
0:36:29 > 0:36:33I think it depends what you want to do with it, really.
0:36:33 > 0:36:38If you have a use for the shop and you were an owner-occupier, then you would add value.
0:36:38 > 0:36:41'Could this be a good investment?'
0:36:42 > 0:36:46If you were renting the property as a single unit, as it is now,
0:36:46 > 0:36:49but clearly with some money spent to upgrade it,
0:36:49 > 0:36:53you'd probably achieve a rental of about £8,000 a year.
0:36:53 > 0:36:58If you were to separate the upper floor accommodation and make a flat out of that,
0:36:58 > 0:37:01so that you rented a lock-up shop at ground floor level,
0:37:01 > 0:37:06you would probably have an aggregate income of nearer £10,000 a year,
0:37:06 > 0:37:10but you would have to spend a lot more money in order to achieve that.
0:37:10 > 0:37:15'Of course, much of the shop's value would lie in it being a going concern with an income.
0:37:15 > 0:37:20'What if the whole thing was sold in its current configuration?'
0:37:20 > 0:37:23If it was rented out as a single unit, as it has been,
0:37:23 > 0:37:26then as long as there is an active lease on the place,
0:37:26 > 0:37:29which would give greater appeal than an empty shop,
0:37:29 > 0:37:32it would probably achieve about £100,000.
0:37:32 > 0:37:37If you made a flat upstairs and were able to rent out the shop,
0:37:37 > 0:37:40you might even get up to £120,000.
0:37:41 > 0:37:43I'm a big fan of mixed-use developments.
0:37:43 > 0:37:48It's great to have commercial and residential and not have all your eggs in one basket.
0:37:48 > 0:37:52What plan did whoever bought this place hatch for its future use?
0:37:52 > 0:37:56Let's find out who that was when it went under the hammer.
0:37:59 > 0:38:01Lot 29 is a vacant retail sales unit
0:38:01 > 0:38:05with three-bedroomed living accommodation.
0:38:06 > 0:38:0975,000 for it? Bid me where you will. 68 for it?
0:38:09 > 0:38:1468? 65? Thank you. I'll take 65 as a starter.
0:38:14 > 0:38:16At £65,000.
0:38:16 > 0:38:1966 I've got. At 66. 67?
0:38:19 > 0:38:2267,000. 68?
0:38:22 > 0:38:2469,000. 70,000 I've got.
0:38:24 > 0:38:26At 70. 71?
0:38:27 > 0:38:3071? 71. At 72.
0:38:30 > 0:38:3373. 74? 73 and a half.
0:38:33 > 0:38:3774? 74 and a half?
0:38:37 > 0:38:4174,000. The bid's against you at 74,000.
0:38:41 > 0:38:43Going once. Going twice.
0:38:43 > 0:38:47Third and last chance. All done? £74,000?
0:38:48 > 0:38:51Sold at 74,000. Thank you.
0:38:51 > 0:38:56'Looking pleased with his successful bang-on-the-guide-price bid of 74,000
0:38:56 > 0:38:58'was Phil on the left here.
0:38:58 > 0:39:01'Next to him is his friend, John.
0:39:02 > 0:39:06'I met them at the property to hear their story.'
0:39:12 > 0:39:15- Phil, John, great to meet you both. - And you.
0:39:15 > 0:39:18Congratulations. Tell me why you wanted to buy this house.
0:39:18 > 0:39:22- I want to start my own letting agent's.- Right.
0:39:22 > 0:39:29I've been a landlord for ten years and decided the natural step was to start my own letting agent's.
0:39:29 > 0:39:33So you're going to utilise the shop bit or the whole thing?
0:39:33 > 0:39:36The shop, and then the house will be rented out.
0:39:36 > 0:39:39Wow! What's the relationship between you guys?
0:39:39 > 0:39:41We're friends, basically.
0:39:41 > 0:39:46I've worked with Phil for a number of years now, off and on.
0:39:46 > 0:39:51- I like to think I'm his right-hand man! - MARTIN LAUGHS
0:39:51 > 0:39:54- You're supposed to say "yes". - Oh, right. Yes.
0:39:54 > 0:39:56LAUGHTER
0:39:56 > 0:40:02- What's your involvement going to be? - I'm going to help Phil do lots of work on the property.
0:40:02 > 0:40:05- And I hope to be running the letting agency for him.- Fantastic.
