Episode 6 Homes Under the Hammer

Hello. Buying property can have its highs and lows.

It's not always as easy as it looks.

There is one element in the process you can skip.

You can avoid the dreaded property chain by buying at auction.

There are all sorts of properties going to the auctions these days.

There certainly are and it's all the variety that keeps us riveted.

Yes, so here are the three properties that captivated the buyers on today's show.

'This charming two-bed semi in Chatham, Kent, shows great potential.'

There's so much you could do in this room.

'This spacious Durham end terrace shows its age.'

Well, the house certainly has some interesting period features.

'And this Derbyshire mid-terrace shows its true colours.'

What you have got at the back here which is absolutely extraordinary is a huge garden.

'All these properties have been sold at auction. We'll find out

-'who bought them and what they paid when they went under the hammer.'

-Sold at the back.

Today, I'm on the Kent coast, Chatham to be precise,

a town proud of its maritime heritage.

It's now undergoing a resurgence thanks in part to a high-speed train link

which can whisk you to London St Pancras in under 40 minutes.

I'm here to see a property today on this busy main road,

but on the plus side, you overlook this wonderful green space and there's a little park over there.

Here it is, a large, two-bedroom detached house, quite handsome, I would say,

and it had a guide price of £135,000 to £140,000.

# He's my big, bad, handsome man... #

Oh, I do love a broad-shouldered, double-fronted property.

It gets me going every time!

Now, parking on this busy road could be an issue,

but for now, I can't see past the rugged good looks of this old charmer.

Oh, so many stairs to negotiate and if you wanted to go upstairs,

a load more and very steep indeed.

Now, the inside of the property, well, it's gorgeous.

What I love about this house is the symmetry and the proportions of the room,

a beautiful, square room.

A bit of worrying damp in this corner.

It's definitely coming from downwards going up, so rising damp, I'd certainly get that looked at.

But on the upside, look at this amazing, chunky fireplace.

It's beautiful. You've got some lovely original tiles here.

In fact, I think it's solid marble, really beautiful.

I don't reckon much to the brick effect wallpaper.

There's so much you could do in this room, so, so far, a very good start.

# And it keeps getting better... #

A chunky fireplace in a hunky house and there are two more reception rooms on this ground floor.

I can feel my heart racing and then...

..there's the kitchen!

And there's me banging on about the wonderful proportions this house has!

This kitchen is just too small.

You have got a bit of a problem

because this wall is an original exterior wall and it's about this thick.

You've got a massive chimney breast on the other side to negotiate,

so it would be quite a big job getting this down.

I'm just wondering, if you wanted to make this kitchen larger, if there's another solution?

THEME MUSIC: "2001 - A Space Odyssey"

Another bonus with this property is the garden.

You probably think it ends here where the fence is.

Oh, no, it doesn't because look, you've got all that space over there!

It's all a bit overgrown, but there's loads of potential out here.

You could extend the kitchen into the old outside loo, spruce up the conservatory.

You might even be able to squeeze in some off-street parking if you're really clever.

But before I get carried away out here,

there's more, um, SPACE to discover inside.

Upstairs, there are two huge bedrooms, but only two, so a bit of a disappointment.

You've got a massive bathroom here with a tiny little bath right in the middle of it.

Originally, I don't think this was the bathroom.

It would have been over there somewhere, probably where the outside toilet is now,

but because this space is so big, you can move things around a little.

I would put the bathroom here, a nice, big wall up here,

put the entrance through here, so you can knock through.

You don't need a window, so that could work perfectly, then I'd use this side of the room as a bedroom.

You've got a big, sunny window there, so that means you've got three upstairs bedrooms.

I think a third bedroom would be the making of this property,

but if there's still not enough space for you here, how about an enormous basement?

When you're looking at property, it's always the little extras that help clinch the deal,

and in this case, well, look at the size of this cellar!

You'd only need to tank it. It could possibly be a little bit damp, but it's a fantastic space.

You could use this for so many things - a home cinema room, an office, extra storage.

Once it's done, it will look great. It will certainly add value to the house.

This is definitely something that would help clinch the deal for me if I were bidding for this.

So, I love this place and its guide price

of 135,000 to 140,000,

but what does a local property expert make of it?

The two main issues here are the two-bedroom and no parking.

Parking is very hard down here.

They've got a really big bathroom.

If they could make a smaller bathroom and a third bedroom upstairs

and do the off-road parking, it would make a fantastic home.

Fair enough. But if you create that third bedroom, what kind of rental income might you achieve?

If they put the third bedroom upstairs, I think they'd achieve £725 to £795 per calendar month.

What about a resale valuation?

If they made it into a three-bedroom, I think it'd achieve around £180,000 to £190,000.

This is a lovely-looking house. There's no getting away from it.

And it's got lovely views.

