Episode 57 Homes Under the Hammer

Hello, now sometimes the property market is extremely competitive,

other times, it's, well...slow.

But, either way, you've got to know where to get a bargain.

So, what's our advice? Well, do as much research as you can,

then set a limit and stick to it.

And one place you can kind of move things in your favour,

is visit your local property auction.

Now a lot of people are nervous about bidding at auctions and there's really no need to be.

Yeah, don't worry. You won't find if you scratch your nose

-you've bought a two-bed flat in Basingstoke.

-No.

It's really simple, just make sure you can be seen,

bid clearly and don't go over your limit.

So, let's see what today's bidders bought.

First up, in Burton-on-Trent, there's no messing about -

quicker, cheaper, faster, now, tomorrow, today even.

Yeah, definitely.

And up in Kirkcaldy, Scotland, I have to watch my step before I enter this property.

Man coming in. All clear?

Whilst in Wales, I need to take a step back.

It looks like the whole of the front of this house is actually leaning this way.

That's not a good start.

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.

Yours, sir. Well done.

Burton-on-Trent in East Staffordshire is a town,

which in its heyday was home to over a dozen breweries.

And one quarter of all beers sold in Britain came from here.

Today, there are excellent transport links to Derby and Birmingham

and it's got lots of amenities, including pubs for all those important pints.

This is a busy road. So, excuse me while I shout over the noise of the traffic.

But it's not all bad news as this is a really central spot,

only a few minutes' walk from the high street.

And as for the property I'm here to see, well, it's a one-bedroom flat

and it had a guide price of £38,000.

And...it looks freshly painted on the outside. Good stuff.

MUSIC: Movin' on Up by Primal Scream

The building the flat is in is the Grade II listed.

It's a historic early 18th century brewery.

There's a charming courtyard at the rear, which leads on to a back garden

and an amazing stairwell that I'm about to get to know very well.

# I'm moving on up now

# Gettin' out of the darkness

# My light shines on... #

And...breathe! Can you just wait there while I catch my breath?

It's quite a lot of stairs to climb, but what a magnificent stairwell.

I mean, that really is beautiful. When you stand at the top and look down, wow!

Very impressive, indeed. And well maintained.

Just like this flat. So, walk straight in into a sitting area.

Really nice, it's cosy, it's very light. You've got two big windows there.

Separate kitchen, which is fantastic.

A lot of the time you find the kitchen's all squashed up in the corner of the room,

but it's really nice to see that. And it's actually quite a quirky little kitchen.

Separate bathroom over here, which is good as well.

But you've got a shower that looks like a TARDIS or a phone box

right in the middle of the room. It's not really working.

I think I'd rearrange the space in there and try to get a bath in,

because I think that would work well.

But what I really like about this room here

is that you can see what it will be like dressed up.

Nice fireplace, you could have a great big mirror over here, some lovely curtains.

It's got a great feel to it, this flat.

It's very handsome, it looks good, it feels good

and I can imagine this will be a fantastic flat for somebody.

MUSIC: From A Window by Billy J Kramer and The Dakotas

There's a good size double bedroom with another set of those lovely Georgian windows

and, yes, this, along with the whole flat, would benefit from a cosmetic upgrade.

I can see a bit of a damp under the windows,

BUT, on the whole, this is almost good to go.

And I really love the character of this listed flat.

I know I've said it plenty of times on Homes Under The Hammer,

but Georgian sash windows are my favourite.

Yes, they are so much more expensive to restore and maintain,

but they look so much better and more in keeping with period properties

like this than modern UPVC windows.

And in this Grade II listed property, there will be restrictions

on changing these windows anyway. My only concern is,

they're single glazed and you can hear the noisy traffic outside.

At least the management company replaced these frames three years ago.

You can double-glaze sash windows, but it would be costly to do so.

So, it might be a case of earplugs at the ready here.

But I do think it would be worth listening

to a local property expert's opinion.

Here comes one.

The fact that a building is listed or in a conversation area,

it's 50-50 really. Some people will find that appealing,

it will add to its charm and character.

But some people will be put off because they realise that the burden of responsibility

and the constraints that that places upon you.

I think the cosmetic upgrades required really are the decoration, it needs a lick of paint.

The carpet tiles will need to be cleaned or changed

and I'd get rid of the coloured light switch.

But what about values? Not forgetting the property has a guide price of £38,000.

Once fully renovated, I would expect this property to achieve £70,000.

And on the rental market?

Once renovated, I would expect this property to achieve

somewhere in the region of £425-£450 per calendar month.

Well, you need to be superfit to get up to the top floor,

but once you arrive in the flat... Wow. What a lovely surprise it is.

It's not in bad nick and I absolutely love the character

that the staircase and the outside areas and the flat have.

In the brewing tradition of Burton-on-Trent, I would definitely raise a glass to that.

Let's see who had the same opinion as me when it went to auction.

Lot 24. It's a one-bedroom,

second floor apartment in a period building.

38 plus is the guide price. Who'd like to start me at 38? 38?

36? Who's got 35? 34,000? 34 and we're away, thank you.

At £34,000. Very handy money for a one-bedroom flat.

At 34,000. 35 somewhere? Opening bid at 34, 35 is bid.

At 35,000... 36? 36. At 36,000.

37, on my left. At 37. 500? 37,500.

38? 37,500.

