Episode 8 Homes Under the Hammer

Hello. If you're interested in buying property,

you want to make sure you buy at the right price, but it's not always easy to do.

How do you know what the market is doing?

Is it rising? Is it falling?

One way to dip your toe in the market and gauge what's happening is to visit your local auction house.

Auctions are really exciting places to buy but, to guarantee success,

you must do your homework first.

Let's see what properties stirred up the interest on today's show.

Remember to follow the rules at this two-bed terraced house in north Kent.

Work out your figures because, at the end of the day, it's all about the cost.

In Morecambe, this terraced property could be a classic hammer horror.

You start to see indications of... real problems.

And this run down place in Derbyshire has one big redeeming feature.

Look at this. An absolutely massive garden!

What a fantastic find.

All these properties have been sold at auction.

We'll find out who bought them and what they paid for them when they went under the hammer.

Yes, we are. Well done.

I'm on the north Kent coast, just five miles east of Dartford

in a small town with an important place in history.

Swanscombe in Kent was where Britain's second oldest human remains were discovered -

the so-called Swanscombe Man.

But the town isn't stuck in the past.

There's modern developments happening all around

and we're only a mile from Bluewater shopping centre

and a five-minute drive to Ebbsfleet International Train Station

which can take you straight to Paris.

Sadly, no Gay Paree for me today.

I'm off to check out a property rather closer to home.

I'm just a few minutes walk from Swanscombe high street

and I'm here to see this two-bed mid-terrace property.

It had a guide price at auction of £85,000 to £90,000.

And if you like little doggies, this might be the house for you.

The exterior paintwork does look a little dog-eared in places.

I don't think this terrace would win any Best In Show awards.

These terraced houses always feel quite small

but I would like to call them cosy.

You can see it does need a lot of decorating.

It's really old-fashioned, you've got swirly wallpaper on the ceiling,

a fireplace which once you put back together could look quite nice,

but something I've noticed which is not a good sign is this - dry rot.

You can really tell it's dry rot because of the webbing

and the way it just crumbles in your hand.

It's a fungus and, believe me,

that will spread like wildfire through the house.

It even goes through bricks and concrete so I would get that sorted out as soon as possible.

That's not a good sign.

The fungus creeps over and through building materials to reach any wood to feed on.

Before you know where you are, your house can be crumbling around your ears.

Rot issues aside, the room is a decent side

and offers a blank canvas.

Much of the same thing in the second reception room.

I would open those stairs up because I think you'd get a lot more light in the room.

The stairs are very narrow so I think that's something you could do quite cheaply.

Through here you've got a very small kitchen.

But more disappointingly, and this really is a disappointment,

look at this tiny, tiny, weeny little shower room at the end of the property!

Thinking about this, I suppose you could move this kitchen into this room

and have a nice open plan kitchen, a lovely sitting room through there,

but then you have got to move all the surfaces, so that could be quite costly.

Or, option B, you could think about having an extension across this way,

putting in a door here,

and have this as the bathroom and have the kitchen through there.

So you have got some options but you've got to sit down and work out your figures

because, at the end of the day, it's all about cost.

Even if you don't go down the extension route, that lean-to has to go

and the kitchen would need a total refurbishment.

The back door has been boarded over so we can't get to the side-return

or the garden beyond.

However much you rejig the layout of the ground floor,

unfortunately, the bathroom will have to stay down here.

Not ideal.

But, as far as I can see, there is no way of moving it upstairs

without sacrificing a bedroom.

At least they're both good-sized doubles.

The one at the back has a hand basin and a boiler.

From up here, you can see the garden,

which looks like it's going to need a bit of hard graft to tidy it up.

We invited a local estate agent to come and take a look at the property

to see what he thinks of this two-bed terrace

which was guided at £85,000 to £90,000.

It's a good-sized property.

It's a blank canvas for someone to put their own mark on it.

There's a lot of potential.

You can do a lot with the kitchen and that rear space. Good property.

What about extending at the rear of the property? Is that advisable?

I probably wouldn't advise extending

as the cost may eat into the profit from the property.

To keep the cost down, I would look at bringing the kitchen into that rear reception room,

then using the kitchen space as a bathroom or shower area.

Once refurbished, what is the rental potential?

We are looking at around £700 per calendar month.

How about a resale valuation after it's been done up?

Depending on the finish of the property,

we are looking at figures between £125,000 and £140,000 in this area.

Probably looking towards the top of that end, so about £135,000.

This small Swanscombe house does have potential,

but you need to rejig the layout, modernise that kitchen

and try and squeeze in a bathroom somewhere.

And then I think you'll end up with a nice little property.

Let's find out who was tempted by this terrace when we head to auction.

Number 94. 85 to 90 is the guide price.

Where do you want to start? 85,000? Start me where you will.

Start me at 80. £80,000. I'm on the way.

At 80, sitting in front of me. And two at 82.

82. And five. 85?

85. And 88 at the back?

86? I'll take one if it helps you.

86,000? Otherwise at 85,000 to the gentleman sitting down.

86 I've got over on the right. 87.

And eight. 88 I've got.

89 or make it 90 if you want. 90? 90 I've got.

And two? 92? You know what it's worth.

Otherwise £90,000, sitting in front of me again.

At 90,000 for the first time.

