0:00:02 > 0:00:05Welcome to the show. Over the years, Lucy and I have witnessed
0:00:05 > 0:00:07the ups and downs of the property market.
0:00:07 > 0:00:09Whether it's a home or an investment you're looking for,
0:00:09 > 0:00:12you want to see its value go up, not down.
0:00:12 > 0:00:15Therefore, it's really important to buy at the right price.
0:00:15 > 0:00:19One way you could do that is by buying under the hammer.
0:00:45 > 0:00:48Well, we've all heard about the ever-changing property market.
0:00:48 > 0:00:53But by doing a deal at auction, well, it's one of simplest processes.
0:00:53 > 0:00:56Your hand goes up, the hammer goes down, you've bought it.
0:00:56 > 0:00:58So what did people buy today?
0:01:00 > 0:01:03I visit a three-bed terrace in Shildon, County Durham
0:01:03 > 0:01:05and discover that some houses are priced so low
0:01:05 > 0:01:08you might not be able to buy them.
0:01:10 > 0:01:15In Burslem, Stoke-on-Trent, we meet a father whose investment in property is very much an investment
0:01:15 > 0:01:17in his children's future.
0:01:20 > 0:01:22And in London, these two mid-terrace flats in Streatham
0:01:22 > 0:01:28may need work, but for a potential profit of over £130,000,
0:01:28 > 0:01:29it's worth it!
0:01:32 > 0:01:34These properties were all purchased at auction.
0:01:34 > 0:01:36We find out who bought them and for how much
0:01:36 > 0:01:38when they went under the hammer.
0:01:42 > 0:01:45I'm in County Durham, north of Darlington,
0:01:45 > 0:01:47south of Durham itself,
0:01:47 > 0:01:49and a little town called Shildon,
0:01:49 > 0:01:51once known as the cradle of the railways
0:01:51 > 0:01:55because of the part local industry played in developing the country's rail network.
0:01:55 > 0:02:00Big question is, will the property I'm here to see today be on the right tracks?
0:02:00 > 0:02:03# All aboard! #
0:02:03 > 0:02:07The Shildon Works closed in 1984,
0:02:07 > 0:02:10after almost two centuries in business.
0:02:10 > 0:02:12The area is less prosperous than it used to be,
0:02:12 > 0:02:14but still a popular place to live,
0:02:14 > 0:02:17as property prices are more attractive than its near neighbours.
0:02:17 > 0:02:21And by attractive, I also mean more affordable.
0:02:21 > 0:02:25# I'm going off the rails on a crazy train... #
0:02:25 > 0:02:27So, what brings me here?
0:02:27 > 0:02:30Well, it's a property on this fairly busy main road,
0:02:30 > 0:02:31which isn't ideal,
0:02:31 > 0:02:38but wait till you hear the guide price - £29,950-plus.
0:02:38 > 0:02:41Plus about 50 grand, it'd still be worth a look.
0:02:42 > 0:02:46So, that kind of money, if it's anything better than a garden shed...
0:02:46 > 0:02:49Well, not quite, I'm being a bit facetious there.
0:02:49 > 0:02:52But basically, I'm not expecting much,
0:02:52 > 0:02:54and yet you walk in here...
0:02:54 > 0:02:55Doesn't smell of damp.
0:02:55 > 0:03:00It looks like it's been relatively recently decorated.
0:03:00 > 0:03:03I mean, everything is a bonus.
0:03:03 > 0:03:05It's a...yeah, it's a good house.
0:03:05 > 0:03:09Bit noisy in that room, because you've obviously got the fairly busy main road there.
0:03:09 > 0:03:13But nice-sized rooms. Front room there, a rear sitting room here.
0:03:13 > 0:03:16I guess that's where the house would have ended at one point,
0:03:16 > 0:03:19but in this case, it looks like there's an extension.
0:03:19 > 0:03:22So this is where your kitchen is.
0:03:22 > 0:03:24I mean, it's a half-decent size.
0:03:24 > 0:03:27You are limited to the kind of design you can go for -
0:03:27 > 0:03:29this sort of galley look or U-shape.
0:03:29 > 0:03:32At the moment, it's got this pine effect.
0:03:32 > 0:03:35The interesting thing with this is, it looks really dated.
0:03:35 > 0:03:39If you put a really nice matt paint on here,
0:03:39 > 0:03:42white, you'd transform it.
0:03:42 > 0:03:45In terms of renovations, depending on how much you have to spend,
0:03:45 > 0:03:47one thing you could save on is just by painting that.
0:03:47 > 0:03:49Definitely replace the units.
0:03:49 > 0:03:52Boiler's definitely seen better days.
0:03:52 > 0:03:54But all in all...you know...
0:03:54 > 0:03:56you've got a lot of space.
0:03:56 > 0:03:59As I make my way upstairs, I realise
0:03:59 > 0:04:02it's not just the kitchen that might need some redoing.
0:04:02 > 0:04:04STAIRS CREAK
0:04:07 > 0:04:08Can you hear that?
0:04:10 > 0:04:12Wow! Those stairs...
0:04:12 > 0:04:14feel...ahem...
0:04:14 > 0:04:17decidedly dodgy. That needs investigating.
0:04:17 > 0:04:19But once you get upstairs, if you actually make it...
0:04:19 > 0:04:23Half-decent-sized bathroom and loo,
0:04:23 > 0:04:26although it could do with a bit of - what's the word? - regeneration.
0:04:26 > 0:04:29Little landing area.
0:04:29 > 0:04:31Large bedroom at the back there.
0:04:31 > 0:04:34And then two more bedrooms. Definitely not short of space.
0:04:34 > 0:04:38And I just keep coming back to that price - wow! Wow, wow, wow!
0:04:38 > 0:04:42# Wow, wow, wow, wow... #
0:04:42 > 0:04:44That guide price is unbelievable.
0:04:44 > 0:04:47# Unbelievable... #
0:04:47 > 0:04:52Even if it does need some modernisation, it's nothing desperately urgent on the inside,
0:04:52 > 0:04:55although maybe the outside needs a bit of work.
0:04:55 > 0:04:57There could be lovely stonework under there.
0:04:57 > 0:04:59I'll say it again - wow!
0:04:59 > 0:05:03# Unbelievable... #
0:05:05 > 0:05:08This is a really truly outstanding investment.
0:05:08 > 0:05:12Let's say you get this for approximately the guide price of £30,000-odd
0:05:12 > 0:05:17and you get, what, £400 a month rent for it -
0:05:17 > 0:05:19that's £4,800 in a year.
0:05:19 > 0:05:23That's 16% yield. 16%.
0:05:25 > 0:05:28Apart from the fact that's an amazing return on your money,
0:05:28 > 0:05:31just think about it - take the money out the bank, put it into this place,
0:05:31 > 0:05:35and in just about five years' time, you've got all your money back
0:05:35 > 0:05:37and you're left with this house.
0:05:41 > 0:05:44We asked a local estate agent whether she agreed with me.
0:05:44 > 0:05:47This property, it's a little tired.
0:05:47 > 0:05:51But not a million miles away from a lettable condition.
0:05:51 > 0:05:53Little bit extra work would be required
0:05:53 > 0:05:58if you were to put it up to sell to get the best price in what's quite a difficult market locally.
0:05:58 > 0:06:01To bring this property up to a reasonable standard,
0:06:01 > 0:06:03there's quite a bit of decorative work to be done,
0:06:03 > 0:06:06because there's quite a bit of Artex, which people don't like.
0:06:06 > 0:06:09And the bathroom's very tired and the kitchen also
0:06:09 > 0:06:12and it does need new floor coverings throughout.
0:06:12 > 0:06:15What are this property's resale prospects?
0:06:15 > 0:06:18Once the property's brought up to a reasonable standard,
0:06:18 > 0:06:23I would expect it to be worth in the region of £60,000 to £65,000.
0:06:23 > 0:06:25And as a rental?
0:06:25 > 0:06:28Being three-bedroom, this would be quite a popular property, I believe,
0:06:28 > 0:06:33and would probably command somewhere in the region of £425 per calendar month.
0:06:35 > 0:06:37Well, what can I say? It's a great little house,
0:06:37 > 0:06:39nice location,
0:06:39 > 0:06:43and at that kind of price, you just can't go wrong.
0:06:43 > 0:06:45Let's see who agreed when it went under the hammer.
0:06:50 > 0:06:53It's a spacious three-bedroom mid-terrace property.
0:06:53 > 0:06:55Let's not waste time. £30,000 anywhere?
0:06:57 > 0:06:58No bid at 30?
0:06:58 > 0:07:00At £30,000.
0:07:00 > 0:07:02I have one bid of £30,000.
0:07:02 > 0:07:0431 anywhere?
0:07:04 > 0:07:07I have one bid of £30,000.
0:07:07 > 0:07:0931 anywhere else?
0:07:09 > 0:07:1031 bid.
0:07:10 > 0:07:12Standing at 31. 32.
0:07:12 > 0:07:1432 bid. 33?
0:07:14 > 0:07:16I'm at 32,000. 33.
0:07:16 > 0:07:21A bid has been called in over the phone and is currently leading the auction.
0:07:21 > 0:07:23I'm selling once at 32...
0:07:24 > 0:07:27For the second time at £32,000.
0:07:28 > 0:07:34Sold. Gentleman's bid at £32,000. Seems a good buy for someone there.
0:07:34 > 0:07:38I agree! At 32 grand, that is a good buy.