38, quickly someone else? At £37,500...

38. At 38... 38,500.

39. At 39 and 5 again?

Lady's bid at 39,000, it's in the market, ladies and gentlemen,

it's going to be sold. £39,000 is the bid.

For the first time at 39.

For this second time at 39. Last opportunity, any higher bid for it?

It's sold at 39,000. 125, thank you.

Sold to Michelle for 39,000.

Just £1,000 more than the guide price.

Michelle recently took redundancy from high-end engine manufacturers,

where she worked as a project manager.

I met her back at the flat to discuss her first property project bought at auction.

-Michelle, congratulations.

-Thank you.

-So, tell me what happened on auction day.

-OK.

Well, I'd got five properties that I was looking out

and three of them I was going to put bids on and this one came up first and it was a bargain, so I bought it.

The only concern I had was if there was a problem with the roof,

but I've had it checked out and it's fine. So, it looks like it's a bargain.

So, what is the plan for this flat in particular?

Well, definitely going to do some refurbishment to it

and then get it straight on to rental.

-What are you going to do improve this? It's such a lovely little flat anyway.

-OK.

Well, it just needs completely replastering.

I need to put some new tiles into the fireplace,

a fire into it and some work on the bathroom.

-So, let's first of all talk about the plastering. So, you are going to replaster the whole flat?

-Yes.

-Wow. Really?

-Just to skim it, yes.

-OK.

Just to completely freshen it up and make it look crisp and clean and tidy.

-Yes, as you can see, there's a bit of damp under the window, just to totally freshen it.

-OK.

-And those beautiful windows?

-Yes, they're going to get a nice painted

-and they've just been freshly painted outside yesterday.

-So, how amazing. The exterior of the building

-has already been freshly painted for you.

-Yes. Well, it's part of the management fee.

And yes, I came yesterday, there was scaffolding floor-to-ceiling

and I was thinking, "Oh, you're going to be able to film it." But it went overnight.

-How amazing. Are you pleased with the job they've done?

-Yes.

-Yeah, they've done a really good job.

-Even though you've had these beautiful windows installed,

-they're not double glazed and you can hear the traffic outside.

-Yeah.

Do you think that's going to bother anybody?

Well, I hope not. There is nothing more we can do, really.

Cos, obviously, it's listed you can't do any more glazing to it.

So, hopefully, the road won't be so noisy when you've got other things in the room...

-the telly on, you probably won't hear it as much.

-I tell you what I really loved,

the fact that you walk in the front door, along the little corridor to a second door

and then there's a courtyard. It's like a nice surprise, isn't it?

The shared areas are lovely in this property.

And that's one of the things that really made me think, "Yeah, I definitely want to buy this."

And also you've got that amazing staircase with the banisters

-and the balustrade, it's beautiful.

-Yeah, it is. And that's one of the things about the listed

that I really wanted to go for. So, that's what I think will sell it

when people come in through the door and see how nice it is.

It's so important that the front facade and communal areas are well kept

as they are the first thing a potential buyer or tenant will see.

I'm really pleased to see that the £800-a-year service charge is being put to good use.

It should help with the search for a tenant when Michelle comes to letting the flat out.

-So, what about your kitchen and bathroom? Anything there?

-Yes.

So, the kitchen is going to be redeveloped with all new doors and appliances.

And the bathroom, at the moment, is a strange shower arrangement.

LUCY LAUGHS

We'll have a nice bath placed in it and a nice vanity unit.

At the moment it's just like a TARDIS in the middle of a room.

-It's like, "Oh, there's the stand-up shower."

-It is entertaining.

But, obviously, people rented it before, but I want to make it look nicer.

-So, you're going to have a bath put in there as well?

-Yes.

-Fantastic, I love that idea.

Maybe a P-shaped one, so you can keep the shower as it is.

So, Michelle, why property? It's so different from what you were doing before.

Well, I just wanted to do something different. I was a project manager

and project management skills are the same in a property.

So, I thought I could make some more money out of it.

-So, would you say you're a very efficient person and this role will suit you beautifully?

-Yes.

I would say definitely. Anyone who knows me will tell you I am.

Come on. What are you like, tell me?

Well, I can be persistent

-and delivery and cost shouldn't be too much of a problem.

-Really?

-Is that what you're all about?

-Yes, so it's all about planning

and I've already had people in to give me prices and things like that.

So, as soon as you've gone, people will start work.

-And you're a thorough? You're on it? Clipboard lady.

-That's it.

I've been walking round here with a plan. Do it faster, come on, quicker.

-Quicker, cheaper, faster, now, tomorrow...

-Yes.

-..today, even.

-Definitely.

-So, have you got a healthy budget?

I think at the moment I've had some estimates in and it should be about 5,000.

£5,000 for new kitchen, new bathroom, skimming, new carpets?

-Yes.

-How long is this going to take you?

I'm planning to take about eight weeks.

So, there's not too much to do. So, I want to take about eight weeks.

-And what are you going to be like if it goes over?

-It won't go over and it won't go over budget.

So, what you most excited about with this venture?

I just want to see the before and after. It's just the... This is what I like doing,

I wanted to do it for years and I've got an opportunity.

-So, this is what I want to do.

-Are you quite excited or a little bit nervous?

Because you are actually giving up a job you've done for many years.

No, excited. It's a new challenge. Everyone needs a new challenge.