0:40:05 > 0:40:12- You're going to do a bit of the work beforehand then build the place you're going to work in?- Basically.
0:40:12 > 0:40:15- Yeah. Very hands-on. - So what's the process now?
0:40:15 > 0:40:19- What's the steps to getting it sorted out?- Clear the rubbish out.
0:40:19 > 0:40:23All the equipment out of the shop and get it back to a bare canvas.
0:40:23 > 0:40:28- I've got to get planning permission to change the use from...- A1.
0:40:28 > 0:40:33..a newsagent's, A1. It's got to be A2 for a letting agent.
0:40:33 > 0:40:35I've had a surveyor look at it.
0:40:35 > 0:40:41We're going to do some alterations, make a toilet and kitchen for the shop.
0:40:41 > 0:40:44- Wow!- We're going to knock through into the outbuildings.
0:40:44 > 0:40:49- Ah!- Hopefully. And put a toilet and kitchen in there for the shop.
0:40:49 > 0:40:55The idea is what, to literally renovate this part, the house bit, and rent that out?
0:40:55 > 0:40:56Yes.
0:41:01 > 0:41:04'So, this shop is staying in business.
0:41:04 > 0:41:08'Phil already has a portfolio of 26 properties he lets out,
0:41:08 > 0:41:11'so that's something he knows about.
0:41:11 > 0:41:16'A letting business seems like an obvious area to utilise his expertise.
0:41:16 > 0:41:21'There's a lot of work to turn this into the letting agency downstairs,
0:41:21 > 0:41:23'never mind refurbishing the maisonette.'
0:41:23 > 0:41:25What's the budget for the work?
0:41:25 > 0:41:29Not a lot. Probably...3,000?
0:41:29 > 0:41:32Three? What? Including sorting this out?
0:41:32 > 0:41:38Well, a new kitchen, if the two of us do it, maybe 1,000,
0:41:38 > 0:41:40- 1,500 for a kitchen.- Right.
0:41:40 > 0:41:44And all the labour is the two of us.
0:41:44 > 0:41:48- Have you worked together before in this kind of thing?- Yes, yes.
0:41:48 > 0:41:51- John helped me on a couple of my other houses.- Right.
0:41:51 > 0:41:55- We put a new kitchen in one, didn't we?- We did, indeed.
0:41:55 > 0:42:00- And we get on well together, don't we?- Yeah, we have a laugh.
0:42:00 > 0:42:03# Come on, people Got to work together... #
0:42:06 > 0:42:08'Having enjoyed working together before
0:42:08 > 0:42:12'and with a rental portfolio already built up for the letting agency,
0:42:12 > 0:42:14'they could be laughing even more.'
0:42:14 > 0:42:18- How many staff are you going to have? Just John?- Just me!
0:42:18 > 0:42:23- Just the two of us, really.- But I'll be predominantly in the shop.
0:42:23 > 0:42:25- The front man! - The front man, indeed.
0:42:25 > 0:42:28Timescale for getting the shop opened?
0:42:28 > 0:42:31About three months for the shop.
0:42:31 > 0:42:35- Maybe six months for the shop and house.- Right.
0:42:35 > 0:42:38May possibly run to nine months, I don't know.
0:42:38 > 0:42:43- The key thing for you is to get the shop opened?- Yeah. That's the priority.
0:42:43 > 0:42:46Well, congratulations. Good luck with it.
0:42:46 > 0:42:49- Thank you.- Looking forward to seeing how you get on.- Thank you.
0:42:51 > 0:42:57This really is an ideal property for Phil and his new venture with his lettings company.
0:42:57 > 0:43:01With John's help, it should go to plan - but really?
0:43:01 > 0:43:04That budget? 3,000 quid to sort it out?
0:43:04 > 0:43:06You have got to be kidding.
0:43:06 > 0:43:11Find out how they get on... Hahaha! ..later in the show.
0:43:14 > 0:43:19Time and tide wait for no man, but we can't possibly wait any longer.
0:43:19 > 0:43:23We've given our developers plenty of time. Have they achieved what they wanted?
0:43:23 > 0:43:26There is only one way to find out.
0:43:27 > 0:43:31'Earlier, I visited the popular south-west London area of Battersea.
