Episode 58 Homes Under the Hammer

Hello and welcome to the show.

Now, there are plenty of reasons to try your hand at property investing.

Yes, but there are plenty of things you've got to do right

if you want it to go smoothly.

Yes, number one is get the property at the right price.

One way you can do that is by going to the auction.

We always say, "Do your research before buying at auction,"

and that means going to see the property beforehand

and reading the legal pack.

But it doesn't mean there won't be any problems.

Forewarned is forearmed.

Here's what tempted the buyers on today's show.

Today we test the temperature of the Midlands market in Nottinghamshire.

Talk about the hot seat!

What a strange place for the boiler.

This three-bedroom semi in Derby has a red-hot kitchen.

It's like a red wine mixed with tomato. Clash!

And the buyer of this Stoke property is going to need a cool head.

Now, clearly we are entering the realms

of fairly specialist opportunity.

All of 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.

The village of Pleasley in Nottinghamshire

is very pleasing on the eye.

The River Meden runs through the village and determines

which parts of it are in Derbyshire and which are in Nottinghamshire.

Pleasley Pit, which formed the main employment for the area,

closed in 1983 and then became a mining museum.

The nearby village of New Houghton was built to house the mine workers,

like the property I've come to see.

Some real nice little details on these terraces.

I love these arched bits above the windows. Brilliant.

But what am I here to see?

Well, thankfully it is one of these very properties.

Three-bed, mid-terrace. Guide price of £40,000.

Boing!

So what have we got? Well, a little entrance area here.

Interesting sort of cupboard area there underneath the stairs,

but a useful place to store all those things

you've got nowhere else to put. New carpet...

That's not a bad thing to see,

although you do wonder sometimes if it's covering up something.

But front room here - big window underneath that archway,

it's a nice size.

A few signs of damp on that front wall -

you'd want to investigate that.

Through into the rear sitting room, and I quite like this layout, actually.

You've got that front room there, the stairs up to the bedrooms

curving round there and then this...

I guess this is your rear sitting room/dining room

dominated by this fireplace.

So what do you think? Keep it? Get rid of it?

Personally, I think I'd put something slightly more in-keeping

in its place. Definitely retain the lovely feature,

but maybe not that one.

Through into your kitchen. Well, it's not huge.

You could contemplate basically taking out that wall -

supporting it, obviously, with some beam over the top there -

opening this into a really nice sort of kitchen/living area,

a real family-friendly space.

Or you could leave it as it is, replace the units.

I mean, either way, it's just adding to, you know,

a not bad little house.

Actually, not little at all.

A not bad BIG house.

Opening up spaces like this and making a dining-kitchen

is what's in demand for modern-day living.

That and easy access to the garden.

Oh, I do like a nice set of sliding patio doors.

Only bettered by the slightly more modern trend of bi-fold doors,

where you can literally pull back the whole glass wall

to reveal the room and open out the house onto the garden.

I think you'd probably want to do a bit of work

before you do that, though.

It's largely laid to concrete at the moment

and the rest of it is a bit of a jungle. But it is a good size.

Look at this!

And rear access, which is a bonus, so maybe decking, grass,

water feature, place to park your cars...

Ideal.

Out here, I've spotted a trio of bonuses - quiet back garden,

secure off-road parking, and the vista from the front of the property

over the fields is very nice.

So far, I like everything downstairs and outside.

There's just upstairs left to discover.

So upstairs and just more confirmation

that this really is a good-sized terrace -

seemingly on the inside much bigger than it is on the outside.

Three half-decent-sized bedrooms, so lots of ticks, really,

and really importantly, the bathroom upstairs too.

But what a strange place for the boiler.

That's not very clever, is it?

All in all, it's not a bad house,

especially with a guide price of 40,000.

But that carbuncle of a boiler and casing would have to go for me.

A case of "mind your head on the way back out".

And on the way in is a local estate agent invited along

to give some opinions and valuations.

I'd say the property is in very good condition.

It doesn't need a tremendous amount of work doing to it in order

to put it up either for resale or onto the rental market.

For the price bracket and for the area,

if you were to sell the property, it would probably go to a first-time buyer.

I could see that - they could live in it as is

and do up the kitchen etc in due course.

What would be the market value, then?