-Michelle, I'm so excited for you. Good luck with your first project.

-Thank you.

-Thank you.

So, this flat marks a new start and a change of direction for Michelle.

And I have no doubt she has the drive to succeed.

I think she's paid a great price for this flat, but is there something we don't know,

will there be a spanner in the works?

Join me later in the programme and you can find out.

Whilst we're on the subject of fresh starts, the town of Kirkcaldy

on the east coast of Scotland is certainly having one of its own.

It's in an area known as the Kingdom of Fife,

which has glorious beaches and pretty fishing villages.

Its harbour was pivotal in the exports and imports required

for the linoleum industry, in which Kirkcaldy was a world leader.

Now, the town has had its ups and downs over the years

and, in 1992, the harbour closed.

But, in 2011, it reopened as part of a major rejuvenation

and regeneration programme for both the town and the local area.

Overshadowed by its neighbour,

Glenrothes, Kirkcaldy nonetheless has good transport links

to the motorway, and a train station on the mainline.

With its lovely beach and a recent upturn in fortunes, I think

Kirkcaldy could be just the place for a brave soul to

dip their toe into the property waters.

So, on these blazing streets in this Scottish summer,

what have I come to see? Well, something kind of unexpected.

Er, it had a guide price of less than £5,000.

But then it's only a WEE place!

Yeah. Former public conveniences.

Toilets.

This is the gents.

# Ooh, ooh, wee

# Ooh, wee

# Ah-la-la-la, la la la la la la la... #

Well, when you've got to go...

# Ooh, ooh, wee... #

What we have here, then,

is a mid-to-late-20th-century brick-built block.

And you don't have to be too FLUSH to manage that guide price

of 5,000 quid.

Time for me to have a sniff around.

It does feel decidedly weird!

But what have we got?

Basically, one room that's been cleared out.

So I suppose that's good news.

I was expecting to see urinals and cubicles. All that's gone.

A little store cupboard there,

probably used by a cleaner or whatever.

And that's basically it.

No, really!

Well, it's not exactly two-up, two-down, but thankfully,

you can't tell it was once a toilet any more.

# Don't break the waters...

It does have two rooms, though.

You've guessed it, a gents and a ladies. I'm goin' in!

Man coming in. All clear?

HE LAUGHS

This was the ladies' side. Pretty much a mirror image of the gents'.

And again, it's been cleared out of all the things you might recognise.

The toilets have all gone.

What I am drawn to straightaway is the fact that there is a board

over there with all the electricity on it, so you've got services.

You got electricity. You would have had water.

You will definitely have sewerage!

All things which cost a lot of money when it comes to renovating a place.

Now, it has already been knocked through, probably as part of the clearing process.

And, yes, it looks like a bit of a mess.

But I'm already thinking about what this could potentially become.

It's got the basics there. You know what they say.

Where there's muck, among other things, there's brass.

Of course, the loos don't have to stay as loos and,

once you've washed your hands of their past,

what you basically have here is a brick block near local shops

and transport, which looks and smells a whole lot rosier.

Well, at the back of the toilets there's a little bit of extra space.

It all adds to the footprint of what is actually not a bad sized lot.

# Baby, don't you leave me this way... #

On the surface, it's a rotten, old, abandoned toilet.

But, I think, if you dig a little deeper,

some potential starts shining through.

Now, at this point you are probably thinking,

"Who on earth would consider buying that?"

Well, there's one piece of the jigsaw that

I haven't told you that could make all the difference.

Because the building has got planning permission

for conversion to a fast-food outlet.

Ah! You start viewing it in a different light.

The fact that it's on a busy main road, it's by existing shops,

in obviously a fairly residential area and, at the back of it,

there's this huge, big, free car park. You know what?

A business like that, in there, could actually work.

So where there's muck there's brass, perhaps.

And let's not forget that £5,000 guide price.

Is that possible potential I hear knocking on the door?

We asked a local property expert to visit

the little boys' room for us, as it were.

First impression of this property? I have to say, it does, at the moment,

look a bit like a public toilet or a pillbox, to be honest.

It's been stripped back, it's very basic condition,

but then you've got a blank canvas.

It's already got planning consent for a hot-food carry-out.

The alternative use has got to be a small shop or an office,

perhaps a taxi office.

The council would be delighted to see this brought

back into beneficial use and I think there are a number of options for it.

Sounds very positive indeed.

What kind of resell value would this have if it were a takeaway?

If you had the property let as a hot-food carry-out and, for instance,

let's say it was producing about £3,000 a year, I think you'd probably

be looking at a capital value of about eight times the passing rent.

So that would be round about £20,000-£25,000.

And if it were rented out?

I think that if you could get a tenant

who'd got a good-going business

in here for hot-food carry-out,

you might be able to get something around £250 per calendar month.

I actually think this is a very interesting opportunity.

Good location, car park, planning permission...

The big question is, will whoever buys it take, in fact,

a more CISTERN-matic approach?

I couldn't resist it. Let's go to the auction.

So lot number three. Good redevelopment opportunity.

We've sold a few public conveniences before.

Somebody start me off at £5,000.

5,000 anywhere?

2,000, then, anywhere?

1,000. I'll take 1,000, thank you.

At 1,000, looking for 2,000.

I'll take 1,500 if it helps anybody.

1,500 I have. 2,000, 2,500.