£90,000 for the second.

90,000 for the third and final time. If you're sure you're all done.

It's yours, sir, at £90,000. Well done.

The successful bidders, Dave and Christine,

secured the mid-terrace for £90,000.

The couple have featured on Homes Under the Hammer before

when they bought a property in Gravesend.

# I can do it again

# I can do anything, honey Do, do, do it again... #

This time around in Swanscombe,

Dave was busy when I visited doing his day job managing a golf course,

so I met up with his wife Christine who is a singing teacher

and their builder Chris to hear about their plans for this place.

Christine, we met about a year ago on the show.

Chris, I've never met you before.

Chris has been in charge of all our developments since we started

so it's for him to talk about what we're going to do to this property.

When I saw you a year ago, you'd bought a place in Gravesend

that you were going to renovate and let out.

-What have you been doing since then?

-We have bought several more.

Really?! Wait a minute, what number are we up to now?

This is actually our sixth investment property.

So number six already.

Why this one and what did you like about this property?

This was down to how much money we had.

We released some capital from that property in Gravesend to help us buy this.

We had to look at what we could afford, so that left us

only about two or three houses in this particular auction

and we got it for the right price on the day.

Christine's husband Dave not only works on a golf course,

he plays there too, so he won't be doing much of the hands-on work.

However, he has been keeping an eagle eye out

for useful contacts on the green.

# Straight down the middle

# It went straight down the middle... #

So far, he has a gas engineer and an electrician ready to tee off.

Builder Chris reckons this is a good buy.

It's got a lot of potential.

The main thing about it, on my advice, structurally, it's safe,

apart from a couple of iffy bits and bobs here,

but other than that, it's a structurally safe building.

It's a mid-terrace so a good little property to work with.

Christine, let's talk about this property and how you guys are going to turn this place around.

At the moment we've got a couple of reception rooms, a kitchen

and a ridiculous bathroom at the back of the property.

-What are your options, do you think?

-We have discussed lots of options.

We've thought we might even put a kitchen in here

and just make that a decent-sized bathroom.

But that can be quite expensive because we'd have to take the chimney breast out,

we'd have to bring all the plumbing in to do that,

so I'm more thinking now that we're going to knock through where that window is at the moment,

build a square box on that, and make that into a decent sized kitchen

with a small bathroom on the side

so we can get a bath in and a proper toilet.

There's no way of putting it upstairs effectively.

But we're hoping that because we bought it reasonably well

and where it is in the market, it's right at the bottom,

we might be able to sell it in the end rather than rent it out.

Does it work out financially better for you to do that -

not to put the kitchen in here and to build an extension?

-Have you done your number crunching?

-That's what we're in the middle of at the moment.

It's still, you know, we may go one way, we may go the other,

but I do think it would be such a small kitchen in here

and it steals another room from the property that, in a way,

it would be cheaper and better to just build on existing what's there.

Christine favours building an extension and rejigging the layout

but that's not all that's needed here.

I think builder Chris will be kept busy.

We're thinking the electrical side is fine,

it may need to be rewired in certain places,

a new gas supply from the meter brought in,

then we've got our services here and running up

and upstairs keep the bedrooms exactly the same.

New skirtings, architraves, full decoration.

We've noticed a bit of dry rot this morning

but Chris tells me that can all be sorted out.

It looks a lot worse than it is. The garden needs a lot of work but superficial.

Let's talk about the budget. How much have you got to spend on this

because that's what it really boils down to?

We think it's probably going to be around 20. Those sorts of figures.

£20,000 is your budget. What is the timescale?

Chris, how long is this going to take?

You're looking at about eight weeks in total.

I'd say no longer than that.

-It might be a bit longer than that.

-What has got to happen to me?

-He's got to have surgery.

-I've got to have open heart surgery.

What?! That's a bit of a curveball.

-So you've got to have open heart surgery...

-In four weeks' time.

So how are you going to work that out?

I'll be out of the game for a couple of weeks, I can't do a lot,

but I've got a very able and willing team of fellas

who will take the reins and get it through.

We wish you the best with that and we will be thinking of you.

-Thank you very much.

-Don't work too hard.

-No, I will not.

So, property number six for Christine,

but this time she hopes to sell and not let the property out

so I think she needs to keep a tight rein on that budget,

but to add to that, Chris the builder is having open heart surgery.

Will he recover in time to get that place finished?

Join us later in the programme and you can find out what happens.

I'm in Morecambe, famous for potted shrimps, the kite festival

and being the hometown of Eric Morecambe.

In fact, he took his name from the town.

Like many British seaside resorts, Morecambe has had its fair share of problems in recent history,

but it looks like things are on the up.

There's a sea of change. Maybe there is some sunshine on the way.

# Bring me sunshine

# In your smile

# Bring me laughter

# All the while... #

Well, the sun might be absent,

but the winds of change have certainly swept through Morecambe,

which used to have two piers and throngs of tourists.

Now that's all gone, but the outlook for Morecambe is promising

with an action plan to regenerate the area.

The property I'm here to see couldn't be more centrally located.

You've got the railway station and the town centre a few minutes' walk away,

the beach close by and you're right behind a supermarket.

So, what do you reckon it's going to cost

to get a six-bedroom property around here?

Well, have you got £30,000 to £35,000 to spare?

