0:00:02 > 0:00:03Hello, and welcome to the show.
0:00:03 > 0:00:05Now, with the property market in a state of flux,
0:00:05 > 0:00:07everybody has to make their own decisions.
0:00:07 > 0:00:10You have to do your research and trust your own instincts.
0:00:10 > 0:00:13Yes, and you need to find out what's going on.
0:00:13 > 0:00:17One way you can do that, is by going down to your local property auction.
0:00:42 > 0:00:43Martin, it's true, isn't it?
0:00:43 > 0:00:46Sometimes you just know you've got yourself a bargain,
0:00:46 > 0:00:48and other times you're not quite sure.
0:00:48 > 0:00:51Well, one way to find out is to test the market,
0:00:51 > 0:00:55so, did the buyers on today's show get themselves a bargain?
0:00:55 > 0:00:57Let's find out. Here's what they bought.
0:00:58 > 0:01:01Today, we're searching high and low for property bargains.
0:01:01 > 0:01:05I'm searching high in London. Take a look up there.
0:01:05 > 0:01:06Can you spot what's wrong?
0:01:08 > 0:01:10And I'm searching low, in Gillingham, Kent.
0:01:10 > 0:01:14Whoa, whoa, what is that?
0:01:15 > 0:01:19Whilst in Lisburn, Northern Ireland, I don't have to look far at all.
0:01:19 > 0:01:22So, that's the first job on the list, then.
0:01:24 > 0:01:26All of these properties have been sold at auction.
0:01:26 > 0:01:30We'll find out who bought them and what they paid for them
0:01:30 > 0:01:32when they went under the hammer.
0:01:32 > 0:01:33Sold.
0:01:36 > 0:01:40Ladies and gentlemen, for our first location,
0:01:40 > 0:01:41we have to solve a mystery.
0:01:41 > 0:01:43Shall I start by giving you a few clues
0:01:43 > 0:01:45about which part of London I'm in?
0:01:45 > 0:01:49Number one, Stratford is located a five-minute drive down the road.
0:01:49 > 0:01:52Number two, there's a tube station
0:01:52 > 0:01:57with services that take you into central London in under 30 minutes.
0:01:57 > 0:02:02Number three, it's an area that's well-known for being the birthplace
0:02:02 > 0:02:05of the famous film director, Sir Alfred Hitchcock.
0:02:09 > 0:02:11Have you guessed where I am yet?
0:02:11 > 0:02:14Leytonstone, that is where I am.
0:02:14 > 0:02:16Now, I'm going to cut for a moment
0:02:16 > 0:02:19as it's a little more than 39 Steps to today's property.
0:02:19 > 0:02:20Let's get going.
0:02:22 > 0:02:23Wow, well, there's no mystery
0:02:23 > 0:02:25as to why prices are creeping up in this area.
0:02:25 > 0:02:29It's the Olympic effect, and the property is just a five-minute walk
0:02:29 > 0:02:32from Leyton tube station.
0:02:32 > 0:02:35Along this row of terraces is the flat that I'm here to see today.
0:02:35 > 0:02:38It had a guide price of £110,000
0:02:38 > 0:02:42and it's described as having three rooms.
0:02:42 > 0:02:45Now, I assume that means a lounge and two bedrooms.
0:02:45 > 0:02:48Let's head inside and get to the bottom of that.
0:02:48 > 0:02:52The flat is on the first floor of this attractive period property.
0:02:52 > 0:02:55Up the stairs and what are we going to find?
0:02:55 > 0:02:58Oh, it's great to have this double-height window here,
0:02:58 > 0:03:01letting in lots of light, quite a few stairs to climb.
0:03:01 > 0:03:04So, let's have a little wander around.
0:03:04 > 0:03:08Quite a small room through there. Probably a bedroom.
0:03:08 > 0:03:10You've got a very squeezed bathroom
0:03:10 > 0:03:13with a ceiling coming at you like that.
0:03:13 > 0:03:15Through there, not ideal I'd say.
0:03:15 > 0:03:18And this is the kitchen, so quite a good space.
0:03:18 > 0:03:21Yup, you've got the units, needs a bit of a tidy up,
0:03:21 > 0:03:23there might have been some sort of leak in the ceiling
0:03:23 > 0:03:27because part of that is hanging down.
0:03:27 > 0:03:30You can see there's been a bit of damp around the window area.
0:03:30 > 0:03:32So where's that third room?
0:03:32 > 0:03:35Is it through here?
0:03:35 > 0:03:36It must be.
0:03:37 > 0:03:43I'm very intrigued by this third room. Up more stairs to find out.
0:03:43 > 0:03:49Now, I did have my suspicions, but judging by this steep staircase,
0:03:49 > 0:03:52I don't think this room complies with building regs.
0:03:52 > 0:03:55Now, it's not been legally converted into a second bedroom
0:03:55 > 0:03:57and tall people beware,
0:03:57 > 0:04:00the ceiling height is a little low over here and here.
0:04:00 > 0:04:02I would recommend speaking to the local council
0:04:02 > 0:04:07who will advise you how you can convert this space officially.
0:04:07 > 0:04:11At the moment, you could only use this as a play room or for storage
0:04:11 > 0:04:14and I think it will be well worth spending a bit a bit more
0:04:14 > 0:04:16so you can call this bedroom number two.
0:04:24 > 0:04:28Now there's something in here that I am really quite worried about.
0:04:28 > 0:04:31Take a look up there. Can you spot what's wrong?
0:04:31 > 0:04:34It's crooked and that's at the top of the window frame.
0:04:34 > 0:04:38You can see it just falls away. It's tilting to the side.
0:04:38 > 0:04:42In fact, this whole kitchen floor runs this way.
0:04:42 > 0:04:44Thank you. It's a sure sign of subsidence.
0:04:44 > 0:04:48Now alarm bells ring because it's expensive to rectify,
0:04:48 > 0:04:51and it always makes future buyers very wary.
0:04:51 > 0:04:53Subsidence equals stigma, I'm sorry to say.
0:04:58 > 0:04:59Now, the first thing to do
0:04:59 > 0:05:02is to get a structural engineer to investigate.
0:05:02 > 0:05:04Best case scenario - it's historical
0:05:04 > 0:05:07and you'll need to fix the results of it.
0:05:07 > 0:05:09Worst case scenario - a big bill
0:05:09 > 0:05:11and further complications could ensue
0:05:11 > 0:05:13because this is a lease-hold flat
0:05:13 > 0:05:18so would you get the cooperation needed to do any remedial work?
0:05:18 > 0:05:20It's guided at 110,000
0:05:20 > 0:05:23so does a local agent think that odd upstairs room
0:05:23 > 0:05:25is a place to add value?
0:05:25 > 0:05:27If they're looking to resell the property,
0:05:27 > 0:05:32I think it's a good idea to put a dormer window and extend upstairs.
0:05:32 > 0:05:37If you're looking to rent the property, it's not worth doing it.
0:05:37 > 0:05:40The dormer extension would add around ten grand
0:05:40 > 0:05:41onto the resale value of the flat,
0:05:41 > 0:05:44but as long as you have the use of the second bedroom,
0:05:44 > 0:05:47the size wouldn't affect the rental figures.
0:05:47 > 0:05:52Time to talk potential values for once this flat has been renovated.
0:05:52 > 0:05:54As a one-bedroom flat with attic space,
0:05:54 > 0:06:01we can resell this property at a price in between £170-180,000.
0:06:01 > 0:06:04As a two-bedroom flat, after renovation,
0:06:04 > 0:06:08the property could achieve around £220,000.
0:06:08 > 0:06:10And rental figures?
0:06:10 > 0:06:12After refurbishment, one-bedroom flat,
0:06:12 > 0:06:18it can achieve between £950 and £1,000 per calendar month.
0:06:18 > 0:06:19As a two-bedroom flat,
0:06:19 > 0:06:24we can achieve between £1,000 and £1,100 per calendar month.
0:06:26 > 0:06:28Well, this flat does have a few issues
0:06:28 > 0:06:31but it could make a worthy investment
0:06:31 > 0:06:32once they've been rectified,
0:06:32 > 0:06:36particularly with the extra potential of that top floor.
0:06:36 > 0:06:38Now, I just hope whoever took this on
0:06:38 > 0:06:41doesn't suffer from Stage Fright, in the words of Hitchcock.
0:06:41 > 0:06:44Time now to head to the auction and find out
0:06:44 > 0:06:45who was up for the challenge.
0:06:47 > 0:06:48120.
0:06:50 > 0:06:53Sorry, didn't see you, 120 sitting down.
0:06:53 > 0:06:55121?
0:06:55 > 0:07:00121 with you. 122. 123.
0:07:00 > 0:07:01124.
0:07:02 > 0:07:04125.
0:07:04 > 0:07:09126, 127, 128, 129.
0:07:09 > 0:07:11130.
0:07:11 > 0:07:12131.
0:07:12 > 0:07:13With a packed house,
0:07:13 > 0:07:16there was plenty of bidding on this property
0:07:16 > 0:07:19and we rejoin it at 142,000.
0:07:19 > 0:07:23142, first time, second time.
0:07:23 > 0:07:25Third and last - 143.
0:07:25 > 0:07:27144.
0:07:29 > 0:07:31145.
0:07:31 > 0:07:33146?
0:07:34 > 0:07:39145, sitting down, gentlemen. First time, second time.
0:07:39 > 0:07:41Third and last time, if you're all done.
0:07:42 > 0:07:44Sold, 145.