0:07:38 > 0:07:42That phone bid was made by business partners Perry, seen here on the right,
0:07:42 > 0:07:45who's from London, and local boy Aidan.
0:07:45 > 0:07:48Formerly developers in their own right, they've now joined forces
0:07:48 > 0:07:51and are focusing on this area of Durham.
0:07:51 > 0:07:54- Aidan, Perry, good to see you both. - Hi.
0:07:54 > 0:07:57Congratulations. How does the partnership work?
0:07:57 > 0:07:59What do you both get involved in?
0:07:59 > 0:08:03Perry and I are beginning a portfolio/investment strategy
0:08:03 > 0:08:05that we're working on together.
0:08:05 > 0:08:09So that's a new direction, if you like, for us.
0:08:09 > 0:08:12And why are you joining forces with Perry?
0:08:12 > 0:08:17Well, I think... I like the man, he's a very nice guy!
0:08:17 > 0:08:19So that's a good place to start.
0:08:19 > 0:08:21He's a very honest chap
0:08:21 > 0:08:24and shares a similar belief
0:08:24 > 0:08:28in terms of the quality we should be renovating to.
0:08:28 > 0:08:32The pair have developed a strategy which is not just focused
0:08:32 > 0:08:35on improving one house to the standard they set.
0:08:35 > 0:08:39The long-term aim is to maximise their equity in each property
0:08:39 > 0:08:42by looking at the wider picture and whole streets,
0:08:42 > 0:08:44not just individual homes.
0:08:44 > 0:08:48If you own six properties on a street of 12 and they're all renovated,
0:08:48 > 0:08:50regenerated, to a really nice standard,
0:08:50 > 0:08:53that becomes ultimately a more desirable street
0:08:53 > 0:08:56which benefits everyone and the investors.
0:08:56 > 0:08:59Aidan and Perry were attracted as investors to this area of the country
0:08:59 > 0:09:02because of the purchase prices and the returns on them.
0:09:02 > 0:09:06They know they couldn't hope to buy properties in the southeast
0:09:06 > 0:09:07for these sums.
0:09:07 > 0:09:09And how do you see the local scene?
0:09:09 > 0:09:14I think it's probably the same as everywhere else in the country -
0:09:14 > 0:09:19it's very challenging for, certainly, people looking to buy for the first time.
0:09:19 > 0:09:21If you were to approach a bank
0:09:21 > 0:09:26for a rental mortgage, if you like,
0:09:26 > 0:09:29they have a minimum criteria for a property, which is obviously
0:09:29 > 0:09:33normally around £50,000 or £60,000
0:09:33 > 0:09:36and obviously, these properties are slipping underneath that value.
0:09:36 > 0:09:40Who'd have thought a house could be too cheap?
0:09:40 > 0:09:42It can be a mad world in the property game.
0:09:42 > 0:09:46Of course, it varies across the country and from lender to lender.
0:09:46 > 0:09:48But sometimes a house with a whole host of problems
0:09:48 > 0:09:51and a really low price
0:09:51 > 0:09:53might scare off lenders.
0:09:53 > 0:09:55And, interestingly for mortgages,
0:09:55 > 0:09:59there is an absolute minimum of 25 grand that can be borrowed.
0:09:59 > 0:10:02That is something to bear in mind when you're looking at lower-priced properties.
0:10:02 > 0:10:06So, what impact do local investors have on the housing market?
0:10:08 > 0:10:11In any way are you adversely affecting the opportunities
0:10:11 > 0:10:14for local people to buy these properties?
0:10:14 > 0:10:17From a moral perspective, if you like,
0:10:17 > 0:10:20what we're doing is we're providing... This is an empty house
0:10:20 > 0:10:24and we're turning it into a good-quality family home for somebody to rent.
0:10:24 > 0:10:26And at the moment, it isn't that,
0:10:26 > 0:10:30so my perspective would be, generally speaking,
0:10:30 > 0:10:35what we're doing is a positive for the towns that we're working in.
0:10:35 > 0:10:38Most of these are lying empty.
0:10:38 > 0:10:42A lot of the ones we've bought are two years plus as voids,
0:10:42 > 0:10:45so it doesn't make any sense to leave them.
0:10:46 > 0:10:49Perry and Aidan believe they can raise these houses
0:10:49 > 0:10:52up to a decent standard and increase their value.
0:10:52 > 0:10:55So how will they do that with this particular property?
0:10:56 > 0:11:01Certainly, we're going to redo electrics, top to bottom.
0:11:01 > 0:11:03It's going to need a new central heating system.
0:11:03 > 0:11:05It's running on the very narrow pipes
0:11:05 > 0:11:10and I don't suppose there's been any calculations done for heat source or anything similar,
0:11:10 > 0:11:12so we need to go back through all of that.
0:11:12 > 0:11:16I think after that, you're looking at new kitchen and bathroom.
0:11:16 > 0:11:21New kitchen and bathroom, definitely. Maybe re-skim some of the walls, definitely the ceilings.
0:11:21 > 0:11:25And we're probably going to knock out the fireplace in the front room.
0:11:25 > 0:11:27- All the way up?- Yeah.- OK.
0:11:27 > 0:11:29- Create a bit more space.- Yeah.
0:11:29 > 0:11:32Aidan and Perry plan to spend £20,000,
0:11:32 > 0:11:37which is a substantial sum, bearing in mind the purchase price of £32,000.
0:11:39 > 0:11:43You're not necessarily buying something in pristine condition,
0:11:43 > 0:11:46so there's some work to do. Typically, we could be...
0:11:46 > 0:11:52- at 100% or more in terms of the renovation cost over the price of the property.- Wow!
0:11:52 > 0:11:54Yeah.
0:11:54 > 0:11:58We've also got an unforeseen - the stairs going up.
0:11:58 > 0:12:03When you walk up them, you'll hear they creak like nobody's business.
0:12:03 > 0:12:06So I think that's going to need major work to it.
0:12:06 > 0:12:10- Good. Well, congratulations. - Thank you.- Good luck with it.
0:12:10 > 0:12:12Look forward to seeing how you get on.
0:12:14 > 0:12:18Well, what an interesting scenario you've got going on here.
0:12:18 > 0:12:21Houses that are currently priced so low
0:12:21 > 0:12:25that you can't raise finance on them, get a mortgage.
0:12:25 > 0:12:29Wow! But Perry and Aidan recognising the potential of this place -
0:12:29 > 0:12:32paying £32,000, spending £20,000.
0:12:32 > 0:12:35That's 62% on top of what they paid when they bought it.
0:12:35 > 0:12:39Wow! But putting the money in to get that amazing return.
0:12:39 > 0:12:42How will they get on? You can find out later in the show.
0:12:46 > 0:12:50# I passed this way before... #
0:12:50 > 0:12:54I'm back in the Potteries, on the terraced streets of Burslem,
0:12:54 > 0:12:57one of the six towns that make up the city of Stoke-on-Trent.
0:12:57 > 0:13:04There's something about a well-proportioned red-brick exterior that makes my heart sing.
0:13:04 > 0:13:08Well, I'm in a traditional street of terraced houses,
0:13:08 > 0:13:11like many similar streets in the UK,
0:13:11 > 0:13:14and ones that I've been to a hundred times before over the years.
0:13:14 > 0:13:17But there's a reason why these kind of houses are popular -
0:13:17 > 0:13:21they're solid, they're well-built, they're good value for money.
0:13:21 > 0:13:23And that's certainly the case with this one.
0:13:23 > 0:13:26The guide price was £45,000-plus.
0:13:26 > 0:13:28Two bedrooms, nice brick-built exterior.
0:13:28 > 0:13:30Let's see if I can fall in love with the inside as well.
0:13:33 > 0:13:36Now, call me Martin the psychic,
0:13:36 > 0:13:38but I can already sense
0:13:38 > 0:13:40a traditional two-up, two-down layout
0:13:40 > 0:13:44with good rental potential and possible appeal to first-time buyers.
0:13:44 > 0:13:46Let's see if I'm right.
0:13:46 > 0:13:47Wow! Here's the front living room.
0:13:47 > 0:13:50It's not too bad. I like the high ceilings.
0:13:50 > 0:13:53Lots of light coming in from that little window area.
0:13:53 > 0:13:58Through to the rear of the property, where we've got a rear living room.
0:13:58 > 0:14:00Um, yes, I mean...
0:14:00 > 0:14:02I've seen worse.
0:14:02 > 0:14:04I've seen better. So it's kind of in the middle.
0:14:04 > 0:14:07Let's see if upstairs excites me further.
0:14:07 > 0:14:11# Seems like old times... #
0:14:11 > 0:14:14Beneath the teasingly bland facade,
0:14:14 > 0:14:16there might be one or two hidden problems here,
0:14:16 > 0:14:20but perhaps it's too early to be mentioning the D-word.
0:14:20 > 0:14:23Let's just say the downstairs of this formerly vacant abode
0:14:23 > 0:14:25might be a little...moist.
0:14:25 > 0:14:28So, up here - and two bedrooms.
0:14:28 > 0:14:33Well, there you go. Sometimes I scare even myself when my predictions come true.
0:14:33 > 0:14:36What you've got there is a really traditional solid little house.
0:14:36 > 0:14:38Now, that has lots of pluses going for it.
0:14:38 > 0:14:41If you're looking at buying this to live in,
0:14:41 > 0:14:43you've got a good idea of what it'll cost to sort it out.
0:14:43 > 0:14:47Similarly, if you're doing up to sell on, or just to rent out.
0:14:47 > 0:14:49There's not too many unknowns.
