0:00:02 > 0:00:05- Hello and welcome.- Now, for many, buying at auction gives the chance
0:00:05 > 0:00:07to get hold of properties in need of some work.
0:00:07 > 0:00:11Yes, people like to put their own stamp and style on their purchases
0:00:11 > 0:00:14and improve them enough to hopefully make a profit along the way.
0:00:14 > 0:00:17And there's more chance of doing that when you buy your home under the hammer.
0:00:42 > 0:00:45We love the buzz and the excitement of the auction room.
0:00:45 > 0:00:48You can sort of sense the hope and frustration in the air.
0:00:48 > 0:00:51Yes, and you never know how it's going to go until the last moment.
0:00:51 > 0:00:55Will somebody swoop in and make a bid that takes you over your limit?
0:00:55 > 0:00:58Well, let's see what's tempted the buyers on today's show.
0:00:59 > 0:01:06'In Exeter, this tall terraced property's grotty and grubby, but I'm still a fan.'
0:01:06 > 0:01:08I like the high ceilings, there's some original features.
0:01:09 > 0:01:15'You'll need to pull in lots of help before you pull any pints at this pub in South Wales.'
0:01:15 > 0:01:18The big question is, would you want to turn it back into a pub?
0:01:19 > 0:01:22'And in Darlington, is this plot a developer's dream
0:01:22 > 0:01:25or is it verging on the ridiculous?'
0:01:25 > 0:01:29It doesn't look much, does it? But for a developer, this is a potential money-spinner.
0:01:30 > 0:01:34'All these properties went to auction.
0:01:34 > 0:01:39- 'We'll find out who bought them and what they paid when they went under the hammer.'- Sold.
0:01:44 > 0:01:48'Today I'm in Exeter on the banks of the River Exe.
0:01:50 > 0:01:54'The architecture here is rich with history and full of character
0:01:54 > 0:01:57'The cathedral is particularly impressive.
0:01:59 > 0:02:04'I doubt the property I'm here to see today will be so grand,
0:02:04 > 0:02:09'but it's no less interesting to those with an eye for investment.'
0:02:09 > 0:02:13I'm in St Thomas, a popular part of Exeter,
0:02:13 > 0:02:16and the property I'm here to see is situated on this busy road
0:02:16 > 0:02:20which links through to the city centre, about a mile in that direction.
0:02:20 > 0:02:25The property itself, it's a three-storey mid-terrace. It looks pretty big from the outside.
0:02:25 > 0:02:30Had a guide price of £130,000 to £150,000. Let's take a look.
0:02:34 > 0:02:39So, what have we got? Well, the house has actually already been converted into an HMO,
0:02:39 > 0:02:44house of multiple occupation, so view it as that and it's quite interesting.
0:02:44 > 0:02:49For instance, through here into the front bedroom.
0:02:49 > 0:02:52It would normally be the living room. But it is exactly that, a bedroom.
0:02:52 > 0:02:54You've got a little sink unit in there.
0:02:54 > 0:02:56It's all a bit tired and dated, obviously,
0:02:56 > 0:02:59but I like the high ceilings, there's some original features.
0:02:59 > 0:03:04It smells a bit damp. It's just crying out for a bit of tender loving care.
0:03:04 > 0:03:08# Just a little bit of TLC, tender loving care is what you need #
0:03:08 > 0:03:12'At the back of the property is the second sitting room,
0:03:12 > 0:03:15'which has also been converted into another bedroom.
0:03:15 > 0:03:20'Right at the back of the house is a dining room leading to the kitchen.
0:03:20 > 0:03:23'It's all very grubby and grungy,
0:03:23 > 0:03:27'but this terrace does offer a great deal of square footage.'
0:03:27 > 0:03:32This place has actually got a licence to be an HMO, a house of multiple occupation.
0:03:32 > 0:03:35So what does that mean?
0:03:35 > 0:03:41It needs things like a certain number of toilets, in the kitchen, a certain number of cookers.
0:03:41 > 0:03:43Now, if you take this place on,
0:03:43 > 0:03:46you'd have to adhere to the requirements of the HMO
0:03:46 > 0:03:49and they are quite stringent.
0:03:49 > 0:03:52You need to check with the local authority to see exactly what they are.
0:03:52 > 0:03:56But the fact that it's got one is great, cos it means the local council are saying,
0:03:56 > 0:04:00"Yes, this can be an HMO," and that could be a very profitable thing to own.
0:04:00 > 0:04:04'On the first floor, there are three further bedrooms,
0:04:04 > 0:04:08'and also a bathroom with shower facilities.
0:04:08 > 0:04:13'Again, it's all a bit tired and worn, but pop on those property developer goggles for a moment
0:04:13 > 0:04:16'and you can see this could be a real rental machine,
0:04:16 > 0:04:19'especially since you're near a steady supply of students
0:04:19 > 0:04:23'from the University of Exeter in search of accommodation.
0:04:23 > 0:04:26'You can see the possibilities.
0:04:26 > 0:04:31'Up in the attic, there's a sixth bedroom with a shower room.
0:04:31 > 0:04:35'It's a squeeze, but it does have that essential second loo.
0:04:35 > 0:04:38'All in all, three floors, six letable rooms
0:04:38 > 0:04:41'and a lot of work to get it up to a decent standard.
0:04:41 > 0:04:44'But if that's not your bag,
0:04:44 > 0:04:48'what else could you do with this ginormous terraced property?'
0:04:48 > 0:04:52So, at the rear of the property, a little courtyard area leading onto the rear garden.
0:04:52 > 0:04:55It's very overgrown but it's not a bad sized space.
0:04:55 > 0:04:57But while I'm out here, let's talk about the options
0:04:57 > 0:05:00if you didn't want to use this as an HMO.
0:05:00 > 0:05:05Well, you could convert it back into one large house. You'd need to talk to local estate agents
0:05:05 > 0:05:08to find out if there's a demand for that kind of thing.
0:05:08 > 0:05:12Otherwise, why not consider turning it into two flats?
0:05:12 > 0:05:15You'd obviously have to get planning permission, but the good news is,
0:05:15 > 0:05:19some of the neighbouring properties have done exactly that, so there is a precedent set.
0:05:19 > 0:05:22I think, from a financial point of view, that could be the way to go.
0:05:23 > 0:05:31'I think that if you were to pick up this property for anything like that guide price of £130,000 to £150,000
0:05:31 > 0:05:34'then there could be scope for a decent profit.
0:05:38 > 0:05:40'Does a local property expert agree
0:05:40 > 0:05:43'that all the signs here say go?'
0:05:45 > 0:05:48The destiny of the building is completely governed by
0:05:48 > 0:05:52will the new owner want it to be generating income for them
0:05:52 > 0:05:56or to be a capital project?
0:05:56 > 0:05:59Generating income, they'll just do it up,
0:05:59 > 0:06:02spruce up the bathrooms and the loos particularly,
0:06:02 > 0:06:05and just get it churning over in rental terms.
0:06:05 > 0:06:12Or if they're looking just for a lump of money return in one go, for me, it's the flats.
0:06:12 > 0:06:16'So, if you want to maximise your profit in the short-term,
0:06:16 > 0:06:20'convert this three-storey house into two two-bedroom flats,
0:06:20 > 0:06:22'do them up and sell them on.
0:06:22 > 0:06:26'Long-term, HMO rental might provide the best yield.
0:06:26 > 0:06:30'Let's talk cold, hard cash.
0:06:30 > 0:06:34'What sort of return could this property earn as an HMO?'
0:06:34 > 0:06:38There's six individual rooms to be had here.
0:06:38 > 0:06:41They average £80 a week.
0:06:41 > 0:06:44So in a perfect 52-week year,
0:06:44 > 0:06:50you'd end up somewhere between £23,000 and £25,000, depending on specification.
0:06:50 > 0:06:54'And what about the best sell-on option, two flats?'
0:06:54 > 0:06:58A pair of all-singing and all-dancing two-bedroom flats
0:06:58 > 0:07:04ought to be worth something in the region of £250,000 collectively.
0:07:08 > 0:07:12Well, it's a large house in a pretty good location with lots of options.
0:07:12 > 0:07:16Do you keep it as an HMO? Do you turn it into one house? Or maybe flats?
0:07:16 > 0:07:19I guess that's all down to whoever bought it.
0:07:19 > 0:07:22Let's find out who that was when it went under the hammer.
0:07:22 > 0:07:25'It was the last lot of the day,
0:07:25 > 0:07:29'so let's see who's been biding their time before they bid.'
0:07:29 > 0:07:33The guide is 130 to 150. Who'll say 140, in the middle? 140.
0:07:35 > 0:07:37130.
0:07:37 > 0:07:40120, won't go less... 120. At 120.
0:07:40 > 0:07:42At 120. 122.
0:07:42 > 0:07:44121? 121
0:07:44 > 0:07:46122. 122.
0:07:46 > 0:07:50123. 123. 124.
0:07:50 > 0:07:53124. Have you worked out stamp?
0:07:53 > 0:07:55125 is not you. 125.