3,000?

I'll take 250 if it helps, 2,750.

No?

2,500?

2,750. 3,000?

3,250...not at that?

OK. 3,000 is our current bid, are we all done? Any other interest?

3,250.

3,250 is our bid, any other interest?

3,500. 3,750? I have.

4,000. 4,000, I've got. 4,250.

No, not this time. 4,250 I'm looking for. Are we all done?

4,000 going once...

..twice...

third and final time. GAVEL BANGS

Sold to the gentleman in the blue shirt in the aisle.

Thank you very much.

He's right to look pleased.

With a successful bid of £4,000,

coming £1,000 under the guide price, Phil,

an experienced property developer

and full-time landlord from Rosyth has bagged himself a bargain.

And he's got form in buying unusual properties - we've seen him

on Homes Under The Hammer before along with his business partner,

Brian, when he bought this disused community centre in Dunfermline

and converted it into a dance studio.

I met him back in the gents to find out his plans for this property.

I've been really looking forward to meeting the person

-who bought this, and it's you.

-That's right.

Tell me why you wanted to buy this?

I thought that I could make it into a hot-food outlet and let it out.

-Right.

-That's the idea behind the purchase.

-Right.

I tried to buy it a number of years ago, but I was outbid.

-The person that bought it bought it for £24,500.

-Wow!

It came up again, so I thought, "I'll have another try,"

and I managed to buy it.

Now, somebody bought it for £24,500 and did anything to it, or nothing?

I think all they did was rip the inside out, stripped it back.

-They did away with the urinals and all the cubicles.

-Right.

So I've got a practically derelict building, that's what I've bought.

Phil has done his homework and knows this property already

has planning permission for a fast-food outlet,

making his timescale of two to three months achievable. But why here?

Why this place?

The location's good because it's in a shopping area,

it's beside other businesses, you can see it -

-it's very, very visible and it's a fairly big toilet.

-Yes!

-A fairly big toilet on two levels.

-Yeah.

This top area, they tell me, will be the kitchen area and toilet

and the front area will be the serving part of it,

so there's quite a bit of work to do to bring it up.

I've been advised that it will cost round about between 15 and 30.

And that's to get it completely sorted out?

-Roof, electrics, floor...?

-Yeah.

-The architect's told me including his bill, I'll be £25,000.

-Right.

But who knows?

Phil knows he could spend as much as this place could be worth,

but he's taking a long-term view

that the rental return is worth having.

It's an unusual purchase for sure.

Has he had any WEE jokes made at his expense?

I've had, "Well, just take the I out the toilet and it'll be to let,"

I've had, "You should call it The Wee Takeaway," I've had that...

I've had all these things, aye, and they'll all watch me

with interest because everybody loves a failure.

-No, we don't want it to fail at all!

-Not at all.

I just wondered if you might have had

-a few raised eyebrows from people?

-Definitely.

I had one this morning, a friend of mine, and he said,

"When's Home Under The Hammer?" I says, "The day,"

he says, "Phil, that's a terrible decision, buying that place."

And he's a really sensible chap, so we'll see.

We'll see.

So lots of Phil's friends and colleagues laughing at him

for what he's done here and on the face of it,

I suppose you can understand why.

However, what he's got here is a commercial unit

in a really popular location, lots of passing traffic, free car park,

planning permission for a commercial unit...

They could be laughing on the other side of their faces

when he's finished. You can find out who he gets on later in the show.

Still to come... In Ferndale, Wales, I get straight to the point.

Kitchen here... It's all right, I suppose.

No, it's not.

Take it out, replace it.

And in Kirkcaldy, Scotland, the truth comes out.

A toilet's quite a good gamble for a property investor

who knows about planning, which I don't.

Over to Burton-on-Trent again, where I earlier looked around

this one-bedroom flat that had a guide price of just £38,000.

It was in a listed building and had a lovely courtyard,

and once I'd made my way up the numerous

but gorgeous steps to the flat, I found it really inspiring.

What I really like about this room here is that you can see

what it will be like dressed up.

Nice fireplace, you could have a great big mirror over here,

some lovely curtains... It's got a great feel to it, this flat.

It's very handsome, it looks good, it feels good

and I can imagine this will be a fantastic flat for somebody.

And that somebody was Michelle who bought it

for £39,000 on auction day.

Former project manager Michelle had recently taken redundancy

and decided to move into property renovation as a new career,

although she certainly wasn't to be trifled with.

As soon as you've gone, people will start work.

And you're thorough, you're on it. Clipboard lady.

That's it, I've been walking round with a plan -

"Do it faster. Come on, quicker."

"Quicker, cheaper, faster, now, tomorrow...today, even."

Definitely.

So Michelle was hoping that her background in project management

would stand her in good stead.

And with a strict budget of £5,000 and a timescale of eight weeks

to transform this dated and tired flat

into a desirable rental property, I was eager to see how she'd get on.

Eight weeks later, bang on Michelle's schedule,

we're back in Burton-on-Trent to see just how Michelle has progressed.

Good to see that the space-wasting shower cubicle

is a thing of the past.

So, in the bathroom, before there was a shower cubicle here.

Like a TARDIS effect.

Now, we've replaced it with a nice L-shaped bath,

there's a new toilet, kept the same sink, kept the same tiles,

new blind and a new shower rail.

I really like it now.