But it needs lots of work, a bigger kitchen and you could definitely do with that third bedroom,

but I really like it.

Let's find out who felt the same way when we head to auction.

Over the page then to lot number 30.

Attractive detached house.

135 to 140. Where do you want to start me on this?

Start me at 130? £130,000 for a detached house?

130 anywhere? 130, I'm on the way. 130.

And 2? 132? 132, I have.

And 4? 134?

134. And 6?

At £134,000 I've got... 136.

And 8. 138.

And 40. 140. At 140...

And 2 now, it's against you? 142?

At 142? It's with you at 140.

At 142, I'm looking for. Are we all done at £140,000?

142 anywhere? It's still worth this.

A good property, good detached house at £140,000.

I'm looking for 142.

I'll sell it at 140 if you're not coming back again.

It's against you at 140.

142 anywhere?

If you're all done then, for the first time at £140,000...

If you're sure you're all done, second time at £140,000...

Third and final time, if you're sure you're all done at £140,000...?

GAVEL BANGS

'That winning bid of £140,000 was placed by Doug, a retired pensions adviser.

'He's bought the property with his good friend and sailing buddy Geoff,

'a retired chartered building surveyor.'

# We are sailing... #

'Geoff and Doug have undertaken a couple of renovation projects together

'which came about partly by chance and partly through Doug's persuasions.

'The last project was no small beer either, turning an old maltings into 59 flats!

'So what course have the sailing buddies charted to make this one ship-shape?'

Congratulations. This is a handsome house.

What did you like about it enough to want to buy this on auction day?

It had so much going for it. There are so many things you can do above and beyond what we're going to do.

It's a lovely family house. It's got a big garden. It's got potential, real potential.

-And it has good investment potential as well.

-Who was it that spotted it?

-Geoff.

-I did.

-You spotted it. Did you have to talk Doug into this one?

Well, yes and no. We've worked together for a long time,

so he sort of listens to what I have to say, criticises and adds bits and argues.

-That's a great partnership.

-Quite.

From what I told him, because he didn't see it before we bought it, he felt it was good as well.

How did you guys meet?

We've known each other since 1985. We joined the Medway Yacht Club about the same time.

We had our own yachts to start with.

And both Geoff's wife and my wife get along well, so it's just a long-standing relationship.

Who's doing what here? How will you divide up the work?

-Well...

-I...

-You answer that.

Stop! OK, tell me how you're going to do it, Doug.

I'm going to do very little except employ Geoff's skills to get everything organised.

I essentially have organised the finance. Geoff is essentially doing everything else.

-You both have your own sets of skills?

-Yes, he writes cheques.

-I have no skills at all.

-You're the money man?

-Yes.

'Before retiring, Doug worked in company pension schemes

'and he'll be looking after the pot on this one.

'Geoff has recently retired from a career as a building surveyor,

'working on large commercial properties.

'Over the next four months, with Geoff at the helm project-managing,

'they plan to hoist this place out of the doldrums.'

There's some land at the side, a little part of the garden.

We'll dig that out. That will create quite a large car park area.

The application is in to Medway Council at the moment. We're waiting for them to say yes.

We've got a cellar that we can convert into a media room, games room, whatever.

You have two bonus areas in my opinion.

You've got the lovely parking area that you can create, a nice, big basement downstairs.

The big downside is you've only got two bedrooms upstairs. That was a bit of a surprise to me.

-But that's a huge bathroom.

-That's the situation now.

What Geoff has in mind to do, in fact, what we ARE going to do,

the large bathroom we'll convert into a bedroom and a bathroom,

so it will become a three-bedroom property with a bathroom.

'On top of that, there'll be a new kitchen, a revamped conservatory

'and general updating throughout.

'Geoff has already amassed three folders of paperwork on the build,

'so how much is money man Doug going to allow his friend for the renovation?'

We'll have to spend something in the order of £40,000.

That's not bad. I was thinking you might have said a little bit more.

-That's our budget.

-Hold on a minute. You mentioned a media room to me. Is that included in the price?

-Yeah, absolutely.

-Wow!

-I've got some good prices for tanking,

plastering, floor, lights, new window.

I've produced a whole load of packages. Each bit of work is a package.

That's gone out to people to price,

then my job is to sort out who I want doing the packages, bring it all together and make it happen.

-Doug, this really is the man for the job.

-Absolutely.

-He is all over it. I love it.

He spent his whole career in the construction industry as a successful building surveyor,

-so we're very lucky to have his experience.

-Absolutely.

-Can I have a copy of that recording?

-I've said it on the telly. What more do you want?

-Guys, I cannot wait to see what you do here. Geoff, lovely to meet you.

-And you.

-Doug, thank you.

What a team!

Doug is the money man and Geoff will provide the expertise, packages and folders.

Gosh, he's so thorough!