0:14:49 > 0:14:52Good, solid little house, and I like it.
0:14:57 > 0:15:01But true to the period, there's no upstairs bathroom here.
0:15:03 > 0:15:06Well, as is the case with many of these two-up, two-down terraces,
0:15:06 > 0:15:09they've been extended, usually - as this one has -
0:15:09 > 0:15:12with a single-storey extension coming out of the back.
0:15:12 > 0:15:16That creates a really useful bit of extra space
0:15:16 > 0:15:19and, as is often the case, it houses the kitchen.
0:15:19 > 0:15:22It needs replacing, this one.
0:15:22 > 0:15:25I don't think it does the property justice.
0:15:25 > 0:15:29And then heading through the kitchen right to the back of the property,
0:15:29 > 0:15:32where you've got your bathroom and a separate loo on the end.
0:15:32 > 0:15:35It all looks a little bit...
0:15:35 > 0:15:37like it could be better.
0:15:37 > 0:15:41So, spend some money in here and in the kitchen. Money well spent.
0:15:41 > 0:15:43Bathroom downstairs - usual story.
0:15:43 > 0:15:46Around here in these kind of properties, I don't think it really matters.
0:15:46 > 0:15:49So leave it as it is, but tart it up.
0:15:49 > 0:15:52However, to be thoroughly thorough,
0:15:52 > 0:15:56it's always best to find alternative ways of viewing a property.
0:15:57 > 0:16:00Here's a bit of a tip. Whenever you're looking round a house
0:16:00 > 0:16:03and maybe it's got an extension, like this one has,
0:16:03 > 0:16:09use the windows to look out and check what state the roof of that extension is,
0:16:09 > 0:16:11because that can often be an indication
0:16:11 > 0:16:13of the state of the roof of the rest of the house.
0:16:13 > 0:16:15In this case, it's not looking too good.
0:16:15 > 0:16:18We've got ridge tiles, which have got concrete,
0:16:18 > 0:16:23which looks like it's breaking away. That'll start leaking if it hasn't already. We've got slipped tiles.
0:16:23 > 0:16:26We've got bits of flashing that have come adrift.
0:16:26 > 0:16:29That roof itself definitely is going to require some work,
0:16:29 > 0:16:31as will the gutters. But my fear would be,
0:16:31 > 0:16:34if that's not been looked after, then neither has the main roof.
0:16:34 > 0:16:38So, look out of the windows. Just use everything you can
0:16:38 > 0:16:40to assess the state of the property.
0:16:43 > 0:16:47We asked a local property expert to cast his eyes over this house.
0:16:47 > 0:16:49First impressions of this property,
0:16:49 > 0:16:51it's very typical for this area.
0:16:51 > 0:16:56It's turn of the century, old terraced-style property.
0:16:56 > 0:16:59The condition isn't actually too bad at the moment.
0:16:59 > 0:17:02There's just really some improvements that are needed.
0:17:04 > 0:17:07The downside at the moment is that most first-time buyers
0:17:07 > 0:17:11would probably want to do improvements before moving into the property.
0:17:11 > 0:17:13The kitchen and bathroom, they are very basic,
0:17:13 > 0:17:15but they are usable.
0:17:15 > 0:17:19However, I do feel they are likely to be replaced in the near future.
0:17:19 > 0:17:22There does appear to be works that are probably required to the roof
0:17:22 > 0:17:26and possibly a damp-proof course would need to be installed in the property.
0:17:26 > 0:17:29Possibly not too much to spend here.
0:17:29 > 0:17:31So what could it sell for once done up?
0:17:31 > 0:17:33After renovations, I would market this property
0:17:33 > 0:17:36in the region of £75,000.
0:17:36 > 0:17:38What could the rental income be?
0:17:38 > 0:17:41In good condition, I would anticipate a rental income
0:17:41 > 0:17:46in the region of £425 to £450 per calendar month.
0:17:48 > 0:17:51So, all in all, a pretty decent property,
0:17:51 > 0:17:54especially around that £45,000-plus guide price.
0:17:54 > 0:17:56Yes, you'll have to spend some money on the roof
0:17:56 > 0:17:58and sorting it out a bit inside.
0:17:58 > 0:18:02Let's find out who wasn't put off by that when it went under the hammer.
0:18:02 > 0:18:04Lot 75 is in Burslem.
0:18:04 > 0:18:08Because it was one of the last auction lots,
0:18:08 > 0:18:11bidders were already thinning out.
0:18:11 > 0:18:1340 to start me on this one?
0:18:13 > 0:18:15Save time. 40, can I say?
0:18:16 > 0:18:1838, then. 38 bid.
0:18:18 > 0:18:20£38,000. 40, can I say now?
0:18:20 > 0:18:22At £38,000. 40 now?
0:18:22 > 0:18:2540. At 40.
0:18:25 > 0:18:26I'll go in 1s if it helps. 41 anywhere?
0:18:26 > 0:18:2841.
0:18:28 > 0:18:3042.
0:18:30 > 0:18:31No? At 42 in the middle.
0:18:31 > 0:18:34At £42,000. 43.
0:18:34 > 0:18:3643, seated.
0:18:36 > 0:18:3744? 44.
0:18:37 > 0:18:4045. 46.
0:18:40 > 0:18:4247.
0:18:43 > 0:18:46At £47,000, seated.
0:18:46 > 0:18:48At 47. Against you, standing.
0:18:50 > 0:18:52Half, he's saying. 47,500. 48.
0:18:53 > 0:18:55And a half?
0:18:57 > 0:18:59No. At £48,000, then. The bid is seated.
0:18:59 > 0:19:01No mistake. Against you, standing.
0:19:01 > 0:19:04Selling, then, at 48, for the first time.
0:19:04 > 0:19:06At 48 for the second time.
0:19:06 > 0:19:10Third and final time at £48,000.
0:19:10 > 0:19:12You bought it, sir. Well done.
0:19:12 > 0:19:16David and Corinne certainly seem very happy with the outcome.
0:19:18 > 0:19:23The sale price of £48,000 was lower than David was prepared to pay.
0:19:23 > 0:19:26I met him at the property to find out why he wanted to buy it.
0:19:29 > 0:19:32- David, great to meet you. - Hi, Martin.- Congratulations.
0:19:32 > 0:19:34Tell me why you wanted to buy this place.
0:19:34 > 0:19:40Just looking to build a couple of properties up to get a little portfolio together for my children.
0:19:40 > 0:19:42For your kids? Oh, great.
0:19:42 > 0:19:44What's behind that?
0:19:44 > 0:19:47I've got two boys. They've got moderate learning difficulties.
0:19:47 > 0:19:50So just trying to get a bit of a nest-egg together,
0:19:50 > 0:19:52to support them when they're a little bit older.
0:19:52 > 0:19:56Fantastic. With a view to them living here?
0:19:56 > 0:20:00Potentially, or they can sell them and move to something else.
0:20:00 > 0:20:03I'd like to get about four or five properties
0:20:03 > 0:20:07and then at the end of it, they can decide what they want to do with them -
0:20:07 > 0:20:11sell them and buy something better or if they fancy living in one of them, whatever they want to do.
0:20:11 > 0:20:15- How old are they at the moment? - The youngest one is nine in a few weeks' time
0:20:15 > 0:20:17and the eldest is 12.
0:20:17 > 0:20:20They have got a chromosome disorder,
0:20:20 > 0:20:21which is a genetic disorder.
0:20:21 > 0:20:25It means they go to a specialist school for children with learning difficulties.
0:20:25 > 0:20:31But they're mobile and out and about and will cause you lots of havoc!
0:20:31 > 0:20:33Fantastic!
0:20:33 > 0:20:35So you're not doing this for you, then?
0:20:35 > 0:20:36Indirectly. And also,
0:20:36 > 0:20:40it's money that I would be putting towards a pension,
0:20:40 > 0:20:43but I'd rather put it into property.
0:20:43 > 0:20:44So why this particular house?
0:20:44 > 0:20:48It's local - it's probably about three-quarters of a mile from where I live.
0:20:48 > 0:20:51So I can manage it myself.
0:20:51 > 0:20:55And it just seems to be about the right amount of work
0:20:55 > 0:20:56that I can afford to do on it.
0:20:56 > 0:20:58Have you done this kind of thing before?
0:20:58 > 0:21:03Not for rental, but I've done two of my own properties up where I live,
0:21:03 > 0:21:09and had trades in and gutted them completely from head to toe.
0:21:09 > 0:21:15And we've basically just refurbished them to our own standards.
0:21:15 > 0:21:20As these kind of properties go, it really isn't in bad condition, is it?
0:21:20 > 0:21:22I think it's a bit deceiving, to be honest,
0:21:22 > 0:21:24because it does need quite a bit of work doing.
0:21:24 > 0:21:28- What have you found?- The roof and damp-proof course.
0:21:28 > 0:21:33And we also need to do the work in the kitchen and the bathroom.
0:21:33 > 0:21:38- Right.- So, a bit more than what I would have planned to do,
0:21:38 > 0:21:40but nothing too major.
0:21:40 > 0:21:42So do you get hands dirty?
0:21:42 > 0:21:48Unfortunately not. I spend most of my time trying to keep my two boys occupied at the weekend.
0:21:48 > 0:21:54And we go out and do interesting things and try and have a good life.
0:21:54 > 0:21:57But I've got people that'll come and do this for us.
0:21:57 > 0:22:01So the return isn't as much as it would be if I got my hands dirty,
0:22:01 > 0:22:03but that's a trade-off.
