0:00:02 > 0:00:06If you want to invest in property, make sure that you buy
0:00:06 > 0:00:09at the right price - but that's not always easy.
0:00:09 > 0:00:13How do you know what the market is doing? Is it rising or falling?
0:00:13 > 0:00:17One way to gauge demand is to take a trip to your local auction house.
0:00:43 > 0:00:48Auctions are really exciting and you can easily be tempted to buy,
0:00:48 > 0:00:52but to guarantee success, you have to do your homework first.
0:00:52 > 0:00:57Let's see what properties created interest at auction on today's show.
0:00:58 > 0:01:02'In Staffordshire, we meet a Hollywood cameraman
0:01:02 > 0:01:07'whose new project is sure to be an absolute blockbuster.'
0:01:08 > 0:01:12'In East Ham, London, a fashion designer's first auction buy
0:01:12 > 0:01:17'sees him investing more money on a home for less time on a lease.'
0:01:18 > 0:01:21'And a blast from the past on Homes Under The Hammer,
0:01:21 > 0:01:24'as we revisit a property bought in 2007,
0:01:24 > 0:01:28'and check in to see how the owner's got on since.'
0:01:29 > 0:01:32'All these properties were bought at auction.
0:01:32 > 0:01:35'We find out who bought them and for how much
0:01:35 > 0:01:37'when they went under the hammer.'
0:01:41 > 0:01:45'Welcome to Wolstanton in Staffordshire.
0:01:45 > 0:01:50'The buoyant property market is helped by the lovely parks, friendly small-town feel
0:01:50 > 0:01:55'and having Stoke-on-Trent and Newcastle-under-Lyme an easy commute away.'
0:01:55 > 0:02:00We have established we like the area. What is the property like?
0:02:00 > 0:02:04It's a three-bedroom terrace. Has a guide price of 70,000 quid.
0:02:04 > 0:02:08That's if I can find it, fighting my through the buddleia.
0:02:08 > 0:02:12# Hey, hey, hey I'm beating around the bush. #
0:02:12 > 0:02:17'This house looked to me like a traditional two-up, two-down terrace
0:02:17 > 0:02:20'so it'll be interesting to find out where that third bedroom is.
0:02:20 > 0:02:25'To begin with, trimming back the foliage will help improve this property's kerb appeal.'
0:02:29 > 0:02:33So, first investment, a pair of pruning shears!
0:02:33 > 0:02:35What have we got, in terms of the house?
0:02:35 > 0:02:38Through the front door into the lounge.
0:02:38 > 0:02:42Lots of light pouring in from the bay window area.
0:02:42 > 0:02:44That's pretty reasonable.
0:02:44 > 0:02:48Fairly standard layout. Stairs up to your bedrooms.
0:02:48 > 0:02:50Through to your rear sitting room.
0:02:50 > 0:02:55This is where the house would have ended - a classic two-up, two down.
0:02:55 > 0:02:57Oh, dear. Just before we go on,
0:02:57 > 0:02:59don't like the look of that.
0:02:59 > 0:03:02Nasty bits of damp going on.
0:03:02 > 0:03:05We'll have a look outside and see what's causing that.
0:03:05 > 0:03:09Need to get that checked out. Also, do check the floor joists.
0:03:09 > 0:03:13They may have been affected by whatever's causing that.
0:03:13 > 0:03:16Then the house continues
0:03:16 > 0:03:20into this, which is... It's a half-decent sized kitchen.
0:03:20 > 0:03:23But it feels very cramped, partly because of the layout.
0:03:23 > 0:03:27If you did this with more care, you could create something
0:03:27 > 0:03:31a bit more friendly and not as claustrophobic feeling.
0:03:31 > 0:03:35Then it carries on! Here you've got a loo.
0:03:35 > 0:03:37Come on, come on.
0:03:37 > 0:03:41Down this little corridor, it continues and continues
0:03:41 > 0:03:43to this bathroom.
0:03:43 > 0:03:49- CHUCKLING:- Suddenly, this little terrace is going on and on and on.
0:03:49 > 0:03:53In an ideal world, you'd clearly prefer a bathroom and loo upstairs.
0:03:53 > 0:03:56If you could achieve that,
0:03:56 > 0:04:00then knock this through, taking out the bathroom and the loo,
0:04:00 > 0:04:03you've got an amazing space
0:04:03 > 0:04:06with French doors out onto the garden. Wow!
0:04:08 > 0:04:11'This property is chock-a-block with potential.
0:04:11 > 0:04:14'Remodelling it will improve the profit margins.
0:04:14 > 0:04:18'The back garden, like the front, is in need of serious hacking back.
0:04:18 > 0:04:23'There is rear access to a driveway and also a garage.
0:04:23 > 0:04:26'As for the damp in the back reception room,
0:04:26 > 0:04:32'I spy what I believe to be the cause - blocked and leaky gutters.
0:04:32 > 0:04:35'It may be worth getting an expert to verify that,
0:04:35 > 0:04:40'but if it proves to be the case, it's inexpensive to fix.
0:04:40 > 0:04:43'Let's investigate upstairs.
0:04:43 > 0:04:47'At the front is a good sized double and at the back, the master bedroom.
0:04:47 > 0:04:51'Unfortunately, the third bedroom is accessed through the master
0:04:51 > 0:04:54'in the first-floor extension.
0:04:54 > 0:04:59'That's far from ideal, but no need to worry, as I have a cunning plan.'
0:05:00 > 0:05:04Upstairs, the smallest of the three bedrooms here
0:05:04 > 0:05:09would be an ideal location for an upstairs bathroom and loo.
0:05:09 > 0:05:13The only problem is, A, you lose a bedroom, which isn't good,
0:05:13 > 0:05:18and B, the only way to access it is through one of the bedrooms.
0:05:18 > 0:05:22You could put in a corridor or even change the stairs round,
0:05:22 > 0:05:24but that's quite a lot of expense.
0:05:24 > 0:05:27It's desirable to have the bathroom upstairs.
0:05:27 > 0:05:29That desirable? I'm not so sure.
0:05:29 > 0:05:34However, something which is even more exciting is here.
0:05:34 > 0:05:38As somebody else has been thinking, it's worth looking into the loft.
0:05:38 > 0:05:43There's a lot of space and you might consider a third bedroom up there.
0:05:43 > 0:05:46Under normal circumstances, in a terraced property
0:05:46 > 0:05:50it's debatable whether it's worth it, in terms of how much it costs
0:05:50 > 0:05:53and how much you're going to add to the resale price.
0:05:53 > 0:05:56But in this case, because the area's so desirable
0:05:56 > 0:06:01and the house is a good size, I think adding that would be worth it.
0:06:01 > 0:06:05If you got this at the guide price, it could make you quite a bit of money.
0:06:10 > 0:06:13'This terraced house is almost 100 years old.
0:06:13 > 0:06:18'Renovating it to ensure it lasts another 100 years is something to be proud of.
0:06:18 > 0:06:22'But making money is the name of the game in property development.
0:06:23 > 0:06:27'We asked a local estate agent for her opinion on this place,
0:06:27 > 0:06:30'which had a guide price of £70,000.'
0:06:31 > 0:06:33It's got a lot of potential,
0:06:33 > 0:06:36but does need modernising throughout.
0:06:36 > 0:06:39It is on a very sought-after road.
0:06:39 > 0:06:45'If this property was modernised, how much could it then be worth?'
0:06:45 > 0:06:51If the property was fully renovated, I would look at achieving in the region of £115,000 to £120,000.
0:06:51 > 0:06:56'If the bathroom was moved upstairs and the attic converted?'
0:06:56 > 0:07:01With the third bedroom in the loft and a family bathroom on the first floor,
0:07:01 > 0:07:05I would look at achieving in the region of £140,000 to £150,000.
0:07:06 > 0:07:08'What about rental?'
0:07:08 > 0:07:12If the property was modernised, you could look at achieving
0:07:12 > 0:07:16in the region of £495 to £525 per calendar month.
0:07:16 > 0:07:22With the third bedroom in the loft, you could look at achieving £600 per calendar month.
0:07:24 > 0:07:27As auction lots go, this is a good'un.
0:07:27 > 0:07:31Nice area and the property could do with a few internal modifications,
0:07:31 > 0:07:36but spend some cash and you'd get more in terms of your money back.
0:07:36 > 0:07:39Let's see who agreed and went for it at the auction.
0:07:40 > 0:07:4360 to start me on this?
0:07:43 > 0:07:4655, then? Get me going at 55.