If the property was done up to a reasonable standard,

I would recommend an asking price of £70,000,

to achieve in the region of £60,000-£65,000.

For a rental value, I would recommend marketing

the property at £400-£425 per calendar month.

Well, a few modifications required here and there,

but intrinsically it's a good house in pretty good condition

and I certainly like the location. So, yes, lots of boxes ticked.

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

Onto lot 279, it's New Houghton.

Mid-terraced house, three-bedroom,

lot 279 in New Houghton.

Start me at...

Start me at 30,000.

30 I have...31, 32,

33, 34,

35, 36,

37,

38, 39,

40...

No. It's against you on my right, it's with you on my left at 39,000.

40 anywhere else? Gentleman's bid. Bold bid. Thank you, 40 I have.

Fresh place. 41? Fresh place for that, 41. 42, sir?

43.

No, he's not in. Your bid, 42,000. It's against you in the back.

43, anywhere else?

First for 42...

Second time, 42...

The third and final time at £42,000...

Your bid, I think you've got it...

Sold at 42.

You may recognise Kate and Charlie,

they've been on the show before with their family of little helpers.

My work was painting

and trying to get woodchip wallpaper off the walls.

I scrubbed quite a lot of the skirting boards, hoovering...

I did a lot of things, from stripping wallpaper to painting.

I'm really pleased to see the house come back to life, really.

In fact, they bought this house at the same auction as

the previous one, so I met them to find out

what their plans are for this one.

Tell me why you wanted to buy this place.

We were looking to buy a new buy-to-let property and we came

to look round here and it was just the house that we were looking for.

Ticked all the boxes, doesn't need a huge amount of work doing to it

and we know the area, so, yeah.

What was on your checklist, then?

It ticks boxes - what was in your boxes?

Something that we could do and the family could do as

a joint project, and so this really fitted the bill.

We'll get them to do as much of the refurbishment as we can do.

We obviously get tradesmen in to do the electricity and gas

and all those bits and pieces

and the plastering - they're not plasterers yet.

Let's talk about this place.

What are you going to do to sort it out?

It doesn't need a huge amount doing to it.

There's a bit of damp to sort out, we're going to get someone

to come and have a look at that for us.

We want to take out the feature fireplace

and we're going to refurbish a little bit in the kitchen.

The only other thing we're going to check is the boiler.

If that needs replacing, we'll put a combi boiler in

and sort that out so it doesn't eat into as much space

in the room, and try and get a shower in that bathroom as well.

OK. What are you going to do with outside?

I think we should leave the back area for space for three cars

and then...we've actually had quite a lot of interest in renting

-the property already.

-Oh, right. Even before you've refurbished it?

So we may even have a discussion with the tenant to see what they'd like.

So let's talk about the refurbishment costs.

How much do you think it's going to cost?

We've put a budget of about £3,000.

If we have to do the boiler, we might put that up to five,

but we really are looking at a quick turnaround - four weeks.

-Three weeks.

-Oh, wow. Three weeks?

-It might slip to four.

-Cracking the whip, then.

-Absolutely.

-And will you two get involved as well?

Yeah, very much so.

It must be nice to be doing it as a family, actually.

It actually is quite a teambuilding experience, we've found.

It has been... Over the last year

when we've done other houses up it's been really good, hasn't it?

It has, yeah. We enjoy it, really.

Not, perhaps, in the thick of it, when it's really late at night

and everyone's hungry, but it is good, it's good.

The family certainly seem to be on a roll.

You might recall I mentioned earlier that they bought the two properties

on the same day at the same auction,

and the similarities didn't end there.

Both houses have the same street name.

That's obviously going to be lucky for you, then, isn't it?

Yeah, it is lucky. It causes lots of confusion, but it is, yeah.

-It was meant to be, I think.

-You say it caused confusion...?

Well, unfortunately our solicitors decided to only convey

-on one property...

-Oh, no!

..and we got to the exchange day and we said, "Where's the other one?"

And they went, "Other one?"

-You are joking!

-I'm not, no.

So we conveyed, though, they were marvellous.

They conveyed on that whole second house in one week.

-So that shows they can do it.

-That's a classic.

-So they sort of went, "What do you mean, two properties?"