0:07:55 > 0:07:57126. 126.
0:07:57 > 0:07:59126. 126.
0:07:59 > 0:08:03127. 128. 128.
0:08:03 > 0:08:05129.
0:08:05 > 0:08:08130. 130. 131.
0:08:08 > 0:08:10132. 133.
0:08:10 > 0:08:13134. 135. 36. 37.
0:08:13 > 0:08:1638. 39. 140. 141.
0:08:16 > 0:08:19142. 143.
0:08:20 > 0:08:23144. 145.
0:08:23 > 0:08:25146. 147.
0:08:25 > 0:08:28148. 149.
0:08:28 > 0:08:31Half? 149 and a half.
0:08:31 > 0:08:35150. And a half or not?
0:08:35 > 0:08:36Handbrake goes on.
0:08:36 > 0:08:38150 on my left. At 150.
0:08:38 > 0:08:41Think of the income that's going to come out of here,
0:08:41 > 0:08:45almost whether you want to or not. At 150 once.
0:08:45 > 0:08:47150 twice.
0:08:47 > 0:08:51- All done? Last chance. On my left, going at 150. - HAMMER BANGS
0:08:51 > 0:08:56'It was Meg who made that successful bid of 150,000.
0:08:58 > 0:09:02'She placed that final bid on behalf of her auction companion,
0:09:02 > 0:09:05'her brother Jack, and their mum Ally,
0:09:05 > 0:09:07'who's taking a year off from teaching maths.
0:09:07 > 0:09:11'Ally met us at the house as Jack and Meg weren't free.
0:09:11 > 0:09:15'She was more than happy to tell us how the sums were going to add up here.'
0:09:17 > 0:09:21# Doing the math don't bring satisfaction
0:09:22 > 0:09:27# No more addition now, it's a subtraction #
0:09:27 > 0:09:30- Ally, good to meet you. - Good to meet you.- Congratulations.
0:09:30 > 0:09:34So, tell me why you wanted to buy this place.
0:09:34 > 0:09:37Erm, well, we've been looking for an auction property
0:09:37 > 0:09:39and this one came up in Exeter,
0:09:39 > 0:09:41which is close to where we live,
0:09:41 > 0:09:45and it seemed like what we wanted. Needs a lot of work.
0:09:45 > 0:09:47But it was specifically one at auction you were looking for?
0:09:47 > 0:09:50Yep. We've been looking for one at auction for some time.
0:09:50 > 0:09:53- Why is that?- You can get a bargain,
0:09:53 > 0:09:56- bit of a challenge, bit of a risk. - Right.
0:09:56 > 0:10:00- OK. So is this something which you do?- We have bought one other house
0:10:00 > 0:10:02which we've developed, but that was not at auction.
0:10:02 > 0:10:05- Right. - And that's not quite finished yet.
0:10:05 > 0:10:08And it's something we're hoping to do, yes.
0:10:08 > 0:10:12- So what's your background? - I'm still a full-time maths teacher but I'm on a gap year.
0:10:12 > 0:10:14My headmaster gave me a gap year,
0:10:14 > 0:10:19and during that year, it was an idea to buy a property and do it up
0:10:19 > 0:10:23- and now I've bought a second property and resigned.- Oh! Oh, wow!
0:10:23 > 0:10:25# Doing the math
0:10:25 > 0:10:28# Is bringing you down
0:10:29 > 0:10:32# Gravity and time will put you back in the ground #
0:10:32 > 0:10:35'It's not just her career she's changed.
0:10:35 > 0:10:39'Ally and her husband sold the family home to finance her new career.
0:10:39 > 0:10:43'They're currently living in a boarding house in the grounds of the school
0:10:43 > 0:10:46'where her husband's a house master.
0:10:46 > 0:10:48'With her maths skills, the budget should be a breeze,
0:10:48 > 0:10:52'but she's just one half of the development team.'
0:10:52 > 0:10:55- I'm going to be doing it with my son, Jack.- Yes.
0:10:55 > 0:11:01His background is, he graduated two years ago with a degree in construction engineering management
0:11:01 > 0:11:06and just at the time when all the companies dropped their graduate schemes,
0:11:06 > 0:11:09so he's really excited about it.
0:11:09 > 0:11:12- A real practical project for him to take on.- Yeah.
0:11:12 > 0:11:15He sees it as a sort of learning opportunity as much as anything.
0:11:15 > 0:11:19- Right.- And hopefully, when he gets some money behind him,
0:11:19 > 0:11:24- he can carry on and do it himself. - A great opportunity for you and him to work together, as well.
0:11:24 > 0:11:28- Yeah, that's the challenge. - Oh. Is it?
0:11:28 > 0:11:33We have slightly different views on things, but having done the one house that we've nearly finished,
0:11:33 > 0:11:37we're sort of coming to an agreement on what I can do and what he can do.
0:11:37 > 0:11:40- He has much higher standards. - Oh, does he?
0:11:40 > 0:11:44He likes to do everything perfectly because that's the way he's been taught
0:11:44 > 0:11:49and he can't really see the profit margin at the moment, because it's my money.
0:11:49 > 0:11:53'Well, it's good to hear that Jack does want to demonstrate his newly learned skills
0:11:53 > 0:11:56'and put into practice what he's learnt.
0:11:56 > 0:12:00'But it will be down to his mum Ally to do the maths.
0:12:00 > 0:12:03'She would prefer to convert the terrace into two flats,
0:12:03 > 0:12:05'but that would require planning permission,
0:12:05 > 0:12:10'so she's in the process of having plans commissioned. Why two flats?'
0:12:10 > 0:12:14First we thought we would keep it HMO and let it,
0:12:14 > 0:12:19but I've spoken to a letting agent that says council will probably
0:12:19 > 0:12:23not renew the licences come 2016 cos they're trying to get away from multi-occupancy.
0:12:23 > 0:12:28'Ally and Jack have a £40,000 budget and a five-month timescale.
0:12:28 > 0:12:32'That might be a bit tight when planning permission's involved.
0:12:32 > 0:12:35'However, a maths teacher and a construction graduate
0:12:35 > 0:12:40'must be a bit of a dream team for a property-developing future.'
0:12:40 > 0:12:45- And then what next for you?- Er, two years is the sort of time plan,
0:12:45 > 0:12:48because we come out of the boarding house in two years
0:12:48 > 0:12:52and Lee, my husband, will retire in four years.
0:12:52 > 0:12:54Hopefully, as I say, do it for two years,
0:12:54 > 0:12:57Jack's made enough money, he can do it himself
0:12:57 > 0:13:00and we'll retire and play golf.
0:13:00 > 0:13:03- Well, congratulations.- Thank you very much.- Good luck with it.
0:13:03 > 0:13:07- We look forward to seeing how you and the family get on.- Thank you.
0:13:10 > 0:13:13So, will former maths teacher Ally
0:13:13 > 0:13:15get the numbers right on this place?
0:13:15 > 0:13:18Well, with the help of son Jack, maybe.
0:13:18 > 0:13:23Something tells me there's going to be a bit of a... between them two.
0:13:23 > 0:13:26Jack absolutely wants to do it right at any cost,
0:13:26 > 0:13:29Ally trying to keep a tight rein on the budget.
0:13:29 > 0:13:32There's lots to be done. It all relies on that important planning permission.
0:13:32 > 0:13:35What will happen? You can find out later in the show.
0:13:42 > 0:13:44Today I'm in the Rhondda Valley in Wales
0:13:44 > 0:13:47in a village called Penygraig.
0:13:47 > 0:13:49The name gives us a clue to its history.
0:13:49 > 0:13:53Penygraig means "head of the rock" and it was a mining village.
0:13:53 > 0:13:58But these days, with good transport links into Cardiff, well, it's home to commuters.
0:13:58 > 0:14:02'With the capital city of Cardiff only 45 minutes away,
0:14:02 > 0:14:05'you can access city life very quickly.
0:14:05 > 0:14:10'But if you prefer a less hectic pace then there are facilities in the town of Tonypandy
0:14:10 > 0:14:15'less than mile down the road and the lovely valley views of Penygraig.'
0:14:16 > 0:14:21Well, the property is not far from the centre of the village and it's on this busy road.
0:14:21 > 0:14:23Now, it's mostly residential buildings around here,
0:14:23 > 0:14:28but I've got my eyes on something a little different today.
0:14:28 > 0:14:30This rather large old pub.
0:14:31 > 0:14:36And I'm just in time, too, because I could really do with a lovely refreshing drink.
0:14:37 > 0:14:41'This building's very interesting and a pub for sale always intrigues me.
0:14:41 > 0:14:46'Even more intriguing, the guide price of £10,000.
0:14:46 > 0:14:49'Yes, you heard me right. Ten grand!
0:14:49 > 0:14:53'Hm. Let's find out if there's a reason for that.'
0:14:54 > 0:14:58Well, I think it's obvious I'm not going to be having a nice, cool, refreshing drink in here.
0:14:58 > 0:15:02I certainly can't smell any beer. There are no peanuts hanging up.
0:15:02 > 0:15:05Goodness! Look at the state of it!