No, that's not for the deposit, that's for the whole thing.

There's got to be a catch. There has to be a catch.

# Catch a falling star and put it in your pocket

# Never let it fade away... #

Well, I fear this star may have fallen a rather long way.

So, a teeny-weeny guide price and very low expectations have I.

But, OK, I can see some potential straight away.

I love the fact you've got these original features.

A large front room. It's got an open fire.

Stairs up to the bedrooms, et cetera.

A rear living room there. It's a real state but, in its day,

I think this would have been one of Morecambe's smarter houses.

At the moment, though, smart it certainly is not.

Lots and lots and lots and lots of stuff here.

Pans. Urgh!

Yes...but, as property professionals,

we have got to look through this surface clutter

and think about what the house might be.

One thing it's certainly going to need is a new boiler.

I think that's slightly beyond repair.

Yeah, this one needs a serious clear out.

Safety gloves and a skip permit for starters.

But, looking through all this stuff, there are three well-proportioned rooms on the ground floor.

Up the stairs to a loo and the bathroom which is, shall we say,

well ventilated at the moment.

Then there are three of the six bedrooms.

The first is huge, the second not bad

and the third is chock-a-block.

I've got a feeling this one needs everything ripping out

and starting from scratch.

I'm afraid it doesn't get any better the higher I climb.

Certainly something has been living here recently of the feathered variety.

And much more seriously up here, you start to see...

indications of...

..real problems.

That might even be dry rot. But as you can see, it's a state.

Obviously there's a major problem with the roof,

guttering, lead flashing, whatever, it's a bit of a nightmare.

Erm, and the state of the property, it continues.

A nice open plan feeling here.

No window and, again, indications on the ceiling here

of just how serious the problems are.

Downstairs, it was like, OK, it's a bit of a mess.

Come up here and it starts to get really scary because it's structural stuff.

It's the roof, it's damp, it's water ingress, it's pigeons,

it's everything.

Also, in terms of space, two little rooms.

Would you knock that through to create one big one? Probably.

But it's one of those properties, you've got to start with getting the shell outside sorted

and then move inside to get the house into some kind of a state.

One thing you can say though, on the positive side, it's big.

# Size matters, size matters

# But not how you think...#

Yeah, in this case, size really does matter

because on top of the structural work,

you've got to strip back and reinstate six bedrooms,

a loo, and only one bathroom, which could be too few.

Two reception rooms, a kitchen and just when you thought that was it,

another two rooms on the lower ground floor.

Then there's a garden of sorts to tidy at the back

and, is it just me or is that greenery growing out of the wall?

Deep pockets are an absolute must here.

So, what to do with a place this size?

Ideal for flats, you might think.

However, the local council now have a moratorium on large houses

being turned into flats or houses of multiple occupancy.

But they are very keen that they remain as large houses.

So, what are the downsides here?

It's a big house with a tiny garden on a fairly busy road.

Perhaps not ideal for families,

but you can't deny that it's a lot of house, so could it have a decent profit in it?

We asked a local estate agent for his take on this monster property.

The best future I see for this house

is either for it to be renovated into a large family home

and either resold to a family purchaser

or sold to a landlord who would then rent it off to a large family.

In both markets, those families would be working to a budget.

OK, the guide price was £30,000 to £35,000,

but, if done up and sold on, what might it fetch?

The ceiling price for a property within this area

I would imagine would achieve somewhere in the region of £75,000.

So there might be a profit in there with careful budgeting.

What about rental values as a family home?

We would be looking probably at achieving somewhere between £550

and £600 per calendar month.

Well, it's certainly a big house

which could generate gigantic returns once it's done.

However, there's a lot of work to do to get it to that point.

Let's see who was willing to take it on when it went under the hammer.

This was very nearly the last lot of the day

but there were still buyers interested.

£15,000, that's all, to start. £15,000 do we see?

15 towards the back on my left I've got. 16, then?

16,000? 16 here. 17? Got it.

18? Yes. 19? 19,000.

20, then? Got that. 21?

21 we've got. 22?

Got it. 23? 23 I've got. Yes.

24? 24 I've got. 25?

No. At £24,000. 25? Yes.

25, gentleman in the grey top. 25,000 here.

26? Do you want to come back? Shaking his head.

The gentleman in the aisle, halfway down in the grey top, at £25,000.

I'll sell it at £25,000 if we're all finished.

First time at 25. Gentleman here.

Second time, £25,000. Are we all done? Yes, we are.

That successful bid of just £25,000 came from Mike,

a tiler from the Manchester area.

I met him back at the property to see if he was going into this one with his eyes open.

# You're just too good to be true

# Can't take my eyes off of you... #

-Mike, congratulations. Nice to meet you.

-And you.

-A bit of a mess, isn't it?

-Just a bit.

That's what I thought when I first looked at it. It is a mess.

-But it obviously didn't put you off.

-I'd already bought it.

-How do you mean?

-Well, I bought it at the auction without seeing it.

Why?

Erm...it weren't the one I went for at the auction.

The one I went for, I couldn't afford. It had gone past my price.

So I was left with this.

Well, I weren't left with this. I just wanted to plunge in and get a house and I ended up with this.

-Right. So you hadn't seen it inside?

-No.

-Had you read the legal pack?

-No.