-Yes.

There must have been a heart-in-the-mouth moment.

There was, there was a slight moment of panic because we didn't want

to incur huge fees for not completing within the 28 days,

-so we were only a week late.

-Yeah, well, phew.

-It's good that the vendor was sympathetic.

-Yeah, they were.

-So is it going to be rented out?

-It is.

-Both of them?

-Yes.

-We're going to be renting them out.

-Building a portfolio, or is this...?

We are, yes. We already have two.

Our first two houses we bought last year and then these two.

Well, congratulations for your double purchase.

-Thank you.

-Yes.

-Good luck with it.

-Thank you very much.

We look forward to seeing how you get on.

-Thank you, Martin.

-Cheers.

Well, what an unusual set of circumstances,

and a slightly problematic one, as it turned out.

Thankfully, though, it was sorted and Kate and Charlie

and their children can get on with sorting this place out.

How will they get on? You can find out later in the show.

It's Derby day here on our meander round the Midlands.

We are in Chaddesden, just east of Derby town centre.

As well as lots of its own amenities,

it has great transport links into the surrounding area.

I bet we'll be finding some interesting properties here.

Well, along this residential road is the three-bed semi I'm here to see.

Now, it had a guide price of £55,000.

That sounds pretty reasonable,

but I'm not fan of the pebbledash exterior.

But there are a few positives I can see from the outside.

Firstly, there's double-glazed windows, and secondly,

somebody has already built a porch which now only needs to be rendered.

So far, so good.

I think porches are wonderful creations.

They keep out the wind and the rain,

somewhere to store your coats, bags, shoes and bikes - fabulous.

So let's have a look around, then.

Well, nice hallway, reception room, double glazing - a real bonus -

you've got central heating and a...

Wowzer! Check out the kitchen.

It's red. Black and white tiles...

The funny thing is, though, it's like a red wine mixed with tomato.

Clash!

I think I'd like to try and come down just a little bit in here.

But something else you need to think about - the guidelines

to have your cooker and your sink...

Well, you should have at least 40cm apart.

You could think about switching this over so your sink's over here

and your draining board's here,

but I'd definitely have a little bit more of a gap between the hob

and the sink, or even you could move it somewhere else.

But a great space in here.

If you think THIS is a good space, check this out.

It's only a utility room, and it's massive.

It's almost like a second kitchen.

You've got a downstairs loo, door leading out to the front,

door leading out to the garden.

In fact, I would say this downstairs space is almost good to go.

That's if you like red kitchens, of course.

# Red rain is coming down

# Red rain... #

That's a great-sized ground floor.

There is some work needing to be done, but it's all cosmetic.

Things are looking good.

The upstairs bathroom looks freshly done.

I just hope that if the new owners do decorate the kitchen,

they buy enough paint for the upstairs, too.

Lime green, anyone?

When a property's already in good condition,

there are less ways you can add value to it.

However, one way you can give a place like this a boost

and make it more saleable is to create some off-road parking.

I can see a lot of the neighbours along here, well,

they've already done that. You will need to apply

for permission from the local council to drop this kerb

but the driveway should only cost around £800

and it could add as much as £8,000 onto the value of the property.

Well worth it, don't you agree?

Along with the relevant permissions to get a driveway,

the front and back gardens are going to need a good clear-out.

Never underestimate how much soil this produces,

so factor skip hire into your budget.

Still, all this space and a potential driveway for a guide price of 55,000!

What's the catch?

If something seems too good to be true, well,

unfortunately it often is. I have a big bombshell to drop.

This house is prefabricated, which means it's of non-standard construction.

# Duh, duh, duh... #

Yes, that is bad news.

It means that this is susceptible to structural problems

and, even though there are no signs of that yet,

mortgage lenders will be very reluctant to provide money,

which means it could be tricky to sell on.

Not only that, it reduces the value of this property

compared to its brick-built neighbours by around £20,000.

Ouch!

I hope the buyer of this one did their homework and

they know exactly what they're dealing with.

# I want to build you up

# Brick by brick

# I want to break you down

# Brick by brick... #

This issue can be resolved by building a brick skin, which

could cost around £20,000.

Oh, suddenly the colours inside the house don't seem like an issue.