0:15:05 > 0:15:10There's glass everywhere, you can see it's been broken into.
0:15:10 > 0:15:13Oh, look over here. Look. We've got some old photographs here.
0:15:13 > 0:15:17You can see, this is what the place looked like many, many years ago.
0:15:17 > 0:15:21Beautiful on the outside. A really lovely-looking property.
0:15:21 > 0:15:24Sadly, on the inside, there are no redeeming features.
0:15:24 > 0:15:28You've got an awful lot of work if you want to turn this back into a pub.
0:15:28 > 0:15:32But the big question is, would you want to turn it back into a pub?
0:15:34 > 0:15:38'Behind the former bar is another large room.
0:15:39 > 0:15:42'Plus the pub's kitchen and toilets.
0:15:42 > 0:15:47'But everything's been vandalised so it's going to need a total refurbishment.
0:15:47 > 0:15:50'Upstairs there's the remainder of what was a bathroom
0:15:50 > 0:15:55'and three good-size bedrooms, which provided the accommodation.
0:15:55 > 0:16:00'Although this is described as a hotel in the auction catalogue,
0:16:00 > 0:16:04'I think that with it being so small, you really have to call it a pub.
0:16:04 > 0:16:07'Everything has long since checked out.
0:16:07 > 0:16:11'But right at the far end of the first floor, there's a pleasant surprise.'
0:16:11 > 0:16:14And then we come into this large space.
0:16:14 > 0:16:19Now, I think this would've been another function room, complete with its own bar.
0:16:19 > 0:16:24But look at this wonderful old ceiling. Now, this is the nicest redeeming feature I've seen so far.
0:16:24 > 0:16:29I know this building dates back to the 1800s, but that is beautiful!
0:16:29 > 0:16:31Now, I've been chatting to some of the locals today.
0:16:31 > 0:16:35They've been telling me that pubs in this area are just not doing well.
0:16:35 > 0:16:40There's a real chance you will not be pulling enough pints here to make a profit.
0:16:40 > 0:16:44But you could think about converting this into flats.
0:16:44 > 0:16:47But you'll have to get that vital planning permission
0:16:47 > 0:16:49and that comes with its own pitfalls.
0:16:49 > 0:16:52# Rules and regulations
0:16:53 > 0:16:56# Rules and regulations #
0:16:57 > 0:17:01'Apart from planning permission, you'd also have to obtain change of use
0:17:01 > 0:17:07'from its current business, ie, A4 use as a public house to residential.
0:17:07 > 0:17:10'The outside is also in a dilapidated condition
0:17:10 > 0:17:14'with little outside space, as the back of the property faces the hill.
0:17:14 > 0:17:17'Also, there's no customer parking.
0:17:17 > 0:17:21'But one bonus point is that there's a separate access door to the first floor.
0:17:21 > 0:17:25'To find out more about the options for this lot,
0:17:25 > 0:17:30'that went to auction with that amazing guide price of £10,000,
0:17:30 > 0:17:33'we asked a local property expert for his opinion.
0:17:33 > 0:17:37'Can he see any merit in reopening it as a pub?'
0:17:37 > 0:17:40I don't think it could be returned to that
0:17:40 > 0:17:42because of the current climate,
0:17:42 > 0:17:45public houses are closing down within the valleys,
0:17:45 > 0:17:49like everywhere else in the country. I think the only option would be
0:17:49 > 0:17:52to convert it to residential, which would mean flats.
0:17:52 > 0:17:55'Might the local council have any objections?'
0:17:57 > 0:18:01The problems they might face is that any residential property now,
0:18:01 > 0:18:03new build or conversion,
0:18:03 > 0:18:06the local authority look for parking facilities.
0:18:06 > 0:18:08That would be the main issue, the parking facilities,
0:18:08 > 0:18:11and the lack of the outside space.
0:18:11 > 0:18:14'If the new owner was successful and obtained planning permission
0:18:14 > 0:18:16'to convert the property into flats,
0:18:16 > 0:18:19'how much could a one or two-bedroom flat be worth?'
0:18:19 > 0:18:23Once renovated, I would estimate, for resale purpose,
0:18:23 > 0:18:28that the flats would be between £35,000 and £40,000 per flat.
0:18:28 > 0:18:33'That could generate around £160,000 if four flats were built.
0:18:33 > 0:18:36'What about the rental income?'
0:18:36 > 0:18:41A one-bedroom flat, per calendar month, would be approximately £350.
0:18:41 > 0:18:45A two-bedroom would probably be approximately £390 per calendar month.
0:18:45 > 0:18:50Well, you've really got to look past the devastation in here.
0:18:50 > 0:18:53But this pub does have so much to offer.
0:18:53 > 0:18:56You're going to need some cash to throw at it, but more importantly,
0:18:56 > 0:19:01you're going to need to know what kind of development or business is going to work in this location.
0:19:01 > 0:19:06One thing's for sure, though. With that guide price of only £10,000,
0:19:06 > 0:19:10I think this one might have pulled in the punters when it went to auction.
0:19:10 > 0:19:13Let's see who will be calling last orders from now on.
0:19:13 > 0:19:17It's lot number seven in the catalogue, the former public house.
0:19:17 > 0:19:20A lot of potential there. Who's got 20 to start me?
0:19:20 > 0:19:23Let's see 15,000 to get going.
0:19:23 > 0:19:2615 I'm bid. Thank you, sir. At 15 on the telephone.
0:19:26 > 0:19:2916 down here, thank you.
0:19:29 > 0:19:31And 17 in the back. At 17.
0:19:31 > 0:19:34'There was a phone bidder and lots of interest.
0:19:34 > 0:19:37'We rejoin the auction a little later.'
0:19:37 > 0:19:41At 32. 33? 33 for the lady.
0:19:41 > 0:19:46Try one more. Is it 4? 34 I'm bid, thank you. At 34.000.
0:19:46 > 0:19:485 can I? 5 for the lady.
0:19:48 > 0:19:526. 36. At 7 for the lady, 37.
0:19:52 > 0:19:5638, he's come back. 39. 40 I'll take in the back.
0:19:56 > 0:20:00At 40,000. And 1 will you, madam?
0:20:00 > 0:20:031. 41 for the lady close to me.
0:20:03 > 0:20:06At £41,000. Yes or no?
0:20:06 > 0:20:092. Thank you. It was just in time, too.
0:20:09 > 0:20:1143.
0:20:11 > 0:20:13At £43,000, are you all done?
0:20:13 > 0:20:17- At £43,000. - HAMMER BANGS
0:20:17 > 0:20:20Sorry, can't wait all day. Yours, madam, at 43,000. Thank you.
0:20:22 > 0:20:27'That final bid of 43,000 was made by Andi, on the right here,
0:20:27 > 0:20:31'a gardener from Essex, and her partner Cath, who works in administration.'
0:20:32 > 0:20:35# All men are gardeners
0:20:35 > 0:20:37# In this life #
0:20:37 > 0:20:41'The couple live in Essex but Cath's originally from this area.
0:20:41 > 0:20:44'They're not totally new to the property developing game.
0:20:44 > 0:20:48'As their last project was to convert a local pharmacy into flats,
0:20:48 > 0:20:54'I get the impression they didn't pick up this place to start pulling pints.'
0:20:54 > 0:20:58- Congratulations.- Thank you.- Tell me, why did you want this pub so much?
0:20:58 > 0:21:01Because, erm, before we were going to buy this place,
0:21:01 > 0:21:05we were buying another place and we got gazumped at exchange,
0:21:05 > 0:21:08so I quickly looked on the internet and we saw this pub,
0:21:08 > 0:21:12so we rang the agent and we said, "When's the last viewing?"
0:21:12 > 0:21:15and they said, "Tomorrow," so we quickly had the day off work,
0:21:15 > 0:21:19we came down and looked at it, so we decided to go for it.
0:21:19 > 0:21:22So we had another day off work the next week and went down to the auction.
0:21:22 > 0:21:26- Cath, how well do you know this area?- Really well.
0:21:26 > 0:21:28I'm from Pontypridd, which is about two miles.
0:21:28 > 0:21:33It's quite a nice area and properties are really cheap,
0:21:33 > 0:21:37- so it's an ideal place to buy. - What do you want to do with this?
0:21:37 > 0:21:40Because, oh, boy, it needs an awful lot doing to it.
0:21:40 > 0:21:43We've got to go to planning for it,
0:21:43 > 0:21:46but hopefully we'll be turning it into flats,
0:21:46 > 0:21:51two two-bedroom upstairs and hopefully three one-bedrooms down here.
0:21:51 > 0:21:55Why have you decided to convert this into flats and not reinstate this as a pub?
0:21:55 > 0:22:01We're not in the pub game, we're in the turning things back into residential
0:22:01 > 0:22:04and flats and renting them out.
0:22:04 > 0:22:08So you have got a long road ahead. You've got to get planning, build it.
0:22:08 > 0:22:10How much research have you done?