-You know you could have got yourself into all sorts of trouble, don't you?

-Yes.

-Driven past it?

-No, I hadn't seen it.

-You hadn't seen it from the outside either?

-No.

The first time I seen it was in the auction and then about a week later I come up and had a look.

That was the first time I seen it.

Are you so, what's the word, cavalier,

in all the rest of your life?

I think, sometimes, yeah.

When I went to the auction... I've been to a few auctions,

and this was in my price range, and I thought, I'll go for it.

I know the state it's in but I knew that for what I was going to pay,

they were going to be a mess - it was nothing going to be good,

so I went for it then.

Do you think the state might have put a few people off?

I think so, yes. I think it would have.

When I got in, it put me off, it gave me a second thought.

A bit late, isn't it?

# And it's too late, baby, now It's too late

# Though we really did try to make it... #

But Mike's not going to sit around feeling sorry for himself.

He's a hands-on kind of guy who will do as much as he can himself

to turn this property around and sell it on.

First of all, I'm going to seal it, secure it,

and then have a good look - check all over.

It was always going to be a rip out,

full rewire, heating system, all the windows.

It needs a lot of work on it. It doesn't scare me though.

I'll just get into it and get it done.

-And you'll personally do the work?

-I'll do the majority of it.

There's things I can't do, like the electric and the certified stuff you need a certificate for,

but the rest of the work, the plastering and the ceilings,

they will come down and change them.

-New kitchen, new bathroom.

-Yeah, new kitchen, new bathroom.

What about outside? All the guttering is shot and the roof looks...not sure.

I've had a look at the roof and just the bay roof here's leaking.

The roof upstairs seems to be all right

but a lot of it's from the gutter down there.

It's bringing the damp through the walls. Again, not a big job.

It's great to meet an optimist

and I do really admire Mike's can-do attitude.

He's giving himself six months to get this place back on the resale market

but what kind of a budget is he working to?

What I paid for it, I had about £38,000.

I've paid £25,000 now, plus the cost,

so I reckon I've got about £10,000.

-I don't think that will be enough.

-No.

But I'll have to deal with that as it comes along.

-How are you going to deal with it as it comes along?

-There's options.

-Bank loans, stuff like that.

-Right.

-Well, good luck.

-Cheers.

-I really look forward to seeing how you transform the place.

-Hopefully.

Well, just because Mike got the property cheap

does not mean he's not going to have to spend a lot of money sorting it out.

In fact, the opposite.

£10,000 really isn't even going to scratch the surface,

once he's found the surface, that is!

Probably about 150 skips from now.

You can find out how he gets on with this mammoth project later in the show.

Coming up, this house in Derbyshire shows signs of cracking up.

It'll be OK as long as it doesn't go through to the other side.

Oh, dear.

In Morecambe, Lancashire, how hard was it to move the rubbish from this six-bedroomed house?

It took a good few skips to get shot of it all.

And in Kent, it's not often you hear owners talking about their builders working too hard.

He did try and do too many things too quickly.

Earlier in the programme, in the Kent town of Swanscombe,

this two-bed terrace was bought for £90,000

by Christine and her husband Dave.

It was the couple's sixth investment purchase.

They had appeared on the programme a year earlier

when they bought another property in Gravesend, Kent.

In this Swanscombe property, it was Christine and their builder Chris who showed me around

as Dave was busy managing the golf club where he works.

They were hoping their budget of £20,000 would allow them to build

an extension or move the kitchen and improve the teeny-weeny shower room.

However, there were few options given the space upstairs.

There was also dry rot to tackle

and a garden somewhere underneath all that stuff.

As if that wasn't enough, builder Chris was facing some further complications.

-He's got to have surgery.

-Open heart surgery.

-What?!

Wait a minute! That's a bit of a curveball. You've got to have open heart surgery?

-In four weeks' time.

-How are you going to work that out?

I will be out of the game for a couple of weeks,

I can't do a lot, but I've got a very able and willing team of fellas

who will take the reins and get it through.

It meant that both Chris and the house needed attention.

Five-and-a-half months have now passed.

Well, the exterior looks so much better.

Clearly, Christine, Dave and builder Chris have added that extension

and just look how the ground floor accommodation has changed.

The house has been opened up thanks to the new extension,

which didn't require planning permission

as it was within permitted development.

Christine is delighted with it.

I'm now standing in what was originally the old lean-to

that was full of rubbish.

We decided to put the wall here, have the bathroom next to the kitchen,

creates this nice long run of units

which is easy to design and to manage.

A brand-new built-in cooker and cooker hood.

This lovely skylight which makes such a difference. A lovely bit of light.

Otherwise it makes the dining room so dark.

Over on this side of the room, this is the space for the refrigerator

and the plumbing for the washing machine.

And I'll show you into the bathroom.

This is a very small space but very, very functional.

The original plan was to do the work in eight weeks.

However, Christine and her husband Dave were happy to wait

until builder Chris was ready and able to finish the job.

It's the same team as we've used for all our other developments

but, as you know, Chris had his heart operation right in the middle of this development.

I didn't want to swap it onto anybody else.

I'd rather use the people we're used to.

It's great to see Chris back.

Obvious question, how is he feeling now?

Very well, thank you very much. I must consider myself a lucky man.