It seems to me that all the pressure will mainly be on Geoff because he'll be project-managing.

Will they get planning permission for the parking to the side

and will Doug be pleased with his pal Geoff's work?

You can find out how the chaps get on later in the programme.

I'm a couple of miles south-west of Durham in the village of Meadowfield

which has great transport links to the city,

making it particularly attractive to first-time buyers and investors.

This is the two-bedroom house I'm here to see.

It has a tiny front garden, but that looks like new double-glazing. What's not to like?

So you're on a bus route on a main road, so we quite like that.

You've got an end of terrace, we like that,

and a guide price of £39,950,

so we like that!

Looking good so far then.

I'm not that keen when you come through a front door and there's a cupboard facing you.

It gives you that wrong initial impression, but a decent-sized front living area on that side,

then into the rear living room.

A gas fire, I'd like to see that opened up,

but then through here to a real...

Oh, nearly bangs his head! ..a really nice surprise, a kitchen

which looks like it's been pretty recently refurbished.

It's clean, it works in the space, it's surprisingly big

and it gets better because right towards the rear of the property...

a bathroom which similarly looks like it's been recently refurbished.

You've got panelling on the walls. The colours seem to work.

I'm getting a really good feel about this place.

This is a house that gets better and better.

Downstairs, these two good-sized rooms, one each side of the front door, both obviously need updating,

but sort out the wallpaper and carpets here and you're away.

I'd want to look at the layout though.

Those odd little stairs leading off the sitting room are the only access to the first floor.

It might be too costly to re-locate them, but I'd definitely think about it.

Often with a terraced house like this, your only bathroom is off the kitchen as it is here,

but upstairs, this little house has a bit of a surprise.

Well, the house certainly has some interesting period features,

the period being, I think, the 1970s,

especially when you come up here to the bathroom upstairs.

As you can see, you've got wood panelling, you've got a pink suite

and you've got this most extraordinary sunken bath.

'What do you do in the bath?'

Having two bathrooms is a real bonus in a property like this

and even if this doesn't leave you feeling in the pink,

the two decent-sized bedrooms certainly don't give me a sinking feeling.

At the back, there's a little yard with a small extension

which contains the downstairs bathroom and rear access to the property.

All in all, I think this is a lot of house for not a lot of money.

We asked a local estate agent for his opinion on this house

which had a guide price of £39,950.

It's a fairly standard layout

with a couple of reception rooms, a kitchen, two bedrooms

and interestingly, two bathrooms

which is quite unusual in a terraced house of this nature.

There is a bit of difficulty in finding first-time buyers.

There are a lot of similar houses on the market currently,

so it may be an investor who will rent the property out.

But if you did find that buyer, what could this place sell for once updated?

If the house were brought up to modern-day standards,

I would anticipate it to be somewhere in the order of £80,000 to £90,000.

And if it were to be let, what would a refurbished house rent out for?

In terms of rental value, I would think it would bring somewhere in the order of £400 per calendar month.

Well, a few issues to sort out, but intrinsically, this is a good house

which you could rent out or live in pretty much as it is and for a great price too.

Let's see who bought it when it went under the hammer.

OK, we're up to lot number 81,

a two-storey, end terrace house with central heating and double glazing.

We've got this in with a price guide of 39,950. Somebody must for £36,000?

Thank you very much, with the glasses at the back at 36,000.

37? 37, the lady in the third row.

38? 38 bid. 39? 39 bid.

At £39,000. I'll take 500 if it helps.

I'm going at 39. 39 and a half? 39 and a half bid.

40? 40 bid.

I'm selling at £40,000. I'm selling once at 40,000...

I'm selling for the second time at £40,000...

-Sold.

-'With that successful bid of £40,000, only £50 over the guide price,

'the new owners are husband and wife team Ann and Paul.'

# Well, I'm so tired of cryin', but I'm out on the road again

# I'm on the road again... #

'Paul is a technical analyst for a company which specialises in road surfaces

'while Ann works as an administrator in a bank.'

-Ann, Paul, great to meet you both.

-Hello.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

As an investment, really. We're hoping to do it up and rent it out.

-Right.

-We've got two children that we want to set on the right footing, really.

-Great.

Hopefully, it'll be something for the future for them.

-Great. What are their names?

-Maria and Rob.

-How old are they?

-20 and 18.

Right. What do they think about this whole thing?

Rob's quite keen. Maria's away at university, but Rob's at home and is keen to get his hands dirty,

-so I'm going to hold him to it.

-Right.

-We've got a lot to do.

Why now? Why this particular moment to do it?

For about 20 years we've talked about buying a property,

then a few months ago, my wife was off with a bad back for two weeks

and she did basically nothing but watch Homes Under The Hammer.

Oh, good.

Basically, we decided... The mortgage was coming to an end.

We'd never had the money, so we weren't going to miss it.