0:07:45 > 0:07:50And the successful bidders paying £145,000 for the flat
0:07:50 > 0:07:53were Howard and Shane on the left, both from Northern Ireland.
0:07:53 > 0:07:56Shane owns a business that manages property companies
0:07:56 > 0:07:59whilst Howard is a new build developer.
0:07:59 > 0:08:01The men bonded over their shared love of property
0:08:01 > 0:08:05and decided to set up a part-time renovation business together.
0:08:05 > 0:08:09They're now focusing their attention on the London property market
0:08:09 > 0:08:12and here we are at their latest project.
0:08:12 > 0:08:13Time to find out more.
0:08:17 > 0:08:20Shane and Howard, congratulations, lovely to meet you.
0:08:20 > 0:08:21Good to meet you too.
0:08:21 > 0:08:25I want to know the story and why you wanted to buy this flat at auction.
0:08:25 > 0:08:27We're looking at a number of different properties
0:08:27 > 0:08:28in the south west of London.
0:08:28 > 0:08:32And they all exceeded the price that we were prepared to pay for them.
0:08:32 > 0:08:35And then me and Shane were sitting there and erm...
0:08:35 > 0:08:38..thought we might try to pick up something, at smaller money.
0:08:38 > 0:08:39We seen this lot here.
0:08:39 > 0:08:40We had comparables on it,
0:08:40 > 0:08:42we thought there's a bit of meat on the bone here.
0:08:42 > 0:08:47- Right.- And then the hammer dropped us at £145,000 for this property.
0:08:47 > 0:08:49- The deal was done. - The deal was done there.
0:08:49 > 0:08:52So there's a bit of meat on the bone here, so you say.
0:08:52 > 0:08:55But by the sounds of things you hadn't looked at the flat.
0:08:55 > 0:08:58No, because it doesn't matter where you buy so long as you buy it
0:08:58 > 0:09:01at the right level so that's how we've come up with this.
0:09:05 > 0:09:07How often have we said it on Hammer?
0:09:07 > 0:09:11Please don't buy blind, no matter how many comparables you have.
0:09:11 > 0:09:13This flat has real issues
0:09:13 > 0:09:17and subsidence and steep stairs aren't necessarily in the catalogue,
0:09:17 > 0:09:21so Shane and Howard had no idea about them.
0:09:21 > 0:09:23So 145,000.
0:09:23 > 0:09:26Now you've seen it, do you still think you've got a great deal
0:09:26 > 0:09:30- and there's still meat on the bone? - Yeah.- Really?- Yeah.
0:09:30 > 0:09:34OK, so the hammer went down, you'd bought the flat. What happened next?
0:09:34 > 0:09:36We knew this was sold, not as a two-bedroom flat
0:09:36 > 0:09:37but as an attic room.
0:09:37 > 0:09:39So then we had to see about planning permission
0:09:39 > 0:09:42to make sure we can get that sorted out.
0:09:42 > 0:09:44Then we had to get in contact with the freeholder.
0:09:44 > 0:09:47Who started saying there was issues with subsidence here, with this flat.
0:09:47 > 0:09:50So then we're like, that's not very good for us that there's problems.
0:09:50 > 0:09:53But he said he would sell the freehold so then we thought,
0:09:53 > 0:09:56if we can buy the freehold, we can fix the subsidence problems.
0:09:56 > 0:09:58So then we thought we can do a lot ourselves.
0:09:58 > 0:10:00With our own builders, basically,
0:10:00 > 0:10:02and then we can be in control of the situation.
0:10:02 > 0:10:05So basically then we went to the downstairs guy,
0:10:05 > 0:10:07the owner who bought it at the last auction.
0:10:07 > 0:10:10And we've since then purchased that off him.
0:10:10 > 0:10:14Wow, so you've now got not just this flat, the flat downstairs,
0:10:14 > 0:10:17you also own the freehold which is great news.
0:10:17 > 0:10:20They bought the downstairs flat for £145,000
0:10:20 > 0:10:23and the freehold for 15 grand,
0:10:23 > 0:10:27meaning they have spent 305,000 on the whole property so far.
0:10:27 > 0:10:28Now the good news is
0:10:28 > 0:10:30that their structural engineer has told them
0:10:30 > 0:10:32that the subsidence is historical
0:10:32 > 0:10:35so hopefully it isn't getting any worse.
0:10:35 > 0:10:36Bad news is,
0:10:36 > 0:10:40not only is there no planning to convert the attic into the bedroom,
0:10:40 > 0:10:43the conversion of this building into two flats
0:10:43 > 0:10:45has never been approved either!
0:10:45 > 0:10:47Thank goodness they bought the freehold.
0:10:47 > 0:10:50You don't think there's going to be any problem keeping this
0:10:50 > 0:10:52as two separate dwellings?
0:10:52 > 0:10:55No, we don't see an issue currently with planning.
0:10:55 > 0:10:58We had the architect in looking round and he's very happy.
0:10:58 > 0:11:05And the submission has gone in now to have it right for the end user.
0:11:05 > 0:11:07But, you know, Plan B wouldn't be so bad either,
0:11:07 > 0:11:09to turn this into a family house.
0:11:09 > 0:11:11That was in the back of our minds
0:11:11 > 0:11:13when we were buying the freehold and the flat below.
0:11:13 > 0:11:18If everything does go wrong, if the planners say no for whatever reason
0:11:18 > 0:11:23then we always can convert it into one house and still come away happy.
0:11:23 > 0:11:27- So quite smug there, then? - We were.- Quite smug.
0:11:27 > 0:11:31So what do you think you're going to do to really turn this place around?
0:11:31 > 0:11:32The roof.
0:11:32 > 0:11:34The roof's coming off on Monday and basically,
0:11:34 > 0:11:36strip everything you see here out
0:11:36 > 0:11:39take off the joists and all the roof rafters have to come off,
0:11:39 > 0:11:44and then, basically, strip. All the walls have been plasterboarded over.
0:11:44 > 0:11:46We'll expose everything, basically, and start again.
0:11:46 > 0:11:48It's fantastic, what you guys are doing.
0:11:48 > 0:11:50You're going to strip it back to the bare bone
0:11:50 > 0:11:52and give it every chance it can possibly have
0:11:52 > 0:11:56and then remedy everything, rectify the problems.
0:11:56 > 0:12:00- And dress it back up again.- Yeah. - We've done it in the past, so...
0:12:00 > 0:12:02And obviously, it's a lot of headaches and stuff
0:12:02 > 0:12:05- but that's part and parcel of the game, I think.- And downstairs?
0:12:05 > 0:12:08There's different structure walls that we're going to take out
0:12:08 > 0:12:10to make it a two-bedroom property
0:12:10 > 0:12:12with a nice kitchen/living out onto the garden
0:12:12 > 0:12:14with the bathroom in the middle.
0:12:14 > 0:12:16Now you've got not one, but two flats,
0:12:16 > 0:12:18what is your budget for the work?
0:12:18 > 0:12:23- 75,000.- 75 grand. Do you believe you boys can do it for that?
0:12:23 > 0:12:27Yeah, well, if we spend 85 it's not going to be a crisis
0:12:27 > 0:12:30but you have to sort of set a target and work towards it.
0:12:30 > 0:12:32Cos it will be all the same issues that you only look upon
0:12:32 > 0:12:36when you start the property. But that's a rough target.
0:12:36 > 0:12:39Good luck, I can't wait to see what it looks like when it's finished.
0:12:39 > 0:12:41I hope it all goes to plan, well done.
0:12:41 > 0:12:43- Thank you very much.- Lovely. Thank you.
0:12:44 > 0:12:47So Shane and Howard have bought not one,
0:12:47 > 0:12:51but two flats as well as the freehold of the whole property.
0:12:51 > 0:12:54A sensible investment, or double the trouble?
0:12:54 > 0:12:58You can join me later in the programme and find out what happens.
0:13:16 > 0:13:17If you want to commute,
0:13:17 > 0:13:21then Gillingham in Kent might be a good departure point,
0:13:21 > 0:13:26with a fast train to London and good access to the M2 and M25.
0:13:26 > 0:13:28If you're arriving, then you might want to study
0:13:28 > 0:13:31at one of the three universities in the busy town.
0:13:31 > 0:13:34All good pointers for your savvy property developer.
0:13:35 > 0:13:37Well, just five minute's walk from the high street,
0:13:37 > 0:13:40and more importantly, just five minute's walk from that train station
0:13:40 > 0:13:43is the property I'm here to see.
0:13:43 > 0:13:48Now, it is on this fairly busy road, but look at the size of the house
0:13:48 > 0:13:52and, baring in mind that we're 45-50 minutes from central London,
0:13:52 > 0:13:55what do you reckon the guide price is?
0:13:55 > 0:13:57120,000 quid?
0:14:01 > 0:14:06Whoa, pretty impressive entrance with some of the original features.
0:14:06 > 0:14:10Clearly not in the best of states but... Ooh!
0:14:11 > 0:14:12OK, first of all,
0:14:12 > 0:14:14into what would have been, I imagine, a living room
0:14:14 > 0:14:17when the house was first built, now it looks to me
0:14:17 > 0:14:21like it's been converted into a kind of bedroom but it's a good size.
0:14:21 > 0:14:25Obviously, the house is in need of a bit of tender loving care
0:14:25 > 0:14:26but you've got a lot of space.
0:14:26 > 0:14:28Through that door into this,
0:14:28 > 0:14:30again, converted into some kind of a bedroom.