Before, it was a real eyesore and I think it looks nice now.

It's a nice, clean, fresh bathroom.

Quite right too.

In fact, the whole flat is looking fresher and more homely.

Michelle has installed new central heating, replastered,

wallpapered and painted in the living room and the bedroom.

And in the kitchen, she's fitted new kitchen doors

and installed a boiler.

As we know on Homes Under The Hammer,

timescales and budgets can be hostages to fortune.

So, has she been sticking to them?

It's taken exactly eight weeks, which was the plan.

The last week has been very challenging

to stick to that timescale but I've managed to achieve it.

Excellent. But what about that budget of £5,000?

So, I've ended up spending approximately £6,500.

The main increase was, as I said to you last time,

it would be £5,000 but I wasn't replacing the boiler,

and the boiler cost nearly £3,000 because I had to replace

a lot of the piping outside cos it was so old.

So that was the major cost of going over.

Often, it's the unseen issues that tend to end up costing you money.

However, I think replacing the boiler is a very wise move

in terms of having a tenanted property.

After all, not only will it be more efficient in terms of energy,

it would mean it's safer too.

So, how has swapping an office job

for dustsheets and decor suited her?

So, during this time, I have been project manager, cleaner,

painter, decorator.

I put my hand to everything.

I've obviously had tradespeople in as well

but, no, I've definitely got my hands dirty.

I've kept the workmen on their toes by being here early

so that they can get into the property and also provide them

with lots of tea and coffee and also being a builder's mate.

I've been passing things and collecting things and

backwards and forwards to the DIY shops

to get all the different items that they haven't got and that they need.

I think they'll say I was challenging, to say the least.

No harm in cracking the whip, I say.

But now the job's done and the workmen have left,

how is she feeling?

I'm really pleased with the way the flat's turned out in the end.

Towards the last week, it's really come together

and it's nice to see the finishing results. It's been...

I hated it at times, but now I really like it.

I think it's got nice style about it.

Well, with total investment here of £45,500,

it will be interesting to hear what two local property experts

make of Michelle's first auction purchase.

I think the property's great. We're close to Burton town centre.

It's a lovely, compact flat on the top floor

and I think it's a superb property.

Yes, I think the finish done over here is at a high standard.

I couldn't expect anything more,

you can't do anything more to this property.

The estate agents are impressed,

and with Michelle eager to rent the property out,

let's hear their rental predictions.

I think, on the rental side of things,

this flat should be able to achieve £400 to £425 per calendar month.

I would have thought that this flat would rent for around about £475

per calendar month.

That's excellent. That's higher than I was expecting.

I was thinking round about £400 but £475, very nice.

Well, if she was to achieve £475 per calendar month,

that would mean a yield of around 12.5%, which is very nice indeed.

Added to the estate agent's top valuation of £65,000,

that could mean a pre-tax profit of £19,500,

which makes Michelle's first foray into property renovation

a big success.

However, after all the whip cracking on this project,

will the builders come back for another?

I'm sure my builders will want to work for me again.

I pay on time and can be very pleasant to them.

20 miles north of Cardiff is Ferndale,

a former coal mining village that sits within the Rhondda valley.

Well, in the hills above Ferndale, you find this.

Known as the Maiden's Pool.

Well, legend has it that a Welsh enchantress

lives at the bottom of the lake.

How romantic.

Let's hope that the property I'm here to see is just as enchanting.

And the property is located just a short drive away down the valley.

So, what am I here to see? Well, a two bedroomed mid terrace.

Guide price, £29,000. Let's take a look.

That's an encouraging price,

but just as this house seemed to be shaping up well...

It looks like the whole of the front of this house is actually

leaning this way.

That's not a good start.

It is potentially one of those properties where you wouldn't

necessarily go any further than the front door,

but let's see what it has to offer.

Well, that's actually quite a surprise.

Into this room, which is, for this kind of house, pretty large.

It's two rooms that have been knocked together at some stage

to create this really nice sized space.

But it's kind of wobbling this way.

Wobbling? Well, no, slanting. You know what I mean. And the fireplace?

I'm reminded of one of those Western bars where you slide a drink down.

It would be very easy here

because it would slide perfectly well in one direction.

Right. Can you imagine trying to fit furniture or trying to find

a square point of reference for doorframes or skirting boards

or anything in this house.

It's, like, bad.

Yes, I know. It's not always easy to see on your TV screen,

but take my word for it, this place is all a little bit wonky.

The general state isn't too good either.

# Because I'm bad, I'm bad

# Really, really bad Who's bad? #

But, on a positive note,

there aren't any obvious signs of recent cracking,

which tends to suggest that this is historical movement

and therefore not something to be unduly worried about.

But I'd still want that checked out by a professional.

So, kitchen here. You know, it's all right, I suppose. No, it's not.

Take it out, replace it.

And, unfortunately, it doesn't get any better as you work towards

the very back of the property.

Kitchen here, then this area here which has been

covered in by this sort of plasticky kind of roof.

It feels damp, it smells damp.

Out the back there, wow,

you're just faced with some massive great retaining wall.

It's just coming together as a place that has its fair share of issues

and the wonkiness might be the least of it.

It's really just dreadfully damp, dilapidated and dingy,

certainly on the ground floor.

Outside, the tiny courtyard space and the high walled bit of garden

would only be enticing to a mountain goat.