0:43:31 > 0:43:35'This block of flats had certainly been refurbished on the outside,
0:43:35 > 0:43:40'but I was concerned that this meant less scope for a healthy profit.
0:43:40 > 0:43:43'However, 76-year-old Stephanie was undaunted,
0:43:43 > 0:43:50'even after paying a whopping 405 grand for this two-bed flat.
0:43:50 > 0:43:54'As it was her first investment property, she was wisely open to advice.'
0:43:54 > 0:44:01I might put a breakfast bar in. I was going to ask you whether that might be attractive or not bother.
0:44:01 > 0:44:05It's so worthwhile to be able to sit down, have a sandwich in your kitchen.
0:44:05 > 0:44:09- Do you think so?- Definitely. - It isn't an elderly thing?
0:44:09 > 0:44:13- It's a convenience thing. - It's not an elderly thing!
0:44:13 > 0:44:17'Stephanie was going to employ a builder to refurbish the flat.
0:44:17 > 0:44:23'She had set a budget of 16,000 and hoped to have it ready to let in about a month.
0:44:27 > 0:44:29'It's now almost two months later
0:44:29 > 0:44:32'and the place is just about finished.
0:44:34 > 0:44:37'Look what a lovely flat Stephanie's created!
0:44:48 > 0:44:51'In the living room, Stephanie has followed my suggestion
0:44:51 > 0:44:54'and retained the dividing doors.
0:44:59 > 0:45:02'But did she take my advice about the breakfast bar?
0:45:03 > 0:45:05'She most certainly did.'
0:45:07 > 0:45:11The kitchen, that was really important. It was in an awful state.
0:45:11 > 0:45:17We had a sink here. That's had to be moved to, as you can see, here.
0:45:17 > 0:45:21And, um...I wanted a breakfast bar and I wasn't sure where to put it.
0:45:21 > 0:45:25That's why we had to move the sink.
0:45:25 > 0:45:28I'm really pleased we moved this and hid that.
0:45:28 > 0:45:31That's very discreet. I'm delighted with that.
0:45:31 > 0:45:35All the other appliances are integrated so you can't see them.
0:45:35 > 0:45:39Because I live on a boat and I'm used to small galleys,
0:45:39 > 0:45:41I like things hanging on hooks.
0:45:41 > 0:45:46It's been worth the extra expense, the careful planning and rejigging.
0:45:46 > 0:45:49I'm delighted with it.
0:45:50 > 0:45:54'The layout in the bathroom has remained pretty much the same,
0:45:54 > 0:45:56'but with a new suite and hidden cistern,
0:45:56 > 0:45:58'it looks far less cluttered.
0:45:58 > 0:46:00'And I love the tiles!
0:46:00 > 0:46:04'First job for Stephanie was to find a qualified builder
0:46:04 > 0:46:06'to do the refurbishment.'
0:46:07 > 0:46:11I chose a contractor builder out of two.
0:46:11 > 0:46:15Before he took decisions about positions and styles,
0:46:15 > 0:46:19I wanted to be consulted on all that.
0:46:19 > 0:46:22He's been very good on that.
0:46:22 > 0:46:25'The flat's been rewired and new radiators installed.
0:46:25 > 0:46:29'I think Stephanie made the right choice of engineered wood flooring.
0:46:29 > 0:46:32'That's a veneer of solid wood on a base.
0:46:32 > 0:46:36'It's pricier than laminate but looks so much better.
0:46:36 > 0:46:39'Apart from the high-quality finish on the fittings,
0:46:39 > 0:46:44'she spent about £3,000 furnishing the flat.'
0:46:44 > 0:46:47I've got two double beds, new, obviously,
0:46:47 > 0:46:53a new leather sofa, an oak table and four matching chairs
0:46:53 > 0:46:55and an extra easy chair.
0:46:58 > 0:47:00'Outside, the garden is a real plus.
0:47:00 > 0:47:04'Stephanie's added some furniture, had the wall painted
0:47:04 > 0:47:06'and disguised those manhole covers a bit.
0:47:13 > 0:47:16'Overall, this first investment property for Stephanie
0:47:16 > 0:47:18'has been a real success.
0:47:18 > 0:47:21'It's taken a little longer than the month she'd hoped for.
0:47:21 > 0:47:24'It's going to be nearer to seven weeks.
0:47:24 > 0:47:27'I wonder how her £16,000 budget fared.