0:14:30 > 0:14:32Nice high ceilings though
0:14:32 > 0:14:35and some lovely features with these windows,
0:14:35 > 0:14:38though a window like that would need to be double or even triple glazed
0:14:38 > 0:14:42otherwise this room would be a fairly unpleasant place to be.
0:14:42 > 0:14:43But it is a bit of a labyrinth.
0:14:43 > 0:14:48Through here, to more of the sort of communal facilities of the property.
0:14:48 > 0:14:50Down there there's some loos and then this way,
0:14:50 > 0:14:55through into the kitchen. Now, I say kitchen.
0:14:55 > 0:14:59It is a space which has a few kitchen-esque type things in it.
0:14:59 > 0:15:02Needs some time and effort spent in here though.
0:15:02 > 0:15:05But as a shell, it's a really good start.
0:15:13 > 0:15:17This property must have once been a fabulous Victorian home.
0:15:17 > 0:15:19What a scale to live in.
0:15:19 > 0:15:24But now, as a house divided, it's certainly practical, if a bit tatty.
0:15:24 > 0:15:27Would you rearrange this? I don't know yet.
0:15:27 > 0:15:28So, onwards and upwards.
0:15:28 > 0:15:32What's actually quite nice is that the staircase area isn't too big
0:15:32 > 0:15:35so it isn't detracting from the size of the rooms
0:15:35 > 0:15:37and lots of light coming in too.
0:15:37 > 0:15:39I know there's work to be done
0:15:39 > 0:15:42but at least what you've got to work with, I think...
0:15:44 > 0:15:47..has huge potential. More rooms to explore.
0:15:47 > 0:15:49It goes on and on.
0:15:49 > 0:15:52There are three rooms on this first floor
0:15:52 > 0:15:56and all good Victorian-sized rooms they are, most with a sink.
0:15:56 > 0:16:00Onwards and, I'm afraid, upwards.
0:16:00 > 0:16:03Well, up on to the top floor and the final two rooms.
0:16:03 > 0:16:05They're in the attic but quite nice.
0:16:05 > 0:16:08You've got this really good head height which is sort of unusual.
0:16:08 > 0:16:11This makes another let-able two rooms. I say let-able
0:16:11 > 0:16:13because that's exactly what this house was used for,
0:16:13 > 0:16:16as a house of multiple occupation.
0:16:16 > 0:16:17The good news about that is
0:16:17 > 0:16:20it's obviously been approved for that use
0:16:20 > 0:16:23and clearly, looking around, it's going to need modernisation
0:16:23 > 0:16:25and bringing up to standard
0:16:25 > 0:16:29things like automatic closing doors, fire alarms and things like that
0:16:29 > 0:16:32which are up to current specifications etc. etc.
0:16:32 > 0:16:37But the principle has been set for this to be a licensed HMO
0:16:37 > 0:16:43and, in my experience, they can be a really fantastic money earner.
0:16:43 > 0:16:46Quite rightly, there are strict rules and regulations
0:16:46 > 0:16:50when it comes to houses of multiple occupancy.
0:16:50 > 0:16:54Everyone in the house has to have adequate kitchen and toilet facilities,
0:16:54 > 0:16:56and also all the occupants have to be safe,
0:16:56 > 0:16:58so whilst a money earner,
0:16:58 > 0:17:01there are serious responsibilities that go with it.
0:17:06 > 0:17:11Whoa, whoa, whoa, what is that?
0:17:11 > 0:17:15There's an electrical socket and I better not touch it any more.
0:17:15 > 0:17:18As you can see, it's in a right old state, completely burnt out.
0:17:18 > 0:17:20Whenever you're looking round houses,
0:17:20 > 0:17:22you've always got to be on the lookout for clues
0:17:22 > 0:17:25as to the state of things you can see and of things you can't.
0:17:25 > 0:17:27That's obviously got burnt out.
0:17:27 > 0:17:30My guess would be somebody's put something like a heater here
0:17:30 > 0:17:34or something that was just overloading this socket.
0:17:34 > 0:17:36But you don't know what it's done to the wiring
0:17:36 > 0:17:38hidden behind the wall there
0:17:38 > 0:17:41and my guess is the whole thing is going to need rewiring.
0:17:41 > 0:17:42A little clue.
0:17:42 > 0:17:44(Don't ignore them.)
0:17:45 > 0:17:48So, add a rewire to the list of tasks needed
0:17:48 > 0:17:52to upgrade this HMO to a decent and safe standard.
0:17:52 > 0:17:53There is a lot to do,
0:17:53 > 0:17:58but with the possibility of the rental potential of individually let rooms,
0:17:58 > 0:18:00the investment could reap good returns.
0:18:00 > 0:18:03So, we asked a property expert to give us the
0:18:03 > 0:18:05benefit of his local knowledge.
0:18:06 > 0:18:08It's clear this property has been used in the past
0:18:08 > 0:18:12for some considerable time for students, for multiple occupancy,
0:18:12 > 0:18:14so I would certainly suggest
0:18:14 > 0:18:16that's where this property will remain.
0:18:16 > 0:18:18If it ain't broke, don't fix it, eh?
0:18:18 > 0:18:20So, why does it work so well?
0:18:20 > 0:18:22Ideal for students
0:18:22 > 0:18:26because the town centre is approximately 500m up the road
0:18:26 > 0:18:29and really useful for Medway University.
0:18:29 > 0:18:33So, there is certainly a good niche market you could cater for.
0:18:33 > 0:18:36What sort of income could you get for it?
0:18:36 > 0:18:39You're looking at £80 per week per room.
0:18:39 > 0:18:43Single rooms locally are going for £70 per week per room,
0:18:43 > 0:18:46so a terrific investment whichever way you look at it.
0:18:46 > 0:18:50Well, all the rooms are doubles so with seven rooms at £80 per week,
0:18:50 > 0:18:55you're looking at potentially £560 per week for all the rooms.
0:18:55 > 0:18:57And what about the property itself?
0:18:57 > 0:19:00Modernised, will it hold its value for resale?
0:19:00 > 0:19:03Provided all the current building regulations
0:19:03 > 0:19:07and fire regulations are adhered to for a student let,
0:19:07 > 0:19:13then we see no problem at all in the current market of achieving £200,000.
0:19:13 > 0:19:16Well, there's lots of really good things going on in the area
0:19:16 > 0:19:20and you are certainly getting a lot of house for the money,
0:19:20 > 0:19:24which could turn out to be a really profitable venture for somebody.
0:19:24 > 0:19:26Let's find out who bought it when it went under the hammer.
0:19:29 > 0:19:33Now we move to Lot 43. Substantial end-terrace property.
0:19:33 > 0:19:37Accommodation arranged over the ground, first and second floor.
0:19:37 > 0:19:41We've got a guide of 120-130. Start me where you will.
0:19:41 > 0:19:47£120,000 anywhere? Bottom end of the guide. 120,000, do I see?
0:19:47 > 0:19:52110 then. Must be worth 110. 110,000 I have, thank you.
0:19:52 > 0:19:59112 and 15, and 15, and 17, and 20. And 20 and 22. Anyone, 25?
0:19:59 > 0:20:04125, thank you. £125,000, gentleman in the blue.
0:20:04 > 0:20:05127 do I see?
0:20:07 > 0:20:10At £125,000 then. It's being sold in the room.
0:20:10 > 0:20:14At 125,000 then for the first time.
0:20:14 > 0:20:18At 125,000 for the second time.
0:20:18 > 0:20:24125,000 for the third and final time, 125,000, are you all done?
0:20:25 > 0:20:28Sold at 125, congratulations.
0:20:28 > 0:20:29The successful bidder was Abed,
0:20:29 > 0:20:32who bought the property with his wife, Lubna,
0:20:32 > 0:20:35as an investment property for their children.
0:20:35 > 0:20:39Lubna is a GP while Abed is a stay-at-home dad
0:20:39 > 0:20:42who sees this property as a great project
0:20:42 > 0:20:44that he can fit around his main job
0:20:44 > 0:20:47of looking after their son when Lubna is at work.
0:20:47 > 0:20:50- Abed, Lubna, great to meet you both. - Hi.- Thank you.- Congratulations.
0:20:50 > 0:20:52Thank you so much.
0:20:52 > 0:20:53So why this particular property, then?
0:20:53 > 0:20:57This particular one is very close to the high street
0:20:57 > 0:21:00and very close to the train station.
0:21:00 > 0:21:05And there's potential here, like students. That's why I bought this.
0:21:05 > 0:21:08Were you happy with what you paid for it, though?
0:21:08 > 0:21:11Yeah, very, very happy because this sort of property...
0:21:11 > 0:21:16..could be around, like, maybe 200,000.
0:21:16 > 0:21:20I was thinking maybe this property would go over 150.
0:21:20 > 0:21:25But I was very shocked when the hammer go down on 125.
0:21:25 > 0:21:28I'm really surprised and very happy.
0:21:33 > 0:21:37It's always reassuring to hear that people have done their research,
0:21:37 > 0:21:41know the area, the property prices and what the potential market is.
0:21:41 > 0:21:45- So, Lubna, have you done anything like this before?- No, not really.
0:21:45 > 0:21:47- Really?- First time.- Wow!- Yes.
0:21:47 > 0:21:50Abed had this idea that, you know,
0:21:50 > 0:21:56I want to invest some money in a property
0:21:56 > 0:21:58and I thought that was a good idea.
0:21:58 > 0:22:01What did you think about the house when you first saw it?