And they don't increase any feelings of fondness for this house.

So, upstairs, and the property takes a turn for the better.

Yes, two really nice sized bedrooms and a huge bathroom and loo upstairs.

Brilliant, and let's try and think about this house

in a slightly different way.

The guide price, £29,000.

Average rental for this kind of house round here, £350 a month.

That produces a yield, not allowing for doing it up,

but just on those numbers, of around 14.5%.

Suddenly, can we put up with the damp and the wonkiness?

Hmm, possibly.

# It just might work

# I'm hoping it just might work

# Nothing beats a failure but a try

# It might work

# Yeah, it might work

# Yeah, it might work... #

So, does a local estate agent think this might work?

The property does need quite a lot of work.

It structurally seems OK,

although there is evidence of some

movement over the years but I don't think it's anything major.

It's probably historic

so I don't think there's going to be any recent movement in the property.

Primarily, the kitchen needs upgrading.

The bathroom, there's issues with damp in the bathroom,

and the conservatory needs sorting out as well.

With average rental figures of £350 per calendar month,

we know the house's rental potential is good.

But how would this house, that was guided at £29,000,

fare on the resell market?

If I was to put it on the market to sell, depending

on the standard of work, I would be looking in the region of £60,000.

That's encouraging.

So, what is the best option for the house once fully refurbished?

At the moment, in this area, sales are pretty slow.

The rental market, on the other hand, is quite buoyant,

so personally I would go down the route

of trying to rent the property.

Well, that's good to know.

If you want a fast return then this might not be for you.

But as a long term rental investment, well, it should do OK.

Well, it's a bit damp and it's a bit wonky.

So, one to be a little bit careful about.

Still, let's see who bought it when it went under the hammer.

Lot number 11.

Mid-terraced house, stone fronted house with two bedrooms,

bath on the first floor. Great buy-to-let property.

Start me at 20 then, if you like. 20 can we see? Put a hand up at 20.

Thank you, sir. I've got you at 20. At £20,000. Now one I'm looking for.

I've got 20 there, one can I see?

At 21, thank you, 21. 22 now, 22.

23. 24. 25. 26. 27. 28. 28? No.

27, I've got. You're now out. At 27 here, then.

Make no mistake, it's going to be sold.

At 27,000, then, for the first time.

Second time.

Third and last time at £27,000.

Well done, sir. Got yourself a bargain there.

And so for £2,000 below the guide price at £27,000,

the two bed terraced house in Ferndale

was bought by Cardiff-based father and son team Paul and Nathan.

And with dad Paul busy at work,

I met up with son Nathan to find out what their plans were for the house.

-Nathan, good to meet you.

-And you.

-Congratulations.

-Thank you very much.

Tell me why you wanted to buy this place?

We're looking to get a portfolio of rental properties together

so on the road to be doing that, basically.

-And this is number what?

-Three.

-OK.

Are the other ones you've got, are they similar?

We've got one in Cardiff

-and we bought one in the same auction as this one as well.

-Right.

Which is just about ten minutes down the road from here.

-When did you start?

-Couple of months ago, not too long at all.

So, why now?

We've, over the last couple of years,

bought a few properties, renovated them and sold them on for profit.

But just wanted to get rentals now to get a portfolio together.

So the two are relatively new to property developing

and they also have day jobs.

Nathan's a taxi driver and his dad runs his own business.

He couldn't be here today but he's out to work on the ice-cream van.

-Ice-cream van?

-Ice-cream van, yeah. He's an ice-cream vendor.

-Oh, great.

Yeah, he's been doing it for about 35 years now.

Wow, like, a traditional ice-cream van?

-Yeah, old-fashioned ice-cream man.

-Oh, fantastic.

And is that something you've done as well?

Yeah, I do it through the summer as well.

Help him out there,

and I do a bit of taxi driving in the winter as well.

But the idea is to get slowly into property

and for this to be the sole occupation.

# I'm the ice cream man

# I'm an ice cream man honey I'll be good to you... #

Well, with three properties scooped up in just a couple of months,

Nathan and dad Paul hope that their ice cream days might be numbered.

But this house has quite a lot of work to lick it back into shape.

What are you going to do to the property

to get it into a reasonable condition?

It's suffering from a lot of damp at the moment

-so we've addressed the problem.

-What is it?

It's a bit of the guttering, bit of the roof.

It's a number of things, to be honest with you.

-But we've got that booked in for this week now.

-OK.

-To get that done.

We're just going to pull all the walls back then.

The central heating system is not working at all.

It's unsafe so it'll be a new combi boiler with new radiators.

Spruce up the kitchen, new worktops, doors et cetera.

And flooring, carpets, laminate.

-Just make it nice, basically.

-And is it stuff that you can do yourself?

I'll be doing parts but we'll be getting people in as well,

-and turning around quite quickly, hopefully.

-What kind of time?

We're looking at about four to six weeks,

depending on if anything else crops up.

Any other problems, but should get it done in four, really.

And what budget?

Looking at only about 4,000 to 5,000 on here, so, yeah.

And then the plan is to get how many in the portfolio?

As many as possible, basically.

Keep going, hopefully, so you might see us again.

-Yeah, for sure. Well, listen, congratulations.

-Thank you very much.

-Good luck with it.

-Thank you.

-We look forward to seeing how you get on.

Thank you.