0:22:10 > 0:22:14We have spoken to the council about change to residential use
0:22:14 > 0:22:16and they said they won't tell you outright
0:22:16 > 0:22:20but they said they can't see any problem in principle.
0:22:22 > 0:22:26'Cath and Andi hope the planning process will take around four months
0:22:26 > 0:22:28'with a further eight months for the build itself.
0:22:28 > 0:22:31'So if all goes according to plan,
0:22:31 > 0:22:35'in around a year, they'll have two flats upstairs, which they'd like to sell on,
0:22:35 > 0:22:39'and two or three flats downstairs, which they'll let.
0:22:40 > 0:22:43'They've budgeted around £90,000 to £100,000 for the project.
0:22:43 > 0:22:49'But as with their timeframe, they know there could be hold-ups and unforeseen issues.'
0:22:51 > 0:22:55One big downfall with this property as far as I can see is there's no parking.
0:22:55 > 0:22:57Now, how are you going to overcome that?
0:22:57 > 0:23:01Well, opposite there is a big public car park,
0:23:01 > 0:23:04so we're hoping the council will let the people park over there.
0:23:04 > 0:23:09We've got one parking space at the top of the hill where the outside door is on the top floor.
0:23:09 > 0:23:13But our architect's going to have to try and get round that how he can, really.
0:23:15 > 0:23:19'Although Cath and Andi have converted a commercial property into flats before,
0:23:19 > 0:23:21'they're stepping into the unknown with this build,
0:23:21 > 0:23:24'particularly as they've got no plan B
0:23:24 > 0:23:26'if they fail to get planning permission.
0:23:26 > 0:23:30'What's more, they live four hours' drive away
0:23:30 > 0:23:32'and both have other jobs.'
0:23:32 > 0:23:35When are you going to find the time to do this? Because you've just told me
0:23:35 > 0:23:40you had to get the day off work to go to the auction and to view the property.
0:23:40 > 0:23:44When are you going to actually find the time to do this and how involved are you going to be?
0:23:44 > 0:23:46Well, we'll be coming down every weekend.
0:23:46 > 0:23:51I mean, we've been coming down nearly every weekend for two years, doing the other places we've done.
0:23:51 > 0:23:56We have got a couple of builders that are going to be doing a lot of the structural,
0:23:56 > 0:23:59putting up the walls and all that. We've got a plumber and an electrician.
0:23:59 > 0:24:03But basically, all the rest, all the bathrooms, all the flooring,
0:24:03 > 0:24:08all the tiling and the kitchens we do ourselves.
0:24:08 > 0:24:11- So who's got the eye for the interior design, then? - Cath, probably.
0:24:11 > 0:24:13I mean, we do choose things together,
0:24:13 > 0:24:17but I sort of say, "That would be nice."
0:24:17 > 0:24:20And I say, "OK." THEY LAUGH
0:24:20 > 0:24:25'I really admire the couple's can-do attitude and hands-on approach.
0:24:26 > 0:24:29'When they come up from Essex, they'll stay over
0:24:29 > 0:24:32'in one of the flats they've converted in the pharmacy.'
0:24:32 > 0:24:35Is this purely a money-making venture for you?
0:24:35 > 0:24:40Yes, it is. Neither of us have really got much of a pension, I'm self-employed,
0:24:40 > 0:24:44so we're seeing it, really, that if in 18 months' time
0:24:44 > 0:24:47we've got quite a few properties rented out,
0:24:47 > 0:24:51it'd be like an income and we can perhaps cut down to a couple of days a week,
0:24:51 > 0:24:55I can just do a couple of days gardening instead of five days gardening.
0:24:55 > 0:24:59Good luck with this. I've got my fingers crossed for you. I hope you get the planning permission.
0:24:59 > 0:25:01- And congratulations. - Thank you.- Thank you.
0:25:01 > 0:25:05Andi and Cath have got a plan, they've got the cash,
0:25:05 > 0:25:08but are they really going to achieve what they want on their budget?
0:25:08 > 0:25:11And they don't have planning permission yet.
0:25:11 > 0:25:16Now, we already know the parking issues may make that a bumpy road to travel down.
0:25:16 > 0:25:18Have they taken on too much?
0:25:18 > 0:25:22Will that pub shine once again as a modern flat development?
0:25:22 > 0:25:26You can come back later on in the show and find out.
0:25:27 > 0:25:30'I go to see a really small plot of land in Darlington.
0:25:30 > 0:25:32'And I mean really small.'
0:25:32 > 0:25:36This is it. Yeah, really. No, really.
0:25:36 > 0:25:38'In Penygraig, Wales,
0:25:38 > 0:25:40'it wasn't just the beer that went flat.'
0:25:40 > 0:25:43It was just one massive room upstairs and one downstairs
0:25:43 > 0:25:46and then we just put the walls up where they needed to be.
0:25:48 > 0:25:53'And we return to Exeter, where mother and son found the perfect balance.'
0:25:53 > 0:25:56I did some of the work, Jack did most of the work.
0:26:00 > 0:26:03'Let's make our way back to Exeter now.
0:26:04 > 0:26:08'That's where I viewed this three-storey mid-terrace,
0:26:08 > 0:26:12'which had a guide price of between £130,000 and £150,000.
0:26:14 > 0:26:21'It had been converted into a six-bedroom house of multiple occupancy, an HMO,
0:26:21 > 0:26:26'and was in what could be best described as a right old state.
0:26:27 > 0:26:31'On the plus side, though, options galore. Keep it as an HMO
0:26:31 > 0:26:36'or restore it to a single house or convert it into two flats, subject to planning, of course.
0:26:39 > 0:26:44'The property was purchased at auction by former maths teacher Ally
0:26:44 > 0:26:47'for £150,000.
0:26:47 > 0:26:50'She planned to turn the terrace into flats
0:26:50 > 0:26:53'and her son Jack, a construction engineer graduate,
0:26:53 > 0:26:55'was hoping to put his skills to good use.'
0:26:57 > 0:26:59- He has much higher standards. - Oh, does he?
0:26:59 > 0:27:03He likes to do everything perfectly because that's the way he's been taught,
0:27:03 > 0:27:08and he can't really see the profit margin at the moment because it's my money.
0:27:08 > 0:27:11'So, might the conflicting approaches
0:27:11 > 0:27:16'of Jack's quest for perfection versus Mum's pursuit of profit
0:27:16 > 0:27:19'lead to family fisticuffs?
0:27:21 > 0:27:26'Well, ten months later, we're back to find out if these opposing views
0:27:26 > 0:27:29'have met in perfect harmony.'
0:27:31 > 0:27:33# Right now
0:27:33 > 0:27:35# Oh, yeah
0:27:36 > 0:27:38# In sweet harmony #
0:27:44 > 0:27:47'The property is looking fantastic
0:27:47 > 0:27:52'and Jack's pursuit of perfection is putting a big smile on my face.
0:27:52 > 0:27:57'But first, unless the trend for a shower in the living room has passed me by,
0:27:57 > 0:28:03'I'm guessing Ally's plan for a pair of two-bedroom flats was kiboshed by the planners.'
0:28:05 > 0:28:11Unfortunately, Exeter City Council have very strong rules
0:28:11 > 0:28:13on how big each flat has to be
0:28:13 > 0:28:16and it didn't come up to their measurements,
0:28:16 > 0:28:20so we could've had a one-bedroom and a two-bedroom,
0:28:20 > 0:28:25but the amount of work it would've taken for the return, it probably wasn't really worth it.
0:28:28 > 0:28:33'So, they stuck with plan A and kept it as a house of multiple occupancy.'
0:28:34 > 0:28:38Really, in the end, we just turned it back into a six-bedroomed HMO
0:28:38 > 0:28:43and we put en suites in four rooms,
0:28:43 > 0:28:45a new kitchen, new bathroom,
0:28:45 > 0:28:50erm, knocked a few chimney breasts out, did the garden.
0:28:50 > 0:28:53Basically, just a full refurbishment.
0:28:56 > 0:28:59'Ally, there is nothing basic about this refurbishment.
0:28:59 > 0:29:03'The kitchen/diner has undergone a top-to-bottom transformation.
0:29:03 > 0:29:09'It's now a great communal space that will bring the occupants together and be a social hub.
0:29:12 > 0:29:15'By removing the partition wall and chimney breast,
0:29:15 > 0:29:18'it feels much larger.
0:29:18 > 0:29:22'The addition of patio doors leading to the now easily-maintained garden
0:29:22 > 0:29:24'is a major plus.
0:29:26 > 0:29:30'Ally's son Jack is a construction engineer management graduate.
0:29:31 > 0:29:33'He's been a tremendous driving force here,
0:29:33 > 0:29:39'doing most of the work himself, apart from the plaster work and the electrical and heating engineering,
0:29:39 > 0:29:42'which required certified tradesmen.'
0:29:44 > 0:29:49I did some of the work, Jack did most of the work.
0:29:49 > 0:29:51He's a workaholic.
0:29:51 > 0:29:54He's just been here seven days a week. He's been amazing.
0:29:54 > 0:29:57He's done all the hard graft.