0:22:03 > 0:22:05So, tell me exactly what you're going to do to sort it out.
0:22:05 > 0:22:08First thing is that we need a new roof
0:22:08 > 0:22:12on the main building and also on the extension outside.
0:22:12 > 0:22:15Damp-proof course all the way through.
0:22:15 > 0:22:18New central heating boiler. I think the radiators
0:22:18 > 0:22:21and the pipework are OK, and a new kitchen,
0:22:21 > 0:22:27and we're going to make some changes and alterations into the bathroom.
0:22:27 > 0:22:30- Which are?- I'm planning on extending the kitchen
0:22:30 > 0:22:33and making the bathroom a little bit smaller,
0:22:33 > 0:22:36because it's quite a large bathroom with a separate toilet,
0:22:36 > 0:22:38and we're going to knock that into one
0:22:38 > 0:22:41and make the kitchen a little bit bigger and more usable.
0:22:41 > 0:22:46David has a budget of £18,000 for renewals and repairs.
0:22:46 > 0:22:49I want to do it right, because I'm intending on keeping it.
0:22:49 > 0:22:51It's not a flash and get rid of it job.
0:22:51 > 0:22:54What kind of rental return do you think you might get?
0:22:54 > 0:22:59Properties around this area I believe are fetching somewhere between
0:22:59 > 0:23:04£400 and £450 per full calendar month.
0:23:04 > 0:23:07Right, OK. So a half-decent return then, really.
0:23:07 > 0:23:08- Not too bad.- What's the timescale?
0:23:08 > 0:23:12I'm trying to get it done within three months.
0:23:12 > 0:23:17So most of the trades that are coming to give me a hand to get it done
0:23:17 > 0:23:20will probably be coming at the weekends
0:23:20 > 0:23:23and I'll also be coming and doing some work at the weekends.
0:23:23 > 0:23:28So it's not their primary work during the week.
0:23:28 > 0:23:31So we'll just fit in with them as and when we can.
0:23:31 > 0:23:33- Well, congratulations.- Thank you.
0:23:33 > 0:23:36- Have your sons seen it yet? - Yes, they've been up.
0:23:36 > 0:23:41They tried to scam me this morning to say that they were off school
0:23:41 > 0:23:44and they could come and do some filming with me if it was available!
0:23:44 > 0:23:48But yeah, they want to come here this afternoon after school
0:23:48 > 0:23:51- and start ripping the kitchen out. - Oh, they do?
0:23:51 > 0:23:53They're going to get heavily involved, then?
0:23:53 > 0:23:55They'll be here and doing whatever bits they can.
0:23:55 > 0:23:59- Listen, congratulations. Good luck with it.- Thank you very much.
0:23:59 > 0:24:01- Look forward to seeing how you get on.- Thank you.
0:24:01 > 0:24:04So David's getting himself a good little property in Burslem
0:24:04 > 0:24:08and setting up his children for their financial future.
0:24:08 > 0:24:10Fantastic. How will he get on?
0:24:10 > 0:24:13You can find out later in the show.
0:24:14 > 0:24:17Coming up... Two flats in a mid-terrace property in Streatham
0:24:17 > 0:24:19don't make my heart sing.
0:24:19 > 0:24:24It's got a very negative feeling for me, because it really does feel hemmed in.
0:24:24 > 0:24:27In Burslem, David finds that when it comes to renovations,
0:24:27 > 0:24:29boys will be boys.
0:24:29 > 0:24:32They quite enjoyed smashing the old kitchen to bits
0:24:32 > 0:24:34and ripping out the old bathroom.
0:24:36 > 0:24:38But first, we return to Shildon, County Durham,
0:24:38 > 0:24:41to see how Aidan and Perry's modernisation is going.
0:24:41 > 0:24:44It has been to the wire, no doubt about that.
0:24:47 > 0:24:48We're back in County Durham,
0:24:48 > 0:24:51where this three-bedroom mid-terrace property in Shildon
0:24:51 > 0:24:54was bought for £32,000,
0:24:54 > 0:24:58and I thought it was a lot of house for not a lot of money.
0:24:58 > 0:25:00It was bought by Perry, here on the right,
0:25:00 > 0:25:02and his business partner Aidan.
0:25:02 > 0:25:05This pair aren't newcomers to the development game
0:25:05 > 0:25:08and have an interesting strategy for developing in this area.
0:25:08 > 0:25:13If you own six properties on a street of 12 and they're all renovated,
0:25:13 > 0:25:16regenerated, to a really nice standard,
0:25:16 > 0:25:21that becomes ultimately a more desirable street, which benefits everyone and the investors.
0:25:21 > 0:25:24Business partner Perry felt that although they were going to make a good yield
0:25:24 > 0:25:27that there were benefits to the local community as well.
0:25:27 > 0:25:29I think we're doing something positive in the area,
0:25:29 > 0:25:32because most of these are lying empty.
0:25:32 > 0:25:36A lot of the ones we've bought are two years plus as voids,
0:25:36 > 0:25:39so it doesn't make any sense to leave them.
0:25:39 > 0:25:42With a tight five- to six-week schedule
0:25:42 > 0:25:44and a budget of £20,000,
0:25:44 > 0:25:4662% of the actual house price,
0:25:46 > 0:25:50is this property up to scratch?
0:25:52 > 0:25:55Well, two and a half months later, we're back.
0:25:55 > 0:25:57# Everything changes but you
0:25:57 > 0:26:01# We're a thousand miles apart And I miss you, baby
0:26:01 > 0:26:04# Everything changes but you
0:26:04 > 0:26:09# You know every single day I'll be thinking about you
0:26:09 > 0:26:12# Everything changes but you
0:26:12 > 0:26:15# I'll be thinking about you
0:26:15 > 0:26:17# Thinking about you... #
0:26:17 > 0:26:20It certainly looks like Perry and Aidan have made a difference here.
0:26:20 > 0:26:23If some of the rooms seem slightly more spacious,
0:26:23 > 0:26:27there's a very good reason for that, as Aidan explains.
0:26:27 > 0:26:29The room's been changed fairly significantly
0:26:29 > 0:26:32by the removal primarily of the chimney breast.
0:26:32 > 0:26:36This was a decision we made early on to increase the space in the room
0:26:36 > 0:26:40and provide probably a slightly better entrance to the kitchen.
0:26:40 > 0:26:43We've also removed the cupboard in the bottom corner,
0:26:43 > 0:26:47which is now just the area under the stairs, rather than intruding
0:26:47 > 0:26:50into the room as a whole.
0:26:50 > 0:26:55And I think, ultimately, both of those have been the right decision.
0:26:57 > 0:26:59The extra space is a big improvement.
0:26:59 > 0:27:02What I hope has been changed are those creaking stairs.
0:27:04 > 0:27:06- CREAKING - Can you hear that?
0:27:06 > 0:27:09That creaking staircase no longer sounds like
0:27:09 > 0:27:11something out of a horror film.
0:27:11 > 0:27:14When we first got possession of the house,
0:27:14 > 0:27:18we found that the staircase was really, really creaky.
0:27:18 > 0:27:21So we decided, when we had a look at it,
0:27:21 > 0:27:23that it wasn't worth patching it up.
0:27:23 > 0:27:26There was all bits of chipboard
0:27:26 > 0:27:28and other bits of wood glued together.
0:27:28 > 0:27:32We ripped the whole thing out and, as you can see, we've renewed it all.
0:27:32 > 0:27:34And it's fantastic now.
0:27:36 > 0:27:39Fantastic indeed. The pair had originally estimated
0:27:39 > 0:27:42five to six weeks for the renovation,
0:27:42 > 0:27:43so how long did they take?
0:27:43 > 0:27:46In actual fact, we were able to drop a few extra bodies onto it
0:27:46 > 0:27:49and complete it inside of four weeks,
0:27:49 > 0:27:52which is the quickest turnaround we've had to date,
0:27:52 > 0:27:56given the time pressure of having a tenant ready to go as well.
0:27:56 > 0:28:01So four weeks is good. Really, really happy with the finish and everything.
0:28:01 > 0:28:03But it has been to the wire, no doubt about that.
0:28:03 > 0:28:07So the schedule worked out, but what about the budget?
0:28:08 > 0:28:10We spent about 25-ish.
0:28:10 > 0:28:13There was a couple of unforeseens, like the staircase.
0:28:13 > 0:28:15So I'm not too unhappy about that.
0:28:15 > 0:28:19I think it's a good show home for what we're capable of doing.
0:28:19 > 0:28:23What do two local estate agents think?
0:28:23 > 0:28:26We begin with the one who viewed the property first time round.
0:28:26 > 0:28:29The transformation of the property is marked,
0:28:29 > 0:28:31because it was previously very old-fashioned,
0:28:31 > 0:28:33with textured ceilings,
0:28:33 > 0:28:36old-fashioned fireplace, very sad kitchen.
0:28:36 > 0:28:39The jobs have all been done right through.
0:28:39 > 0:28:43And also the addition of a brand-new central heating system, so they've worked really hard.
0:28:43 > 0:28:46The property's very modern. It's in a very clean and tidy condition.
0:28:46 > 0:28:48The kitchen looks well.
0:28:48 > 0:28:51The bathroom is modern and a white suite.
0:28:51 > 0:28:54All in all, the property has a very nice look about it.