I had to be off for four months so it took longer due to my health

but I'm pleased with the outcome and I think the client, Christine and David, are as well.

I was worried that he was going to overdo it. I think he did at one stage.

Yes, he did try to do too many things too quickly, as usual,

-but he's fighting fit now.

-I think he's back to normal.

The dry rot in the front living room has been treated.

Apart from this new fire, central heating and replacement boiler have been installed.

Some of the house has also been rewired.

The two bedrooms upstairs didn't require any major structural work.

There has been some replastering and the windows were replaced.

Although the dry rot was downstairs, the timbers in the whole house

had to be sprayed and the floorboards replaced.

That added about £900 to the budget,

but the house now has the crucial certification if they decide to sell.

So, what are their plans?

We're really interested to see what the valuations are going to be.

I think it's worth trying to sell it but, if we don't get top money, I'd rather rent it for a bit.

There's things happening in Swanscombe as well.

There's some big developments planned

so that may help the value of the place in the future.

But if we sell it, we'll only go and buy another one.

What effect did the damp and the longer time scale have on their £20,000 initial budget?

A little bit over budget, by about another £5,000,

so really the budget came in at about £25,000.

Added to the £90,000 they paid at auction,

that means their total investment is £115,000.

We invited two local estate agents

to come and have look at the property.

Will their valuations prove to be the icing on the cake for this refurbishment team?

I think the extension was a worthwhile build.

It extended the kitchen very nicely and kept the downstairs bathroom.

First impressions are how big the kitchen is, how bright it is.

What they've done to the property with the extension.

I think the standard of work is excellent.

All beiges and all very neutrals. Very saleable and very rentable.

How much rental income could the house achieve?

On today's market, it will achieve £700 per calendar month.

The rental value would be £700 per calendar month.

Those valuations would produce yield over 7%

if they get £700 per calendar month.

-That's about what we thought.

-That's about right.

I'm sure we would get at least £700 for it.

Is the house worth more than the £115,000 the couple have invested here?

I would probably put it on the market for £135,995,

probably to achieve £134,000 to £133,000.

I believe once they've finished with the property

we should be looking in the region of £135,000.

That could mean a potential profit of between £18,000 and £20,000,

minus the usual tax and expenses.

The resale value, £135,000, that's what we'd expected to get for it.

We might market it at £140,000, but in the hope we would get £135,000.

The couple have already bought six investment properties.

Are they planning to add to that total?

I think we're going to carry on doing this, aren't we?

Yeah, we'll keep going, as long as we can find the finance.

It's something we've always wanted to have a go at.

All the while we're doing OK, we'll carry on.

Not old enough to retire.

Not yet.

Today I'm in the hilltop market town of Heanor in Derbyshire.

This place grew up around the textile industry

and many of the houses were built to house the textile workers.

Some have fared better than others,

so what will the one I'm here to see today be like?

Despite those industries being long gone,

Heanor's population has been growing steadily.

Its proximity to Nottingham and Derby, both about ten miles away,

make it a handy commuter spot.

The property I'm here to see today is a two-bedroom double-fronted semi-detached.

At a guide price of £35,000 plus, very close to the town centre,

so that's good for local facilities et cetera.

Let's have a look inside.

Double glazed door, sadly you can't say the same about the windows.

They're going to have to be replaced.

But straight into your front living room area.

It's not a bad space, although I am seeing some signs of damp in this corner.

If that was new plaster and you had this white stuff on it,

the crystals, whatever it is, salts drying out, I wouldn't be too concerned,

but that is actually very old so that is a sign of damp.

And that's not good news either.

A big, nasty crack above the door.

It'll be OK as long as it doesn't go through to the other side.

Oh, dear. It does.

That could be a potential problem with some kind of subsidence. Needs to be checked out.

But this is the second of your front rooms.

Again, not a bad size, lots of light coming in through the windows,

but you can see straight away it's a gut it and start again kind of property.

OK, it's in a right old state,

especially the kitchen, which has obviously seen better days.

Those cracks are deeply worrying

but not unusual in this former mining area.

# Everybody knows it's the industrial disease... #

It's obvious it's not been lived in for years.

However, look past the obvious signs of neglect and you will find

a lovely old house full of features and good-sized rooms.

Hopefully it'll be the same upstairs,

without the cracks, of course.

So, upstairs, and quite an interesting layout.

Facing you when you double back around the stairs

is a very large bathroom and loo.

My guess is that was originally a bedroom

and the bathroom has been moved up here at some point.

It's left you with just two bedrooms, one on that side,

not a bad size, and another one here, again not a bad size.

So you've lost a bedroom.

I think there's some internal modifications you could do here.

Maybe make that bathroom a little bit smaller. Get that third bedroom back.

You want to talk to a local estate agent, find out what kind of difference it would make

in terms of potential rental yield or, if you're buying it for yourself,

if you really need that extra room, and then make your decision.

But look, the nasty old crack has continued upstairs.

That is much more a worry than any internal modifications.

As with all ex-mining areas, you would need to do a survey

to find out if the property could be subject to subsidence.

So, with those cracks and the run down state of the place,

I'm looking for something to lift my spirits.

I do hope the garden isn't a bricked over backyard.

Well, at the rear of the property, you really do get a sense

of the fairly run down nature of the house,

although there are a couple of useful places for storage and an outdoor loo.