0:29:57 > 0:30:00I've basically just done some tiling and some painting.
0:30:00 > 0:30:03So, yeah, I couldn't have done it without him.
0:30:03 > 0:30:07'So, did Ally's preference for a less expensive renovation win out
0:30:07 > 0:30:10'over Jack's desire for top-quality workmanship?'
0:30:10 > 0:30:12There was the occasional clash of philosophies
0:30:12 > 0:30:15over how we did things.
0:30:15 > 0:30:18I'm pleased because his philosophy is right.
0:30:18 > 0:30:20We know that everything is as it should be,
0:30:20 > 0:30:23so we haven't bodged anything or papered over any cracks.
0:30:23 > 0:30:28So, yes, there's been the odd clash, but he wasn't in control of the budget.
0:30:28 > 0:30:34'Ah, the budget. Ally had £40,000 and a ten grand contingency.
0:30:34 > 0:30:38'But did Jack's perfectionism come with a hefty price tag?'
0:30:41 > 0:30:48We finished up with £45,000 we've spent, almost exactly. That's including stamp duty
0:30:48 > 0:30:52and the fees. So, yeah, I'm pretty pleased with it.
0:30:52 > 0:30:58'If you add that £45,000 to Ally's £150,000 purchase price,
0:30:58 > 0:31:02'it makes her total outlay £195,000.
0:31:02 > 0:31:06'And despite taking three months longer than the five they'd hoped for
0:31:06 > 0:31:10'to complete the renovation, surely both mother and son are happy.'
0:31:12 > 0:31:14We're very pleased with it.
0:31:14 > 0:31:17It's looking really smart. It's very easy to maintain.
0:31:17 > 0:31:20We're looking forward to letting it, really.
0:31:22 > 0:31:26We invited two local property experts to give us their opinions.'
0:31:27 > 0:31:29The standard of the work is exceptionally high.
0:31:29 > 0:31:33They haven't left any stone unturned, they've gone to town on everything
0:31:33 > 0:31:35from the fitments, the paint,
0:31:35 > 0:31:38the skirtings, you name it, they've done it.
0:31:38 > 0:31:41They've paid really good attention to detail here.
0:31:41 > 0:31:44It's been done really nicely. The en suites are a really high standard.
0:31:44 > 0:31:46It's just a really nice property.
0:31:46 > 0:31:48'As this is an HMO property,
0:31:48 > 0:31:53'when it comes to resale, it would make more if sold as a going business concern.
0:31:53 > 0:31:56'So, how much did these estate agents believe it could achieve,
0:31:56 > 0:32:01'bearing in mind Ally's total spend of £195,000?'
0:32:02 > 0:32:05As the property stands today, being vacant,
0:32:05 > 0:32:08you could probably put this on the market for in the early 200,000s,
0:32:08 > 0:32:11maybe up to as much as 210,000.
0:32:11 > 0:32:14But once fully let and all the rooms are full,
0:32:14 > 0:32:19I'd expect that figure to go upwards to maybe £225,000 to £235,000.
0:32:19 > 0:32:21As it is, being empty,
0:32:21 > 0:32:24it would probably sell for about £220,000.
0:32:24 > 0:32:27If you were to put tenants in it and then sell it on,
0:32:27 > 0:32:31I'd probably value it at about £235,000.
0:32:31 > 0:32:34'That top figure for a fully tenanted house would mean
0:32:34 > 0:32:37'a pre-tax profit of around £40,000 for Ally and Jack.
0:32:37 > 0:32:42'But if it were empty, ie, vacant, between £5,000 and £25,000 profit.
0:32:42 > 0:32:46'However, that's not the plan here, as Ally intends to let the rooms.'
0:32:46 > 0:32:50On a room-by-room basis, per calendar week, you could expect to achieve
0:32:50 > 0:32:55somewhere in the region of £100 for the ones which have an en suite facility,
0:32:55 > 0:32:57and for the ones that don't, maybe a fraction under.
0:32:57 > 0:33:02I think rental-wise, it would rent out for about £85 to £100 per week,
0:33:02 > 0:33:05depending on the size of the room.
0:33:05 > 0:33:13'Those weekly figures would translate into just under £2,600 per calendar month for all six rooms.'
0:33:13 > 0:33:15I think that's sort of in line with what we were thinking.
0:33:15 > 0:33:19It's quite a good return if you multiply it by six,
0:33:19 > 0:33:21and then by 52.
0:33:21 > 0:33:26'But you do have to bear in mind that student lets are not always 52 weeks of the year,
0:33:26 > 0:33:30'so that needs to be factored in. But on a 52-week basis,
0:33:30 > 0:33:33'that would give her around £30,000 per annum.
0:33:33 > 0:33:36'That's a possible yield of 16 percent!
0:33:36 > 0:33:39'So is Ally happy with the outcome?'
0:33:39 > 0:33:42Yes, it's been a good project. I'm pleased with it.
0:33:42 > 0:33:44I'm glad it's over.
0:33:46 > 0:33:52'I'm in the northeast of England today in the historic market town of Darlington.
0:33:52 > 0:33:55'There's a lot of investment going into the town these days
0:33:55 > 0:33:59'from colleges, local businesses and multinational companies.
0:33:59 > 0:34:04'That means improved prospects for employment and for the housing market.'
0:34:04 > 0:34:06Well, I'm close to the centre of Darlington
0:34:06 > 0:34:09in an area called Eastbourne.
0:34:09 > 0:34:13Good local amenities, shops, schools, et cetera.
0:34:13 > 0:34:17And I'm here to see not a house but a plot of land.
0:34:19 > 0:34:23And this is it! Yeah, really. No, really.
0:34:23 > 0:34:28The guide price, £15,000 plus.
0:34:29 > 0:34:32'Hm. To be absolutely clear, the plot of land we're talking about
0:34:32 > 0:34:35'doesn't include this generous expanse of grass over there.
0:34:35 > 0:34:39'It's just this small rectangle here.'
0:34:39 > 0:34:45Now, you're probably thinking, "I've strolled past plots of land that look almost identical to that
0:34:45 > 0:34:47"and I've never considered it to be a building plot."
0:34:47 > 0:34:50Well, it takes vision. Somebody had it. What did they look for?
0:34:50 > 0:34:53Well, it's flat, it's got easy access to the roads,
0:34:53 > 0:34:56it's got residential properties all around it,
0:34:56 > 0:35:00and most importantly, they made the decision to try and get planning permission.
0:35:00 > 0:35:07That was successful. So, suddenly this little plot of land that could be anywhere
0:35:07 > 0:35:09just happens to be very valuable.
0:35:09 > 0:35:12# Don't you let
0:35:12 > 0:35:15# The green grass fool you
0:35:16 > 0:35:18# Don't let it
0:35:18 > 0:35:21# Change your mind #
0:35:21 > 0:35:25'It may look like any common or garden patch of grass,
0:35:25 > 0:35:31'but put a new build here and it's likely to sell or let very quickly, perhaps even before it's finished.
0:35:31 > 0:35:34'This busy road wouldn't suit everyone,
0:35:34 > 0:35:37'but someone's going to love the fact that the bus stop
0:35:37 > 0:35:39'will be right outside their front door.'
0:35:41 > 0:35:46So, what could possibly be built on this fairly small plot of land?
0:35:46 > 0:35:50What do you think? A one-bedroom? No, not one.
0:35:50 > 0:35:53A two-bedroom? No, not two!
0:35:53 > 0:35:58A three-bedroom detached house, believe it or not.
0:35:58 > 0:36:02How are they going to do that? Let's take a look at the plans. Well, a fairly basic design,
0:36:02 > 0:36:04but it's functional, it works.
0:36:04 > 0:36:08That's the outside. Here's how it sits on this plot.
0:36:08 > 0:36:11You can see the plot here. Basically, downstairs...
0:36:11 > 0:36:15Literally squeezing in here. These are the existing houses all around it.
0:36:15 > 0:36:21Downstairs you've got yourself a lounge and a kitchen. They've managed to squeeze in a WC.
0:36:21 > 0:36:25And then upstairs, you've got the three bedrooms.
0:36:25 > 0:36:29They've even managed to squeeze in an en suite! Unbelievable. And a family bathroom.
0:36:29 > 0:36:32There you go. Those are the plans.
0:36:32 > 0:36:34Absolutely extraordinary.
0:36:35 > 0:36:38'Hm. Yeah. The crucial aspect about these plans, though,
0:36:38 > 0:36:40'is that they have been passed.
0:36:40 > 0:36:43'And as they're surrounded by other houses,
0:36:43 > 0:36:47'the chances are that it will have easy access to essential utilities,
0:36:47 > 0:36:52'like gas, water, electricity and drainage, which will cut down on build time.
0:36:52 > 0:36:55'So, at that guide price of £15,000,
0:36:55 > 0:36:59'what does a local property expert think of this building plot?'
0:36:59 > 0:37:02Most people would walk past a piece of land like this and not realise its potential.
0:37:02 > 0:37:05A developer would look at this land and think to himself,
0:37:05 > 0:37:08"There's a good resale value in it."