0:22:01 > 0:22:06I thought it was very good. It's very big, seven bedrooms.
0:22:06 > 0:22:10It's got potential to do lots of things with it.
0:22:10 > 0:22:13And I think Abed's been discussing with friends
0:22:13 > 0:22:18and professional people as well about what we could do with it.
0:22:18 > 0:22:21So tell me about the plans then, what are you going to do to it?
0:22:21 > 0:22:26I think I can achieve five ensuite one bedsit studios.
0:22:26 > 0:22:30If we have the old facilities in their own place, I think
0:22:30 > 0:22:33this way, we'll be dimensionally happy.
0:22:33 > 0:22:35That sounds like a really good plan.
0:22:35 > 0:22:38A happy tenant equals a happy landlord.
0:22:38 > 0:22:39If you provide good living accommodation,
0:22:39 > 0:22:42your tenants will likely stay longer,
0:22:42 > 0:22:45meaning no constant turnover and empty units.
0:22:45 > 0:22:47And they will take pride in it too
0:22:47 > 0:22:50and that all means a better return for the landlord.
0:22:50 > 0:22:53One bedsit studio flat
0:22:53 > 0:22:56around this area, I think...
0:22:56 > 0:22:57..500.
0:22:57 > 0:22:58So if you've got five of those
0:22:58 > 0:23:00that's two and a half grand per month.
0:23:00 > 0:23:02- Something like that, yes.- That's pretty good.
0:23:02 > 0:23:04That's what I'm thinking.
0:23:04 > 0:23:07So it all seems to be making sense on paper.
0:23:07 > 0:23:08Self-contained bedsits
0:23:08 > 0:23:12which still come under the category of a house of multiple occupancy
0:23:12 > 0:23:17do provide more personal autonomy then just individually let rooms,
0:23:17 > 0:23:19however, it's worth baring in mind
0:23:19 > 0:23:22that individual kitchen facilities in each flat,
0:23:22 > 0:23:25may reduce those arguments that come with communal living
0:23:25 > 0:23:28like other people's dirty dishes in the sink,
0:23:28 > 0:23:31but it might increase your refurbishment costs.
0:23:31 > 0:23:34Abed's plan of action involves reskimming all the rooms,
0:23:34 > 0:23:38replacing the carpeting, putting in new windows where needed,
0:23:38 > 0:23:41as well as all the upgrades necessary
0:23:41 > 0:23:44and each flat will have a little kitchen and shower room.
0:23:44 > 0:23:49He hopes to do this in four to five months, with a budget of £20-25,000.
0:23:49 > 0:23:52So, will GP Lubna find any time to help?
0:23:52 > 0:23:56- It's to my kind of, cup of tea. - Isn't it?- No.
0:23:56 > 0:23:58- Which bit of it isn't your cup of tea?- The whole bit.
0:23:58 > 0:24:00THEY LAUGH
0:24:00 > 0:24:03- I'll just see the end piece. - The end product, OK.
0:24:03 > 0:24:07- So if this is a success, will you do more?- Definitely.
0:24:07 > 0:24:12Once I've finished this, yes, I'll go for another one.
0:24:12 > 0:24:14- Well, congratulations.- Thank you.
0:24:14 > 0:24:17- Really great, look forward to seeing how you get on.- Thank you.
0:24:17 > 0:24:20- Good to meet you.- Thank you.
0:24:20 > 0:24:23Well, quite a project for Abed to take on.
0:24:23 > 0:24:27Lots of work to be done and is his plan for converting this
0:24:27 > 0:24:31into five self-contained units the right way to go? Time will tell.
0:24:31 > 0:24:34Hopefully, though, with Lubna's help,
0:24:34 > 0:24:37this place will get a clean bill of health.
0:24:37 > 0:24:40You can find out how it all turns out later in the show.
0:24:42 > 0:24:46Coming up - there aren't too many negatives to be found in this property.
0:24:46 > 0:24:48There's a lot going on here which I think is very positive.
0:24:50 > 0:24:53And there are positives for Abed too, in Gillingham.
0:24:53 > 0:24:57We're quite happy because the builder who done the job for us,
0:24:57 > 0:24:59they done it quite well.
0:25:02 > 0:25:04We return now to Leytonstone,
0:25:04 > 0:25:07which is in easy commuter reach of central London.
0:25:08 > 0:25:11The property we looked at earlier was a three-roomed flat
0:25:11 > 0:25:13in this end-terrace house.
0:25:13 > 0:25:16So, let's have a little wander around.
0:25:16 > 0:25:18Quite a small room through there.
0:25:18 > 0:25:21You've got a very squeezed bathroom
0:25:21 > 0:25:23with the ceiling coming at you like that.
0:25:23 > 0:25:26And this is the kitchen so quite a good space.
0:25:26 > 0:25:27So where's that third room?
0:25:34 > 0:25:36Judging by this steep staircase,
0:25:36 > 0:25:40I don't think this room complies with building regs.
0:25:40 > 0:25:44So that means that this can't be described as a second bedroom.
0:25:44 > 0:25:47This property certainly has its downs and ups.
0:25:47 > 0:25:49Take a look up there.
0:25:49 > 0:25:51Can you spot what's wrong?
0:25:51 > 0:25:54It's crooked and that's at the top of the window frame.
0:25:54 > 0:25:58In fact, this whole kitchen floor runs this way.
0:25:59 > 0:26:01So a sure sign of subsidence,
0:26:01 > 0:26:06which gave new owners Howard and Shane some unexpected issues.
0:26:06 > 0:26:10They hadn't viewed the property before buying it for 145,000.
0:26:10 > 0:26:14But then this down led to a very promising up.
0:26:14 > 0:26:16We had to get in contact with the freeholder
0:26:16 > 0:26:19who started saying there was issues with subsidence here, with this flat.
0:26:19 > 0:26:21But he said he would sell the freehold.
0:26:21 > 0:26:23We thought, if we can buy the freehold,
0:26:23 > 0:26:24we can fix the subsidence problems,
0:26:24 > 0:26:27So basically, then we went to the downstairs guy.
0:26:27 > 0:26:29The owner who bought it at the last auction
0:26:29 > 0:26:32and we've since then purchased that off him.
0:26:46 > 0:26:48A fantastic result in fact.
0:26:48 > 0:26:52Now, with the two flats and the freehold under their belt,
0:26:52 > 0:26:54they were good to go with a budget of 75 grand
0:26:54 > 0:26:57and a timescale of three months.
0:26:59 > 0:27:02We returned six months later to see the results.
0:27:05 > 0:27:08Wonky camera angle not withstanding,
0:27:08 > 0:27:13the structure looks fairly even so what about that subsidence problem?
0:27:13 > 0:27:14Structural engineer was very happy
0:27:14 > 0:27:17with the state of the current building.
0:27:17 > 0:27:21The movement that was shown was from quite a long time ago
0:27:21 > 0:27:25and there's no telltale signs of any movement recently.
0:27:25 > 0:27:27Recently within the last 30-40 years.
0:27:35 > 0:27:37That is good news.
0:27:37 > 0:27:39The boys' budget would certainly have been on shaky ground
0:27:39 > 0:27:42if they had major underpinning to do.
0:27:42 > 0:27:45As it was, they did work on the gable wall,
0:27:45 > 0:27:47taking it down and replacing the joists.
0:27:47 > 0:27:49Now, there was also that small issue
0:27:49 > 0:27:52of whether they would keep the building as two flats
0:27:52 > 0:27:54as approval had never actually been granted.
0:27:54 > 0:27:58So, will there be two flats here, or one family house?
0:28:04 > 0:28:07Two flats, fantastic.
0:28:10 > 0:28:13Well, that's the upstairs flat, what about downstairs?
0:28:18 > 0:28:21The downstairs flat was reconfigured.
0:28:21 > 0:28:24We basically moved the kitchen from the middle of the flat
0:28:24 > 0:28:27to the back onto the double door of the garden
0:28:27 > 0:28:31and then where the small bedroom is, there was a bathroom originally
0:28:31 > 0:28:35and therefore we made it a purpose-built two-bedroom flat.
0:28:35 > 0:28:38And remember that dodgy attic conversion?
0:28:41 > 0:28:45Here we are in the loft bedroom, as such. The attic conversion.
0:28:45 > 0:28:47This was done to create the full dormer.
0:28:47 > 0:28:49Originally there was a conversion here
0:28:49 > 0:28:50and there was obviously no bathroom,
0:28:50 > 0:28:53which we've managed to create now, a small ensuite,
0:28:53 > 0:28:56which makes this feel like a proper master bedroom.
0:28:56 > 0:28:57It's turned out very well.
0:28:57 > 0:29:00In the end, Howard and Shane were able to get planning permission
0:29:00 > 0:29:05for the conversion of the house into two flats and the attic conversion.
0:29:05 > 0:29:07That's a relief.
0:29:07 > 0:29:08So with all that,
0:29:08 > 0:29:11how did the original budget and timescale hold out?
0:29:11 > 0:29:16So the original budget was 75,000 but it's now 95,000 but obviously,
0:29:16 > 0:29:18we didn't envisage the amount of work that had to be done.
0:29:18 > 0:29:20At the start,
0:29:20 > 0:29:23we initially had a target of three months to do the full works.
0:29:23 > 0:29:25When we started the project,
0:29:25 > 0:29:29there was a bit more work than we first anticipated
0:29:29 > 0:29:34with the attic conversion so all in all, we completed within four months
0:29:34 > 0:29:36and we're happy enough with that time frame
0:29:36 > 0:29:39and we're very happy with the end result.