0:07:46 > 0:07:5155 bid, thank you. At £55,000. 60 can I say now?
0:07:51 > 0:07:5360. At 60,000.
0:07:53 > 0:07:5665?
0:07:56 > 0:07:5962,000. Two to you, sir. 64?
0:07:59 > 0:08:0064,000.
0:08:00 > 0:08:0266?
0:08:03 > 0:08:0566. Do you want to go in ones?
0:08:06 > 0:08:08You do. 67.
0:08:08 > 0:08:0968.
0:08:09 > 0:08:1169. 70.
0:08:12 > 0:08:16At £70,000. Bid's left at 70,000.
0:08:16 > 0:08:19Another one? First time at...
0:08:19 > 0:08:22New bidder. £71,000. At 71.
0:08:22 > 0:08:2472. 73?
0:08:25 > 0:08:2773.
0:08:27 > 0:08:2974? 74.
0:08:29 > 0:08:3475. At £75,000. Bid's there. Pointing at him now.
0:08:34 > 0:08:36At 75,000 against you, sir.
0:08:36 > 0:08:39Against you, sir. Bid's there. Green shirt, no mistake.
0:08:39 > 0:08:42At 75, then, first time.
0:08:42 > 0:08:45At 75, second time.
0:08:45 > 0:08:48Third and final time at 75,000.
0:08:48 > 0:08:4976.
0:08:49 > 0:08:5177.
0:08:51 > 0:08:5378. 79.
0:08:53 > 0:08:5680. 81.
0:08:56 > 0:08:5982. 83. 84.
0:08:59 > 0:09:0185. Shaking his head.
0:09:01 > 0:09:04Still with you, sir, £85,000.
0:09:04 > 0:09:0685 for the first time.
0:09:06 > 0:09:0985 for the second time.
0:09:09 > 0:09:12Third and final time at £85,000.
0:09:13 > 0:09:17'It was Trevor who made the successful bid at 85,000.
0:09:20 > 0:09:22'He has experience of property renovation,
0:09:22 > 0:09:26'having worked in the building trade in his early 20s.
0:09:26 > 0:09:31'However, the glitz and glamour of Hollywood movies enticed him away
0:09:31 > 0:09:34'and he currently works as a film cameraman.
0:09:34 > 0:09:38'So, it's lights, camera, action - and I'm ready for my close-up.'
0:09:38 > 0:09:42- Trevor, good to meet you.- And you. - Congratulations.- Thank you. I think.
0:09:42 > 0:09:47- Tell me why you wanted this place. - We'd been researching this area for six months.
0:09:47 > 0:09:51We started property dabbling down south, but suddenly realised...
0:09:51 > 0:09:55- Not suddenly! ..that you could get more for your money up here.- Wow!
0:09:55 > 0:09:59- How did you do that?- Well, research on the internet.- Oh.- Yeah.
0:09:59 > 0:10:03Download the catalogues of every auction in the country,
0:10:03 > 0:10:05discount 90% of them,
0:10:05 > 0:10:09examine the other 10% a little bit more closely, elbow 90% of those,
0:10:09 > 0:10:13come up with a couple per auction and this ticked all the boxes.
0:10:13 > 0:10:16There's no wet rot, dry rot. There's a bit of damp, but not rot.
0:10:16 > 0:10:21And it needs improving. It needs the bathroom moving upstairs.
0:10:21 > 0:10:25- We're going to change these stairs around.- You are?- They're so steep!
0:10:25 > 0:10:29Does that give you the corridor to access the bathroom?
0:10:29 > 0:10:34Yes, we will build walls in the back bedroom.
0:10:34 > 0:10:37Because they're quite big rooms for a small house,
0:10:37 > 0:10:39it will still be a small double.
0:10:39 > 0:10:43'Trevor has a budget of £30,000 to £40,000,
0:10:43 > 0:10:47'depending on whether he decides to convert the attic into a bedroom.
0:10:47 > 0:10:51'This would increase the chances of a quick sale.
0:10:52 > 0:10:58'He's based in London, but will hire local builders to do the renovation,
0:10:58 > 0:11:02'which he hopes to have completed within four months.'
0:11:02 > 0:11:06How do you manage the renovations of properties from a distance?
0:11:06 > 0:11:09I'll be coming up a couple of days a week.
0:11:09 > 0:11:13I work in the film industry, and if I'm not on a movie or TV series,
0:11:13 > 0:11:16I have a lot of rest periods in between!
0:11:16 > 0:11:22I can take days off to come up and make sure they're pulling their weight.
0:11:22 > 0:11:26- What exactly do you do? - I'm a freelance camera operator and director of photography.
0:11:26 > 0:11:29- It depends what I do. - What do you work on?
0:11:29 > 0:11:34- My career's based in large features, Harry Potter and Star Wars...- No?
0:11:34 > 0:11:36- Yeah.- Harry Potter and Star Wars?
0:11:36 > 0:11:39Yes. Indiana Jones, that sort of stuff.
0:11:39 > 0:11:41- No way?- Absolutely.
0:11:46 > 0:11:49'Trevor has worked with famous stars of the silver screen,
0:11:49 > 0:11:53'including Marlon Brando, Harrison Ford, Tom Hanks, Brad Pitt
0:11:53 > 0:11:56'and now, at last, yours truly, Martin Roberts.
0:11:56 > 0:11:59'Well, maybe not quite!'
0:12:00 > 0:12:03# Could you be a teenage idol?
0:12:04 > 0:12:07# Could you be a movie star...? #
0:12:07 > 0:12:12So, the move from movies to property, is that...?
0:12:12 > 0:12:18It's not a move. When I left school, I was a partner in a building firm for eight years
0:12:18 > 0:12:21while I was trying to make my way in the film industry.
0:12:21 > 0:12:27I had to make a decision to either go full-time building or full-time film.
0:12:27 > 0:12:33The lure of Hollywood, or Pinewood, was greater than the lure of the local builders' merchant!
0:12:33 > 0:12:36- Listen, good luck. Congratulations. - Thank you.
0:12:36 > 0:12:42- I look forward to seeing how you get on.- Yes, in three months or five months or whatever it is.
0:12:46 > 0:12:51So, as well as lights, camera, action,
0:12:51 > 0:12:54it's now research, renovate and sell for Trevor.
0:12:54 > 0:12:57With this property, I think he's got a really good one.
0:12:57 > 0:13:00Will he end up doing that loft conversion?
0:13:00 > 0:13:03You can find out later in the show.
0:13:07 > 0:13:11'Looking for an affordable property in London can be a struggle,
0:13:11 > 0:13:14'but the borough of Newham might be a good place to start,
0:13:14 > 0:13:16'as it currently has the cheapest homes in the city.
0:13:16 > 0:13:20'The average price there is 220,000.
0:13:20 > 0:13:23'That's a lot of money, but if that is in your price range,
0:13:23 > 0:13:27'East Ham in the middle of the borough is worth investigating.'
0:13:27 > 0:13:32Just ten minutes or so from the Tube is the property I'm here to see.
0:13:32 > 0:13:39It's in this block. It's got three bedrooms and it had a guide price of £105,000.
0:13:39 > 0:13:42'OK, not a looker from the outside,
0:13:42 > 0:13:44'but it does have a communal area,
0:13:44 > 0:13:48'plenty of space for the kids to play and to hang out your washing,
0:13:48 > 0:13:52'plus loads of off-street parking, which in London is a bonus.
0:13:52 > 0:13:55'Inside, the communal area looks fine.
0:13:55 > 0:13:57'So, what about the interior?'
0:13:58 > 0:14:02Well, I'm not expecting character in this property,
0:14:02 > 0:14:05but hoping for good proportions and so far, so good.
0:14:05 > 0:14:08Lovely space here. Very welcoming.
0:14:08 > 0:14:13A bedroom with some big windows, although they will need replacing.
0:14:13 > 0:14:18The decor has seen better days. Little bedroom through there.
0:14:18 > 0:14:22A bathroom, where a bit of investigation needs to be going on,
0:14:22 > 0:14:25because there might have been some sort of leak.
0:14:25 > 0:14:29In here, I thought it was the lounge,
0:14:29 > 0:14:33but it's actually a kitchen/lounge area.
0:14:33 > 0:14:37I am wondering whether you could put the kitchen in here.
0:14:37 > 0:14:40You'd need to look into this space carefully.
0:14:40 > 0:14:43My guess is there's been a huge leak from upstairs
0:14:43 > 0:14:45because the walls look rather damp.