0:37:08 > 0:37:11One of the benefits of this plot is that the planning permission
0:37:11 > 0:37:14has already been accepted, so anyone buying this plot now
0:37:14 > 0:37:17would be able to build pretty quickly on it.
0:37:17 > 0:37:21'What kind of resale value could there be?'
0:37:21 > 0:37:23Looking at the plans that have already been agreed,
0:37:23 > 0:37:26if they do go ahead and build a three-bedroom detached house here,
0:37:26 > 0:37:30I think it would be worth £120,000 to £125,000.
0:37:30 > 0:37:33'If the plot sold for near its guide price of £15,000,
0:37:33 > 0:37:38'then depending on the build costs, there could be a healthy profit to be made here.
0:37:38 > 0:37:40'What about the rental potential?'
0:37:40 > 0:37:48I think the rental value could be worth anywhere between £550 to £575 per calendar month.
0:37:48 > 0:37:53Well, it doesn't look much, does it? But for a developer, this is a potential money-spinner.
0:37:53 > 0:37:57Most importantly, it's flat, it's got potential access to all sorts of services
0:37:57 > 0:38:00and it's got that all-important planning permission.
0:38:00 > 0:38:03Let's see who went for it when it went under the hammer.
0:38:05 > 0:38:08We're going to go to Darlington. This is a building plot
0:38:08 > 0:38:13with planning permission for the erection of a three-bedroom detached family-size home.
0:38:13 > 0:38:15Can I ask for 15,000 to start?
0:38:15 > 0:38:19OK, somebody start me at 10. 10,000 on the second row.
0:38:19 > 0:38:23£10,000 bid. Do I have £12,000 anywhere else?
0:38:23 > 0:38:25I'll take one from anywhere. One bid.
0:38:25 > 0:38:2811,000. 12. No?
0:38:28 > 0:38:30New bidder in the centre at £12,000. 13.
0:38:30 > 0:38:3313 bid. 14. 14.
0:38:33 > 0:38:3515. 16.
0:38:35 > 0:38:3717. 18.
0:38:37 > 0:38:4019. 20.
0:38:40 > 0:38:42£20,000 bid. 21?
0:38:42 > 0:38:46Gentleman in the middle with the blue shirt, £20,000.
0:38:46 > 0:38:48I'm selling once at 20. This is your last chance.
0:38:48 > 0:38:51For the second time at £20,000.
0:38:51 > 0:38:55- HAMMER BANGS - Sold, gentleman in the centre of the room at £20,000.
0:38:55 > 0:39:00'That successful bidder, who got the plot for £20,000, was Kriton.
0:39:00 > 0:39:05'He runs a family-owned property development business
0:39:05 > 0:39:07'with up to 60 properties in their own portfolio.
0:39:07 > 0:39:11'They also manage another 60 on behalf of their clients.
0:39:11 > 0:39:14'He's been on the show before when we saw him renovate
0:39:14 > 0:39:17'this semi-detached house in Brandon near Durham.
0:39:20 > 0:39:23'I was keen to find out his plans for the plot.
0:39:23 > 0:39:26'But first, let's get out of this downpour.'
0:39:26 > 0:39:30# Get in, get out of the rain #
0:39:30 > 0:39:34- I thought it was a bit more sensible to meet here rather than the plot. - OK.
0:39:34 > 0:39:37- But tell me why you wanted to buy it.- We'd been after a plot of land for some time.
0:39:37 > 0:39:42We, as a business, do a lot of refurbishments,
0:39:42 > 0:39:44so we buy a lot of properties from auction
0:39:44 > 0:39:47and they're generally in a pretty bad state and we refurbish them.
0:39:47 > 0:39:53My guys have always wanted something that's flat and square and easy to build. So that was number one.
0:39:53 > 0:39:57The second part, we wanted more exposure to Darlington,
0:39:57 > 0:39:59cos there's a great rental demand in Darlington.
0:39:59 > 0:40:03That's a great area, it's very close to the train station,
0:40:03 > 0:40:08and whether we decide to keep it or sell it on, it'll always have a good, steady market.
0:40:08 > 0:40:12'Kriton certainly seems to have done his research about the area
0:40:12 > 0:40:15'and is confident about the demand for this new build.
0:40:15 > 0:40:19'You would never guess that this is a relatively new career for him.
0:40:19 > 0:40:23'In a previous life, he was a high-powered executive in the music industry,
0:40:23 > 0:40:26'living with his wife and family in California.'
0:40:26 > 0:40:30- I came back from Los Angeles about five or six years ago.- Right.
0:40:30 > 0:40:33- And found myself jobless.- Right.
0:40:33 > 0:40:35The company I worked for in London
0:40:35 > 0:40:38didn't want me to live up in North Yorkshire
0:40:38 > 0:40:41- and have an office in London. - What were you doing? - I was in the music business.
0:40:41 > 0:40:45I headed up a big digital division for one of the big five music companies.
0:40:45 > 0:40:47- Oh, wow! What, in Los Angeles?- Yeah.
0:40:47 > 0:40:52- That sounds very rock'n'roll. - It possibly sounds more rock'n'roll than it actually was.
0:40:52 > 0:40:56It was in the early days when nobody really knew what it was.
0:40:56 > 0:40:59iTunes hadn't even been established then.
0:40:59 > 0:41:02So we were sort of pioneering it along with Steve Jobs and his team.
0:41:02 > 0:41:05- Really?- Yeah. It was fun.
0:41:05 > 0:41:08And then property, from being a record executive?
0:41:08 > 0:41:13Well, we had some property in London, which we rented out while we were in LA,
0:41:13 > 0:41:16and again, we released some money out of that property in London
0:41:16 > 0:41:18as a deposit to buy a house in LA.
0:41:18 > 0:41:21So that's us got two.
0:41:21 > 0:41:26And the rental easily more than covered the mortgage on the property in London.
0:41:26 > 0:41:29And then so we used a bit more of that money to buy another property.
0:41:29 > 0:41:34And then suddenly you're on the ladder. And we just made a decision, my wife and I,
0:41:34 > 0:41:38- about 2005, 2006, we're going to really do this properly.- Right.
0:41:38 > 0:41:41So, sold the house in London, sold the house in LA,
0:41:41 > 0:41:45and just got a lump of capital together and got started.
0:41:45 > 0:41:47'Since that career-changing decision,
0:41:47 > 0:41:52'Kriton, his wife and brothers have built up a successful property business.
0:41:52 > 0:41:55'But making it that has meant watching the pennies,
0:41:55 > 0:42:00'even when buying a potentially lucrative plot like this for £20,000.'
0:42:00 > 0:42:02You were happy with what you paid for the plot?
0:42:02 > 0:42:05I'm a Scotsman. How can I be happy with what I paid?
0:42:05 > 0:42:08I would've liked it maybe £2,000 or £3,000 less,
0:42:08 > 0:42:12but I sort of had an idea about,
0:42:12 > 0:42:14and other people said that's a reasonable, fair price.
0:42:14 > 0:42:18And, as well, I've got the planning permission, I've got a set of drawings,
0:42:18 > 0:42:22- so maybe I shouldn't be too greedy. - No. It's all good.- Yeah, it's fine.
0:42:22 > 0:42:26'He'll use his regular tradesmen to build the new house,
0:42:26 > 0:42:29'which will blend in with the surrounding properties.
0:42:29 > 0:42:33'He's reckoning on a build cost of £40,0000 and a turnaround of four months.
0:42:33 > 0:42:36'But even before a brick's been laid,
0:42:36 > 0:42:40'the unbuilt property is attracting interest.'
0:42:40 > 0:42:44- Is the idea to sell it on or to rent it out?- I know three investors that want it,
0:42:44 > 0:42:49because it's a good quality investment and it's a nice one to have in a portfolio.
0:42:49 > 0:42:53- But because of that, we might decided to keep it ourselves.- Right.
0:42:53 > 0:42:57I know my young brother's quite keen on putting it into our portfolio, so that'll be another discussion.
0:42:57 > 0:43:00We really look forward to seeing it all finished.
0:43:00 > 0:43:03- Good luck with it.- Thank you. - Nice to meet you.
0:43:03 > 0:43:05Well, Kriton clearly knows what he's doing,
0:43:05 > 0:43:10but this is his first venture into developing a property from scratch
0:43:10 > 0:43:13and that can throw up all sorts of issues.
0:43:13 > 0:43:16How will he get on? Will there be a house here when we return?
0:43:16 > 0:43:18You can find out later in the show.
0:43:21 > 0:43:26Now, finding good tradesmen is the key to getting properties done up well and on time,
0:43:26 > 0:43:31but some people choose to do it themselves to maximise their profits.
0:43:31 > 0:43:33So have our buyers been getting stuck in
0:43:33 > 0:43:36or just stuck? Let's find out.
0:43:37 > 0:43:42'Back now to Mid Glamorgan and the village of Penygraig in the Rhondda Valley.
0:43:42 > 0:43:46'Just outside the village, on a busy road, this former pub
0:43:46 > 0:43:52'was bought at auction for £43,000 by Andi, on the right, and her partner Cath.