0:29:39 > 0:29:44So, two flats, plus the freehold for 305,000
0:29:44 > 0:29:50and £95,000 in renovation costs, makes a grand total of £400,000.
0:29:50 > 0:29:53So, will Howard and Shane stay happy?
0:29:55 > 0:29:59We asked two estate agents to give us their thoughts.
0:29:59 > 0:30:01This is my second time at the property
0:30:01 > 0:30:04and I think the changes are very good.
0:30:04 > 0:30:06In fact, the house looks excellent
0:30:06 > 0:30:11and the works being done are very, very high-standard.
0:30:11 > 0:30:14The ground-floor flat has been set up very nicely.
0:30:14 > 0:30:17As soon as you enter the flat, you've got a bedroom
0:30:17 > 0:30:18as soon as you come in
0:30:18 > 0:30:21and then you've got a really well set out bathroom.
0:30:21 > 0:30:22That's done up to a very high standard
0:30:22 > 0:30:25like the rest of the flat to be fair.
0:30:25 > 0:30:29You've got a nice open-plan kitchen with a nice skylight
0:30:29 > 0:30:33looking into the lounge with access to the garden from the lounge too.
0:30:33 > 0:30:36The layout of the first floor flat is very well thought of also.
0:30:36 > 0:30:40It's two bedroom, two bathroom, once again we have two double bedrooms,
0:30:40 > 0:30:44one of the bedrooms of which has an en-suite bathroom.
0:30:44 > 0:30:46You've got an open-plan lounge and kitchen again.
0:30:46 > 0:30:49This property would appeal to investors
0:30:49 > 0:30:53who would like to buy the properties and let them out.
0:30:53 > 0:30:58It's a very well-known area for renters.
0:30:58 > 0:31:00The agents think that the ground floor flat would rent
0:31:00 > 0:31:05for anything between 1,150 and 1,400 per calendar month.
0:31:05 > 0:31:09The flat the boys bought at auction would rent for around the same.
0:31:09 > 0:31:11The higher figure of £1,400 per calendar month
0:31:11 > 0:31:15would give them a yield of over 8%.
0:31:15 > 0:31:17The rental figures are very good for the area.
0:31:17 > 0:31:19As I said, it's very close to the city, so
0:31:19 > 0:31:22it would rent pretty easily so we're happy with those figures
0:31:22 > 0:31:25but we're not going down the rental route, we're going to sell so
0:31:25 > 0:31:27it's not going to concern us.
0:31:27 > 0:31:30Fair enough. What about the resale market then?
0:31:30 > 0:31:34If the owner would like to put the property on the market for sale,
0:31:34 > 0:31:40he can achieve in between £310,000 to £320,000
0:31:40 > 0:31:42for the ground floor flat.
0:31:42 > 0:31:46The ground floor flat should be able to achieve £330,000.
0:31:46 > 0:31:48And for the first floor flat,
0:31:48 > 0:31:54he can achieve in between £305,000 and £315,000.
0:31:54 > 0:31:57On the first floor flat, we should be able to achieve £320,000.
0:31:59 > 0:32:02So, having spent the total of 400,000,
0:32:02 > 0:32:08the potential profit before tax and expenses is between 215-250,000.
0:32:08 > 0:32:11Not bad for four months' work, boys.
0:32:11 > 0:32:15The focus was originally to buy the properties and refurbish them,
0:32:15 > 0:32:17put them straight back on the market, and thankfully,
0:32:17 > 0:32:20we've got them on the market and within a week we'd sold them
0:32:20 > 0:32:21so that's kind of made up
0:32:21 > 0:32:23for the little bit of time we lost in doing the actual work.
0:32:23 > 0:32:26So we've sold them at 320 per flat
0:32:26 > 0:32:31so it's a total of 640 we've sold for and our cost is 400,000 so...
0:32:31 > 0:32:33Great result and, yeah, onwards and upwards.
0:32:37 > 0:32:40I'm in Lisburn, County Antrim.
0:32:40 > 0:32:43Lisburn got its city status in 2002
0:32:43 > 0:32:47and is the birthplace of Ireland's linen industry.
0:32:47 > 0:32:49The city was established near the River Lagan,
0:32:49 > 0:32:54which forms a boundary between Country Antrim and County Down.
0:32:54 > 0:32:56I'm on a really popular housing estate
0:32:56 > 0:32:58about a mile from the centre of Lisburn.
0:32:58 > 0:33:01An easy commute to the centre of Belfast
0:33:01 > 0:33:03if that's what you wanted to do.
0:33:03 > 0:33:07I'm here to see a 1960s mid-terrace.
0:33:07 > 0:33:11The guide price was £40,000.
0:33:11 > 0:33:13Now, before I even get to the property,
0:33:13 > 0:33:15here's an interesting thing to note.
0:33:15 > 0:33:17A lot of these houses
0:33:17 > 0:33:19were originally owned by the housing executive,
0:33:19 > 0:33:22like the council, housing association, etc, etc.
0:33:22 > 0:33:25And as you can see, all bar this one,
0:33:25 > 0:33:28have had some remedial work done on the front.
0:33:28 > 0:33:31Basically, you can see the front of the property has got this plastic cladding.
0:33:31 > 0:33:34That's over a wooden frame and over time they rot.
0:33:34 > 0:33:38These were presumably in housing executive hands
0:33:38 > 0:33:41when they were all repaired and done up like this.
0:33:41 > 0:33:44This one, however, obviously wasn't.
0:33:44 > 0:33:47So, that's the first job on the list then.
0:33:47 > 0:33:51True, it's only a facade and shouldn't affect the structure
0:33:51 > 0:33:54but still, it does want putting right.
0:33:54 > 0:33:56But there are more clues out here
0:33:56 > 0:33:58that reveal how the house has been cared for
0:33:58 > 0:34:00or not.
0:34:00 > 0:34:02So, what other jobs are on the list?
0:34:04 > 0:34:07Well, little entrance area there, stairs up to your bedrooms,
0:34:07 > 0:34:09then though into your main living area.
0:34:09 > 0:34:12The first feeling you get is a little bit...
0:34:12 > 0:34:13The ceilings, I mean,
0:34:13 > 0:34:15they are standard height for a modern-ish house
0:34:15 > 0:34:19but it does feel a little bit low so I think
0:34:19 > 0:34:21one thing you need to think about, in that case,
0:34:21 > 0:34:23is how you paint the room.
0:34:23 > 0:34:25Really nothing dark on the ceilings.
0:34:25 > 0:34:28Just painting that bright white would make a big difference.
0:34:28 > 0:34:30But it's not a bad-sized space, big window,
0:34:30 > 0:34:34obviously you'd want to replace that when you did the front facade.
0:34:34 > 0:34:36Nice feature fire, that could be improved
0:34:36 > 0:34:38but it's good that it's there.
0:34:38 > 0:34:39And through to the kitchen.
0:34:41 > 0:34:46OK, well, straightaway in here I can see a simple improvement.
0:34:46 > 0:34:48There's a wall, fairly solid wall,
0:34:48 > 0:34:52in between the main kitchen area here and like a little utility area.
0:34:52 > 0:34:55I can see the reason why they designed it like that in the first place,
0:34:55 > 0:34:57to keep that stuff away but, you know,
0:34:57 > 0:35:00modern living is all about open plan so take out this wall,
0:35:00 > 0:35:02really increase the size of the kitchen
0:35:02 > 0:35:04and then you haven't got a lot downstairs,
0:35:04 > 0:35:07just that front area there and then this main area at the back.
0:35:07 > 0:35:10But suddenly you've turned it into a really useable family home,
0:35:10 > 0:35:14and yes, it needs a bit of work, yes, it needs new units.
0:35:14 > 0:35:16But with that guide price there's a lot going on here
0:35:16 > 0:35:18which I think is very positive.
0:35:18 > 0:35:22Let's not forget the guide price for this is £40,000.
0:35:22 > 0:35:25So, providing upstairs is in a reasonable state,
0:35:25 > 0:35:29renovation costs should be manageable for a tidy profit.
0:35:29 > 0:35:34So, what is in store on the first floor?
0:35:34 > 0:35:38Well, top of the stairs is your bathroom.
0:35:38 > 0:35:42Nice pale pink suite, clearly could do with a bit of updating.
0:35:42 > 0:35:47Useful storage space on the landing here then, and then three bedrooms.
0:35:47 > 0:35:50I mean, they're not massive but neither's the house
0:35:50 > 0:35:53so actually, in terms of the size outside
0:35:53 > 0:35:58and what you get when you come inside, it is surprisingly big.
0:35:58 > 0:36:02Brilliant looking radiator in the middle of the wall there, wow.
0:36:02 > 0:36:04That is a feature and a half.
0:36:04 > 0:36:05But, like the rest of the house,
0:36:05 > 0:36:08it needs updating, it needs painting, it needs decorating.
0:36:08 > 0:36:11Rounding it up, really great house for the money.
0:36:11 > 0:36:15The house is small, but so is that guide price of 40,000.
0:36:15 > 0:36:17And don't think you need to spend a huge sum
0:36:17 > 0:36:20making it presentable for the rental market.
0:36:20 > 0:36:23Time to find out from a local estate agent
0:36:23 > 0:36:28if this house is really all good news or if there are any downsides.
0:36:28 > 0:36:30In the present market, it's a very good time to buy
0:36:30 > 0:36:33and as long as you buy at the right price
0:36:33 > 0:36:36and the work is carried out satisfactorily,
0:36:36 > 0:36:39then I really don't see too many downsides.