As long as the buyer has done their homework

and is aware of possible constraints around the mortgageability

of this property and the possible cost of making it mortgageable,

then all should be well.

Time to find out if a local property expert thinks this is

a secret gem or some fool's gold.

The property is a good size.

It would certainly appeal, in my opinion, to a young family.

All the big items of expenditure, in my opinion,

have all been taken care of.

I do feel it is ready for a cosmetic overhaul and general tidying up.

I agree entirely, but what about that non-standard construction?

It does pose some limitations in terms of resale value.

Some mortgage lenders are a little bit

guarded about lending on properties of non-standard construction.

However, that is easing a little bit more now.

More lenders are taking a view that they will lend on these properties.

That's certainly positive.

What value will she put on this non-traditional house?

Once renovated, in my opinion,

the property could resell for somewhere in the region of £95,000.

And if the property was to be rented?

In my opinion, the property would let for approximately

£525 per calendar month.

So this property already has double glazing,

central heating, as well as a modern kitchen and bathroom.

It is of non-traditional construction, don't forget,

which will always limit its end value.

Still, as long as the structure remains sound, I think

it doesn't need too much work to bring it up to standard

and, as a rental investment, it could provide a decent return.

Let's find out who that buyer was when we went to auction.

The guide is 55-plus.

Who has got 50 to start me and let's get on? £50,000?

Thank you, 50,000 I've got.

51 is bid.

At 51, 52?

52,000. 53?

The bidding was very competitive.

We rejoin the auction at £66,000.

66.

500?

67.

67,000, is it getting a bit warm?

Or is it me?

£67,000.

500. I thought you might.

68.

68, definite?

67,500, once, twice, third chance...

It's yours for 67,500. Thank you.

With a successful bid of 67,500, the house was to be

developed by Hemi, who has recently become a full-time property manager.

I caught up with her at her house to find out more.

-Hemi, congratulations.

-Thank you very much.

Is this the first one you've ever bought at auction?

No, I actually bought another one on the same day.

Yeah, that one's already rented out.

This is the first big refurb project for the business.

-Tell me more about the business.

-The business.

What it is, I'm a property manager.

I manage buy-to-let residential properties on behalf

of landlords, clients.

This one was the first purchased at auction

that I've done for one of my clients.

-Is this a fairly new business?

-Yes, it is.

Within the last 12 months, it's all very "go, go, go",

considering it's so new.

I'm already managing, like, a dozen properties, two properties bought...

No, it's really fun. Really a lot of fun.

# I'm taking over

# Now I'm in control

# And the pressure is on... #

A dozen properties? Hemi has certainly hit the ground running.

What does she intend to do with this,

the business's first big refurb?

What is your plan - are you going to keep this,

sell it on or are you going to let it out?

I think initially it is going to be let out.

It's a lovely house

and we know the rental potential around here is quite good.

We're going to see really what happens next year.

No-one really knows what's going on in market.

We're just going to wait and see.

Tell me a little bit more about your client.

I manage all his portfolio at the moment.

When he approached me and said he wanted to expand his portfolio,

I was the first person he thought of.

-Lucky for me, he also just happens to be my dad!

-Well!

So he's going to be doing that, so he's putting a lot of faith in me.

Do think your dad has helped you springboard

into this business, really?

I think it's been more than springboarding,

it's more inheriting his passion for it.

The more he talks about it, the more I got interested in it

and thought, "Yeah, I'm going to give that a go, actually."

And guess what, Hemi's parents have been on the show before -

in 2010, in fact.

Homes Under The Hammer spans generations of property developers.

Hemi, I've done my research

and I know this is non-traditional construction.

That might have put some people off on auction day. Did you know that?

We were aware of some things about it.

It was more to do with the fact that we checked all the legal

documentation before the auction.

We made sure all the building regs had been in place for all

the extensions and we were pretty happy with the fact that there

wasn't actually any structural issues, it was just cosmetic stuff that we needed to do.

What about the fact it is non-traditional construction,

it's not built of typical brick, and therefore it's hard to get

mortgages and, hence that's probably why this was at auction.

Do you think that might, in the future, be a bit of a hindrance,

could put some people off?

To be honest with you, if it does in the future come up as an issue

and people do say, "OK, there is a problem with mortgages,"

we will just keep it for rental.