0:47:27 > 0:47:30'I don't think it had taken the furniture into account.'
0:47:30 > 0:47:3316,000 did not include the furnishings.
0:47:33 > 0:47:38And, of course, the breakfast bar, the pipes, you know, the drainage,
0:47:38 > 0:47:40the boiler, that all cost more.
0:47:40 > 0:47:43Probably closer to 18 or 19.
0:47:43 > 0:47:46Then my furnishing, that's a bit difficult.
0:47:46 > 0:47:51Each room probably is going to be up to 1,000 a room.
0:47:51 > 0:47:53Not the kitchen, though.
0:47:53 > 0:47:55'So, taking furnishings out of the equation
0:47:55 > 0:48:01'but adding 19,000 renovation costs to the 412,000 purchase price,
0:48:01 > 0:48:05'which includes her share towards external works,
0:48:05 > 0:48:09'her total outlay is 431,000.
0:48:09 > 0:48:13'That does not include legal fees, Stamp Duty or that furniture.
0:48:15 > 0:48:18'Time to hear if it's all been worthwhile.'
0:48:18 > 0:48:22The flat's great. It's lovely to have two double bedrooms.
0:48:22 > 0:48:25The finish is good and the location's even better.
0:48:25 > 0:48:28It's a beautifully refurbished property, very modern,
0:48:28 > 0:48:30clean lines, very light, very nice.
0:48:30 > 0:48:33A garden's normally just seen in a Victorian terrace,
0:48:33 > 0:48:39so having some outside space with a modern apartment is really useful.
0:48:39 > 0:48:41It's great that it's furnished.
0:48:41 > 0:48:45If anyone wants to move in, they can without any worry.
0:48:45 > 0:48:49It wouldn't necessarily add any more value to the property.
0:48:51 > 0:48:53'How much rental income could it generate?'
0:48:55 > 0:48:59I think this flat could rent for £1,600 per calendar month.
0:48:59 > 0:49:03I believe the flat would rent for £2,160 per calendar month.
0:49:03 > 0:49:10'With that range of rental valuations, there could be a yield of between 4% and 6%.'
0:49:10 > 0:49:16This being a garden flat, I was hoping for something in the region of about 2,000 a month.
0:49:16 > 0:49:20So those figures are interesting, really. Hm.
0:49:20 > 0:49:23'What about the resale value?
0:49:23 > 0:49:28'Is the flat now worth more than the 431,000 Stephanie's invested?'
0:49:29 > 0:49:36I think this property could resell for between 490,000 and 500,000.
0:49:36 > 0:49:40I believe this flat would resell for £575,000.
0:49:40 > 0:49:45There was one upstairs on the market for 550, without the garden.
0:49:45 > 0:49:48'What a difference, indicating the margins involved
0:49:48 > 0:49:50'in estimating London prices.
0:49:50 > 0:49:56'However, they suggest a profit of between 59,000 and up to 144,000.'
0:49:56 > 0:50:01The first one was around what I hoped for. The second one was more.
0:50:01 > 0:50:06Really delighted. I have spent more than I had estimated.
0:50:06 > 0:50:09It makes me feel a lot happier that the extra investment
0:50:09 > 0:50:13is not going to be lost, if I do decide to sell.
0:50:13 > 0:50:17'Stephanie's made a great job of her first foray into property developing
0:50:17 > 0:50:19'and the figures reflect that.
0:50:19 > 0:50:22'How did she find her new venture?'
0:50:22 > 0:50:26It has been a bit nerve-racking cos you never quite know until the end
0:50:26 > 0:50:29whether it's going to be worth it.
0:50:29 > 0:50:32'Might she take on another one?'
0:50:32 > 0:50:34Not immediately, no!
0:50:34 > 0:50:38But I might in the future, now I'm a bit wiser about it all.
0:50:38 > 0:50:40I would know a bit more.
0:50:40 > 0:50:47I would do it, so long as I didn't have other big things happening at the same time.
0:50:51 > 0:50:55'We're back in the Nottinghamshire town of Sutton-in-Ashfield.
0:50:55 > 0:50:58'It was here I met pals Phil and John.
0:50:58 > 0:51:02'Phil had purchased this mixed-use property at an auction
0:51:02 > 0:51:05'for its guide price of £74,000.
0:51:05 > 0:51:11'It was a shop at the front on the ground floor and a maisonette at the back and on the first floor.