0:28:54 > 0:28:58There are lots of private rented properties available in this town,
0:28:58 > 0:29:01so you do need, when you're doing a job as a landlord,
0:29:01 > 0:29:03to have a nicely finished property
0:29:03 > 0:29:07to attract a tenant, and I believe this has been done to the appropriate standard.
0:29:07 > 0:29:10They sound impressed.
0:29:10 > 0:29:14Aidan and Perry spent a whopping 62% of the purchase price
0:29:14 > 0:29:16refurbishing this property,
0:29:16 > 0:29:19bringing their total outlay to £52,000.
0:29:19 > 0:29:22So, has the money been well spent?
0:29:22 > 0:29:25The estate agents both agreed the house would market
0:29:25 > 0:29:28for £69,950.
0:29:30 > 0:29:33That's very good, but could be a bit higher, I think.
0:29:33 > 0:29:37I think in the current market, it's probably pretty fair.
0:29:37 > 0:29:39Yeah.
0:29:39 > 0:29:43Should this property sell for anywhere near the estate agents' valuations,
0:29:43 > 0:29:49Perry and Aidan could make a profit of £16,950 before tax and expenses.
0:29:49 > 0:29:51But what about the rental valuations?
0:29:51 > 0:29:56For letting purposes, I'd recommend they ask £450 per calendar month.
0:29:56 > 0:29:59The rent that I think they should be asking for the property
0:29:59 > 0:30:02would be in the region of £425 per calendar month.
0:30:02 > 0:30:07That rental estimate would give a yield of just over 10%.
0:30:07 > 0:30:10Well, having rented it out already,
0:30:10 > 0:30:13we've achieved substantially higher than that.
0:30:13 > 0:30:16So I think they're way out.
0:30:16 > 0:30:18What with that quick turnaround
0:30:18 > 0:30:21and beating the estate agents' rental expectations,
0:30:21 > 0:30:25these boys seem to have found a winning formula in this volatile property market.
0:30:25 > 0:30:28So, what's next for them?
0:30:28 > 0:30:33We're looking to do some more work on larger-scale properties.
0:30:33 > 0:30:36We're converting them into one-bedroom flats again.
0:30:36 > 0:30:41We're also working together on helping other investors...
0:30:41 > 0:30:44achieve similar kinds of returns
0:30:44 > 0:30:49in areas that we now have quite a reasonable knowledge of,
0:30:49 > 0:30:51in particular, in the County Durham area.
0:30:51 > 0:30:55Yeah, so we've plenty more on the cards this year.
0:30:59 > 0:31:01Today I'm in Streatham, southwest London.
0:31:01 > 0:31:02It's a popular suburb,
0:31:02 > 0:31:05as it only takes 20 minutes by train from central London,
0:31:05 > 0:31:08yet right beside parkland.
0:31:08 > 0:31:10There are plenty of shops and restaurants
0:31:10 > 0:31:13and just a few minutes' walk from the High Street
0:31:13 > 0:31:16in this tree-lined street of Victorian terraced houses
0:31:16 > 0:31:17is the auction lot.
0:31:17 > 0:31:21Now, today I'm here to see a mid-terrace building.
0:31:21 > 0:31:24It had a guide price of £425,000.
0:31:24 > 0:31:26It was once occupied as a single dwelling,
0:31:26 > 0:31:29but it's now been converted into two flats
0:31:29 > 0:31:33and it also has the bonus of a loft conversion.
0:31:33 > 0:31:36This sounds like an exciting opportunity. I can't wait to explore further!
0:31:36 > 0:31:38I'm going to have a look around.
0:31:40 > 0:31:44Well, the outside's retained some lovely features - a promising start.
0:31:44 > 0:31:46So, in through the main door to both flats.
0:31:46 > 0:31:50Lovely to see the original front door and the beautiful tiles outside.
0:31:50 > 0:31:54Not many character features to speak of inside.
0:31:54 > 0:31:57Let's start off with the ground-floor flat.
0:31:57 > 0:31:59We've got a bedroom through there,
0:31:59 > 0:32:00a bathroom.
0:32:00 > 0:32:03You can see it's already been sensibly carved up.
0:32:03 > 0:32:06Second bedroom here. All partitioning's been done.
0:32:06 > 0:32:08Under-stair storage here.
0:32:08 > 0:32:11And you've got an almighty kitchen!
0:32:11 > 0:32:16Wow! This really is a big space!
0:32:16 > 0:32:20A bit of an area of devastation over here.
0:32:20 > 0:32:23My guess is lots of water has been leaking down,
0:32:23 > 0:32:26creating this condensation,
0:32:26 > 0:32:28turning it into lots of damp.
0:32:28 > 0:32:31You can see over here somebody's been drilling down,
0:32:31 > 0:32:33possibly to check the footings.
0:32:33 > 0:32:36I'm not even sure whether an extension like this would comply
0:32:36 > 0:32:38with building regulations.
0:32:38 > 0:32:41I would really want to get that checked out.
0:32:41 > 0:32:45And for me, this might be a little too big inside,
0:32:45 > 0:32:48because when you look outside...
0:32:48 > 0:32:51You've heard of the phrase "postage stamp"?
0:32:51 > 0:32:53That's your garden!
0:32:55 > 0:32:57We didn't have access to the outside,
0:32:57 > 0:33:02but believe me, it's small. And I reckon there are enough issues inside to concentrate on here.
0:33:02 > 0:33:06But the damp and construction problems will need expert advice.
0:33:06 > 0:33:09I'd think about getting a structural engineer along
0:33:09 > 0:33:11to cast his eyes over this living area.
0:33:14 > 0:33:17Fortunately, it gets better as you head back to the front.
0:33:17 > 0:33:21The bedroom and bathroom appear to need just a good makeover.
0:33:23 > 0:33:25The large front bedroom has plenty of potential.
0:33:27 > 0:33:31Time to head upstairs to the split-level three-bedroom flat.
0:33:32 > 0:33:36So this is the first-floor flat with two bedrooms on this level.
0:33:36 > 0:33:40Now, look at this - a partition has been created,
0:33:40 > 0:33:43obviously for separate access for the room upstairs.
0:33:43 > 0:33:47But it's got a very negative feeling for me,
0:33:47 > 0:33:49because it really does feel hemmed in.
0:33:49 > 0:33:52There's not much space at all. Quite cramped.
0:33:52 > 0:33:54You've got a lot of rooms going on back there.
0:33:54 > 0:33:57And this is a lovely sunny room. I love it.
0:33:57 > 0:34:00You've got a beautiful fireplace here with some original tiles.
0:34:00 > 0:34:03And then...ta-da!
0:34:03 > 0:34:05Yes, you've got a kitchen in a cupboard.
0:34:05 > 0:34:09Not working for me at all. In fact, I'd love to reinstate this room,
0:34:09 > 0:34:14get this out of here and put it in another room entirely.
0:34:14 > 0:34:17I think I'd like to spend a bit of time rejigging this space.
0:34:17 > 0:34:20And I certainly want to investigate what's going on upstairs.
0:34:21 > 0:34:25Before I do that, I'm keen to check out the two bedrooms.
0:34:25 > 0:34:28This one is directly opposite the entrance door to the flat.
0:34:31 > 0:34:33But this corridor that's been constructed
0:34:33 > 0:34:35really makes the flat feel very narrow.
0:34:43 > 0:34:45If I turned left when I came in,
0:34:45 > 0:34:47I'd have gone past the bathroom
0:34:47 > 0:34:50and reached the second bedroom at the back of the flat,
0:34:50 > 0:34:52overlooking that tiny garden.
0:34:54 > 0:34:58Time to head upstairs to what is supposed to be the third bedroom of this flat.
0:34:58 > 0:35:02Also time to discover the reason for that partition wall.
0:35:02 > 0:35:05Well, this is not what I was expecting.
0:35:05 > 0:35:10Someone has tried to create a whole separate studio flat up here.
0:35:10 > 0:35:13"What a great surprise!" you might be thinking.
0:35:13 > 0:35:14But no!
0:35:14 > 0:35:16Stop right there.
0:35:16 > 0:35:21This property only has planning permission for usage as two self-contained flats
0:35:21 > 0:35:23and not as three.
0:35:23 > 0:35:26You need to ask your local planning authority
0:35:26 > 0:35:31and apply for the necessary permissions to legally use this building
0:35:31 > 0:35:32as three flats.
0:35:32 > 0:35:35Never undertake any structural changes to a building
0:35:35 > 0:35:38before you have the appropriate consent in place,
0:35:38 > 0:35:41because you could be forced to undo all your hard work.
0:35:41 > 0:35:43So be warned!
0:35:44 > 0:35:49And on a lighter note, look at the size of this bathroom.
0:35:49 > 0:35:51Big. Mmm.
0:35:59 > 0:36:01No, the proportions don't work at all.
0:36:01 > 0:36:03This is more like a changing room.
0:36:03 > 0:36:07Even if you could get planning permission to create a separate flat in the attic,
0:36:07 > 0:36:12I think it would be much better used to create a split-level,
0:36:12 > 0:36:14three-bedroom flat with the one below.
0:36:14 > 0:36:16But what would a local estate agent advise?
0:36:16 > 0:36:20Let's start with the ground-floor flat and that large extension.
0:36:20 > 0:36:23A house like this, gardens are very, very popular
0:36:23 > 0:36:26on ground-floor flats. They do give a good value to a flat.
0:36:26 > 0:36:30So I personally would knock it down
0:36:30 > 0:36:33and reduce this space and have a nicer garden
0:36:33 > 0:36:35and still have a nice extension on it.
0:36:35 > 0:36:37What would he suggest for the upstairs flat?