0:14:45 > 0:14:49Would you want to relocate the kitchen here? You lose a bedroom.
0:14:49 > 0:14:54With a bit of careful planning, it might be worth leaving it as it is
0:14:54 > 0:14:56and just spending some money on doing it up.
0:14:56 > 0:15:00'Keeping it in this configuration needs some thought.
0:15:00 > 0:15:03'The layout of the open-plan room could be better.
0:15:03 > 0:15:06'That third bedroom might have been the original kitchen.
0:15:06 > 0:15:12'You would have to weigh up what was most important to you - a separate kitchen or a third bedroom.
0:15:12 > 0:15:14'But it is very flexible.
0:15:14 > 0:15:17'So far, so good, then,
0:15:17 > 0:15:20'but alas, there is a catch.'
0:15:20 > 0:15:24We all know it's important to do your research.
0:15:24 > 0:15:28You don't go by a little pic in the catalogue or the brief description.
0:15:28 > 0:15:34You visit the property, you read the legal pack and, on the day, you check if there were any addendums,
0:15:34 > 0:15:36a list the auction house produces
0:15:36 > 0:15:40with additional information about the lots going under the hammer.
0:15:40 > 0:15:44It's all there for you, if you just read it.
0:15:44 > 0:15:47And in this case, that's uber-important
0:15:47 > 0:15:51because the length of the lease in the catalogue was nice and long.
0:15:51 > 0:15:55On the website, the legal pack and the addendum, it was different.
0:15:55 > 0:16:00It had been amended to a very short 57 years.
0:16:00 > 0:16:02Ouch!
0:16:03 > 0:16:09# Please release me, let me go... #
0:16:09 > 0:16:14'Time is of the essence when it comes to re-leasing a property.
0:16:14 > 0:16:18'With only 57 years left, few mortgage companies would lend on it.
0:16:18 > 0:16:22'So if you planned to sell it on, you could be in trouble.
0:16:22 > 0:16:26'The less time the lease has left, the more expensive those years can be to add on.
0:16:26 > 0:16:30'Unless you're prepared to fork out a lot more money to extend the lease
0:16:30 > 0:16:33'I'd steer clear of this flat.
0:16:33 > 0:16:36'The addendum on the auction house's website did correct the details,
0:16:36 > 0:16:40'so it pays to check and double check before you bid.
0:16:40 > 0:16:43'Could it work better as a rental?
0:16:44 > 0:16:47'We asked a local estate agent for her thoughts.'
0:16:47 > 0:16:50East Ham is a very good area for rentals at the moment
0:16:50 > 0:16:55because of the Olympics and we have Newham University Hospital
0:16:55 > 0:16:59about 15 minutes away from here.
0:16:59 > 0:17:03And then we have Newham College.
0:17:03 > 0:17:05It's a very populated area.
0:17:05 > 0:17:08Also, we do have Eastern European communities,
0:17:08 > 0:17:13which improved the rental side in the area.
0:17:14 > 0:17:19'This sounds like a real rental machine with a hospital nearby
0:17:19 > 0:17:21'and a community looking for rental properties.
0:17:21 > 0:17:27'So, that all sounds promising. What might this flat achieve on the rental market?'
0:17:27 > 0:17:30If the property would be modernised,
0:17:30 > 0:17:38the rental income would be in between £1,050 and £1,100 per calendar month.
0:17:38 > 0:17:42'As I said, trying to put this up for sale after refurbishment
0:17:42 > 0:17:44'might be tricky with the lease issue.
0:17:44 > 0:17:47'If it was refurbished to a good standard,
0:17:47 > 0:17:49'what could it make, if sold on?'
0:17:51 > 0:17:54If the lease would be renewed and the property modernised,
0:17:54 > 0:18:00we're looking at a figure around £165,000 and £170,000.
0:18:00 > 0:18:03At the guide price, there's probably still money in it
0:18:03 > 0:18:06after a lease extension, if you wanted to sell this on.
0:18:06 > 0:18:09If not, it's a very, very decent rental.
0:18:09 > 0:18:11Let's see who went for it at the auction.
0:18:13 > 0:18:19'On the day of the auction, the bidding started at £140,000.'
0:18:19 > 0:18:22Three-bed flat. 140?
0:18:22 > 0:18:25140 with you. Can't let him have it on his first bid.
0:18:25 > 0:18:28140,000. 141?
0:18:30 > 0:18:32141 on the phone.
0:18:32 > 0:18:36142?
0:18:36 > 0:18:40143 elsewhere? If not, 142.
0:18:40 > 0:18:42First time.
0:18:42 > 0:18:43Second time.
0:18:43 > 0:18:46Third and last time... Where?
0:18:46 > 0:18:49You should be jumping up and down. Where?
0:18:49 > 0:18:51There.
0:18:52 > 0:18:55143. Just.
0:18:55 > 0:18:57144?
0:18:58 > 0:19:02144 elsewhere? If not, 143...
0:19:02 > 0:19:03First time.
0:19:03 > 0:19:05Second time.
0:19:05 > 0:19:08Third and last time. If you're all done...
0:19:08 > 0:19:10Sold, 143.
0:19:10 > 0:19:12'That was a bit of a struggle!
0:19:12 > 0:19:15'The winning bidder hidden from our view
0:19:15 > 0:19:19'who made that successful bid of 143,000 was Ali.
0:19:19 > 0:19:22'He runs a designer men's wear shop.
0:19:22 > 0:19:26'I met him at the three-bedroom flat to find out more.'
0:19:26 > 0:19:30- Congratulations.- Thank you. - Why did you want to buy this flat?
0:19:30 > 0:19:35I'm quite used to this area. I live local.
0:19:35 > 0:19:37Not far from this flat.
0:19:37 > 0:19:40I've been looking for a house in this area,
0:19:40 > 0:19:43but I ended up with a flat.
0:19:43 > 0:19:47And it looks quite nice, very spacious.
0:19:47 > 0:19:50Also, I was very happy with the communal garden
0:19:50 > 0:19:53and it's ground floor.
0:19:53 > 0:19:58- You wanted a house, but you bought a flat.- That's right. - Did you look inside the property?
0:19:58 > 0:20:01Yes, I had a quick view the week before the auction
0:20:01 > 0:20:04and I was quite happy with it.
0:20:04 > 0:20:07'This wasn't Ali's first choice at the auction.
0:20:07 > 0:20:12'Failing to get one he wanted led him to being caught out on this.'
0:20:12 > 0:20:14Did you get a chance to read the legal pack?
0:20:14 > 0:20:18I didn't get a chance to read the legal pack on this one.
0:20:18 > 0:20:21And what about the addendum they put in on the day?
0:20:21 > 0:20:23Did you have a look at that?
0:20:23 > 0:20:27Initially, as the lot number was going, I was looking at it.
0:20:27 > 0:20:30- But this particular one got me excited, I didn't read it.- Ah!
0:20:30 > 0:20:34- It is so important that you read those.- Yeah.
0:20:34 > 0:20:39Now you've fallen down hugely. You bought a flat and you've got a very short lease.
0:20:39 > 0:20:42- Yes.- Did you know about the short lease?
0:20:42 > 0:20:44No, only once I purchased it.
0:20:44 > 0:20:51After going home, reading the addendum paper, I realised it's a shorter lease.
0:20:51 > 0:20:54- Tell me honestly, how did you feel?- I felt really bad.
0:20:54 > 0:20:56- Oh, did you?- Yes, I did.
0:20:58 > 0:21:05'I do feel for him, but that's why Martin and I nag about the pitfalls of not doing thorough research.
0:21:05 > 0:21:09'However, the good news is that Ali's consulted his solicitor,
0:21:09 > 0:21:12'who believes an extension of the lease should be possible
0:21:12 > 0:21:17'for £10,000 to £12,000, but he'll have to wait and see.
0:21:17 > 0:21:20'Putting that aside, what are Ali's plans for the flat?'
0:21:20 > 0:21:25Once I do my refurbishment, I'll see if I can find a buyer.
0:21:25 > 0:21:28If not, I'll put it into the rental market.
0:21:28 > 0:21:32- How much would you like to market the property for? - Around 190, 195.
0:21:32 > 0:21:35- So you need to take it up a notch? - That's right.
0:21:35 > 0:21:40What are you going to do and how are you going to change the layout, if at all?
0:21:40 > 0:21:44I won't be changing the layout. Just new windows, new flooring.
0:21:44 > 0:21:48All the paintwork has got to be done.