0:36:39 > 0:36:42And certainly, I feel there would be a high demand for the property.
0:36:42 > 0:36:43Good news.
0:36:43 > 0:36:48So with high demand, how will that reflect on the open market value?
0:36:48 > 0:36:50Having been renovated satisfactorily,
0:36:50 > 0:36:53in my opinion, you'd be talking somewhere in the region
0:36:53 > 0:36:58of 55,000, possibly, on a good day, up £60,000.
0:36:58 > 0:36:59Rental valuation,
0:36:59 > 0:37:04somewhere in the region of £400-£450 per calendar month.
0:37:04 > 0:37:06If it was my property,
0:37:06 > 0:37:10I would spend the money to renovate the property
0:37:10 > 0:37:14and at that stage I would look at renting the property out
0:37:14 > 0:37:19and I feel that certainly it is a very, very good long-term investment.
0:37:19 > 0:37:21Well, there's a bit of modernisation required
0:37:21 > 0:37:23and certainly a few structural changes
0:37:23 > 0:37:25that would increase the usability of the property.
0:37:25 > 0:37:28But it's a lot of house for that guide price
0:37:28 > 0:37:31and as a rental potential
0:37:31 > 0:37:35or just a good family home, I don't think you can go far wrong.
0:37:35 > 0:37:38Let's see who agreed when it went under the hammer.
0:37:38 > 0:37:39Lot number 64.
0:37:40 > 0:37:44Guide price 40,000. We've a pre-auction bid here 35.
0:37:44 > 0:37:45Any advance on 35.
0:37:45 > 0:37:50We have a pre-auction bid of 35,000, and advance on the 35,000 we have?
0:37:50 > 0:37:5436,000. Seated at 36. Any advance on 36,000?
0:37:54 > 0:37:57Any advance on the 36,000? We've got 36 over here.
0:37:57 > 0:38:0237, 37 we have. Seated at 37,000. Any advance on 37,000?
0:38:02 > 0:38:05We have 37 here. All sure?
0:38:05 > 0:38:08Last call at the 37. 37 going once.
0:38:08 > 0:38:1137 going twice, we'll try it for you, the 37, sir.
0:38:12 > 0:38:15The hammer didn't actually go down on the last bid,
0:38:15 > 0:38:17as it didn't reach the reserve price.
0:38:17 > 0:38:19That's the lowest bid deemed acceptable
0:38:19 > 0:38:21by the person selling the property.
0:38:21 > 0:38:25The bid was made by Noel, who runs a building company
0:38:25 > 0:38:30and he thought he had the three-bed terrace in the bag for 37,000.
0:38:30 > 0:38:31So what happened?
0:38:31 > 0:38:35Well, I went out to try to pay for the property and I was told,
0:38:35 > 0:38:37"No, you do not have it."
0:38:37 > 0:38:39So the following day I got a phone call to say
0:38:39 > 0:38:43could I up the price a bit, so I says yes.
0:38:43 > 0:38:46So I upped it and the following day they rang me back and said,
0:38:46 > 0:38:48"The property's yours."
0:38:48 > 0:38:51That upped offer allowed Noel to acquire the property
0:38:51 > 0:38:54for the guide price of 40,000.
0:38:54 > 0:38:56Tell me why you wanted to buy the house.
0:38:56 > 0:38:58Well, I liked the price and I liked the area,
0:38:58 > 0:39:01and this is quite a good area and has high demand for further rentability.
0:39:01 > 0:39:06Have you looked at what similar properties are worth, fully done up?
0:39:06 > 0:39:10Yes. They're worth about 55-60,000 in this area.
0:39:10 > 0:39:12A lot of people don't look at that figure
0:39:12 > 0:39:14- and it's really important, isn't it?- It is indeed.
0:39:14 > 0:39:18I did a little bit of research and talked to the neighbours either side of this property
0:39:18 > 0:39:20before I went to auction.
0:39:20 > 0:39:24That's a great research tip. Talk to the neighbours if you can.
0:39:24 > 0:39:27Nobody is going to have more local knowledge than them.
0:39:27 > 0:39:29But there are other tools of course.
0:39:29 > 0:39:33The internet, local estate agents and newspapers. Be thorough.
0:39:33 > 0:39:35You won't regret it.
0:39:35 > 0:39:37Tell me a bit more about you, what do you do?
0:39:37 > 0:39:41- Well, originally I started off as a farm manager.- A farm manager?
0:39:41 > 0:39:45Indeed and we would have done a lot of building on the farms
0:39:45 > 0:39:49in those days and then I branched into building myself.
0:39:49 > 0:39:53And just before that, I was a foreman for a big building firm.
0:39:53 > 0:39:56- So lots of building experience. - That's right, a lot of experience.
0:39:56 > 0:39:58And now you run a building company.
0:39:58 > 0:40:00I run a building company, my own building company, yes.
0:40:00 > 0:40:03And how often do you do your own projects like this?
0:40:03 > 0:40:05Well, this is the first one I've bought at auction to do,
0:40:05 > 0:40:07but I would do a lot for other people.
0:40:07 > 0:40:10So what tempted you to do it for yourself for the first time?
0:40:10 > 0:40:13House prices are at an all-time low and they'll start to increase
0:40:13 > 0:40:17from now on, I think, in Northern Ireland so I thought I better get in.
0:40:17 > 0:40:19It's been...
0:40:19 > 0:40:21..a difficult few years, hasn't it?
0:40:21 > 0:40:24It has been very, very difficult for the industry,
0:40:24 > 0:40:26construction industry, in Northern Ireland.
0:40:26 > 0:40:30- But there is a bit of a turn in the last 12 months.- How bad was it?
0:40:30 > 0:40:33About six years ago, this property would have been worth about 85,000.
0:40:33 > 0:40:36- So literally 50% of what it's worth.- Exactly.
0:40:36 > 0:40:40This Northern Ireland experience is one sobering reminder
0:40:40 > 0:40:44that property prices don't always go up, they can come crashing down.
0:40:44 > 0:40:47So if you're thinking of going into development,
0:40:47 > 0:40:52don't just focus on the potential profits. Look at risks involved too.
0:40:52 > 0:40:55Sometimes the things that go wrong are not in your control,
0:40:55 > 0:40:59but you might have to bear the consequences like negative equity.
0:40:59 > 0:41:01On a more optimistic note, I think Noel is right
0:41:01 > 0:41:03and confidence is returning.
0:41:03 > 0:41:06So, tell me what you plan to do to it.
0:41:06 > 0:41:09The first thing I want to do is the front facade,
0:41:09 > 0:41:12put a brick facade on it, and a rear facade.
0:41:12 > 0:41:18After that, a whole new kitchen and bathroom and redecoration inside.
0:41:18 > 0:41:22- Right.- New flooring. - So basic major refurb.- Exactly.
0:41:22 > 0:41:24No major structural changes then?
0:41:24 > 0:41:28No, everything structurally is perfect.
0:41:28 > 0:41:32So nothing, just one wall in the kitchen to be taken out
0:41:32 > 0:41:35- to make it larger. Other than that, that's it.- Right.
0:41:35 > 0:41:39- So what's the budget for the work? - Well, I've got £15,000 of a budget.
0:41:39 > 0:41:40That's my own time and effort
0:41:40 > 0:41:42but I would hope to be well within that budget.
0:41:42 > 0:41:44OK and what's the time-scale?
0:41:44 > 0:41:45Two to three months, Martin.
0:41:45 > 0:41:49I've other projects on as well so as soon as I can get it done.
0:41:49 > 0:41:52And then is the idea, presumably, to rent it out?
0:41:52 > 0:41:54Yes, I might test the market to see
0:41:54 > 0:41:58if I can get 5-10,000 I'll sell it on, otherwise I'll rent it.
0:41:58 > 0:42:03- Roughly what do you think you might get for rental?- Between 450 and 475.
0:42:03 > 0:42:05That sounds to me like quite a good investment
0:42:05 > 0:42:08because that's delivering double-digit returns.
0:42:08 > 0:42:10- Absolutely, absolutely, yes. - Why would you sell it?
0:42:10 > 0:42:13- THEY LAUGH - What are you going to do with the money when you've sold it?
0:42:13 > 0:42:16- Buy another one. - Buy another one.- Yes, indeed.
0:42:16 > 0:42:18I reckon that Noel should hang on to this
0:42:18 > 0:42:20once he's put all his effort into it.
0:42:20 > 0:42:23It will bring him a good return on his money in the short term
0:42:23 > 0:42:26and in the long term, will hopefully increase in value.
0:42:26 > 0:42:30He could, of course, also refinance it to buy another property
0:42:30 > 0:42:33but remember what I said earlier, always be careful.
0:42:33 > 0:42:35Don't risk losing your shirt.
0:42:35 > 0:42:37That is the plan, then, to move on to other projects?
0:42:37 > 0:42:40I would hope so, yes. If this is successful for me,
0:42:40 > 0:42:41I certainly will move on to other ones.
0:42:41 > 0:42:45Obviously, the auction in your case was a little bit rocky.
0:42:45 > 0:42:47It didn't quite go as it was supposed to go.
0:42:47 > 0:42:49- Exactly.- Did it put you off?
0:42:49 > 0:42:51Not at all, I did enjoy the experience.
0:42:51 > 0:42:53- I've been at several auctions before.- Great.
0:42:53 > 0:42:57- Well, listen, congratulations.- Thank you very much.- Good luck with it.