0:51:11 > 0:51:16'Phil's been a landlord for ten years and has accrued 26 properties.
0:51:16 > 0:51:20'His plan was to set up a letting agency with the help of friend and colleague John,
0:51:20 > 0:51:22'but it appeared not much else.'
0:51:22 > 0:51:25What's the budget for the work?
0:51:25 > 0:51:28Not a lot. Probably...3,000.
0:51:28 > 0:51:32Three? What? Including sorting this part out?
0:51:32 > 0:51:36Well, a new kitchen, if the two of us do it,
0:51:36 > 0:51:39maybe 1,000, 1,500 for a kitchen.
0:51:39 > 0:51:43- Right.- And all the labour is the two of us.
0:51:43 > 0:51:47- Have you worked together before in this kind of thing?- Yes, yes.
0:51:47 > 0:51:51- John helped me on a couple of my other houses.- Right.
0:51:51 > 0:51:55- We put a new kitchen in one, didn't we?- We did, indeed.
0:51:55 > 0:51:59- We get on very well together. - Yeah, we have a laugh.- Yeah.
0:52:01 > 0:52:04'That £3,000 budget to refurbish a three-bedroom maisonette
0:52:04 > 0:52:11'and create an office with a loo in the shop area didn't sound like nearly enough to me.
0:52:11 > 0:52:15'Phil had a maximum nine-month timescale.
0:52:15 > 0:52:17'One year later, we're back.
0:52:27 > 0:52:30'The shop is now a bright and welcoming office space,
0:52:30 > 0:52:32'ideal for Phil's letting agency.
0:52:32 > 0:52:36'The maisonette has a slightly different story to tell.
0:52:36 > 0:52:41'It's pretty much as it was. That's because Phil's plans have changed.'
0:52:42 > 0:52:49Originally, I was going to have a two-bedroom flat above the property.
0:52:49 > 0:52:54The logistics of doing that and the costs were prohibitive, really,
0:52:54 > 0:53:00especially in the current climate in the UK with finances and everything.
0:53:00 > 0:53:04I thought, hopefully, when the business takes off,
0:53:04 > 0:53:07I could expand upstairs myself and use offices upstairs.
0:53:07 > 0:53:11I want to be an estate agent as well as a letting agent in the future.
0:53:11 > 0:53:14'So, plans to expand already, but Phil did find
0:53:14 > 0:53:18'there were unexpected costs in getting it to this stage.
0:53:18 > 0:53:23'He had to replace joists, rewire, replumb - including new radiators -
0:53:23 > 0:53:25'replaster and repaint.
0:53:25 > 0:53:27'He still has the flooring to do.
0:53:27 > 0:53:32'Given the change of plan, has that altered the tiny £3,000 budget?'
0:53:33 > 0:53:39If you don't take into account the furnishings and the IT equipment I've had to buy for the shop,
0:53:39 > 0:53:43which isn't really anything to do with the fabric of the building,
0:53:43 > 0:53:47I've probably only spent around £2,000 in planning consent,
0:53:47 > 0:53:50surveyors and materials to do the shop up.
0:53:50 > 0:53:57Before I went any further with costs, I wanted to make sure that the letting agency was a success.
0:53:57 > 0:54:00# That was his first step to success
0:54:01 > 0:54:04# Lord, it was found out that very way... #
0:54:04 > 0:54:07'And here's hoping it will be.
0:54:09 > 0:54:13'Phil's also kept costs down by doing some of the work himself,
0:54:13 > 0:54:17'but he did get experts in for things like electrics.
0:54:17 > 0:54:21'Since his former colleague John has moved on to pastures new,
0:54:21 > 0:54:25'Phil has really had his hands full, in more ways than one.'
0:54:25 > 0:54:29Since I saw you last, I've had a lovely baby daughter last year.
0:54:31 > 0:54:33She's absolutely adorable. CHUCKLES
0:54:33 > 0:54:35So I'm very happy.
0:54:35 > 0:54:37'Aw, delighted to hear it.
0:54:37 > 0:54:40'Now that the work here is complete, so far,
0:54:40 > 0:54:43'he and his family can look forward to more time together.
0:54:43 > 0:54:45'But not quite yet.
0:54:48 > 0:54:52'We invited a commercial property agent and the auctioneer who sold it
0:54:52 > 0:54:56'and saw the property last time we were here to take a look around.'