0:21:48 > 0:21:51Do you think you'll put the kitchen back where it originally was,
0:21:51 > 0:21:54or market this as a three-bedroom property?
0:21:54 > 0:21:58I think I'll market it as a three-bedroom property,
0:21:58 > 0:22:00if I can get away with it.
0:22:00 > 0:22:04I'll probably have the kitchen, the dining and living together.
0:22:04 > 0:22:08Around here, especially on the rental side,
0:22:08 > 0:22:11three-bedder is popular, so I might be going for a three-bedder.
0:22:11 > 0:22:15'Ali has a budget of 10,000 to 12,000.
0:22:15 > 0:22:19'While he needs to keep his spend low, due to the lease extension,
0:22:19 > 0:22:22'he also needs to do a really top quality job
0:22:22 > 0:22:25'if he wants to get that 190 grand he was talking about.
0:22:25 > 0:22:29'He'll keep an eye on the project by checking in every other day,
0:22:29 > 0:22:32'and hopes to finish in four to six weeks.
0:22:32 > 0:22:37'This is a world away from his day job running a men's designer wear business.
0:22:37 > 0:22:42'While he has dealt in property before, this was his first auction buy.'
0:22:42 > 0:22:45- Do you enjoy this or men's fashion? - Men's fashion.
0:22:45 > 0:22:48- More so than this? - Yeah, this is new to me.
0:22:48 > 0:22:53I've got to see how enjoyable this is, but I love the men's fashion.
0:22:53 > 0:22:58- Ali, good luck. It's going to be great to see what you do.- Thank you.
0:22:59 > 0:23:01So, it's as I feared.
0:23:01 > 0:23:03Ali missed the short lease!
0:23:03 > 0:23:06That is just such a shame.
0:23:06 > 0:23:10Still, it can be fixed and if he's clever, there could be a bit of profit.
0:23:10 > 0:23:13Find out if there is later in the show.
0:23:14 > 0:23:19'In Derby, we reveal the tooth... Sorry. ..truth behind this dentist's office.'
0:23:19 > 0:23:23The temptation when you take on a project like this is to start again.
0:23:25 > 0:23:28'Ali's lease issues aren't the only damp squibs,
0:23:28 > 0:23:34'as he tries really hard to make more out of this flat in East Ham, London.'
0:23:36 > 0:23:41'But first, cameraman Trevor's plans are still very much in production.'
0:23:41 > 0:23:44It's a completely new house in an old frame.
0:23:48 > 0:23:51'Back now to Wolstanton, Staffordshire,
0:23:51 > 0:23:53'and this three-bed mid-terrace,
0:23:53 > 0:23:57'which Trevor bought at auction for 85,000.
0:23:57 > 0:24:00'In a previous life, he was a partner in a building firm,
0:24:00 > 0:24:04'and already has a portfolio of rental properties.
0:24:04 > 0:24:10'His day job is working as a camera operator on some pretty high-profile blockbusters.'
0:24:10 > 0:24:15My career's been based in large features - Harry Potter, Star Wars.
0:24:15 > 0:24:18- No?- Yeah. - Harry Potter and Star Wars?- Yes.
0:24:18 > 0:24:23- Indiana Jones and that sort of stuff.- No way?- Absolutely.
0:24:26 > 0:24:29'Trevor was planning to rejig the layout of the mid-terrace,
0:24:29 > 0:24:34'moving the bathroom to the first floor and possibly converting the loft.
0:24:34 > 0:24:36'He had a budget of up to £40,000,
0:24:36 > 0:24:39'and a three to five month timescale to do the work.
0:24:39 > 0:24:43'11 months later, we went behind the scenes,
0:24:43 > 0:24:47'to get a peek at what could be a masterpiece in the making.'
0:24:47 > 0:24:52MUSIC: "More Like The Movies" by Dr Hook
0:25:31 > 0:25:35'There's still a bit to do before Trevor lays any carpet here,
0:25:35 > 0:25:37'red or otherwise,
0:25:37 > 0:25:43'but it's well on the way to becoming an up-to-date family home.
0:25:43 > 0:25:46'Knocking through the kitchen and downstairs bathroom
0:25:46 > 0:25:49'has created a wonderful dining kitchen.'
0:25:49 > 0:25:52I'm particularly pleased with the kitchen.
0:25:52 > 0:25:56It's worked out very well indeed. Probably the best room in the house.
0:25:56 > 0:25:59As you can see, it's all integral units,
0:25:59 > 0:26:02fridge-freezer, eye-level oven.
0:26:02 > 0:26:05It's a kitchen I'd like to move into!
0:26:05 > 0:26:09And this end down here, which was the original bathroom,
0:26:09 > 0:26:16is now a breakfast area with enough room for a table and four chairs.
0:26:16 > 0:26:21The floor-to-ceiling windows, I'm particularly pleased with.
0:26:21 > 0:26:24I think the kitchen-breakfast room has worked particularly well.
0:26:27 > 0:26:29'This is a fantastic space,
0:26:29 > 0:26:33'and the newly landscaped garden makes a great backdrop.
0:26:33 > 0:26:38'Moving the super-steep stairs and opening them up works a treat.
0:26:38 > 0:26:42'Up on the first floor, the layout is much improved.
0:26:42 > 0:26:47'The family bathroom is a good size, as are the two bedrooms.
0:26:47 > 0:26:52'Up more stairs, the third bedroom in the loft space is taking shape.'
0:26:52 > 0:26:57Although when you look around, you won't feel it's nearing completion,
0:26:57 > 0:27:00we're only three or four weeks away from completion.
0:27:00 > 0:27:02The bathroom is 90% finished.
0:27:02 > 0:27:05The loft has got quite a bit of work to do.
0:27:05 > 0:27:09But all the structural stuff, we've had five RSJs...
0:27:09 > 0:27:12'Cut! Let me explain.
0:27:12 > 0:27:17'RSJ is industry speak for a rolled steel joist, a structural support.
0:27:17 > 0:27:19'And - action!'
0:27:19 > 0:27:24..put into various places to replace walls or chimney breasts or whatever that have gone.
0:27:24 > 0:27:28There's been a lot of structural stuff. There was no central heating.
0:27:28 > 0:27:31That's all been put in.
0:27:31 > 0:27:34It's basically a completely new house in an old frame.
0:27:34 > 0:27:38We've literally taken everything out and put it all back again.
0:27:40 > 0:27:45'Delays in getting started meant that Trevor's builder of choice had to take other work.
0:27:45 > 0:27:49'That in turn meant it took six months for things to get under way.
0:27:49 > 0:27:51'Hence, the slip in timescale.
0:27:51 > 0:27:55'The damp in the second reception room led to the extra expense
0:27:55 > 0:27:57'of having the wall tanked,
0:27:57 > 0:28:01'but has he managed to keep to keep to his £30,000 to £40,000 budget?'
0:28:03 > 0:28:07We will have spent about 41 by the time we've completly finished.
0:28:09 > 0:28:15'A £41,000 renovation cost on top of his purchase price of 85,000
0:28:15 > 0:28:19'will bring Trevor's total outlay to £126,000.
0:28:20 > 0:28:24'We asked two local property experts for their take on this mid-terrace.'
0:28:24 > 0:28:28First impression is they've done quite a lot of work to it.
0:28:28 > 0:28:31They've stripped it back to brick and renovated the property entirely.
0:28:31 > 0:28:35The renovation's been carried out to a very high standard,
0:28:35 > 0:28:37which I'm really pleased with.
0:28:37 > 0:28:41It's maximised its potential. I don't think there's much more you could do.
0:28:42 > 0:28:48'What do they believe that the completed mid-terrace would fetch on the resale market?'
0:28:48 > 0:28:53Once the property is renovated in full, I'd expect it to go on the market for £135,000.
0:28:53 > 0:28:58I'd have no problem placing this property on the market for £150,000.
0:28:58 > 0:29:02So either side of what we were hoping for, a minimum of 140.
0:29:02 > 0:29:06If it gets nearer the 150 mark, so much the better.
0:29:06 > 0:29:12If it's down at the 135 mark, we would almost certainly put it into the rental market.
0:29:14 > 0:29:19'The estate agents' resale valuations would give Trevor a profit before tax and expenses
0:29:19 > 0:29:21'of between 9,000 and 24,000.
0:29:23 > 0:29:25'What about rental estimates?'
0:29:25 > 0:29:30Should the owner lease the property, a rental value of £550 per calendar month should be placed.