0:42:57 > 0:42:58Indeed. Thank you, Martin.
0:43:01 > 0:43:05Well, Noel getting himself a good property here at a good price
0:43:05 > 0:43:08but he has done that thing which is really important
0:43:08 > 0:43:10which is not get too carried away,
0:43:10 > 0:43:13to check the prices of similar properties in the area
0:43:13 > 0:43:17and then make sure his budget is not going to go over that top end price.
0:43:18 > 0:43:20Great. In terms of sorting it out,
0:43:20 > 0:43:22for a builder, it shouldn't be a problem.
0:43:22 > 0:43:25How will he get on? You can find out later in the show.
0:43:28 > 0:43:31Well, the plans and dreams sounded good at the time.
0:43:31 > 0:43:34Months have gone by but have their dreams become a reality?
0:43:34 > 0:43:36Let's go back and find out.
0:43:39 > 0:43:43Back now to Gillingham in Kent where this large seven-bed property
0:43:43 > 0:43:46was sadly lacking in a few essentials.
0:43:46 > 0:43:49Through into the kitchen. Now, I say kitchen.
0:43:49 > 0:43:53It is a space which has a few kitchen-esque type things in it.
0:44:00 > 0:44:02In this labyrinth of a house,
0:44:02 > 0:44:04it's certainly not just the geography
0:44:04 > 0:44:07that's requiring a lot of attention.
0:44:08 > 0:44:12Whoa, whoa, whoa, what is that?
0:44:12 > 0:44:15Whenever you're looking round houses, you've always got to be on the lookout for clues
0:44:15 > 0:44:19as to the state of things you can see and also things you can't.
0:44:19 > 0:44:21So, quite a lot to get your head around here.
0:44:21 > 0:44:25But with the property having most recently been used as an HMO,
0:44:25 > 0:44:27a house of multiple occupancy,
0:44:27 > 0:44:31it certainly has the making of being a profitable investment.
0:44:31 > 0:44:37Husband and wife, Abed and Lubna, made the investment of £125,000
0:44:37 > 0:44:38to provide some financial help
0:44:38 > 0:44:41towards their children's future education.
0:44:41 > 0:44:43Are they happy with their investment?
0:44:44 > 0:44:49I was very shocked when hammer go down on 125.
0:44:49 > 0:44:51I'm really surprised and very happy.
0:44:51 > 0:44:55Abed planned to make the accommodation self-contained flats
0:44:55 > 0:44:57with a small kitchen and shower room,
0:44:57 > 0:45:00using a budget of £20-25,000
0:45:00 > 0:45:03and a timescale of four to five months in order to do the work.
0:45:03 > 0:45:07So, is there going to be teamwork involved in this refurbishment?
0:45:07 > 0:45:10- It's not my, kind of, cup of tea. - Isn't it?- No.
0:45:10 > 0:45:12- Which bit of it isn't your cup of tea?- The whole bit.
0:45:12 > 0:45:15THEY LAUGH
0:45:15 > 0:45:16So smiles all round.
0:45:16 > 0:45:19Will it still be smiles, or just fixed grins,
0:45:19 > 0:45:22now that we have returned, four months later?
0:45:24 > 0:45:28It's better than what we had imagined.
0:45:28 > 0:45:31It looks much better than that.
0:45:31 > 0:45:34So we're really, really happy with the outcome.
0:45:51 > 0:45:54And the transformation from tired and dilapidated
0:45:54 > 0:45:59to vibrant and sleek is indeed impressive.
0:45:59 > 0:46:01And the addition of not only ensuite facilities
0:46:01 > 0:46:05and a kitchen in each room, but a communal laundry area,
0:46:05 > 0:46:07will certainly improve rental prospects.
0:46:07 > 0:46:13For HMO you're supposed to have, like, six rooms in a building,
0:46:13 > 0:46:16I believe and we had seven originally,
0:46:16 > 0:46:20so we had to put it as two rooms into one.
0:46:20 > 0:46:23Someone actually recommended us the builder, an experienced builder.
0:46:23 > 0:46:29And we followed their designs and the layout.
0:46:29 > 0:46:32We both were coming every day, nearly every day,
0:46:32 > 0:46:36and we were enjoying and we could see the progress.
0:46:36 > 0:46:38We had a vision before the build
0:46:38 > 0:46:41that all slowly, slowly started coming true.
0:46:41 > 0:46:44Having put their trust in their designer and builder,
0:46:44 > 0:46:47how did the timescale work out?
0:46:47 > 0:46:52In the beginning we thought it could take, like, four to six months.
0:46:52 > 0:46:56We just completed in just over three months which is perfect.
0:46:56 > 0:47:00We were quite happy because the builder who done the job for us,
0:47:00 > 0:47:02they done it quite well.
0:47:02 > 0:47:08Better than quite well, I think. How did that 20-25,000 budget bear up?
0:47:08 > 0:47:10We were fine in the beginning.
0:47:10 > 0:47:14When we were very close to completing this building,
0:47:14 > 0:47:17then we were told a different price, which was shocking.
0:47:17 > 0:47:22- But, luckily, we both managed.- We've gone over, £18,000 over the budget.
0:47:25 > 0:47:31Yes, when you look at the end thing it's brilliant.
0:47:31 > 0:47:33Yes, I think it is worth it, but
0:47:33 > 0:47:36getting the money at the time was difficult
0:47:36 > 0:47:39and we had to sort of, you know...
0:47:39 > 0:47:44..borrow and use lots of credit cards as well
0:47:44 > 0:47:48so unfortunately that is the downside.
0:47:48 > 0:47:51Using credit cards for this kind of thing is risky
0:47:51 > 0:47:53and definitely not recommended.
0:47:53 > 0:47:56On the upside, they do have a lovely property
0:47:56 > 0:48:00with really nice facilities, offering any tenant some privacy.
0:48:00 > 0:48:02Of the six self-contained flats,
0:48:02 > 0:48:05the attic and the ground floor have a bedroom as well as a living space,
0:48:05 > 0:48:08while the others are studio flats.
0:48:08 > 0:48:12Abed wants to aim for professionals rather than the student market.
0:48:14 > 0:48:16But I wonder if this will prove to be the right market.
0:48:16 > 0:48:20No doubt two local estate agents can give us an idea.
0:48:20 > 0:48:23Having been in here previously to see the amount of work that was required
0:48:23 > 0:48:26and then coming in here now to see what they've actually done,
0:48:26 > 0:48:28it's absolutely fantastic.
0:48:28 > 0:48:31They've got kitchenettes in every room, the quality's good
0:48:31 > 0:48:36and they've actually put down a really good-quality carpet throughout as well.
0:48:36 > 0:48:39I really don't think that they will have a problem finding suitable tenants.
0:48:39 > 0:48:42I think the owner has chosen the right path
0:48:42 > 0:48:45with converting to studios and one-bedroom flats.
0:48:45 > 0:48:48The size of the properties are perfectly acceptable. They are...
0:48:48 > 0:48:50They tend to be towards the smaller end
0:48:50 > 0:48:52of what people are looking for, but again,
0:48:52 > 0:48:54studios are not expected to be large, generally,
0:48:54 > 0:48:56and one-bedroom apartments equally, in this location,
0:48:56 > 0:48:58are not going to be that large.
0:48:58 > 0:49:01At one time this would almost have been a really good substantial home
0:49:01 > 0:49:04but now, because of the area,
0:49:04 > 0:49:07the only real target audience they've got is for the investment markets
0:49:07 > 0:49:10and I really don't think they could have done any more than
0:49:10 > 0:49:12they've done, they've done a really good job.
0:49:12 > 0:49:15Having paid £125,000
0:49:15 > 0:49:20and then seeing their budget go from 25,000 to 43,000,
0:49:20 > 0:49:22giving a total spend of 168,000,
0:49:22 > 0:49:24what sort of resale figure are we looking at here?
0:49:26 > 0:49:28What we are selling more of at the moment
0:49:28 > 0:49:30is two- and three-bedroom terrace house
0:49:30 > 0:49:33so I would say the resale value on this property at the moment
0:49:33 > 0:49:36is going to be no higher than £270-275,000.
0:49:38 > 0:49:41I would expect, based on the monthly rental incomes,
0:49:41 > 0:49:43to achieve a figure around £300-325,000.
0:49:46 > 0:49:48Wow, not a bad return there then.
0:49:48 > 0:49:52This would give Abed and Lubna a profit before taxes and expenses
0:49:52 > 0:49:57of between £102-157,000.
0:49:57 > 0:50:02- 275 or 325 sound very good. - It's very good.
0:50:02 > 0:50:04Very exciting and very surprising for us,
0:50:04 > 0:50:08we never thought we could achieve that much so we're happy with that.
0:50:08 > 0:50:11But selling was never part of our plan.
0:50:11 > 0:50:13Oh, well. Back to Plan A.
0:50:13 > 0:50:16The flats will be let with all the bills included,
0:50:16 > 0:50:20so what kinds of values would the agents put on them?
0:50:20 > 0:50:25Including bills, you'd be looking at £400 per calendar month.
0:50:25 > 0:50:29The agent thinks all the flats would fetch the same rental,
0:50:29 > 0:50:33regardless of size, however the other agent has a different view.
0:50:33 > 0:50:36The studio apartments, I believe would attract a rental value
0:50:36 > 0:50:40of approximately £400-450 per calendar month.
0:50:40 > 0:50:45The one-bedrooms, around £500-550 per calendar month.