Well, Nathan doesn't seem too fazed by the challenges ahead here.

In fact, he seems ice cool.

Almost the cat that got the cream.

Yep, he's not too flaky about his plans

and he probably gives this place 99 out of 100.

Ooh, enough ice cream puns.

How will he get on with the challenges ahead?

Because I think there are many.

You can find out later in the show.

Well, that's one property done and dusted.

How did the other buyers fare?

Well, let's see if those schedules

and timescales stood the test of time.

Back now to Kirkcaldy in Fife where earlier, I looked at a property

with a small guide price but there was a good reason.

It's only a wee place.

Yeah.

Former public conveniences.

It was here I met Phil who bought the shell for £4,000

to turn it into a fast food outlet.

With the permissions already in place, Phil was thinking long term.

I think it's going to cost maybe 20, 25 to do it up,

and I feel, once it's done up, it'll still be worth what I've spent

if not a wee bit more, but it'll not be a lot more.

But I think it'll give me a good return, rent-wise.

Phil had tried to buy the block back in 2008

but it went beyond his budget for £24,500.

The then owner had stripped out all the fixtures,

leaving what the uninitiated might see as, well, a toilet.

But Phil could see beyond all that.

So, this top area, they tell me, will be the kitchen area and toilet.

And the front area will be the serving part of it.

-Right.

-So, there's quite a bit of work to do to bring it up.

And that's to get it completely sorted out. Roof, electrics, floor.

Yeah. The architect's told me, including his bill,

it'll be £25,000.

-Right.

-But who knows?

Phil's schedule was just two to three months.

14 months after our first visit, we're back,

and yes, from the outside, not much has changed.

# A change would do you good... #

But, no, the same goes for the inside.

# A change would do you good

# A change would do you good... #

So, what went wrong?

I bought it and the planning permission had certain

problems with ventilation, sound, things like that.

So, I had to get that tidied up which I did.

Then I had to arrange to get a building warrant,

and once I had the building warrant, I was able to start the work.

The work? Hope it didn't cost much. What exactly was the work?

I had all the rubbish removed. It only took a day and filled one skip.

I had the electrics checked to make safe

and we cobbled up the water, because we'd need water to do the work.

Other than that, I've done very little,

except for change the padlocks twice.

I suppose when you look closer compared with how it looked before

it is now much tidier but it's still a far cry from a hot food outlet.

# We'll get a Chinese and watch TV... #

Has it been worth it?

I'm going to end up having spent £9,500 on the property.

It was only £4,000 to buy. I've had two sets of architect's fees.

I've had my lawyer's fees to buy. I've had my lawyer's fees to sell.

I had to pay the seller's legal fees.

That was part and parcel of the auction,

and wee bits and pieces with builders

and making safe and things like that.

We did get estimates for the work that required to get done to take it

to full spec and job done, full planning permission and everything.

It was coming in at about £30,000, £33,000,

and that would be a premise ready to open.

Phil decided against going down that road and his actual

outlay of £9,500 to get it to this stage is not to be sniffed at.

However, I suspect Phil has something up his sleeve.

I'm going to sell it for £18,500 so I'm going to make about £9,000.

I owned it for about 15 months

so I've made about £600 a month which is more than I would've

had if I'd rented the place so I'm just deciding to walk away.

Having been passed, Phil's modified plans and the building warrant

added a significant value to the former toilet,

enabling him to make such a profit.

But there remains some unanswered questions,

like did Phil get a good price for his efforts?

And who best placed to ask than two gents from the property world.

Local to these parts, we asked them

if it was convenient to pop in and give us some valuations.

Consents are at a premium.

Fife Council don't give out hot food consents very easily so

a property that has one will likely generate quite a bit of demand.

The main selling point of the property is that it's

well located in an established residential area.

There are both publically owned houses around here plus

a lot of private stock as well.

It's next door to the local neighbourhood centre.

There's good footfall.

It's a busy little location, so it has potential.

So, what market value would you put on that potential?

In its current condition, with planning consent

and I understand it's got building warrants as well now,

I would have thought somewhere between about £17,500 and £20,000.

With the planning consent in place, in its current condition

it should be capable of attracting a price of £20 to £25,000.

I think they're both right.

I think between 17,500 and 25,000

would be the correct value in its present condition.

By selling to a private buyer for £18,500,

Phil was within those valuations and has doubled his money to boot.

However, would he have been better to see the project through

and then rent it out?

If the property was fitted out

and operational as a hot-food takeaway, I would envisage it

attracting a rental of £700, maybe £750 per calendar month.

I would've thought between £800 and £1,000 per calendar month.

Pleasantly surprised it would be as much as that.

I would've thought myself something between 575 and 700.

So, that's good news.

Good news for the buyer? Let's see.

If the new owner goes ahead with the fast food operation

and spends around £30,000 on top of the purchase price he paid Phil,

he or she will stand to make a pretty healthy yield of around 15%.

But Phil's not being caught short either.

He's doubled his money for little effort

and is still looking out for more toilets at auction.

I was at a recent auction in Edinburgh where

a toilet in a small village in Fife sold for £90,000.

So, a toilet's quite a good gamble for a property investor

who knows about planning, which I don't.

Yep, toilets can produce some amazing results.

# You're amazing just the way you are... #

# It's a kind of magic

# It's a kind of magic... #

We return to Ferndale, just north of Cardiff.