But the great surprise is you come out here and look at this.

An absolutely massive garden.

What a fantastic find. Phew!

Well, the vegetation may be rampant but just look at the size.

All that potential and at that £35,000 guide price,

this cracking little house makes a very attractive proposition.

It's been empty for a number of years

so time to find out more about the background story

to this two-bedroom semi-detached house.

There was a plan many years ago, 25 to 30 years ago,

to put a relief road through Heanor which would run along Whysall Street

but now they've decided not to put the relief road through

hence the county council are selling the properties off.

This plan that was dropped has led to this place being neglected

so what's the best way forward to get it looking its best?

I don't think I'd look at changing the layout too much.

I'd refit the kitchen, refit the bathroom,

put as many original features back in as I could

and make a nice feature of the garden because it's a very good size.

If you spent £10,000 to £15,000 on a property like this,

you ought to be able to get it in some reasonable kind of order.

The garden is a great asset so once that and the house are totally spruced up,

what sort of returns could the new owners expect, first on resale?

Once renovated, it all depends on the quality of finish

and exactly how good a job they make,

but I would expect somewhere in the region of £80,000.

What rental income could the house earn?

If I put this on the rental market I would expect to achieve around £450 to £425 per calendar month.

It's a substantial house.

A few structural things to check out but, with a bit of effort, I think

it could be a good place to live or deliver a good rental yield.

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

Lot 31.

Start me on this at the guide at 35, will you?

35,000? 35? 34?

34? Thank you. £34,000 opening bid.

At £34,000.

35? 35. 36?

37. 38. 39. 39, the bids are yours.

40, sir? 40,000.

41. 42. 43. 44. 44,000.

The lot had attracted several interested buyers.

We rejoin the auction when the bidding reaches £52,000.

52,000.

52,500. 53.

53,500.

54? 54.

500? 54,500. 55?

55,000.

At £55,000.

55,500. He's back in. At 55,500. It's against you, madam.

At £55,500. 56, quickly?

At 55,500, going once.

Going twice. Third time. All done.

Yours, sir. £55,500. Thank you.

The successful bid of £55,500 in that tense auction was made by Paul,

supported by his brother Luke and dad John.

Paul has taken on this house despite the possible problems involved.

However, he's no stranger to risk-taking

after a career in the military ranging from intelligence

and the artillery to working with NATO.

I met him and his brother Luke

to find out what strategy they had for this place.

-Luke, Paul, good to meet you both.

-Nice to meet you.

-Congratulations.

Tell me why you wanted to buy this place.

I've been looking for an investment property for quite some time now.

I've had my brother and my dad looking.

I've been living in Afghanistan for the last three years.

-Afghanistan?

-Work.

-Right.

I've just got back and I'm taking a break now so I thought I would

invest a bit of money in property and do it up and rent it or sell it.

What kind of work were you doing in Afghanistan?

-I was working as a risk management consultant for NATO.

-Wow.

-That sounds pretty interesting.

-It certainly is.

And what prompted the move into investment property?

It's something I've always wanted to dabble in but never had the money.

Obviously, living in Afghanistan, there's not much to spend money on so I've saved quite a bit

and thought I would buy something and give it a try.

-Right. Luke, you and your dad were drafted in.

-Yes.

Did you literally search the house out?

Yeah, we looked around about ten or 12 in total at a couple of different auctions

but this one we thought was the best buy.

What was it that you liked about this one?

Its size, the garden,

with it being double-fronted, it's a good-sized property.

That's why we thought it was a good price.

And the state of it inside, it's fairly run down, with a few issues here and there.

Not really bothered because we are going to rip it all out.

We weren't really bothered about that.

The lads are currently doing up Paul's house

and have the skills needed to do this one up from top to bottom.

From a new kitchen, bathroom and plasterwork to the whole lot.

A total overhaul.

But are they concerned about those cracks?

Not really. This area is renowned for mining

so you probably won't find any houses around here without the odd crack here and there

but there's nothing since the '50s, no movement reported on the survey, so not too concerned about that.

OK, internal layout changes at all?

I don't think there's any required really. It's quite big.

The kitchen's a pretty nice size, the other rooms are a good size.

-Maybe change them windows to patio doors.

-Yeah.

Thoughts about putting it back to three beds and making the bathroom slightly smaller or not?

Not quite sure whether the margin is worth doing that.

It depends on what price we get for the difference between the two

and three-bedroom and the difference in budget

so we'll get that from the estate agent - a bit of advice.

So a new layout could be on the cards,

depending on the returns possible on a two or three-bedroomed house.

They have a budget of £10,000

plus a contingency of £5,000 for any unexpected problems

and a two to three-month timescale.

Although Paul is hoping property development will help his finances,

it seems he can't get that military background out of his system.

In my time off since coming back from Afghanistan, I've been running boot camps

-as a fitness instructor in the military.

-Oh, wow.

Up in Scotland, we get girls to pay to come and get thrashed around by me

and made to cry and do press-ups and things.

-Is it popular?

-They're quite happy with the results by the end.

-OK.

And it's a weight loss and health gain thing?

Yeah, but it's more mental.

You get some through things that they never thought they could do so we push them quite hard.

We've got them for seven days and they do things they would never think possible.

-You shout at them and are generally horrible.