We needed to do something with it, so that's what we've decided to do.

So having made the leap, how does it feel?

A bit scary.

I'll tell you in a few months' time when it's all done.

-So why this place?

-It's really local to where we live. I pass it every night on my way home from work.

And the price was right.

The price was right.

The property itself, there's nothing that I'd call major that needs doing to the house.

Because it's our first attempt, we didn't want to get into the realms of having to pull walls down.

-Yeah.

-A lot of it is cosmetic.

Have both of you got experience of doing your own places?

Every house we've bought, I've fitted our own kitchens, own bathrooms.

The only thing, obviously, we can't really do is the gas, electrics. It'll be a learning curve.

'It sounds like Ann and Paul have been studying hard already.

'With skills like kitchen and, more importantly, bathroom fitting under their belts,

'they could renovate this house for very little cash, but that doesn't mean they'll do it on the cheap.'

We intend doing as good a job as we can

because we don't like doing anything that we wouldn't want to move into,

-so we don't want any hidden...

-We don't want to cut any corners.

Do temper that with not overspending. No gold taps and stuff like that.

That's my department, not overspending. He gets carried away.

Really? Is that right?

-Just say "yes".

-Basically, yeah.

'It's handy to have a financial whizz kid like Ann on your team

'if you want to make your money go further and resist the temptation to...SPLASH out.

'So what's the plan for this end terrace?'

We'll change the upstairs bathroom. The downstairs bathroom we'll change into a utility room.

I'm looking more at the structure side of it.

We've had an initial survey done and we know we need damp courses put in,

so I'll be looking more at the structural point and Ann will be looking more at the decor side.

-Pretty things.

-I'll be doing the big hammer work and Ann will have the paintbrushes.

Any walls to come out or anything like that?

No walls as such.

The only structural thing we'll take out is the main fireplace.

It's a bit dated. It was well built, but it's out of date.

We don't know what will happen when we take the wallpaper off the walls.

We've planned that, as a minimum, they're going to need re-skimming.

-It may be a bit more once we get there.

-You never know.

-We don't know.

-What kind of budget have you got?

-10,000 to 12,000. There is more scope if we need it.

But obviously, we've set it at between 10 and 12 to stop us overspending.

-Who's got their finger on the purse strings?

-Me.

Definitely me.

'Time will tell if they need to prise open Ann's purse a little bit wider

'when they strip those walls and lift those carpets.

'Are they planning to sell or let it?'

Clean it up just sort of for the rental market, really. Just have it quite neutral.

So you have got rental in mind to a degree?

-Yeah.

-Yeah, that's where we are heading at the moment.

And then time will tell.

A lot of it will be judged as well by what our children want to do in the end.

-Because ultimately, the reason we're doing this at this time in our life is for the children.

-Right.

We know they're going to have a hard time getting on the property ladder,

so it's whatever realistically will be better for them in the long run.

-Are you going to involve them in the process?

-Yes. If they're going to benefit, they'll have to work.

-They're going to get their hands dirty too?

-Definitely.

-Great. It'll turn into a nice family project.

It's important for them to learn basic skills before they get a home of their own, so it's ideal.

Fantastic. And no pressure particularly?

-Yeah. I'm not letting them play with my house!

-They can knock a wall down. It doesn't really matter(!)

There's no major hurry for us to have to rent it out or sell it straight away.

We're fortunate in that position,

so it means if something overruns or we get held back a little bit,

-it's not a major concern.

-Great.

I'm delighted we played some part in chivvying you on in the first place.

-I really look forward to seeing how you get on. Congratulations.

-Thank you.

-Thank you.

Well, it's lovely that Ann and Paul are so enthusiastic

about their first venture into the property investment world.

I'm delighted that we played some part in that.

I'm concerned they will overspend because their enthusiasm might get the better of them. Hopefully not.

Let's find out how they get on later in the show.

'Coming up, this Derbyshire mid-terrace doesn't quite step up to the mark.'

This is a patio door. However, a bit of a design flaw!

'In Durham, Ann and Paul's renovation of this two-bed end terrace was messier than expected.'

I've never seen as much dust and dirt in my life.

'But first, Doug's very happy with the finished article.'

The living area downstairs is absolutely excellent, particularly for a family.

Back now to Chatham in Kent and this two-bed, detached house

which good friends Geoff and Doug bought at auction for £140,000.

Doug put up the money

and Geoff was going to bring 30 years of experience as a building surveyor to the project.

I've produced a whole load of packages. Each bit of work is a package.

That's gone out to people to price,

then my job is to sort out who I want doing the packages, bring it all together and make it happen.

-Doug, this really is the man for the job.

-Absolutely.

-He is all over it. I love it.

He spent his whole career in the construction industry as a successful building surveyor,

-so we're very lucky to have his experience.

-Absolutely.

-Can I have a copy of that recording?