0:54:58 > 0:55:01It was about 12 months ago that I was last here
0:55:01 > 0:55:03and apart from the room we're in,
0:55:03 > 0:55:05I don't think a great deal has changed.
0:55:05 > 0:55:08Maybe a bit of paint here and there, but that's about it.
0:55:08 > 0:55:13I think they were concentrating on the shop and, essentially, that's done.
0:55:13 > 0:55:18The shop's good. It's nice and light and bright.
0:55:18 > 0:55:21And will attract prospective tenants.
0:55:21 > 0:55:27With regard to the accommodation, particularly the kitchen and bathroom, they need refitting.
0:55:27 > 0:55:30They're dated and anybody else coming into this property
0:55:30 > 0:55:33would need it to be modernised.
0:55:33 > 0:55:38'Phil purchased this property for £74,000.
0:55:38 > 0:55:43'With his £2,000 spend on the work, his total outlay is 76,000.
0:55:43 > 0:55:47'If he decided to sell it on as it is, what could that raise?'
0:55:50 > 0:55:54It's probably got an open-market vacant possession value
0:55:54 > 0:55:57of something between £85,000 and £90,000.
0:55:57 > 0:55:59I think you could only sell the property as a whole.
0:55:59 > 0:56:05There is no chance of selling it in two separate lots, i.e. the first floor and the ground floor.
0:56:05 > 0:56:08With regard to the value, I'd have thought you'd be talking
0:56:08 > 0:56:12somewhere in the region of £90,000, at the present time.
0:56:12 > 0:56:14Not as much as I hoped.
0:56:14 > 0:56:18'Having a sitting tenant running a business upstairs
0:56:18 > 0:56:22'might help increase the value, as would further renovation work.
0:56:22 > 0:56:26'But based on these values, Phil could, at this stage,
0:56:26 > 0:56:29'still be looking at a profit of between £9,000 and £14,000,
0:56:29 > 0:56:31'minus tax and expenses.
0:56:31 > 0:56:35'And if he changes his mind about the business, as I said before,
0:56:35 > 0:56:40'this is a property that offers plenty of options.'
0:56:40 > 0:56:44If it had been me, I'd have converted the ground floor shop into a lounge
0:56:44 > 0:56:47and the whole property into a detached house.
0:56:47 > 0:56:52I think the value would have increased to somewhere in the region of about 120,000.
0:56:52 > 0:56:56If you convert it into a single residence,
0:56:56 > 0:57:00and obviously you've got to inject quite a lot money to do that,
0:57:00 > 0:57:03you've got a significantly higher margin.
0:57:03 > 0:57:07I think ultimately it would have a value of £115,000, £120,000.
0:57:07 > 0:57:10That's what I thought. That's more as a house.
0:57:10 > 0:57:14I know the houses in the street sell for...
0:57:14 > 0:57:19Smaller houses sell for around 110,000, semi-detached.
0:57:19 > 0:57:22'That would raise Phil's potential profit
0:57:22 > 0:57:28'to between £29,000 and £34,000, minus the cost of the work and tax.
0:57:28 > 0:57:33'If Phil were to upgrade the flat and let it and the office separately,
0:57:33 > 0:57:37'he could see an impressive yield of between 9% and 11%.
0:57:37 > 0:57:42'But he's more than happy with the office for his business and the additional space upstairs.
0:57:42 > 0:57:46'First things first - a well-earned break.'
0:57:49 > 0:57:53Next on the cards for me, I've not had a break in a year and a half.
0:57:53 > 0:57:57My wife hasn't seen her family in Thailand for a year and a half.
0:57:57 > 0:57:59Having had the new baby last year,
0:57:59 > 0:58:04we intend to go away for a nice long holiday and relax.
0:58:04 > 0:58:08Forget about everything for a good few weeks.
0:58:11 > 0:58:16I don't know about you, but I never know what to expect from the properties we feature on the show.
0:58:16 > 0:58:21They're so full of surprises, we never know what we're going to find.
0:58:21 > 0:58:25- Join us next time for more Homes Under The Hammer. - Goodbye.- Goodbye.
0:58:29 > 0:58:32Subtitles by Red Bee Media Ltd
0:58:32 > 0:58:35E-mail subtitling@bbc.co.uk