0:29:30 > 0:29:33If I were to place this property on the rental market,
0:29:33 > 0:29:37I'd happily place it on the market at £550 per calendar month.
0:29:37 > 0:29:42'Those rental valuations would give Trevor a yield of just over 5%.
0:29:42 > 0:29:48'How has he enjoyed focusing on builders in Staffordshire
0:29:48 > 0:29:50'rather than movie stars on film sets?'
0:29:50 > 0:29:54It's quite exciting. Every time I come up, there's new bits done
0:29:54 > 0:29:59and it's nearer to completion, probably three or four weeks away.
0:29:59 > 0:30:03So, yes. Basically, I'm very pleased with it.
0:30:06 > 0:30:09'It was way back in 2007
0:30:09 > 0:30:14'when I visited a very unusual auction lot in Derby.
0:30:14 > 0:30:19'The catalogue description was enough to get me really excited.'
0:30:20 > 0:30:25It's a five-bedroom Victorian villa, guided at 200,000 quid.
0:30:25 > 0:30:27I can't wait to have a look inside.
0:30:30 > 0:30:33'I don't come across this type of property every day -
0:30:33 > 0:30:38'a really grand frontage with a nice corner plot set back from the road.
0:30:38 > 0:30:41'One problem is immediately apparent.
0:30:41 > 0:30:43'There is no off-street parking.
0:30:43 > 0:30:47'As a five-bedroomed house, this is likely to attract a two-car family,
0:30:47 > 0:30:50'so I'd want to solve that issue.'
0:30:53 > 0:30:56There's always a sense of anticipation
0:30:56 > 0:31:01coming into a house like this - and wow, it doesn't disappoint.
0:31:01 > 0:31:05Lovely entrance area with this etched glass.
0:31:05 > 0:31:09You've got a drawing room there with shuttered windows.
0:31:09 > 0:31:13Through this large entrance hall.
0:31:13 > 0:31:15You've got great big archways.
0:31:15 > 0:31:20You've got more original features than you could ever wish for.
0:31:20 > 0:31:22All this needs to be cleaned off.
0:31:22 > 0:31:26The feeling you get looking up the stairs, more arches on that doorway,
0:31:26 > 0:31:27absolutely beautiful.
0:31:27 > 0:31:32This is the main part of the house. You go this way into a separate annexe.
0:31:33 > 0:31:37The place is obviously full of someone's belongings.
0:31:37 > 0:31:39It's not an unhappy story in this instance.
0:31:39 > 0:31:43It's just that the current owner hasn't moved out yet.
0:31:43 > 0:31:45We've got a nice living area here.
0:31:45 > 0:31:48Fireplace there, again, loads of character.
0:31:48 > 0:31:52This place is SO full of character I don't know where to start.
0:31:52 > 0:31:54You've got a bathroom there.
0:31:54 > 0:31:57Through here, a conservatory. That's nice to see.
0:31:57 > 0:32:02A kitchen off it there. It's fairly small, but it's one of two kitchens in the house.
0:32:02 > 0:32:06What this whole area does is give the house great flexibility.
0:32:06 > 0:32:08It's a nice start.
0:32:08 > 0:32:11'The advantage of the current owner's furniture being here
0:32:11 > 0:32:14'is that you can see how the rooms work,
0:32:14 > 0:32:16'how a mixture of new and old can be married
0:32:16 > 0:32:19'and gives a flavour of how the house could be.
0:32:19 > 0:32:23'The configuration is a bit higgledy piggledy,
0:32:23 > 0:32:26'but that offers a range of options which I really like.'
0:32:26 > 0:32:29Back over in the main body of the house,
0:32:29 > 0:32:32you've got lots of lovely practical rooms.
0:32:32 > 0:32:36This is a sitting room area with a real fire.
0:32:36 > 0:32:41The cats, presumably the current owner's, seem to be enjoying it.
0:32:41 > 0:32:46Through there into what I suppose is the only downside of the house.
0:32:46 > 0:32:48Well, the only downside inside.
0:32:48 > 0:32:52The kitchen, it's way too small for the size of the house.
0:32:52 > 0:32:56Fairly old-fashioned units, but that's not the main issue.
0:32:56 > 0:33:03It's the fact that it really is not what it could be, which is the focal point of a house like this.
0:33:03 > 0:33:07You would need to do some thinking in terms of knocking down walls
0:33:07 > 0:33:10and integrating this into the rest of the house.
0:33:10 > 0:33:14Apart from that, there's a lot of house for the money.
0:33:16 > 0:33:19There's a lovely blend of old and new here
0:33:19 > 0:33:22and potential to change the layout.
0:33:24 > 0:33:28Then this place really would be the cat's whiskers!
0:33:32 > 0:33:36Upstairs, and on this mid-landing area,
0:33:36 > 0:33:39one issue with the property - a bathroom.
0:33:39 > 0:33:43That is the main bathroom and it's only got a shower,
0:33:43 > 0:33:47so it's disproportionately small in relation to the property.
0:33:47 > 0:33:51But what you have got is wonderful big bedrooms, five of them in total.
0:33:51 > 0:33:55They've all got wooden floors, lots of storage space,
0:33:55 > 0:33:57features oozing out of them.
0:33:57 > 0:34:01In this one, we've got a real fireplace. It's lovely.
0:34:01 > 0:34:07What it also throws open is a possibility of using it for a variety of uses.
0:34:07 > 0:34:10You could have it as a family home, but so many rooms like this,
0:34:10 > 0:34:14maybe it could be an HMO, a house of multiple occupancy,
0:34:14 > 0:34:16rent it out to students.
0:34:16 > 0:34:18I don't know. It's got options.
0:34:18 > 0:34:23But what a great place to live in just as a family home!
0:34:23 > 0:34:27At the rear of the property, a bit of a bonus, there is a garden.
0:34:27 > 0:34:31It's low-maintenance, no grass or anything, just paving stones.
0:34:31 > 0:34:35For a town-centre house like this, not a bad size space.
0:34:35 > 0:34:39The biggest issue, though, is parking. There isn't any.
0:34:39 > 0:34:43On the other side of that wall there is on-street parking.
0:34:43 > 0:34:46What you might want to consider, this was the case in the past,
0:34:46 > 0:34:50somebody knocked down that wall, so you could bring cars in here.
0:34:50 > 0:34:53That's an issue if you're looking at it as a residential home.
0:34:53 > 0:34:57If you are considering it as a kind of office or commercial use,
0:34:57 > 0:35:01parking would be a major issue and you would have to address that.
0:35:03 > 0:35:06'There are plenty of options with the right permissions,
0:35:06 > 0:35:11'or then again, it could just be a cracking family home.'
0:35:14 > 0:35:17These are the original deeds of the house,
0:35:17 > 0:35:21handwritten on parchment with the old wax seal and everything.
0:35:21 > 0:35:23How much did it originally sell for?
0:35:23 > 0:35:27£105. Brilliant!
0:35:27 > 0:35:30It's an example of the kind of history of this place.
0:35:30 > 0:35:36Not only have you got the original features, you've got a great old-fashioned wonderful home here.
0:35:36 > 0:35:39The reality is, somebody will probably split it up,
0:35:39 > 0:35:41which will be a real shame.
0:35:41 > 0:35:45You never know, though. Let's find out who did buy it at the auction.
0:35:46 > 0:35:51Lot number 38. Double-fronted detached period residence.
0:35:51 > 0:35:54Very handsome property. What am I saying for this? £220,000?
0:35:54 > 0:36:00220 is bid. Thank you. £220,000 bid. 22. 222.
0:36:00 > 0:36:0224 is bid.
0:36:02 > 0:36:05226. 28, sir? 228.
0:36:05 > 0:36:08230. 230. 232?
0:36:08 > 0:36:11At 230,000. 32 is bid.
0:36:11 > 0:36:15A fresh bidder. 232. 234. 234.
0:36:15 > 0:36:18236. 236.
0:36:18 > 0:36:2038? 238?
0:36:20 > 0:36:24At £236,000. All done with it?
0:36:24 > 0:36:26For the first time at 236.
0:36:26 > 0:36:30For the second time at 236. Third and last chance.
0:36:30 > 0:36:32That, ladies and gentlemen, is withdrawn.
0:36:32 > 0:36:36'The lot failed to reach its reserve on the day,
0:36:36 > 0:36:39'but a deal was struck after the auction.
0:36:40 > 0:36:45'Pete, who has worked in the motor trade and as an electrician,
0:36:45 > 0:36:48'paid £240,000 for the Victorian villa.