-I said it on the telly. What more do you want?

# Sail away with me

# What will be, will be... #

Sailing buddies Geoff and Doug were full of great ideas to turn this property around,

but ten months after our first visit, Doug is back with some very sad news.

Well, I'm afraid there's been some very sad circumstances.

This was a project I was doing with a very good friend of mine, Geoff.

He was the brains. I was providing the finance.

He had everything set to go, went away on a skiing holiday for a week,

and very sadly and unfortunately, he had a massive heart attack on the ski slopes and passed away.

All our thoughts go out to Geoff's family.

Doug had to think long and hard about whether to continue with the project without his friend.

It was a difficult decision, but he did,

and what a fitting tribute to Geoff's skills this house has turned out to be!

Well, I for one love the transformation here.

Doug hasn't done all of this single-handedly.

Builder James, a friend of both Doug and Geoff,

stepped in and took on the project management work that Geoff had started.

I'd known Geoff since I was 16 so I knew him very well.

And I knew Doug through Geoff.

So I did feel it was an important thing to do

and an interesting thing to be involved with,

to see this run-down property given a new lease of life for hopefully many more years.

Doug spends much of the year abroad so James has been on site getting through a mountain of work.

They've cleverly divided up the old bathroom and created a third bedroom with a new window.

They've made space for off-street parking, the conservatory's redone in uPVC,

the basement can now be a fantastic media room or home office.

The old kitchen has become a utility room and knocking the dining room and second sitting room together

works really well.

It's a wonderful piece of space. You've got the significant kitchen, a very nice living area with it

and when you add that to the other downstairs living room, the living area downstairs is excellent,

particularly for a family.

Now on many levels this has turned out to be a much bigger job than Doug and Geoff envisaged.

They had thought they could salvage the heating system, but James ended up having to replace the lot.

What effect has that and the other extra work had on the planned £40,000 budget?

We spent just about £75,000 on top of what we paid for it.

That £75,000 spend brings the total outlay here to £215,000.

We asked along two local property experts to get their take on the work done.

I think it's been done to a really high standard.

It's lovely inside. It's very neutral. A blank canvas for someone.

First impressions, it's very nice. It's clean, tidy, it's crisp. It's very nice, yeah.

What do they think the property could fetch if rented out?

For rental purposes, I would anticipate getting something in the region of £950 per calendar month.

You'd rent this property out between £950 and £975 per calendar month.

Those rental valuations would mean a yield of just over 5%,

which is OK, but what about Doug's preferred option, the resale market?

If I had to put this property up for sale, I would expect it to achieve

something in the region of £220,000-£225,000.

I would sell this for in excess of £225,000.

I'd be disappointed if we can't achieve 230. I'm probably prepared to stick out for that,

even to the extent of renting out, rather than take less than that.

A sale at £230,000 would mean a profit before tax and expenses of £15,000,

but does Doug think his good friend Geoff would be happy with the transformation here?

This entire design was Geoff

and I'm sure he'd be absolutely delighted with what he's seeing.

It's what he drew up, it's what he expected and we've achieved that.

Today I'm looking for a bit of northern soul in the former mill town of Heanor,

well placed to commute to Derby or Nottingham.

Well, the property I'm here to see is on this really busy main road.

It means you have good transport links, but noise could be an issue.

This is the property I'm here to see. A traditional terrace.

Two bedrooms and a guide price of £39,000 plus. In we go.

Well, at least you've got double glazing in the door and the window,

but I would be tempted to put triple glazing in to keep noise from that road down,

especially for the bedroom that's on this side of the property.

At night, that would be a problem.

Very traditional layout. Through to the living room.

Em, the...

The decoration leaves a little bit to be desired, but it's only a few tins of paint, isn't it?

Stairs up to your bedrooms there. And through into your rear living room area.

You've got to love the people who put that on the ceiling.

Fantastic for a wedding cake. But I can forgive that. This I cannot.

This is a patio door. However, bit of a design flaw.

You're not supposed to have to do that. What were the people thinking?!

Steps are definitely in order here.

Off the sitting room, you head through to the kitchen, the smallest room in the house.

Now you might want to think about re-jigging things down here

and making a larger kitchen, but that could get expensive.

Upstairs, there are two well-proportioned bedrooms and - ta-da! - the bathroom.

Now, traditionally, the bathroom and loo in this kind of property would have been downstairs,

but someone's done the modifications and brought it upstairs. I really like it.

A little corridor between the two bedrooms returns from the stairs, creating a nice-sized bathroom.

You've lost a bit of space in the front bedroom there, but that's not much of a detriment

compared with what you've got here. As a layout upstairs, it works well.

It's all looking quite promising. It does need a bit of TLC,

but there's a decent amount of internal space here and it's laid out sensibly. So far, so good,

but what about the outside space?