-Absolutely, yes.

-Do you enjoy that?

-I do, I love it, it's absolutely brilliant.

I'm basically working on a really nice estate in Scotland

with the hills and the beach and a seal colony down the bottom

so we take the girls running out on the beach and the dunes and it's really nice.

-Wow.

-You can't get a better job really.

I'd rather do that full-time, I think.

-But this pays the wages in some ways.

-Hopefully it will do, yes.

Congratulations to both of you.

Good luck with it and I look forward to seeing how you get on.

How will brothers Luke and Paul get on sorting this place out?

A few issues here and there and they are doing the right thing

which is getting advice in terms of how much it's going to cost

and how much they will get back if they did some of those renovations.

What will they decide to do? You can find out later in the show.

It's always easy putting things off until tomorrow,

but time is money and delays can be expensive.

Have our buyers been busy

or have they let the grass grow under their feet?

Time to find out.

Back now to Morecambe in Lancashire and this six-bedroom...

yes, six-bedroom mid-terrace with lower ground floor.

It was in a pretty sorry state from bottom to top.

Mike, a ceramic tiler from Manchester,

bought it at auction for £25,000.

But hands-on Mike wasn't fazed by the job ahead.

He had a very tight six-month timescale

and an even tighter budget of around £10,000 to do this up and sell on.

However, he did fail to follow our golden rule for buying property at auction.

-I bought it at the auction without seeing it.

-Why?

I just wanted to plunge in and get a house and I ended up with this.

-You know you could have got yourself into all sorts of trouble, don't you?

-Yes.

13 months after our first visit, we are back to see if Mike

has spent his money wisely and improved the outlook for this Morecambe property.

# Bring me sunshine

# In your smile

# Bring me laughter

# All the while

# Let your arms be as warm

# As the sun from up above

# Bring me fun, bring me sunshine

# Bring me love... #

Well done, Mike. Things are really looking up for this mid-terrace.

While there is still a bit to do on the lower ground floor,

it's clear that an awful lot of work has gone on here.

To start with, we had to get rid of all the rubbish.

The beds and the couches. There was loads.

It took a good few skips, about 17, to get shot of it all.

I got rid of that and then I started ripping all the plaster off.

So, basically, it was everything took out

and then start putting it back together.

So, from the top, the roof has been overhauled

and the three bedrooms on the top floor have been made habitable.

There are now two good-sized bedrooms on the first floor.

A loo.

And Mike has cleverly knocked together a small bedroom and the old bathroom

to create one massive family bathroom.

It made sense to make the bathroom bigger.

I didn't think the bathroom would be that bigger. It looked a bit lost.

But it's better than that room being there because that was far too small.

The ground floor has been given a new lease of life too.

The new kitchen looks fabulous

and knocking together the two reception rooms has worked really well.

You might even call it a great idea.

The fireplace looks all right in here. It needed a bit of repair.

I just thought it looked good and it was an original feature

so I decided to keep that - just took it off and re-sprayed it,

and put it back and it works now.

You get some logs in there and it's all right.

But before you get too cosy in front of the fire, there's still a bit to do, Mike.

At the back, it's good to see that the greenery has gone

but there's still a dividing wall to be built out there.

As for the lower ground floor, this has had to be tanked.

It all needs a bit more time to dry out properly

and then Mike can finish it off.

He's going to leave this floor as something of a bank canvas

but there are three good-sized rooms down here plus scope

for a utility room and shower room, so plenty of options.

All this work has blown Mike's schedule from the original tight six months to one year,

but was it done for that wildly optimistic budget of 10,000?

12 months down the line, it's about 32,000, now.

I think it might finish at 35. That's what it is. That's what it's took.

A spend of 35,000 will see Mike's total outlay here rise to £60,000.

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

First up, the estate agent who saw the place before the work started.

I think the owner of this property has done a fantastic job

with the refurbishment.

Very impressed with the overall condition compared to what it was prior to him buying the property.

The kitchen and the bathroom, absolutely fantastic.

So I'm really, really happy with what has been done.

The layout now works much better.

It's made the bathroom a lot larger and also five bedrooms,

to be fair, is perfectly adequate for this type of market.

So far, so good.

Now, Mike would like to sell the property on

so what might it fetch if put up for sale?

I would be recommending this house would go on the market for £75,000.

Based upon recent comparable property sales,

I was market this property at £85,000.

Obviously, I would want more.

But there is another option. I can rent it.

It's a tricky one.

Those resale valuations would mean a pre-tax and other expenses profit of between 15 and 25,000,

but Mike has had people asking about renting the mid-terrace

so what do the experts make of that option?

If we were to rent the house out,

we would expect to rent the house for £550 per calendar month.

If I was putting this property out to rent,

I've expect it to achieve in the region of £595 per calendar month.

A family wanted to move in when I completed it

and they offered me £700 a month.

£700 a month would mean a yield of 14%, which is very good indeed.

It's clearly been a lot of hard work so what's next for Mike?

Another auction?

It's back to work to pay off the money I've used for this.

But I would like to do it again, definitely.

He is certainly a trooper when it comes to property development

but next time, please view before you take the plunge!

Back now to the market town of Heanor,

sandwiched between Derby and Nottingham, where earlier,

we saw this two-bed double-fronted semi sold at auction for £55,500.