0:43:52 > 0:43:58'The couple live in Essex and have previously converted a pharmacy in the village into flats.'
0:43:58 > 0:44:01- How well do you know this area? - Erm, really well.
0:44:01 > 0:44:05I'm from Pontypridd, which is about two miles.
0:44:05 > 0:44:08The properties are really cheap, so it's an ideal place to buy.
0:44:08 > 0:44:13'They had ambitious plans for this derelict former pub.'
0:44:13 > 0:44:15Hopefully, we'll be turning it into flats,
0:44:15 > 0:44:17two two-bedroom upstairs
0:44:17 > 0:44:21and hopefully three one-bedrooms down here.
0:44:21 > 0:44:23'They were going to have to get planning permission
0:44:23 > 0:44:27'and lack of parking could've been a problem with that.
0:44:27 > 0:44:30'But they hoped the conversion would be finished in about a year.
0:44:30 > 0:44:34'They'd set a tentative budget of £90,000 to £100,000.
0:44:34 > 0:44:38'They had builders, plumbers and electricians standing by
0:44:38 > 0:44:43'but were going to do the bathrooms, kitchens and tiling themselves.
0:44:43 > 0:44:49'But it was two years later that we met Andi, Cath and their dog, Ronnie, back at the former pub,
0:44:49 > 0:44:53'which has been converted into five flats.
0:44:53 > 0:44:56'There are two flats on the first floor.
0:44:56 > 0:44:59'Both have large kitchens/living areas.
0:45:00 > 0:45:05'I'm really pleased they've retained that wonderful ceiling in the former function room.
0:45:06 > 0:45:09'Both the flats have two bedrooms.
0:45:13 > 0:45:17'And the derelict washing facilities have gone from this
0:45:17 > 0:45:19'to this.
0:45:21 > 0:45:25'But as Andi explains, the building had to be taken right back
0:45:25 > 0:45:28'and started all over again.'
0:45:28 > 0:45:30When we first came in here, the place had been vandalised,
0:45:30 > 0:45:33so we had to completely clear everything up.
0:45:33 > 0:45:35And then we started taking down the walls,
0:45:35 > 0:45:38it was just one massive room upstairs and one downstairs.
0:45:38 > 0:45:42Then we just put the walls up where they needed to be.
0:45:42 > 0:45:45But everything was governed by the windows,
0:45:45 > 0:45:47because obviously you can't move the windows,
0:45:47 > 0:45:50so that governed the sizes of the rooms.
0:45:50 > 0:45:54'The layout on the ground floor has completely changed.
0:45:54 > 0:45:57'The three flats are beginning to take shape.
0:45:57 > 0:46:00'It's taken a lot longer than they thought.
0:46:00 > 0:46:03'Planning was the main issue, with parking being the problem.
0:46:03 > 0:46:07'Their application was submitted and rejected twice
0:46:07 > 0:46:09'before they appealed and had it approved
0:46:09 > 0:46:12'when it was agreed the eight parking spaces the flats needed
0:46:12 > 0:46:15'could come from the public car park opposite.'
0:46:17 > 0:46:22It was actually 11 months from buying it to getting the planning permission.
0:46:22 > 0:46:24Then we had to get building regs.
0:46:24 > 0:46:28So far, we've probably been building about seven months.
0:46:28 > 0:46:32'The upstairs flat at the far end of the property has separate access
0:46:32 > 0:46:35'out onto the winding road on the hill next to the property.
0:46:37 > 0:46:40'Although the building's been gutted and largely rebuilt,
0:46:40 > 0:46:43'some original features have survived.'
0:46:44 > 0:46:48Well, the vaulted ceiling is still there. It's in the lounge in the other flat.
0:46:48 > 0:46:52When we took some of the boarding off the walls, we've opened up fireplaces,
0:46:52 > 0:46:56like this one, which we didn't know were there, so we've kept as many of those as we could.
0:46:56 > 0:46:59The banisters, they're the original ones.
0:46:59 > 0:47:02'Their initial team of builders left after a few months,
0:47:02 > 0:47:06'so Andi and Cath had to find replacements.'
0:47:06 > 0:47:10We just got other trades in to do the work, some other builders,
0:47:10 > 0:47:13and got a plumber and an electrician and just carried on.
0:47:13 > 0:47:17We've been stuck in from the very beginning, anyway, because we did all the demolition
0:47:17 > 0:47:21you know, to begin with, while we were waiting for planning permission.
0:47:22 > 0:47:26'Back home in Essex, Cath works in administration
0:47:26 > 0:47:28'and Andi's self-employed as a gardener.
0:47:28 > 0:47:34'While she's up here, Andi stays in a flat she and Cath own in the pharmacy they converted locally.
0:47:34 > 0:47:37'But that's about to change.'
0:47:37 > 0:47:40Flat five, which is the one with the vaulted ceiling,
0:47:40 > 0:47:43we're actually keeping that flat for ourselves
0:47:43 > 0:47:46and then we're moving out of the flat we've already got here and we're renting that out.
0:47:46 > 0:47:51'Well, I can't blame them, as it looks like it's going to be a lovely flat when it's finished.
0:47:51 > 0:47:54'Are they still looking to sell the other second-floor flat?'
0:47:54 > 0:47:57We don't think we're going to sell any of them now.
0:47:57 > 0:48:00We've more or less decided we're going to rent them all.
0:48:00 > 0:48:04But it's the same amount of flats rented out, it's just that we're moving into there,
0:48:04 > 0:48:06cos it is a nice flat.
0:48:06 > 0:48:10'The project took longer than expected, so what about the finances?'
0:48:10 > 0:48:16We are over-budget. I would say, so far, we've probably spent 115.
0:48:16 > 0:48:18And there's probably another couple of thousand yet.
0:48:19 > 0:48:22'With the 43,000 they paid at auction,
0:48:22 > 0:48:27'that takes their total investment to around £160,000.
0:48:27 > 0:48:30'We invited two local property experts
0:48:30 > 0:48:32'to take a look at the conversion.
0:48:32 > 0:48:37'It's quite a change from the derelict pub it was two years ago.'
0:48:37 > 0:48:40When I first visited the property a couple of years ago,
0:48:40 > 0:48:42it was in a very sorry state.
0:48:42 > 0:48:45It had been vandalised and it was very dangerous.
0:48:45 > 0:48:49The transformation has been nothing short of spectacular.
0:48:49 > 0:48:51It's obviously still a work in progress,
0:48:51 > 0:48:54but judging by the current condition of the property,
0:48:54 > 0:48:57they will make great first-time buyers or buy-to-let investments
0:48:57 > 0:49:01- ready to move into.- The utilisation of space has been very good.
0:49:01 > 0:49:04The character features in some rooms have been kept.
0:49:04 > 0:49:07Overall, the appearance is excellent.
0:49:07 > 0:49:11'How much could the flats sell on for?'
0:49:12 > 0:49:16I would assess the two-bedrooms to be in the region of £35,000
0:49:16 > 0:49:19and the one-bedroom would be in the region of £25,000.
0:49:19 > 0:49:23For the one-bedroom flats, we'd look to market them for £25,000
0:49:23 > 0:49:26in order to achieve between £20,000 and £25,000.
0:49:26 > 0:49:31For the two-bedrooms, we should be looking to market them for £35,000
0:49:31 > 0:49:33in order to achieve between £30,000 and £35,000.
0:49:33 > 0:49:38'Well, if the three one-beds do achieve £25,000
0:49:38 > 0:49:40'and the pair of two-beds £35,000,
0:49:40 > 0:49:43'then if all five flats were sold,
0:49:43 > 0:49:47'Cath and Andi could reap £145,000.
0:49:47 > 0:49:53'But that's 15 grand less than the £160,000 they'd have invested.'
0:49:53 > 0:49:57I think they're a bit low on the prices there, but we're not selling at the moment, anyway.
0:49:57 > 0:50:01'What about the rental potential?'
0:50:01 > 0:50:03For the one-bedroom flats, we should be looking to achieve
0:50:03 > 0:50:06in and around £325 a month,
0:50:06 > 0:50:10and for each two-bedroom flat, around £375 per month.
0:50:10 > 0:50:13The two-bedroom flats, £375 to £400 per calendar month,
0:50:13 > 0:50:19and the one-bedroom flats, £325 to £350 per calendar month.
0:50:19 > 0:50:23'In fact, Andi and Cath have already let one of the two-bedroom flats
0:50:23 > 0:50:25'for £425 per month
0:50:25 > 0:50:28'and hope to achieve more than the agents' valuations
0:50:28 > 0:50:31'for the one-bed flats, too.'
0:50:31 > 0:50:37We're happy with the 425 and we will be asking 390 for the one-beds,
0:50:37 > 0:50:40which because of the amount of interest we've had,
0:50:40 > 0:50:44I don't think we'll have any problem renting at that price.
0:50:45 > 0:50:47'Of course, this is a long-term investment for the couple
0:50:47 > 0:50:50'to generate income for them when they retire.