0:36:37 > 0:36:40Should that be integrated with the loft conversion?
0:36:40 > 0:36:42In terms of making profit,
0:36:42 > 0:36:45my recommendation would be to try and get three flats out of it.
0:36:45 > 0:36:48However, I don't think it works, and I think it'd have to be two flats.
0:36:48 > 0:36:51I think you'd have to incorporate the studio flat with the first floor
0:36:51 > 0:36:53to make a three-bedroom flat.
0:36:53 > 0:36:55Looking at the first-floor layout,
0:36:55 > 0:36:59the kitchen's too small, so I'd make it an open-plan lounge/kitchen.
0:36:59 > 0:37:03The biggest change for me has to be taking away the partition walls
0:37:03 > 0:37:06separating it from the upstairs. I think that has to be done.
0:37:06 > 0:37:10And sale valuations for the two-bed ground-floor flat
0:37:10 > 0:37:12and the three-bedroom split-level flat?
0:37:12 > 0:37:14The two-bedroom on the ground floor,
0:37:14 > 0:37:18with the small garden, would resell for around £300,000.
0:37:18 > 0:37:23And the three-bed would be around £330,000.
0:37:25 > 0:37:28What rental income could the two flats potentially generate?
0:37:28 > 0:37:32The two-bedroom flat on the ground floor would be around £1,200 per calendar month.
0:37:32 > 0:37:34And the three-bed spread over the two floors
0:37:34 > 0:37:38would approximately be about £1,350 per calendar month.
0:37:38 > 0:37:41Well, this property does have a rather unexpected
0:37:41 > 0:37:43and confusing layout at the moment.
0:37:43 > 0:37:46But it's substantial in size, which I love,
0:37:46 > 0:37:49and it does offer up a lot of alternative options.
0:37:49 > 0:37:52Now, do you revert back to two flats
0:37:52 > 0:37:54or try to take this development further
0:37:54 > 0:37:58by applying for planning permission for that additional third flat?
0:37:58 > 0:38:02This is certainly an exciting, if challenging, prospect for someone.
0:38:02 > 0:38:06Let's find out who felt up to the task in the auction room.
0:38:06 > 0:38:09Mid-terrace building, arranged as two flats.
0:38:09 > 0:38:12Two-bedroom and a three-bedroom flat.
0:38:12 > 0:38:13400.
0:38:13 > 0:38:17£400,000 on my right.
0:38:17 > 0:38:19405 anywhere?
0:38:19 > 0:38:21405 in the red.
0:38:21 > 0:38:23410. 415.
0:38:25 > 0:38:26420. 425.
0:38:26 > 0:38:29There was plenty of interest on auction day.
0:38:29 > 0:38:34We rejoin the action at 463,000.
0:38:34 > 0:38:35463.
0:38:37 > 0:38:38464.
0:38:38 > 0:38:40465.
0:38:41 > 0:38:42466.
0:38:42 > 0:38:45466.
0:38:45 > 0:38:47467.
0:38:48 > 0:38:49468?
0:38:49 > 0:38:51467 first time...
0:38:52 > 0:38:55..second time...third and last time, if you're all done?
0:38:55 > 0:38:57Sold, 467.
0:38:57 > 0:39:02That final successful bid of £467,000
0:39:02 > 0:39:04was made by Jez, a full-time property developer
0:39:04 > 0:39:07with a portfolio of buy-to-let properties.
0:39:09 > 0:39:13I met him at his latest purchase to hear about his plans.
0:39:14 > 0:39:17Jez, this is great news - you managed to secure this on auction day.
0:39:17 > 0:39:19What are you going to do with this place?
0:39:19 > 0:39:21Obviously, it needs a complete refit.
0:39:21 > 0:39:24All the windows will be changed, new electrics, new plumbing.
0:39:24 > 0:39:28The upstairs, we'll change the layout completely.
0:39:28 > 0:39:31It's a bit of a strange layout at the moment,
0:39:31 > 0:39:34because they did the work as three flats,
0:39:34 > 0:39:37but then the council refused them permission for three flats,
0:39:37 > 0:39:40and they didn't bother changing the layout back to how it should be.
0:39:40 > 0:39:42So we'll pull down all the partitions.
0:39:42 > 0:39:45We're going to get rid of the inner corridor that's there at the moment
0:39:45 > 0:39:48to increase the size of the middle bedroom.
0:39:48 > 0:39:54We're going to move the bathroom over to the other side of the house to gain a bit of light from the window.
0:39:54 > 0:39:58And we're going to move the kitchen to the rear wall
0:39:58 > 0:40:01to open up the front of the property.
0:40:01 > 0:40:05And in the loft, we'll reduce the size of the en suite to a more sensible size
0:40:05 > 0:40:07to increase the size of the bedroom area.
0:40:07 > 0:40:10And the flat upstairs, which will end up being a three-bed, two-bath,
0:40:10 > 0:40:13will be a really good rental machine.
0:40:13 > 0:40:16Tell me what you're going to do downstairs on this floor.
0:40:16 > 0:40:19Down here, the layout will stay the same, but obviously,
0:40:19 > 0:40:20completed refitted.
0:40:20 > 0:40:23The inner wall of the extension will have to be rebuilt
0:40:23 > 0:40:25because it's so damp.
0:40:25 > 0:40:27We'll replace the glazing above it.
0:40:27 > 0:40:28I can't help but feel this room is too big,
0:40:28 > 0:40:30while the garden is tiny.
0:40:30 > 0:40:34Would you re-address this room if you're doing the extension anyway?
0:40:34 > 0:40:36I think you're right. It's a perfectly valid point.
0:40:36 > 0:40:42But on the flipside, there is a lot more added expense to rebuilding the rear of the property
0:40:42 > 0:40:46and nine months of the year, you can't really use your garden with our weather.
0:40:46 > 0:40:49So I think having the massive space inside will be
0:40:49 > 0:40:52a big draw for any potential buyers.
0:40:59 > 0:41:01I can see where Jez is coming from,
0:41:01 > 0:41:03but I'd like to reduce the extension a bit
0:41:03 > 0:41:05and gain some more garden,
0:41:05 > 0:41:09putting some bifold doors in to make the most of the outside space.
0:41:13 > 0:41:16What sort of budget have you got to spend on these two flats?
0:41:16 > 0:41:18Quite a bit, actually.
0:41:18 > 0:41:21With all the layout changes upstairs and all the glazing changing,
0:41:21 > 0:41:24I think the budget will be about £80,000.
0:41:24 > 0:41:26That's a realistic budget.
0:41:26 > 0:41:27Jez is on the ball here,
0:41:27 > 0:41:31and intends doing these flats up to a high standard.
0:41:31 > 0:41:33Do you have a team of builders ready to start work?
0:41:33 > 0:41:36I've got a fantastic project manager called Lucas,
0:41:36 > 0:41:40and between us we know all the trades we need in the area.
0:41:40 > 0:41:43We'll call them in as appropriate.
0:41:43 > 0:41:46Jez and Lucas must know some fast workers,
0:41:46 > 0:41:49because he's set an impressive schedule of just four months
0:41:49 > 0:41:51to get the two flats finished and on the market.
0:41:54 > 0:41:56Before becoming a property developer,
0:41:56 > 0:42:00Jez worked in banking, providing finance to other property developers.
0:42:00 > 0:42:03He's also self-built his own house in Clapham
0:42:03 > 0:42:07and currently has about ten buy-to-let properties he rents out.
0:42:08 > 0:42:12You've got a lot going on. You're a busy guy. How do you find the time?
0:42:12 > 0:42:14By working evenings and weekends when necessary as well.
0:42:14 > 0:42:18And I'm going to get even busier because I've now got a wedding to plan,
0:42:18 > 0:42:21- because my girlfriend recently became my fiancee.- Congratulations!
0:42:21 > 0:42:24- When do you hope to get married? - We hope to get married this summer,
0:42:24 > 0:42:28but then maybe have a bigger party next year, when we've got time to plan it properly.
0:42:28 > 0:42:30I do hope to earn enough from this project
0:42:30 > 0:42:33- to pay for the wedding.- Good luck with the wedding.
0:42:33 > 0:42:37- I hope the project goes well, and we look forward to seeing what you do here.- Thank you.
0:42:37 > 0:42:38Thank you very much.
0:42:38 > 0:42:41It's a complicated property, but he really knows what he's doing.
0:42:41 > 0:42:46So it seems like Jez is the guy to fix it.
0:42:46 > 0:42:48He's certainly got a lot on his plate,
0:42:48 > 0:42:51as the property needs a lot of grooming.
0:42:51 > 0:42:53And it's no small feat to take on.
0:42:53 > 0:42:58You can find out if this has been a match made in heaven later in the show.
0:43:01 > 0:43:05We always like to think our buyers set themselves realistic timescales and budgets.
0:43:05 > 0:43:07There's only one way to find out,
0:43:07 > 0:43:10and that's to revisit them after they've done all their hard work.
0:43:10 > 0:43:13We now return to Burslem in Stoke-on-Trent
0:43:13 > 0:43:16to see how David got on with his substantial
0:43:16 > 0:43:19but standard red-brick terrace.
0:43:19 > 0:43:22He bagged it at auction for £48,000,
0:43:22 > 0:43:26but had a special reason for developing his portfolio.
0:43:26 > 0:43:29I've got two boys. They've got moderate learning difficulties.
0:43:29 > 0:43:33So just trying to get a bit of a nest-egg together,
0:43:33 > 0:43:35to support them when they're a little bit older.