At the rear of the property, it is a bit of a hotch potch.

You've got two little extensions, which form the kitchen area and a bit at the end.

What you have got here, which is extraordinary, is a huge garden!

If you did want to do some fairly impressive extensions, you'd still have a lovely family garden.

It's almost too big in some ways.

There's definitely scope to turn this into a lovely garden.

I'd think hard about doing something fabulous with a new kitchen extension if you've got the budget.

The alleyway that runs under part of the property is shared with the neighbours,

giving them access to their garden.

It's what's called a flying freehold.

# One day I'll fly away... #

You should get your solicitor to check put the paperwork to make sure that it's clear who's liable

if anything needs doing, but a flying freehold is not that uncommon or a dealbreaker.

# One day I'll fly away... #

So a two-bed terrace on a busy road for a guide price of £39,000.

What does a local property expert make of it?

The positives are it's a good size, well located for the town centre and it has a nice-size garden.

The kitchen needs to be reconfigured to make a large dining/kitchen.

The bathroom just needs refitting and general refurbishment throughout.

A bit to do then, but once it has been brought up to scratch,

what does he think it might fetch if sold?

If renovated to a good standard,

this could achieve £65,000-£70,000.

What about the rental market?

In the rental market, I'd expect this to achieve £400 per calendar month.

It's a bit of a house of two halves, this one.

The front, with its noise and traffic, and the back with that incredible garden.

The house itself, not too much that scares me. It could be a potentially good one to go for.

Let's see who agreed when it went under the hammer.

Lot 32. A good little investment property.

Start me on this at 40,000.

38? Under the guide price.

38 for a two-bedroom terrace.

38, thank you. On the far left.

£38,000. At 38,000. 39, somewhere else?

39. At 39,000. 40 is bid. At 40. 41?

£40,000 I've got. 41?

41. At 41.

42?

£41,000. All done?

At 41... 42.

42,000. Out standing against the wall.

At £42,000. The bid's in the centre.

42 and a half. 43.

At 43. And a half again?

At 43,000, we're going to sell. £43,000 once.

Twice. Third opportunity.

It's sold at 43. 150, thank you.

It was local businessman Mark who snapped up this property for £43,000.

He has a sizeable property portfolio which he runs alongside his business restoring properties

damaged by flood and fire. I met Mark back at the house with his project manager, Paul.

Mark, Paul, good to see you both. Tell me why you wanted to buy this.

Just basically to add to the portfolio of houses I've got to rent out, basically.

-When did you start building that portfolio?

-About six years ago, but really in the last year.

Why have you been driving it quite hard in the last year?

Em, really just I've gotten older, I've got a daughter come along and my wife

-and we're just trying to secure something for her future.

-Is this your full-time job?

Not full-time. It is becoming quite full-time, if that makes sense.

But we have got another business as well as this one.

-What does that do?

-Insurance claims. Repairs, basically.

-Right.

-It falls hand in hand with what we do here.

-So you have a team of people. That's where Paul comes in.

-Paul, what's your role?

-Basically, make sure everything falls into place, the tradesmen come on time.

Get everything up and running, keep to schedule, get it all done.

Mark viewed the property about eight months before the auction

when it was on the open market, but decided against it at that stage.

When he saw it in the catalogue at the auction, he decided there and then to go for it.

-So what about things like the legal pack?

-Basically, I've got my solicitor at that point in time

-video conferencing on my computer.

-At that point in time?

-While I was physically bidding in the auction.

Your solicitor is on a video conferencing link while you bid?!

-Correct, yeah.

-Wow! And you're having a forwards and backwards conversation?

-Basically.

Just checking the freehold's in place, other bits and bobs, making sure it all stacks up.

-If she'd typed in, "Stop bidding!"

-We would have stopped! Yeah.

That all sounds a bit too seat of the pants for my liking,

but they might just have got away with it. So what exactly is on Paul's schedule of works?

Basically get everything back to plaster,

plaster the Artex and everything.

And then straightforward redecoration, knock a few walls about.

-Right! Any particular walls?

-The one upstairs in the bathroom.

-Oh, right?

-What are you going to do?

-We'll make the property a three-bed.

-A smaller bathroom, two smaller beds.

-Oh, right.

-Yep.

-OK. And then redo the bathroom.

-Yeah, yeah.

-And the kitchen?

-Er, well... We haven't had a look at that yet.

-Right. Are you given carte blanche to do whatever you need?

-Em...

Sort of.

-Within reason, within the budget.

-Right, OK.

-So what budget have you given Paul?

-I'm kind of thinking somewhere along the lines of £15,000

-would be adequate for something like this.

-Yeah.

-We'll try to keep a bit under if we can,

but what's got to be done has got to be done at the end of the day.

I quite like the large bathroom and the fact you've got two good-sized bedrooms.