The lake in Ferndale is supposed to be enchanted,

but would the two bedroom terrace with the guide price

of just £29,000 I was here to see be magic?

Well, it's kind of slanting this way, and the fireplace...

I'm reminded of one of those Western bars where you slide a drink down.

It'd be very easy here because it would slide perfectly well.

Yep, it leaned. It also had damp.

But that didn't put off Nathan and his father,

who paid £27,000 for the property, £2,000 under the guide price.

Tell me why you wanted to buy this place.

We're looking to get a portfolio of rental properties together,

-me and my father.

-OK.

He couldn't be here today but he's out to work on the ice-cream van.

-Ice-cream van?

-Ice-cream van, yep.

He's an ice-cream vendor but the idea is to get

slowly into property and for this to be the sole occupation.

Nathan certainly seemed cool with all the work that needed to be done.

One month later, we returned to see if everything's going well

and if he's going to make a lot of lolly.

Right, have we hit our quota of ice-cream puns, now?

Good. Cue the music.

# I got the eye of the tiger

# A fighter

# Dancing through the fire

# Cos I am a champion

# And you're gonna hear me roar

# Louder, louder than a lion

# Cos I am a champion

# And you're gonna hear me roar

# Oh-oh oh oh oh-oh-oh... #

It's all looking fresh and welcoming.

So, how much work had to be done here?

We've done a lot of plastering.

New central heating system,

radiators, carpet, flooring. Everything, really.

The damp was, er, problems with the guttering

and the rendering was blown a bit,

so we hacked that off, tanked the walls and re-rendered.

It wasn't much of a problem, didn't add any extra cost on.

Just took a couple of days.

Nathan is pretty relaxed - just as he was about that wonkiness.

We've knocked the neighbours, they're all like it as well,

so had a look down the street, it just seems to be movement over time.

Let's just call it a "quirky special feature", then.

# What a kooky little paradise What a kooky little paradise

# Never was an island half as nice

# As my kooky little paradise... #

The bathroom has been repainted and regrouted.

They decided to keep their original tiles.

So what did they do to brighten up the kitchen?

In the kitchen, we've changed the worktops,

wrapped the doors in a vinyl wrap,

makes it look nice and white and new.

Um, we've kept the original oven, hob and extractor fan,

with the sink and the tap - it all didn't need replacing.

It looks much fresher and brighter.

Hopefully the new tenants will be pleased with it.

I think this is a very clever choice. OK, so disguising old units

with vinyl wrap is no substitute for a brand-new designer kitchen,

but this is a good example of knowing your market.

Nathan is intent on renting the property and those cosmetic changes

do make a bit of difference without eating into the budget too much.

Speaking of budgets, Nathan was looking to spend

between 4,000 and £5,000. How did he get on?

We've come in under 4,000. Just, though.

I think about 3,800 all being told.

So it's a bit under budget, it's great.

The timescale's gone great.

We've spent 24 days on the property in total.

There's been a few weekends, a few late nights,

but, all in all, on target.

Under budget and finishing within his four-to-six-week timescale,

Nathan appears to have done well.

Having paid just £27,000 for the property at auction

and spent £3,800 on the development, things are looking positive.

But let's see what two local property experts think of his work

before we crack open the champagne.

They've made some very good changes.

They've obviously improved the kitchen and improved the bathroom.

Um, put new flooring in the living room

and new carpets upstairs.

On the whole, they've done a good job.

The standard of the finish isn't the best I've seen,

um, the painting, um, could do with improving,

um, but the general standard is OK.

I think the good things about this property are the parking,

the new boiler.

It does smell new, because of the paintwork and everything,

new floorings in some areas,

but it is definitely down at the rental standard.

It's definitely not a sale standard.

If you weren't going to replace the kitchen,

I would have redone the doors,

instead of putting the veneer over them, or the lacquer.

While Nathan is aware that there are some finishing touches

to be made to this house,

he was keen to stay on budget.

So, will the cheaper finish affect the values?

So far, the father-son team have spent £30,800.

So, what could it sell for?

I would put this property on the market for £59,950,

with a view to achieving between 50,000 and £55,000.

I think if this property was put on the market at the moment,

it would achieve 60,000 to £65,000.

If Nathan and his dad were able to achieve that top valuation

of £65,000, it would give a pre-tax profit

of 34,200.

But Nathan was looking to add this to a portfolio of properties,

so what rental value could he expect?

I would look to rent this property out for £375 per calendar month.

I think this property could rent for between 350 and £375

per calendar month.

If it was done to a slightly better standard,

definitely £400 per calendar month.

Yep, that's brilliant, that's exactly what I was expecting.

Be great to definitely rent the property out.

£375 per calendar month

would give Nathan a whopping yield of around 14%.

No wonder he's pleased.

A good lesson for all developers -

sometimes, pouring money and time

into the perfect finish is not the solution.

He had a plan, he bought cheap, got it turned round quickly

and didn't spend too much.

So, what now?

More property or more ice-cream?

Property compares very differently to the ice-cream,

but, er, definitely enjoy property more and we'll continue on that.

So that's what happened to our buyers

featured on the programme today,

but there are as many stories as there are properties.

Yes, so join us next time for more tales from the auction rooms

here on Homes Under The Hammer.

-Goodbye.

-Goodbye.