0:36:48 > 0:36:52'He's taking this one on with his partner, Karen.'
0:36:52 > 0:36:56Pete, nice to meet you. Why did you want to buy this place so much?
0:36:56 > 0:37:00It's got a lot of character and we're looking at somewhere
0:37:00 > 0:37:03for conversion into a dental practice - Karen's a dentist.
0:37:03 > 0:37:07- A dental practice?- A dental practice.- Karen your partner?- Yes.
0:37:07 > 0:37:11- Would this make a good dental practice?- I think so.
0:37:11 > 0:37:15There's a lot of good-sized rooms, areas for reception rooms,
0:37:15 > 0:37:20waiting rooms, but it needs a lot of organisation to work out the layout.
0:37:20 > 0:37:24We've got to work it for disabled access, due to the regulations.
0:37:24 > 0:37:30Also, car parking. The back wall, I understand, used to have a hole to get cars into the back.
0:37:30 > 0:37:34Now it's all bricked up and the back area's been raised.
0:37:34 > 0:37:39We'll have to get permission off the council, get the kerb dropped, a gate put in.
0:37:39 > 0:37:43Car parking for staff is one of the requirements for conversion.
0:37:43 > 0:37:47'Over and above that, it needs a change of use from residential to commercial,
0:37:47 > 0:37:50'so there's a lot to sort out.
0:37:50 > 0:37:54'Apparently, it's not that different from Karen's current practice in Derby.
0:37:54 > 0:37:58'She rents that, which is why she now wants a place of her own.'
0:38:01 > 0:38:05What are you going to do to it, subject to getting all the permissions?
0:38:05 > 0:38:10Subject to planning, at least three surgeries, dental.
0:38:10 > 0:38:14We hope to put some other healthcare things in as well,
0:38:14 > 0:38:18maybe a chiropodist, something like a chiropractor or a beautician,
0:38:18 > 0:38:22something you can do in a residential area without upsetting anyone.
0:38:22 > 0:38:25What would you need to do to convert it in such a fashion?
0:38:25 > 0:38:29With the dental thing, we'll put compressors in the cellar.
0:38:29 > 0:38:33There's got to be water and electrics changed.
0:38:33 > 0:38:37You have X-ray machines that need connections to a central computer
0:38:37 > 0:38:39for collection of data.
0:38:39 > 0:38:45It sounds like the conversion could be a quite specific and expensive process.
0:38:45 > 0:38:48Oh, yeah. Anything dental is very expensive.
0:38:48 > 0:38:52Ballpark figure, once you've got the room fitted,
0:38:52 > 0:38:56just to put the equipment in there, the chair's £8,000, £9,000.
0:38:56 > 0:39:00You're looking about £30,000 just to put the cabinets in the one room.
0:39:00 > 0:39:03- Wow!- Put three of those in, there's £90,000 for a start.
0:39:03 > 0:39:07- To kit it out!- We haven't put a compressor in the cellar yet,
0:39:07 > 0:39:10or changed the wiring or even thought about doing reception out.
0:39:10 > 0:39:15'Pete hopes he can retain as many original features as possible.'
0:39:15 > 0:39:20I've been looking at the floors, stripping those, varnishing those,
0:39:20 > 0:39:23not just putting modern floor coverings over the top.
0:39:23 > 0:39:27The nice staircase and the mouldings in the hallway.
0:39:27 > 0:39:30We're trying to retain as much as we can.
0:39:30 > 0:39:35If you feel comfy, it's like someone's front room, you feel more relaxed.
0:39:35 > 0:39:38You never feel relaxed going to the dentist.
0:39:38 > 0:39:42You can get somewhere near feeling more relaxed.
0:39:42 > 0:39:45You can try and do your best to put someone at ease.
0:39:45 > 0:39:49'Well, that was in September 2007.
0:39:49 > 0:39:52'When we went back six months later,
0:39:52 > 0:39:57'converting the villa to a dentist surgery was proving to be like...
0:39:57 > 0:40:01'pulling teeth - for want of a better phrase.
0:40:01 > 0:40:05'Pete and Karen were on hand to show us around the cleared-out house,
0:40:05 > 0:40:09'but things were still very much at the planning stage.
0:40:09 > 0:40:13'However, Karen's vision for the new practice was quite clear.'
0:40:13 > 0:40:17OK, what we've got here is a set of existing plans.
0:40:17 > 0:40:20This is the building, as it's mapped out at the moment.
0:40:20 > 0:40:24This room, we want to maintain this as a waiting room.
0:40:24 > 0:40:28It has some lovely features, the original fireplace and the beautiful floor.
0:40:28 > 0:40:31We'll put a corridor across the back of it.
0:40:31 > 0:40:35That allows access to the conservatory, which will make a great staff sitting room.
0:40:35 > 0:40:39Off that, we have the second kitchen and a staff bathroom.
0:40:39 > 0:40:44For the remainder of the ground floor, access would be through the back of the house.
0:40:44 > 0:40:48We would have disabled access from the car parking facility.
0:40:48 > 0:40:53The two other rooms on the ground floor would be surgeries with disabled access.
0:40:53 > 0:40:55On the upper floor, we have two surgeries
0:40:55 > 0:40:58and a central sterilisation area.
0:40:58 > 0:41:02We still have two rooms, which we could use for other practitioners.
0:41:02 > 0:41:06We may have those as consulting rooms, which we may rent out to other people.
0:41:08 > 0:41:12'There were still many issues to sort out with the council,
0:41:12 > 0:41:15'not least that disabled access and the car parking.
0:41:15 > 0:41:18'But Pete, who was going to project manage the conversion,
0:41:18 > 0:41:21'had uncovered a nasty surprise.'
0:41:21 > 0:41:24The damp problem, as you can see
0:41:24 > 0:41:28from the state of this wall, all the salt's coming out, is quite severe.
0:41:28 > 0:41:32We've had to knock off the plaster quite a way up.
0:41:32 > 0:41:36I think we're going to have to have this wall repaired,
0:41:36 > 0:41:39possibly damp-injected and membranes and things.
0:41:39 > 0:41:42'The dental surgery-to-be was at something of an implant.
0:41:42 > 0:41:44'Sorry, I mean impasse.
0:41:44 > 0:41:47'Find out what happens when we return over five years on.
0:41:47 > 0:41:51'Had Karen and Pete bitten off more than they could chew?
0:41:51 > 0:41:56'Or did they hold their nerve and scale the heights of dental reconstruction?
0:41:56 > 0:41:58'Brace yourselves! I'm rooting for them!'
0:42:01 > 0:42:05It's always easy to put things off till tomorrow,
0:42:05 > 0:42:11but time is money and delays can be very stressful - and expensive.
0:42:11 > 0:42:15Have our buyers been busy or letting the grass grow under their feet?
0:42:15 > 0:42:17Let's check them out.
0:42:17 > 0:42:20'Back to East Ham in London.
0:42:20 > 0:42:24'Clothes shop owner Ali bought this three-bedroom ground floor flat
0:42:24 > 0:42:27'for 143,000.
0:42:28 > 0:42:33'Although he owns one other property it was Ali's first time buying at auction.
0:42:33 > 0:42:38'There was one rather vital detail that he really should have known.'
0:42:38 > 0:42:43- Did you read the legal pack? - No, I didn't get the chance to read the legal pack on this one.
0:42:43 > 0:42:47- This particular one got me excited. I didn't read it.- Ah!
0:42:47 > 0:42:51- Did you know about the short lease? - No. Only once I purchased it.
0:42:51 > 0:42:56After going home, reading the addendum paper,
0:42:56 > 0:42:58I realised it's a shorter lease.
0:42:58 > 0:43:01- Then tell me honestly how you felt. - I felt really bad.
0:43:01 > 0:43:03- Oh, did you?- Yes, I did.
0:43:03 > 0:43:06# Holding back the years... #
0:43:06 > 0:43:09'Ali had every reason to feel bad.
0:43:09 > 0:43:13'A last-minute addendum to the catalogue that he didn't read
0:43:13 > 0:43:15'was going to cost him dear.
0:43:15 > 0:43:17'With only 57 years left on the lease,
0:43:17 > 0:43:22'selling the property on was going to be tricky.
0:43:24 > 0:43:30'His choices were either to rent it out or negotiate with the lease holder to extend the lease.
0:43:30 > 0:43:35'The latter would put paid to his hopes of keeping his budget between 10,000 and 12,000.