0:43:35 > 0:43:39Fantastic. With a view to them living here?
0:43:39 > 0:43:43Potentially, or they can sell them and move to something else.
0:43:43 > 0:43:44Two and a half months later,
0:43:44 > 0:43:47the place has been magically transformed.
0:43:47 > 0:43:48# Could it be magic?
0:43:48 > 0:43:50# Now
0:43:50 > 0:43:51# Now
0:43:51 > 0:43:55# And hold on fast
0:43:56 > 0:44:01# Could this be the magic at last? #
0:44:05 > 0:44:08David and his team of builders have done a lovely job
0:44:08 > 0:44:11and well ahead of the three-month schedule they set.
0:44:11 > 0:44:13And he's already got a tenant.
0:44:13 > 0:44:15I didn't predict that.
0:44:15 > 0:44:19The old kitchen before, we've extended and made it a bit bigger.
0:44:19 > 0:44:22There used to be a wall at the back there.
0:44:22 > 0:44:24Very pleased with the kitchen.
0:44:24 > 0:44:29The way that it's worked out has been a bit tricky
0:44:29 > 0:44:31in configuring -
0:44:31 > 0:44:33which appliances should go where -
0:44:33 > 0:44:37but working with the tenant and knowing what equipment she'd got to put in there,
0:44:37 > 0:44:40we came up with what we think is a good solution.
0:44:40 > 0:44:44In the bathroom, it's been made a bit smaller.
0:44:44 > 0:44:48We've taken some of the room out and extended the kitchen.
0:44:48 > 0:44:50We were worried that
0:44:50 > 0:44:53that might make the bathroom a little bit too compact,
0:44:53 > 0:44:55but very happy with how it's turned out.
0:44:55 > 0:44:59We managed to recycle the toilet and the sink.
0:44:59 > 0:45:04Bought a new bath and a thermostatic shower.
0:45:04 > 0:45:06Chrome radiators...
0:45:06 > 0:45:10And I think that the finish and everything in here is very nice.
0:45:10 > 0:45:13The roof was another huge part of the renovation -
0:45:13 > 0:45:15loose ridges, flashings and tiles
0:45:15 > 0:45:18meant a major overhaul was necessary.
0:45:18 > 0:45:21We've done the roof.
0:45:21 > 0:45:24We've done a damp-proof course, electrics,
0:45:24 > 0:45:26plastered all the way through,
0:45:26 > 0:45:29new central heating...
0:45:29 > 0:45:32and decoration all the way through.
0:45:32 > 0:45:35David had a budget of up to £18,000.
0:45:35 > 0:45:38Did that estimate match his actual spend?
0:45:41 > 0:45:43There were some unexpected costs that we incurred,
0:45:43 > 0:45:48such as a couple of the lintels in the main building,
0:45:48 > 0:45:50we found out were wooden and rotten.
0:45:50 > 0:45:52So we had to replace those,
0:45:52 > 0:45:55and also the wall at the front of the property
0:45:55 > 0:45:58was falling down,
0:45:58 > 0:46:03so we had to rebuild that, so those were additional things we hadn't budgeted for originally.
0:46:03 > 0:46:07I am just waiting for two final invoices to come in
0:46:07 > 0:46:08from two suppliers,
0:46:08 > 0:46:15but my estimate at the moment is that it's come in at £18,247.
0:46:15 > 0:46:20The two boys were involved in quite a bit of work and have been here
0:46:20 > 0:46:23most weekends, helping us do various bits and bobs.
0:46:23 > 0:46:25They quite enjoyed smashing the old kitchen to bits
0:46:25 > 0:46:28and ripping out the old bathroom
0:46:28 > 0:46:34and were also involved in stripping the wallpaper off the walls upstairs before we skimmed them over.
0:46:34 > 0:46:36So they've thoroughly enjoyed it.
0:46:36 > 0:46:38The boys are interested in property.
0:46:38 > 0:46:42They watch your programme all the time on the TV.
0:46:42 > 0:46:48And hopefully, yes, this is something they may be able to have the capacity to do when they're a bit older.
0:46:48 > 0:46:53We've bought this property for their portfolio for later on in life.
0:46:53 > 0:46:56Hopefully, we want to get to about five or six, and that will give them
0:46:56 > 0:46:58a good start in life.
0:47:00 > 0:47:01While the boys are still young,
0:47:01 > 0:47:04what does David intend to do with this property?
0:47:06 > 0:47:10The plan for this property is to let it out long-term.
0:47:10 > 0:47:16We've already got a tenant that's just moved in this week
0:47:16 > 0:47:19and she's very happy with the property.
0:47:19 > 0:47:22So, is David getting the correct rental value for his investment?
0:47:22 > 0:47:25We asked two local estate agents
0:47:25 > 0:47:27for their opinions on this house.
0:47:29 > 0:47:32My first thoughts are they've done a very good job with the property.
0:47:32 > 0:47:36Very well presented all through. Nice new kitchen.
0:47:36 > 0:47:39I can really see they've spent some money on the place.
0:47:42 > 0:47:45I think with how they've finished the property off, it will appeal to
0:47:45 > 0:47:48purchasers and tenants alike.
0:47:48 > 0:47:50Very neutral colours all throughout the house.
0:47:50 > 0:47:53Nice and modern,
0:47:53 > 0:47:54nice and clean.
0:47:54 > 0:47:56They've done a real good job of the place.
0:47:57 > 0:47:59I like the kitchen and the bathroom.
0:47:59 > 0:48:02The finish on these is to a high standard.
0:48:02 > 0:48:03First impression of the property -
0:48:03 > 0:48:05it's been modernised to a good standard.
0:48:05 > 0:48:08The finish applied to the property has come out very well
0:48:08 > 0:48:11and certainly for the rental or sales market, it's a good property.
0:48:11 > 0:48:15Could David have done anything else to improve the property?
0:48:15 > 0:48:17I think in terms of enhancing value,
0:48:17 > 0:48:20they've pretty much done as much as they can do.
0:48:20 > 0:48:23The new kitchen, new bathroom,
0:48:23 > 0:48:27replaster, rewire... They've done all the essentials.
0:48:27 > 0:48:29They've made the kitchen a little bit bigger.
0:48:29 > 0:48:33So, yeah, I think they've pretty much done as much as they could have with it, really.
0:48:33 > 0:48:36So what kind of rental could it attract?
0:48:36 > 0:48:38I think if this was placed on to the rental market,
0:48:38 > 0:48:43you could be asking somewhere around £400 per calendar month.
0:48:43 > 0:48:46In today's market, I'd recommend £400 per calendar month.
0:48:46 > 0:48:49Yeah, that's about the right level.
0:48:49 > 0:48:51We're getting just above that, so, yeah, happy with that.
0:48:51 > 0:48:56So he should be, because David's already achieved a yield of over 7%.
0:48:56 > 0:48:59What about selling it?
0:48:59 > 0:49:01In today's market, I'd recommend an asking price
0:49:01 > 0:49:03of around £70,000.
0:49:03 > 0:49:06I think if he was to place it on to the open market for sale,
0:49:06 > 0:49:09I'd be suggesting he places it on the market
0:49:09 > 0:49:12somewhere around £65,000 to £70,000.
0:49:12 > 0:49:14I would like it to be at the top range of that,
0:49:14 > 0:49:17but as I'm not selling it, it's not really that much of an issue.
0:49:17 > 0:49:19It's a long-term investment.
0:49:19 > 0:49:22Were David to sell now,
0:49:22 > 0:49:27he'd make a profit of £4,000, minus tax and fees.
0:49:27 > 0:49:30By letting the property, he's achieving a healthy yield
0:49:30 > 0:49:32on his £66,000 investment.
0:49:32 > 0:49:34So, would he do it all again?
0:49:34 > 0:49:37I've thoroughly enjoyed it.
0:49:37 > 0:49:42It's perhaps something that I'll want to do perhaps once a year.
0:49:46 > 0:49:49Now it's back to Streatham in southwest London.
0:49:49 > 0:49:52Earlier we saw this mid-terrace building
0:49:52 > 0:49:55sell for £467,000.
0:49:55 > 0:49:57On the ground floor, there was a two-bedroom flat,
0:49:57 > 0:50:00which featured some very worrying damp
0:50:00 > 0:50:02and a postage-stamp-sized garden.
0:50:02 > 0:50:05Upstairs there was another split-level flat,
0:50:05 > 0:50:09which had been divided off with some really claustrophobic corridors
0:50:09 > 0:50:11in an attempt to create an attic floor.
0:50:11 > 0:50:13It just didn't work.
0:50:13 > 0:50:16The hotch-potch was bought by property developer Jez.
0:50:16 > 0:50:20You've got a lot going on. You're a busy guy. How do you find the time?
0:50:20 > 0:50:23By working evenings and weekends when necessary as well.
0:50:23 > 0:50:26And I'm going to get even busier because I've now got a wedding to plan,
0:50:26 > 0:50:30- because my girlfriend recently became my fiancee.- Congratulations!
0:50:30 > 0:50:33- When do you hope to get married? - We hope to get married this summer,
0:50:33 > 0:50:37but then maybe have a bigger party next year, when we've got time to plan it properly.
0:50:37 > 0:50:40I do hope to earn enough from this project to pay for the wedding.
0:50:42 > 0:50:44A wedding can be a very expensive affair,
0:50:44 > 0:50:47so let's hope he's managed to make that profit.