-Why decide to go down the three-bedroom route? Purely for rental return?

-Absolutely.

Through previous experience, we have a selection of two-beds.

We do need a few more three-beds in our portfolio, if that makes sense.

It's just basically down to that, just down to what we require at this moment in time.

What difference does it make a month?

-£40-£50, something like that.

-Right.

-There's a lot more demand for three-bed than two in the local area.

-Right.

They really do seem to have done their homework.

£15,000 is a healthy budget, but there's one more part that they have to tackle - the jungle out the back.

We'll get it all strimmed back and take it from there.

-It's hard to see what's underneath.

-There's a good size out there.

-Yeah.

-And I like the fact you've got the patio door out there.

It's quite an unusual feature. Not quite patio doors, but kind of!

-Yeah.

-Patio doors, but the wrong height! It needs to be a bit lower.

-Yeah.

And then the issue of the little alleyway at the side

or whatever you want to call it. Your property goes over it. What have you found out about that?

Basically, just a flying freehold according to the solicitor. Doesn't really concern us.

-We'll insure against it and we'll just let it be.

-Great. What's the timescale?

-Er, probably looking at 4-6 week, hopefully, to get it all completed.

-With a team of how many people?

-Probably 6, 7 of us.

-Right. So you'll get stuck in.

-Yeah.

-Good.

-Congratulations.

-Thank you.

-Good luck. I look forward to seeing it.

-Thank you very much.

I'm sure Mark and Paul will make an efficient job of sorting this place out,

although I'm a little disappointed about losing those big rooms upstairs, although I can see why.

However, the idea of being in communication with your solicitor about the legal pack

while you are in the process of bidding, that's a new one on me

and is an extraordinary risky thing to do. Do not try that at home.

You can find out how they get on later in the show.

It's been a while since we saw those properties. Have the new owners been busy bees?

Or have they been stung? Let's return and find out.

Back now to Durham and this two-bed end terrace which appeared to be caught in something of a time warp.

# It was acceptable in the Eighties... #

Complete with sunken whirlpool bath, this floated Ann and Paul's boat,

so they snapped it up at auction for £40,000.

This was going to be their first step towards building a property portfolio as an investment.

And they weren't about to cut any corners, either.

We intend doing as good a job as we can. At the end of the day,

-we don't like doing anything that we wouldn't move into.

-Yeah.

So we don't want anything hidden from anybody.

Do temper that with not overspending. No gold taps and stuff like that.

That's my department. He gets carried away!

Ann's aim was to keep to a budget of £10,000-£12,000 and a three-month timescale.

Six months after our first visit, we're back...

to see if the end terrace now has a slightly more contemporary feel.

# Gangnam style... #

That is pretty much bang up to date if you ask me.

Ann and Paul have quite sensibly left the kitchen and downstairs bathroom as they were.

They decided against putting in a utility room, though the rest of the house is very much on trend.

But this hasn't quite been the simple cosmetic job they thought.

Sorting out the damp-proof course turned out to be an enormous job.

What we had to do was take the plaster off to 1.2 metres up.

So you can imagine it was like a bomb had dropped in here. I've never seen as much dust and dirt.

All the plaster was taken off all the way through the house and we injected a damp course.

Then the walls are replastered. It was a lot bigger job than we thought.

On top of that, they had the whole gable end repointed and sorted out a slight bow in the wall

at the same time. With all the structural work done,

they could deal with the inside. Top priority - that bathroom.

Well, the sunken Jacuzzi bath we decided to change.

It was a little bit of a challenge getting it out of the building. It was six foot round.

There's no doors that big, so we had to cut it into three to get it out.

We did consider just putting a bath in, but we worked out that we could get bath and shower.

This has all been done by Paul. He's worked really, really hard

and done it all himself, so I think it's a really, really good achievement.

Well said, Ann. While Paul has turned his hand to almost every aspect of the renovation,

the couple have been sure to get the electrics and gas signed off by certified installers.

That was just as well when it came to this gas fire.

We got a heating engineer in and within about 30 seconds he condemned it.

Unfortunately, what had happened was the back boiler at some point had been changed.

And the flue didn't meet up with the boiler.

So all the fumes that were coming out of the boiler, some was going up the chimney,

but some was going up here and venting into the second bedroom.

We were so glad we got it checked.

It was one of those things we'd considered leaving, but if we had it could have been disastrous.

It really goes to show that you can't take any chances with gas or electricity when renovating.

Delays at the start and the extra structural work doubled their timescale to six months,

but what about their £10,000-£12,000 budget?

We did go over budget. We're near enough £15,000,

which is £3,000 over what we'd originally planned.

Despite all the unforeseen problems, Ann's kept a pretty tight grip on the purse strings.

That £15,000 spend brings the total outlay here to £55,000.

We asked two local property experts

to give us their thoughts on the couple's efforts.