0:43:35 > 0:43:38'On top of that major issue, there were the usual
0:43:38 > 0:43:44'trials and tribulations of property development - damp and dingy decor.
0:43:44 > 0:43:48'Two months later, we're back to see if he's transformed the flat
0:43:48 > 0:43:51'and managed to reel in the years of that lease.'
0:43:51 > 0:43:55MUSIC: "Reeling In The Years" by Steely Dan
0:44:07 > 0:44:11'Ali kept to his plan of keeping the reconfigured kitchen where it was
0:44:11 > 0:44:16'with this open-plan living space, which not only kept his costs down,
0:44:16 > 0:44:19'but allowed him to retain that third bedroom.
0:44:19 > 0:44:22'He now has a smart kitchen-living area,
0:44:22 > 0:44:25'a totally refitted bathroom
0:44:25 > 0:44:29'and three bedrooms, all looking much better.'
0:44:29 > 0:44:33There was a kitchen here before. It was quite in a bad state.
0:44:33 > 0:44:39We have replaced the kitchen with complete new fittings,
0:44:39 > 0:44:44a new oven's been put in, a new cooker, new hood.
0:44:44 > 0:44:49I'm very pleased with the kitchen. It's quite nice, bright and modern.
0:44:49 > 0:44:51It goes quite well.
0:44:51 > 0:44:55In total, it cost me just under £1,500.
0:44:55 > 0:44:59'Considering the improvements Ali's made, that sounds about right.
0:44:59 > 0:45:03'He spent 12,000 in total refurbishing this property.
0:45:03 > 0:45:09'He had to pay to resolve the damp issues and other expensive items.'
0:45:10 > 0:45:16The money has been spread everywhere, mainly on the window, which is £2,450.
0:45:16 > 0:45:20Apart from that, the flooring was reasonable.
0:45:20 > 0:45:23The kitchen was reasonable as well.
0:45:23 > 0:45:26The work has taken six to seven weeks.
0:45:26 > 0:45:30'Ali has managed to stick closely to his estimated schedule
0:45:30 > 0:45:32'and also seems to be on budget.
0:45:32 > 0:45:37'But of course, what's not included is the cost of extending the lease,
0:45:37 > 0:45:42'if he's managed to get the freeholder even to agree on a fee.'
0:45:42 > 0:45:46Initially, we found that you cannot buy a new lease.
0:45:46 > 0:45:48You have to own the property for two years.
0:45:48 > 0:45:51I've been in touch with the freeholder, actually,
0:45:51 > 0:45:55and they have agreed to sell a new lease,
0:45:55 > 0:45:59which is for 90 years and we have agreed £10,000.
0:45:59 > 0:46:03'Ouch! Believe it or not, Ali has been extremely lucky
0:46:03 > 0:46:07'that his freeholder agreed to negotiate so early on,
0:46:07 > 0:46:10'but not so lucky about the additional cost.
0:46:10 > 0:46:13'10,000 is a big budget-busting amount
0:46:13 > 0:46:17'and makes Ali's opportunity for a profit ever slimmer.
0:46:17 > 0:46:22'It's a costly lesson, but at least it's one he's managed to take in his stride.
0:46:22 > 0:46:26'Last-minute addendums are a factor at auctions, so do watch out.
0:46:26 > 0:46:30'That initial concern aside, Ali seems happy enough.'
0:46:30 > 0:46:35I was very relieved. Initially, I thought it would be quite stressful.
0:46:35 > 0:46:40But the freeholder has agreed a new lease
0:46:40 > 0:46:43and it has been going through the solicitors.
0:46:43 > 0:46:49'The leasehold issue doesn't seem to have hindered his plans for this flat.'
0:46:49 > 0:46:52My plan is to sell on and move on to the new project.
0:46:52 > 0:46:56Obviously, I'm going to put it on the market and see how it goes.
0:46:56 > 0:47:01'We asked two local estate agents, including the one who saw it before,
0:47:01 > 0:47:05'how they feel about the renovations and how they've turned out.'
0:47:05 > 0:47:08The property's been refurbished to a reasonable standard.
0:47:08 > 0:47:10It looks much better than before.
0:47:10 > 0:47:12I think the layout works quite well.
0:47:12 > 0:47:16It is big enough to have a living and dining space.
0:47:16 > 0:47:21Then he's benefited from getting the extra bedroom, which is a bonus.
0:47:21 > 0:47:25'They think Ali's done a good job. How would he fare if he let it?'
0:47:25 > 0:47:31For rental, we're looking at achieving approximately £1,150 per calendar month.
0:47:31 > 0:47:34If we have to put it up for rental,
0:47:34 > 0:47:39we can achieve in between £1,050 and £1,100 per calendar month.
0:47:39 > 0:47:42Yeah, I totally agree with that.
0:47:42 > 0:47:47It's around 1,150, the rental figure I could achieve.
0:47:47 > 0:47:51This should be the right figure.
0:47:51 > 0:47:54'Even taking the cost of the leasehold extension into account,
0:47:54 > 0:47:58'the property could generate a yield of around 8.5%,
0:47:58 > 0:48:00'but Ali's determined to sell.
0:48:00 > 0:48:03'If you add his refurbishment cost of 12,000
0:48:03 > 0:48:06'to his purchase price of 143,000
0:48:06 > 0:48:09'that makes £155,000.
0:48:09 > 0:48:14'But of course, he then has to add the additional ten grand for the lease extension.
0:48:14 > 0:48:17'That does, at least, make the flat more saleable.
0:48:17 > 0:48:22'That brings the grand total invested in this flat to £165,000.
0:48:22 > 0:48:24'What could it sell on for?'
0:48:24 > 0:48:32If we had to put it up for sale, I think we can achieve around £175,000 to £190,000.
0:48:32 > 0:48:39If we had this on the market, I'd be very confident to sell this between £180,000 to £185,000.
0:48:39 > 0:48:42This is the figure I was looking for.
0:48:42 > 0:48:47Obviously, it would have been more profitable without the lease extension.
0:48:47 > 0:48:49That's eaten at the bit of profit,
0:48:49 > 0:48:53but I was looking at that sort of figure, around 185.
0:48:53 > 0:48:57'If he managed to sell this three-bed flat for 185,000,
0:48:57 > 0:49:02'that would mean a profit of 20 grand before tax and expenses.
0:49:02 > 0:49:07'It sounds as though the rocky road to completion has not put Ali off.'
0:49:07 > 0:49:13Definitely, I'd like to get into the property market, especially on the buying and selling side.
0:49:13 > 0:49:18This is something I quite enjoy and will be doing in the future.
0:49:22 > 0:49:26'It's time to head back to Derby, to find out what's happened
0:49:26 > 0:49:30'to the fabulous detached Victorian villa we first saw in 2007.
0:49:30 > 0:49:35'It was bought then for £240,000 by local couple Pete,
0:49:35 > 0:49:39'who's worked in the motor trade and as an electrician,
0:49:39 > 0:49:41'and his partner Karen, who's a dentist.
0:49:41 > 0:49:46'They didn't need an X-ray to see the potential the building offered.'
0:49:46 > 0:49:53It's got a lot of character and we're looking at somewhere for conversion into a dental practice.
0:49:53 > 0:49:57- Would this make a good dental practice?- I think so.
0:49:57 > 0:50:02There's a lot of good-sized rooms and there's good areas for reception rooms, waiting rooms,
0:50:02 > 0:50:04but it needs a lot of organisation.
0:50:04 > 0:50:08'Karen's dream was to create a holistic health practice,
0:50:08 > 0:50:13'providing dental surgeries on the ground floor and consulting rooms
0:50:13 > 0:50:16'for other health practitioners upstairs.
0:50:16 > 0:50:19'When we first returned after six months, for OUR check-up,
0:50:19 > 0:50:22'plans were drawn up and the property had been cleared.
0:50:22 > 0:50:26'The disabled access and parking at the rear hadn't begun.
0:50:26 > 0:50:29'Pete was going to project manage the work,
0:50:29 > 0:50:32'and this dentist's conversion needed a big injection of money.
0:50:32 > 0:50:36'They had a budget of around £150,000.
0:50:41 > 0:50:44'It's now nearly six years since they bought it,
0:50:44 > 0:50:48'and back in Derby Karen and Pete are now married.
0:50:50 > 0:50:54'The tooth fairy's been busy as well.
0:50:54 > 0:50:57'On the ground floor, two hi-tech dental surgeries
0:50:57 > 0:50:59'have been installed.'