It was bought as an investment by former military man Paul, on the left, here.

Along with brother Luke, he planned to turn this 'orrible little place into a unit to be proud of.

But first, it appears you can take the man out of the Army

but not the Army out of the man.

I've been doing the odd running boot camp, I'm a fitness instructor in the military.

-Oh, wow.

-So up in Scotland we get girls who basically pay

to get thrashed around by me and made to cry and do press ups and things.

-Is it popular?

-Yeah, they are quite happy with the results by the end.

Paul may be able to whip his clients into shape

but did he and Luke manage the same thing with this run down place?

There were several cracks and the rooms were grubby and shabby, needing a complete overhaul.

But with a £10,000 budget and a two to three-month timescale,

the lads were ready to do battle.

Now it's nine weeks later and the house certainly looks fresher,

with new double-glazed windows.

Inside, the first reception room has been replastered and redecorated

and the same treatment has been given to the second reception room, with a coal effect fire added.

So far, so good.

How did the brothers fare with that run-down kitchen?

New units and tiling have definitely improved this area,

but what really sets it off beautifully are the new patio doors in place of the bay windows.

They now give access to the garden, which has been cleared.

So for the ground floor, it has been a promising start.

Complete transformation from the absolute mess

we came into in the first place to all the nice, clean,

smells nice and fresh and looks actually usable so it's nice to see.

It's also good to see that the stairwell has been made into a brighter space

but the real improvement here has been with the change of layout.

The large bathroom has been turned into a decent sized bedroom.

While the larger of the original two bedrooms has been split into two,

to create a bedroom at the front and at the rear, a new family bathroom.

The other original bedroom has retained its shape

and been made over in a similar style to the other rooms.

So now this former two-bedroomed house

has been rejigged to become a far more sensible three-bed.

Paul reckons most of the credit for making this happen was down to brother, Luke.

I'm giving him quite a bit of credit. He's done most of the work.

I've been away working for quite a lot of the time so he has run with

the project management side of things and done a very, very good job.

He's earned himself a good 50% share of the profits, without a doubt, on that one.

It's well deserved.

That's good for Luke.

He's taken on the main burden of getting the house fixed up.

There were no real problems but the sections of wall with those cracks

had to be rebuilt and are now fixed up.

But being a project manager has meant putting in the hours.

It's been a mad rush last couple of weeks,

I think I've done 100 hours for a good couple of weeks

so it has been long days and no sleep

so I'm ready for a couple of weeks off now.

But the end results are definitely worth it, aren't they?

Absolutely. Without a doubt.

Well, Luke may have put a lot of time into this renovation but that wasn't his only input.

I've put my foot through the kitchen ceiling two days before the deadline,

rushing about and getting ready to watch a football match.

So that was a little bit annoying.

I had to take a little bit of stick for that.

With a little help from family and friends,

contact in the building trade, and of course, Paul,

Luke has turned the project round in nine weeks.

One of the bricklayers who helped on the job is planning

to move into soon as a tenant so that's a vote of confidence for the quality of the renovation.

But with the house we plastered throughout,

rewired and with new gas central heating installed,

did the brothers have confidence in their budget?

We originally planned £10,000 with a contingency of up to 15, if anything goes wrong.

However, we've managed to get it down to £9,300, or just under.

So again, very, very pleased with that.

Adding that £9,300 to their purchase price of £55,500

makes their total outlay just under £65,000.

Time to find out what two local estate agents think of Paul's investment.

My overall impression of the property is very good.

They've made a nice renovation job, put a nice modern fitted kitchen in,

modern bathroom, and it is neutrally decorated throughout. It looks great.

My overall opinion of the property

is that it's very well presented and well decorated.

I think the fact they've chosen to make it into a three-bedroom

from two is a good idea because it appeals more to a family

and the bedroom sizes are very well-proportioned.

So the agents like the new layout.

But with a tenant due in, has Paul got the best return

from his investment of just under £65,000?

What sort of rental figures could he achieve?

If I was putting this property on the market for rental,

I would expect it to achieve in the region of £400 per calendar month.

I would expect to achieve between £450 and £500 per calendar month.

That's kind of what we expected.

We've actually achieved £450 a month from our prospective tenant

so that's pretty good. I'm quite happy with that.

That rental income would give Paul a healthy annual yield of just over 8%

and the estate agents reckon it could sell for up to £90,000.

That could mean a profit of around 25,000, minus the usual tax and expenses.

So with the success of the venture, it looks like Paul and Luke

could be quids in on this new investment.

But like any military man,

it seems as though Paul is already eyeing up his next campaign.

Next-door is empty so we're kind of looking at prospectively buying that

and doing the same thing again because obviously, we know the area.

We've got quite a bit of garden space at the bottom

so we are looking at maybe building plots for a couple of houses on that.

And of course, he won't expect Luke to become demob happy.

It's nice to know I can have a couple of weeks off

after the last couple of months, I think I deserve a couple of weeks at least.

He's not doing bad.

Join us next time when we'll be visiting more intriguing stories

-on Homes Under the Hammer.

-No two stories are ever the same.

-Will it be flats, maisonettes, plots of land, who knows?

-See you soon.

-Bye-bye.

-Goodbye.

Subtitles by Red Bee Media Ltd