0:50:50 > 0:50:53'But what are their immediate plans?'
0:50:53 > 0:50:57We are going on holiday next. We're going to Spain for ten days.
0:50:57 > 0:51:00And then we come back, we've got to get this finished off
0:51:00 > 0:51:04and get rented out and get some money coming in.
0:51:12 > 0:51:17'We're back in Darlington, where earlier I checked out this rather odd little plot of land
0:51:17 > 0:51:21'which sold at auction for £20,000 to Kriton.
0:51:21 > 0:51:23'He runs two property investment companies
0:51:23 > 0:51:26'and one property rental company.
0:51:26 > 0:51:29'The plot had full planning permission for a three-bed detached house
0:51:29 > 0:51:33'which was very much part of its appeal.'
0:51:33 > 0:51:36- Tell me why you wanted to buy it. - We'd been after a plot of land for some time.
0:51:36 > 0:51:41We, as a business, do a lot of refurbishments,
0:51:41 > 0:51:43so we buy a lot of properties from auction
0:51:43 > 0:51:46and they're generally in a pretty bad state and we refurbish them.
0:51:46 > 0:51:51My guys have always wanted something that's flat and square and easy to build.
0:51:51 > 0:51:55'Well, let's hope it was as simple as Kriton made it sound.
0:51:55 > 0:51:59'He estimated a build timescale of four months.
0:51:59 > 0:52:02'But it's now just over one year since we had that chat.
0:52:02 > 0:52:07'Has this plot with a plan been transformed into a property with panache?
0:52:23 > 0:52:26'Well, Kriton lost the plot
0:52:26 > 0:52:30'and from a patch of grass has sprung a modern house
0:52:30 > 0:52:34'with a large lounge, kitchen and WC on the ground floor.
0:52:34 > 0:52:39'Then upstairs, a family bathroom and three bedrooms, as planned.
0:52:39 > 0:52:41'Plus an en suite for the master.
0:52:41 > 0:52:45'It looks great. So, was it straightforward?'
0:52:45 > 0:52:48We've really enjoyed the new build.
0:52:48 > 0:52:51I think everybody involved has learned a lot, I've certainly learned a huge amount.
0:52:51 > 0:52:56One of the nicest things we learned is, on a new build, everything starts off square.
0:52:56 > 0:53:00You know, it's all right angles, it's nice and easy from that perspective.
0:53:00 > 0:53:02I think the biggest thing we've learned on a new build
0:53:02 > 0:53:05is just how much legal requirements there are.
0:53:05 > 0:53:09From your sound testing, to your roof work,
0:53:09 > 0:53:14to your windows, to your insulation, there's a much higher requirement involved in that
0:53:14 > 0:53:16than there is with a refurbishment.
0:53:16 > 0:53:19'Peaks and troughs, then. There were problems with the paperwork
0:53:19 > 0:53:22'which took around eight weeks to iron out.
0:53:22 > 0:53:26'By that time, Kriton and his team had to concentrate on other projects,
0:53:26 > 0:53:29'so this one went on the back burner for a while.
0:53:29 > 0:53:32'But once work began, it was all go.'
0:53:33 > 0:53:38Well, from the time we actually broke ground to lay the footings, it took 20 weeks.
0:53:38 > 0:53:43'That is mighty impressive and just goes to show that sometimes building from scratch
0:53:43 > 0:53:46'can be quicker than a refurbishment. And it really helps
0:53:46 > 0:53:51'to have a dedicated team on side and on site.'
0:53:51 > 0:53:53It was all local contractors.
0:53:53 > 0:53:56There's a young chap who's currently one of our tenants, he's a ground worker,
0:53:56 > 0:54:00so we set him a target of a week to dig the foundations
0:54:00 > 0:54:04and lay all the footings and he achieved that in five days.
0:54:04 > 0:54:07We then recruited a team of bricklayers,
0:54:07 > 0:54:11all of whom were semi-retired, the oldest one being 71.
0:54:11 > 0:54:16They actually put the structure up, from the footings to roof level, in three weeks.
0:54:17 > 0:54:21Says a lot for the grey revolution, doesn't it? Which I'm getting pretty close to myself.
0:54:21 > 0:54:24But, no, they were absolutely tremendous.
0:54:24 > 0:54:28Non-stop, eight hours a day. Best bricklayers we've ever come across.
0:54:28 > 0:54:32'Well, you know what they say. Teamwork makes the dream work.
0:54:32 > 0:54:35'All that's left to do here is to put in a boiler and carpets,
0:54:35 > 0:54:39'but those decisions are being left to whoever moves in.
0:54:41 > 0:54:44'Everything else looks new and fresh and I like the fact
0:54:44 > 0:54:48'that Kriton managed to squeeze in a small back garden here, as well.
0:54:48 > 0:54:52'The whole experience has got him ready and raring to go for the next one.'
0:54:53 > 0:54:59Our watch word's going to be that the land has to come with plans already signed off.
0:54:59 > 0:55:01We don't want to go and purchase a piece of land
0:55:01 > 0:55:06then waste many, many months getting architect's drawings, et cetera.
0:55:06 > 0:55:09So we're looking out again for another project ready to do.
0:55:09 > 0:55:13'But before he does, let's find out how his budget panned out.
0:55:13 > 0:55:17'He had aimed to spend £40,000 on the build.'
0:55:17 > 0:55:21Well, the land cost £20,000
0:55:21 > 0:55:25and we've spent £50,000 on top of that.
0:55:25 > 0:55:29I would say about £25,000 has been on materials,
0:55:29 > 0:55:34about £5,000, £6,000 on regulatory stuff with the land registry,
0:55:34 > 0:55:37certificates, et cetera, and the rest on labour.
0:55:37 > 0:55:42'So, a total outlay here of £70,000.
0:55:42 > 0:55:45'What do two local estate agents have to say?'
0:55:46 > 0:55:49I love the fixtures and fittings,
0:55:49 > 0:55:51I love the kitchen, I think the units are superb,
0:55:51 > 0:55:55and I love the facility that the main bedroom's got en suite.
0:55:55 > 0:55:57I think, in terms of the size of the plot,
0:55:57 > 0:55:59he's done a fantastic job of building this.
0:55:59 > 0:56:04The room sizes, the layout, absolutely sits perfect on the size of the plot.
0:56:04 > 0:56:06The kitchen looks great, the bathroom's great,
0:56:06 > 0:56:09and to put an en suite in the bedroom, again, fantastic.
0:56:09 > 0:56:13Outside, perfect. Perfect for those people who are not keen gardeners
0:56:13 > 0:56:18but somewhere to have a barbie and sit of an evening with a beer or a gin and tonic.
0:56:19 > 0:56:24'Well, let's just hold off raising our glasses and talk numbers for a moment.
0:56:24 > 0:56:26'If Kriton were to let this property,
0:56:26 > 0:56:29'what would the estate agents estimate price-wise?'
0:56:30 > 0:56:36The rental value of this property I would say is between £500 to £550 per calendar month.
0:56:36 > 0:56:42My recommended rental valuation on this property would be £525 per calendar month.
0:56:42 > 0:56:45For a property like this, so close to the station,
0:56:45 > 0:56:47and based on what we rent our other properties in Darlington,
0:56:47 > 0:56:50I'd be expecting a higher figure and I think I would get it.
0:56:50 > 0:56:54'Even if the rental's at the lower end of those estimates,
0:56:54 > 0:56:56'it would still yield over eight percent.
0:56:56 > 0:56:59'Whilst Kriton's not completely ruling out rental,
0:56:59 > 0:57:03'the house is on the market and his preference is to sell.
0:57:03 > 0:57:07'What do these local experts suggest it could sell for?'
0:57:07 > 0:57:10My recommended asking price on this property
0:57:10 > 0:57:13would be offers invited in the region of £110,000.
0:57:13 > 0:57:17I would value this property at £110,000 to £120,000.
0:57:17 > 0:57:24The property's currently being marketed by an estate agent in the town at 115,
0:57:24 > 0:57:30with a view to accepting any offer over 107, 108, so they're absolutely spot on.
0:57:30 > 0:57:36'Those estate agents' valuations would leave Kriton a well-earned pre-tax profit
0:57:36 > 0:57:38'of between £40,000 and £50,000.
0:57:38 > 0:57:43'Is it time for him to take an equally well-earned break now?'
0:57:43 > 0:57:46I am having a holiday. I'm finishing off a stable at home
0:57:46 > 0:57:49for a little girl who's getting a pony.
0:57:49 > 0:57:54We've just finished another big property which is about 30 miles north of here.
0:57:54 > 0:57:57We've purchased two more properties
0:57:57 > 0:58:00which we'll start work on the middle of next week.
0:58:00 > 0:58:05And then it just keeps going and keeps going and keeps going.
0:58:07 > 0:58:11That's it for today's show. Make sure you join us next time
0:58:11 > 0:58:15- for more properties that sold under the hammer.- We'll see you then. - Goodbye.- Goodbye.
0:58:15 > 0:58:19Subtitles by Red Bee Media Ltd
0:58:19 > 0:58:19.