0:50:59 > 0:51:03MUSIC: "Dental Care" by Owl City
0:51:14 > 0:51:18'They've been filling their time very well in the former hall.
0:51:19 > 0:51:24'And at the end of the corridor, the dentist will see you now.'
0:51:24 > 0:51:27Welcome to reception, the kitchen as was.
0:51:27 > 0:51:32The biggest change in this area is the fact that we moved the doorway,
0:51:32 > 0:51:34which now is positioned here.
0:51:34 > 0:51:39Two reasons for that, one is flow of patients as they walk through.
0:51:39 > 0:51:42The other is the need to comply with disability regulations.
0:51:42 > 0:51:46Wheelchair access is throughout the premises on the ground floor.
0:51:49 > 0:51:53'The damp problem in the hall's been treated and the corridor widened,
0:51:53 > 0:51:58'to allow better wheelchair access to the facilities.
0:51:58 > 0:52:00'Entry is from the front or back of the property.
0:52:00 > 0:52:06'I'm delighted they've focused on renewable energy and ease of access.
0:52:06 > 0:52:11'At least getting to this dental surgery is now pain-free.'
0:52:11 > 0:52:13Here we are in one of the surgeries.
0:52:13 > 0:52:16You'll notice that it's quite minimalist.
0:52:16 > 0:52:20We didn't want the patients to be overwhelmed by a lot of equipment.
0:52:20 > 0:52:23They're already nervous when they attend the surgery.
0:52:23 > 0:52:27The other thing that I was keen on was that staff had a major choice
0:52:27 > 0:52:30in the equipment and in the colours of the room.
0:52:34 > 0:52:37Here we are in another surgery.
0:52:37 > 0:52:39Again, it's minimalist.
0:52:39 > 0:52:42The idea of having two linking surgeries
0:52:42 > 0:52:45is that we'll have specialists in different rooms.
0:52:45 > 0:52:50They may want to interchange equipment, so equipment may be moved from one room to another.
0:52:52 > 0:52:55'I like the uncluttered minimalistic look,
0:52:55 > 0:52:58'but I do miss the fish tank in the corner.
0:52:59 > 0:53:01'In this high-tech practice,
0:53:01 > 0:53:05'lots of equipment has been located out of sight, in the basement.
0:53:05 > 0:53:09'Before your treatment, the waiting room is still comfy,
0:53:09 > 0:53:12'calm and old-school traditional.'
0:53:13 > 0:53:16The building itself was built in 1856.
0:53:16 > 0:53:21It's a beautiful building with original features which we wanted to maintain.
0:53:21 > 0:53:24This room is meant to be that people are waiting
0:53:24 > 0:53:27as if they're in their own living room, they feel comfortable.
0:53:27 > 0:53:30'The conservatory is now the staff room
0:53:30 > 0:53:34'and they have kept the kitchen for staff use, too.
0:53:36 > 0:53:39'Upstairs on the half landing, there's a beauty therapy room
0:53:39 > 0:53:41'with an adjoining shower.
0:53:43 > 0:53:46'And a room to sterilise equipment.
0:53:48 > 0:53:50'The upstairs rooms are not quite complete.
0:53:50 > 0:53:54'Pete is determined that the original character will remain.'
0:53:54 > 0:53:58The temptation, when you take on a project like this,
0:53:58 > 0:54:02is to rip all the features out, start again, make it look new.
0:54:02 > 0:54:06Completely the opposite of what we were trying to achieve.
0:54:06 > 0:54:09We've tried to retain everything we could - original covings,
0:54:09 > 0:54:12the doorframes, the wooden mouldings.
0:54:12 > 0:54:17It takes twice as long, if not longer, to do that, than to knock everything down.
0:54:17 > 0:54:21We wanted to leave its battle scars and its character
0:54:21 > 0:54:24because it's part of history.
0:54:24 > 0:54:29'I totally agree. Retaining the period charm has worked really well.
0:54:29 > 0:54:33'Pete's done a lot of the work himself with help from a friend.
0:54:33 > 0:54:37'Specialist contractors have been employed for jobs like the roof.
0:54:37 > 0:54:42'I'm keen to drill down to the raw nerve of any refurbishment, the budget.
0:54:42 > 0:54:46'How much has the property ended up costing?'
0:54:46 > 0:54:50I think we've come in probably about what we thought we'd spend on it.
0:54:50 > 0:54:52I had a guess figure of about 150,000,
0:54:52 > 0:54:54which was what I was aiming for.
0:54:54 > 0:54:59We've come in under that, but we've still got some rooms to finish.
0:54:59 > 0:55:03I'm sure, as happens with building projects, funds will be eaten into.
0:55:03 > 0:55:07'Pete's not included the £43,000 on the dental chairs
0:55:07 > 0:55:10'and other equipment in those figures.
0:55:10 > 0:55:15'If the other refurbishment costs do come in around £150,000,
0:55:15 > 0:55:18'then added to the £240,000 they paid at auction,
0:55:18 > 0:55:23'that would take their total investment to £390,000.
0:55:23 > 0:55:27'It's taken nearly six years since our first visit.
0:55:27 > 0:55:31'Pete and Karen have had to be patient with this project.
0:55:31 > 0:55:37'Will all their hard work have put a smile on two local estate agents' faces?'
0:55:37 > 0:55:40I think the amalgamation of old and new works very well.
0:55:40 > 0:55:44You've got the modern stuff where you'd expect it,
0:55:44 > 0:55:46in the dentist rooms.
0:55:46 > 0:55:49The waiting room's got the old features.
0:55:49 > 0:55:51There's still a lot of old features.
0:55:51 > 0:55:55I didn't see it originally, but today, it's quite fabulous.
0:55:55 > 0:55:59The blend of old and high technology is great.
0:55:59 > 0:56:02Here, you're relaxed, and that's a good start.
0:56:03 > 0:56:08'Both agree that if the property was let just as a dental surgery,
0:56:08 > 0:56:13'the building would generate between £20,000 and £25,000 in rental income a year.
0:56:13 > 0:56:20'What could the two dental and four therapy rooms let for on a room-by-room basis?'
0:56:20 > 0:56:26If you were to let the rooms on a room-by-room basis to individuals on shorter term leases,
0:56:26 > 0:56:31it would produce a higher income of £30,000 to £35,000 per annum.
0:56:31 > 0:56:33If the rooms were let on an individual basis,
0:56:33 > 0:56:37you would generate £6,000 to £6,500 a year per room,
0:56:37 > 0:56:42which would mean the building would generate £30,000 to £35,000 a year.
0:56:42 > 0:56:45'So, a potential yeild of almost 9%.
0:56:45 > 0:56:50'Karen's dream of a one-stop holistic health practice for the whole body
0:56:50 > 0:56:53'sounds financially rewarding as well.'
0:56:55 > 0:56:59The figures are around what we thought and we expected.
0:56:59 > 0:57:02When we took the project on, we did some research
0:57:02 > 0:57:06of what the rooms would fetch and the building as a whole,
0:57:06 > 0:57:09to make sure it was economically viable.
0:57:09 > 0:57:14'How much could this property achieve if it was sold on?
0:57:14 > 0:57:18'More than the £390,000 they got invested here?
0:57:18 > 0:57:22'Well, you might be in for a bit of a surprise.'
0:57:22 > 0:57:26Taking into account the projected income we think we can generate,
0:57:26 > 0:57:31I would suggest that this building could be sold for around £275,000.
0:57:31 > 0:57:38If we were to take it to the market, I would expect it to achieve in the region of £240,000 to £280,000.
0:57:38 > 0:57:45'That resale valuation would mean a loss of between £115,000 and £150,000!
0:57:45 > 0:57:48'Of course, selling it on was never the aim.'
0:57:48 > 0:57:53We've invested a lot of time and money and you've got to take that into account.
0:57:53 > 0:57:55It was never about the profit.
0:57:55 > 0:57:58It's about finding a place that I really cared about,
0:57:58 > 0:58:02that I could put in fabulous equipment, have a lovely feel
0:58:02 > 0:58:07and get the best practitioners working here who did their job to the best of their ability.
0:58:07 > 0:58:10'Pete and Karen hope to open their dental practice
0:58:10 > 0:58:13'in the next couple of months.'
0:58:18 > 0:58:23Join us next time, when we'll have more properties being sold under the hammer.
0:58:23 > 0:58:28We'll have flats, maisonettes and plots of land to follow next time.
0:58:28 > 0:58:30- See you then.- Goodbye.- Goodbye.