0:50:47 > 0:50:50And only four months later, we're back to find out.
0:50:52 > 0:50:55# Pink confetti has flown everywhere
0:50:55 > 0:51:02# These days go by so fast... #
0:51:02 > 0:51:05On the ground floor, there was a two-bedroom flat initially.
0:51:05 > 0:51:08And there, we haven't actually changed the layout at all.
0:51:08 > 0:51:10All we've done is renovate the existing layout
0:51:10 > 0:51:14and we have ended up, I think, with a very nice, spacious, two-bed flat.
0:51:14 > 0:51:15Jez and his team of builders
0:51:15 > 0:51:19have not just given it a modern and clean look -
0:51:19 > 0:51:22they've also put in new electrics, plumbing, double glazing,
0:51:22 > 0:51:24flooring and carpets throughout.
0:51:24 > 0:51:28They've also made a slight improvement to the garden.
0:51:31 > 0:51:33Just take a look at that ground-floor kitchen
0:51:33 > 0:51:35and living space now.
0:51:35 > 0:51:38Well, here in pretty much the same position,
0:51:38 > 0:51:41we've installed a brand-new kitchen with high-gloss units,
0:51:41 > 0:51:44integrated appliances and a nice solid oak worktop,
0:51:44 > 0:51:46which I'm really pleased with.
0:51:46 > 0:51:48Here in the main body of the room,
0:51:48 > 0:51:51if you recall the beginning of the project, this extension wall
0:51:51 > 0:51:53was completely rotten with damp.
0:51:53 > 0:51:56So we took the decision to demolish the whole thing
0:51:56 > 0:51:59and build up from the ground again with a proper wall
0:51:59 > 0:52:02and brand-new glazing to current standards,
0:52:02 > 0:52:05and I think the overall effect is fantastic
0:52:05 > 0:52:07and we've ended up with a really lovely living area.
0:52:10 > 0:52:12So it's looking terrific down here,
0:52:12 > 0:52:15but what about upstairs in the flat above?
0:52:17 > 0:52:19In the first- and second-floor flat,
0:52:19 > 0:52:21it was a complete mish-mash of a layout.
0:52:21 > 0:52:23It was a three-bed, two-bath flat.
0:52:23 > 0:52:27So what we've done is actually enlarged the en suite slightly,
0:52:27 > 0:52:29turned that into a bedroom
0:52:29 > 0:52:33and squeezed an en suite into the master bedroom on the first floor,
0:52:33 > 0:52:37so now we've actually got a four-bed, two-bath flat,
0:52:37 > 0:52:38which actually works really well
0:52:38 > 0:52:41and I'm really pleased with the result.
0:52:41 > 0:52:43It's a clever restructure,
0:52:43 > 0:52:46gaining an extra bedroom whilst keeping two toilets.
0:52:46 > 0:52:48And talk of clever reconstructing,
0:52:48 > 0:52:50look at what they've done in that front room.
0:52:53 > 0:52:56And if you're wondering where that kitchen's gone,
0:52:56 > 0:52:57look on the other wall.
0:52:57 > 0:53:00Jez has created two lovely flats here,
0:53:00 > 0:53:03but as he discovered, it's what's lurking underneath
0:53:03 > 0:53:06the surface of a building that really counts,
0:53:06 > 0:53:10and he also inherited some poor workmanship done over the years.
0:53:10 > 0:53:14We found that the drainage they'd installed
0:53:14 > 0:53:16was completely rubbish -
0:53:16 > 0:53:20full of holes - and that was creating all the damp through the brickwork.
0:53:20 > 0:53:25We then uncovered a bit further and found the cavity wall they'd built
0:53:25 > 0:53:29was not anywhere near up to current regulations.
0:53:29 > 0:53:32Now, there's obviously no damp problem at all.
0:53:32 > 0:53:34It's got a proper lead gutter on top,
0:53:34 > 0:53:36and the results are really great.
0:53:36 > 0:53:40Jez commissioned a structural report that turned out to be very wise,
0:53:40 > 0:53:45because there were no rolled steel joists, or RSJs, as they're known.
0:53:45 > 0:53:47Quite an important omission,
0:53:47 > 0:53:50as those are the beams that hold up a building.
0:53:50 > 0:53:54The second floor could have collapsed into the first.
0:53:54 > 0:53:56The first floor could have collapsed into the ground floor.
0:53:56 > 0:54:01And actually, there was also a chimney breast that wasn't supported at all.
0:54:01 > 0:54:03It was just overhanging a bedroom.
0:54:03 > 0:54:07So, in theory, if there had been high winds or something,
0:54:07 > 0:54:10a whole chimney breast could have fallen into a bedroom
0:54:10 > 0:54:13and obviously potentially killed someone.
0:54:13 > 0:54:18# You're an accident waiting to happen... #
0:54:20 > 0:54:22Do always be aware of bodged building work.
0:54:22 > 0:54:25It's not just electrics and gas that can catch you out.
0:54:25 > 0:54:29Poor structural work can cost lives
0:54:29 > 0:54:31and while that's the most important cost,
0:54:31 > 0:54:34it can also cost you time and money.
0:54:34 > 0:54:39Initially I said, on the best case, they would take three months.
0:54:39 > 0:54:43Worst case, four months. And we did actually use the full four months in the end,
0:54:43 > 0:54:46because of the various bits of extra work we had to do.
0:54:46 > 0:54:49The budget that was initially £80,000
0:54:49 > 0:54:52has actually moved up to about £100,000,
0:54:52 > 0:54:56because we did have to do some extra work,
0:54:56 > 0:54:57extra structural work,
0:54:57 > 0:55:01and then we did take the decision on the extension to knock down and rebuild the wall there.
0:55:01 > 0:55:05So, with a few things like that,
0:55:05 > 0:55:07we have, you know, gone up a bit.
0:55:07 > 0:55:10But at £100,000, I still think we've done a pretty good job.
0:55:13 > 0:55:15Hopefully, that additional spend
0:55:15 > 0:55:17doesn't mean he'll have to skimp on vol au vents or champagne
0:55:17 > 0:55:19at the party to celebrate his wedding.
0:55:22 > 0:55:25In fact, he's already had some interest.
0:55:25 > 0:55:27Both the flats went on to the open market
0:55:27 > 0:55:28even before they were finished.
0:55:28 > 0:55:33And I was very pleased to see that very quickly we had offers on both.
0:55:33 > 0:55:36And they're both now under offer.
0:55:42 > 0:55:45The ground-floor flat is under offer at £330,000
0:55:45 > 0:55:50and the first- and second-floor flat is under offer at £368,000.
0:55:50 > 0:55:53Jez knows what he wants for the flats.
0:55:53 > 0:55:58If he achieved those figures, he'd make a profit of £131,000.
0:55:58 > 0:56:01But has he pitched them at the right price?
0:56:01 > 0:56:05We asked two local estate agents for their thoughts on the two flats.
0:56:05 > 0:56:09The ground-floor flat with the open-plan kitchen/diner
0:56:09 > 0:56:12is very spacious, and having a garden helps.
0:56:12 > 0:56:16The favourite things I like about the flats are
0:56:16 > 0:56:19the real spacious, light and airy feel they have,
0:56:19 > 0:56:21especially in the ground-floor flat,
0:56:21 > 0:56:25with the glass panelling... lets in all that light.
0:56:25 > 0:56:29It retains some period features up in the second flat.
0:56:29 > 0:56:33And the good size, good proportion bedrooms.
0:56:33 > 0:56:35The standard of finish is very high
0:56:35 > 0:56:39and it would appeal to especially first-time buyers and young families.
0:56:39 > 0:56:41So a thumbs-up for all the work he's done,
0:56:41 > 0:56:44but has Jez got his figures right?
0:56:44 > 0:56:47Let's find out what they think these flats could sell on for.
0:56:49 > 0:56:55The ground-floor flat would achieve in the region of £325,000 to £350,000.
0:56:55 > 0:57:00The ground-floor garden flat I would value for £350,000.
0:57:00 > 0:57:05The first-floor flat would achieve in the region of £375,000.
0:57:05 > 0:57:08I would value the first- and second-floor split-level flat
0:57:08 > 0:57:10for £375,000.
0:57:10 > 0:57:13Well, I'm very pleased with them.
0:57:13 > 0:57:16They're about right. I'm most interested in getting a quick sale
0:57:16 > 0:57:18to move on to the next project,
0:57:18 > 0:57:23so I've actually already accepted offers for the ground-floor flat of £330,000
0:57:23 > 0:57:26and the first- and second-floor flat of £368,000,
0:57:26 > 0:57:28which I'm perfectly happy with.
0:57:28 > 0:57:32With a profit of £131,000, minus tax and expenses,
0:57:32 > 0:57:34Jez has come out of this well.
0:57:34 > 0:57:37Now, that's enough for a pretty good wedding party!
0:57:37 > 0:57:40Well, we actually already went through the formality
0:57:40 > 0:57:42and we are officially married.
0:57:42 > 0:57:45We had a very small ceremony, but hopefully next year,
0:57:45 > 0:57:48we'll have a big party and I think the profit from this
0:57:48 > 0:57:51will definitely go towards paying for that party.
0:57:55 > 0:57:58Martin, those stories have now been added to our archive.
0:57:58 > 0:58:00But there are always plenty more,
0:58:00 > 0:58:03so join us next time for more Homes Under The Hammer.
0:58:03 > 0:58:04- Goodbye.- Goodbye.
0:58:14 > 0:58:16Subtitles by Red Bee Media Ltd