The property's been considerably refurbished since my last visit.

The property's been replastered throughout and redecorated,

along with some damp proofing work and repointing of the gable wall.

I think the levels of work done are just right for the property

and it presents well throughout.

What could this property fetch on the rental market?

I would recommend an asking price of £425 per calendar month.

I would be suggesting a figure of somewhere in the order of £425-£450 per calendar month.

Those rental valuations would give a yield of 9-10%, which is very good indeed.

But Ann and Paul have decided to sell the end terrace on and buy another property,

so what about resale values?

I would bring this property to the market at £69,950.

I would be suggesting an asking price of somewhere in the order of £70,000-£75,000 for the property.

Those valuations would see Ann and Paul making a profit, before tax and expenses,

of around £15,000-£20,000.

Paul had to dash off to work, so we asked Ann what the future held. Another renovation project?

The lessons we've learned need to be put to good use for the next one,

so I'll definitely consider another one.

Back now to Heanor in Derbyshire and this two-bed mid-terrace,

which Mark bought at auction for £43,000.

He has a portfolio of rental properties locally, on top of his day job doing insurance repairs.

Mark gave his project manager Paul just 4-6 weeks to sort the place out,

but with a £15,000 budget this was going to be more than just a little tidy-up.

So, Paul, what are you going to do?

We'll make the property a three-bed.

-A smaller bathroom, two smaller beds.

-Oh.

Right.

I wasn't convinced a third bedroom was strictly necessary,

but Mark thought a three-bed would suit his portfolio better.

12 weeks after our first visit we're back to see how Mark and Paul got on.

MUSIC: "Love Plus One" by Haircut 100

Well, the job's a good 'un. Not only have they created a third bedroom,

but the whole place is shining like a new pin.

We had the house totally replastered from top to bottom. Every single surface was replastered in the end.

The kitchen's brand new, bathroom. Generally, everything you see is brand new.

It just made more sense to go right the way through it, rather than patch up existing workmanship.

They've worked within the confines of the existing layout downstairs.

They even left the funny patio doors as they were, but it's all looking so much tidier.

The garden does still need finishing off, but it's upstairs where things have really changed.

The biggest thing we did was create three bedrooms out of the two.

One of the biggest problems was taking out the brick wall.

We had to put steel in to keep the roof up. Getting that into the property was the biggest challenge.

We overcame it.

Mark makes it all sound so easy, but Paul knows better than that.

There was about seven or eight of us having to carry the steel round the back.

Up through the bedroom window, which was a bit difficult, but we managed it.

# Just keep passing the open windows... #

And with everything done to their engineer's specifications,

replacing that load-bearing wall with the RSJ shouldn't cause any structural issues.

They haven't been working on this property full-time.

In fact, Mark has good reason to be distracted.

I've got my second child on the way. A baby boy, we've found out.

So my wife tells me now I've got to work even harder.

# Da-Daddy... #

Congratulations. So how long has the work here actually taken?

It's taken about 5-6 weeks to complete.

Obviously, with the decorators, plumbers, electricians, plasterers,

builders, we've had quite a bit of work on, but it has come out pretty good, to be fair.

So they're within their timescale, but are they within their £10,000-£15,000 budget?

Probably about £10,000 is the ballpark figure. I must admit I'm not 100% to the nearest penny,

but we're around that figure. Somewhere around there.

A £10,000 spend brings their total outlay to £53,000.

We asked two local property experts to cast their eyes over the work.

First up, the expert who saw this mid-terrace first time round.

Overall, the impression is that it's been done to a budget, but done well.

They've made a very nice job.

Overall impression is that they've done a very good job.

Changing it to a three-bedroom property is great. It enhances the market it's designed for.

What could the property fetch on the resale market?

If I was to put this property on the market, I would put it on for £75,000.

If I put this on the market, I'd put it on at an asking price of £75,000.

That's brilliant. That's where we expected it to be.

-No problems with that whatsoever. Fantastic.

-Very good.

A sale at £75,000 would mean a profit before tax and expenses of £22,000,

which is very healthy indeed, but Mark's plan is to rent this one out.

In fact, he's already got a tenant lined up.

If I was to put this property on the market to rent, I would expect it to achieve £450 per calendar month.

If I was to place this on the market for rent, I would expect to achieve £450 per calendar month.

We've got a tenant lined up at 475, so again we can't really complain.

£475 per month gives Mark a yield of almost 11%, which is great news.

So while he's about to become a dad for the second time, what's on the cards for Paul?

-I'm going to ask Mark for a pay rise for all the hard work we've done.

-And he can have one in 2020.

Thank you very much(!)

-Join us next time for more auction action.

-Will the buyers make a profit or a loss?

Will you be envious or glad you didn't do it?

-Join us for more Homes Under The Hammer.

-See you then.

-Goodbye.

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