0:50:45 > 0:50:47The lowest of those evaluations
0:50:47 > 0:50:50would give a still healthy yield of 17%.
0:50:50 > 0:50:53I told you at the beginning, HMOs can make money.
0:50:53 > 0:50:56So, how do the couple feel about those valuations?
0:50:56 > 0:51:03We would love to get and achieve the top part of that quote.
0:51:03 > 0:51:08But let's see how things go because it will cover our budget,
0:51:08 > 0:51:09how much we've spent.
0:51:09 > 0:51:12So, the smiles are still there, and no wonder,
0:51:12 > 0:51:16but would they be prepared to tackle this sort of project again?
0:51:16 > 0:51:19Oh, definitely. Definitely, I do want to do another one.
0:51:19 > 0:51:23This is quite an exciting job for me. Yeah, I'd love to do that again.
0:51:26 > 0:51:28Back now to Lisburn, Northern Ireland,
0:51:28 > 0:51:33where this 1960s three-bed terrace was bought by builder, Noel.
0:51:33 > 0:51:36His plan was to rent it out after refurbishing.
0:51:43 > 0:51:46Noel bid £37,000 at auction,
0:51:46 > 0:51:49but got a surprise when he went to settle up.
0:51:49 > 0:51:51I went out to try to pay for the property and I was told,
0:51:51 > 0:51:54"No, you do not have it."
0:51:54 > 0:51:56So the following day I got a phone call to say
0:51:56 > 0:51:58could I up the price a bit
0:51:58 > 0:52:00- so I says yes. - So you got it for 40.- Yes.
0:52:00 > 0:52:03Tell me why you wanted to buy the house.
0:52:03 > 0:52:05Well, I liked the price and I liked the area.
0:52:05 > 0:52:09Have you looked at what similar properties are worth, fully done up?
0:52:09 > 0:52:12Yes. They're worth about 55-60,000 in this area.
0:52:16 > 0:52:18Four months on, things are much brighter.
0:52:21 > 0:52:25A new brick facade replaces the old rotten wooden and plastic one,
0:52:25 > 0:52:28making the house look much more like its neighbours.
0:52:30 > 0:52:33The rear of the property has had the same treatment.
0:52:33 > 0:52:36Better to look at and there are some practical benefits too.
0:52:39 > 0:52:41The old facade that was there was completely rotten
0:52:41 > 0:52:46so there was a new inner studwork put up, insulation,
0:52:46 > 0:52:48100ml plywood vapour barrier
0:52:48 > 0:52:51and then a brick facade with a cavity in front.
0:52:52 > 0:52:56With properties either side and new insulation front and back,
0:52:56 > 0:52:59the house will be much cheaper to heat.
0:52:59 > 0:53:01Enough about outside, what about inside?
0:53:08 > 0:53:12Noel wasn't able to dedicate all his time to this property
0:53:12 > 0:53:16as he had other jobs, so although it's been five months,
0:53:16 > 0:53:18it only took 11 weeks to finish the work.
0:53:18 > 0:53:23All the items that were put into the house were the new facade front and back,
0:53:23 > 0:53:28new PVC windows and doors, a combi gas boiler,
0:53:28 > 0:53:31brand-new kitchen, we took down a wall.
0:53:31 > 0:53:34Downstairs toilet - the bathroom the bathroom that was in the property
0:53:34 > 0:53:36was very dated, it was a pink suite
0:53:36 > 0:53:39so we decided to put a new, clean, white suite in there
0:53:39 > 0:53:42and then it was just a matter of decorating the bedrooms
0:53:42 > 0:53:45and bringing the doors and latches
0:53:45 > 0:53:47and things like that up to date.
0:53:47 > 0:53:48New wiring and plumbing.
0:53:48 > 0:53:50He makes it all sound so easy
0:53:50 > 0:53:54and well within his original two to three month time scale.
0:53:54 > 0:53:58But I've yet to hear of a renovation which doesn't have unforeseen problems.
0:53:58 > 0:54:00Was that the case here?
0:54:00 > 0:54:05The mains water entering the building has a stop valve called a Toby on it.
0:54:05 > 0:54:07And that was non-existent.
0:54:07 > 0:54:09The manhole was there for it but there was nothing there
0:54:09 > 0:54:14so the stopcock within the house was seized.
0:54:14 > 0:54:16So we had to get a freezing pack and freeze the mains coming in
0:54:16 > 0:54:18so that gave us a few headaches.
0:54:18 > 0:54:22A headache that would have put most people off, I'm sure.
0:54:22 > 0:54:26But Noel, being a builder by trade, took it all in his stride.
0:54:34 > 0:54:37With the kitchen/utility wall removed,
0:54:37 > 0:54:39the space that was released accommodates
0:54:39 > 0:54:44the new downstairs cloakroom and room for a small dining table.
0:54:50 > 0:54:53The once dark skirting board and fire surround are now brighter,
0:54:53 > 0:54:58the lighter colour-scheme making the lounge feel much more welcoming.
0:54:58 > 0:55:01The bedrooms, too, have benefitted from a more neutral tone.
0:55:06 > 0:55:09Noel had said that his maximum budget was £15,000
0:55:09 > 0:55:13but he was hoping to spend nearer the £10,000 mark
0:55:13 > 0:55:16by doing most of the work himself.
0:55:16 > 0:55:18As it turned out, he was busy with other work
0:55:18 > 0:55:22and had to pay more than anticipated on labour costs.
0:55:22 > 0:55:25He reckons he still completed at £15,000
0:55:25 > 0:55:28even with the high-spec kitchen and bathroom,
0:55:28 > 0:55:31making his total spend £55,000.
0:55:33 > 0:55:36No, certainly, when I started this project, I had a vision.
0:55:36 > 0:55:39I could see where I wanted to go and what I wanted.
0:55:39 > 0:55:41Unfortunately, I went a little bit over my budget
0:55:41 > 0:55:44to achieve what I wanted, but I'm very happy.
0:55:46 > 0:55:48Time to find out from two local estate agents
0:55:48 > 0:55:51if they think it's been money well spent.
0:55:51 > 0:55:55Noel originally said he'd like to sell the property,
0:55:55 > 0:55:57but since the market hasn't picked up
0:55:57 > 0:55:59as much as it has in other parts of the country,
0:55:59 > 0:56:02perhaps rental might be better in the short term.
0:56:02 > 0:56:04What do the agents think of the work he's done?
0:56:05 > 0:56:08First impressions are absolutely vital
0:56:08 > 0:56:10and I think the work that has been carried out
0:56:10 > 0:56:12to the front facade of the property will make a difference,
0:56:12 > 0:56:14will make the property appealing
0:56:14 > 0:56:17and will make more people want to come and look at the property.
0:56:17 > 0:56:20It's been fully refurbished and it's in excellent presentation
0:56:20 > 0:56:22and that's important in the current market,
0:56:22 > 0:56:25particularly where first-time buyers are concerned.
0:56:25 > 0:56:28I think it will appeal to both the sale and rental market,
0:56:28 > 0:56:31this particular property, because of the standard of finish
0:56:31 > 0:56:36and nowadays, people are always looking for the best of the best.
0:56:36 > 0:56:38Is this the best of the best, then?
0:56:38 > 0:56:41What rental valuations would the agents suggest?
0:56:41 > 0:56:47I would anticipate a rental value of £475 per calendar month.
0:56:47 > 0:56:49I would envisage a rental
0:56:49 > 0:56:53of approximately £450-500 per calendar month.
0:56:53 > 0:56:56That's just a little bit more than I expected, but certainly,
0:56:56 > 0:57:00I would be very happy with that moving forward, yes.
0:57:00 > 0:57:01And Noel is right to be pleased.
0:57:01 > 0:57:05It's a yield of over 10% on his total spend of 55,000.
0:57:05 > 0:57:08And would there be a profit, if he decided to sell?
0:57:09 > 0:57:12Demand for properties in this condition, in this location
0:57:12 > 0:57:13are very good at the moment,
0:57:13 > 0:57:16and the proximity to the city centre would make it very popular.
0:57:16 > 0:57:17I would anticipate a good response
0:57:17 > 0:57:22and a value in the region of £70-75,000.
0:57:22 > 0:57:28The value would be somewhere in the region of £70-75,000.
0:57:28 > 0:57:30Certainly, that's a lot better than I thought.
0:57:30 > 0:57:32And I'm very, very happy with that figure,
0:57:32 > 0:57:35certainly, about £15,000 more than I would have expected.
0:57:35 > 0:57:38Best case, that would give Noel a potential profit
0:57:38 > 0:57:42of £20,000 minus the usual taxes and expenses.
0:57:42 > 0:57:44But he's decided to hold on to the property
0:57:44 > 0:57:47as a longer term investment.
0:57:47 > 0:57:50As the building process was going on, we've had people passing by,
0:57:50 > 0:57:52knocking on the door, literally.
0:57:52 > 0:57:54Well, when there was a door!
0:57:54 > 0:57:56And asking, could they rent the property,
0:57:56 > 0:57:59and how much did I want for it.
0:57:59 > 0:58:04So a lot of interest and tomorrow evening the new tenants move in.
0:58:04 > 0:58:06And I'm sure they've be very happy here.
0:58:11 > 0:58:14Well, that's it for now. We'll be back next time with more news
0:58:14 > 0:58:16from the front line of property development.
0:58:16 > 0:58:18See you then for more homes under the hammer.
0:58:18 > 0:58:19- Goodbye.- Goodbye.