As Hemi is planning to rent the property,

the house's construction is not much of an issue but, regardless,

I'm glad to hear she went in with her eyes open.

With that concern out of the way,

Hemi's planning on leaving much of the ground floor as is,

simply redecorating, which includes mercifully some paint to

tone down that radical red kitchen.

What about upstairs?

The upstairs, to be fair, is actually pretty good.

There's a few suspect colour choices.

There's some interesting wood ceilings been put in.

To be fair, I've actually had a couple of my contractors say

it could be an interesting feature if we just tidy it up.

I think we're going to do a bit of that. The bathroom is completely new.

We just need to install a shower.

The client, Hemi's dad, has agreed a £5,000 refurbishment budget,

but what about the timescale?

At the moment we've estimated between four and six weeks.

I have to be honest, sometimes I look around and think,

"I don't need that long." Other times I think, "Actually maybe, maybe."

We've allowed six weeks, mainly because a couple of the contractors

I'm speaking to are a little bit busy at the moment.

So rather than starting when we were looking at, it might be delayed for a week.

Although the work won't be actually that long, to make sure

the contractors are all there on time, we've allowed six weeks.

Hemi, I can't wait to see it once you've freshened it up.

-Congratulations.

-Thank you.

Well, it's an exciting time for Hemi.

She has her own property management company

and her client for this house, her dad.

She seems very relaxed about this project but will it all

be as straightforward as it seems when she scratches the surface?

Don't forget, it is non-traditional construction.

Join me later in the programme and you can find out how she gets on.

Coming up, I'm at a property ripe for redevelopment.

The profit could be anywhere between 1.5 million and 2.5 million.

Mmm.

And in Chaddesden, Derby, we find out what Hemi's dad

makes of his daughter's handiwork in her fledging career.

Now back to New Houghton and the parish of pleasing Pleasley.

The village that's partly in Derbyshire

and partly in Nottinghamshire.

This three bedroomed mid-terrace was bought at auction

for £42,000 by Kate and Charlie.

The family were going to get stuck in together,

again having previously renovated another property

bought at the same auction with an uncanny coincidence.

Both houses have the same street name.

That has got to be lucky for you.

-Exactly. It caused us lots of confusion.

-Oh, yes.

It was meant to be, I think.

You say it caused confusion.

Well, unfortunately, the solicitors only decided to convey on one property.

Oh, no!

We got to the exchange day and we said, "Where's the other one?"

They went, "Other one?"

One month later, we're back.

Remember that featureless front room

and the heavily featured fireplace in the back?

Well, it's all changed.

Both the downstairs rooms have been freshly painted and decorated

and the new laminate flooring is practical and bright.

Extra and repaired kitchen units with new worktops

and a new colour scheme refreshed the old kitchen.

Upstairs, the bathroom got a thorough transformation with

that previously daft position for the combi boiler sorted,

and a nice, new suite and shower,

so no more cases of concussion from the combi.

It's all looking much better.

Only the bedrooms remain much the same.

It looks like a sensible refurbishment.

Much of the original fixtures and fittings

have been cleaned up and reused.

What's the story with the latest addition to the family portfolio?

The main infrastructure of the house was pretty sound,

apart from the wiring that we've done.

The carpets upstairs were in good condition, so we've kept those.

That's about it.

In the kitchen, we've kept the same units

but we've moved them around so it makes more sense of the space.

It's quite small in there.

We've replaced all the worktops and really given it a coat of paint

and made it look a lot brighter.

We've installed a gas cooker and an extractor over it,

again to make it a little bit more contemporary

and really make it look a nice, workable kitchen.

The family have been working round the clock - and still are,

by the looks of it.

How has renovating two houses at the same time been?

Panic! They've both gone well.

I think, if the opportunity happened again, buying two

houses at auction at the same time, we would probably do it again.

They are gluttons for punishment.

Buying in pairs could mean double trouble

but they seem to have got through it untroubled. How come?

The kids have been brilliant.

They have come in and done all the decorating,

the cleaning, the tidying.

They've strimmed the garden.

The two older boys have painted the outside of the house.

They've all taken on jobs and tried to do new things, as well.

It's been a really good learning experience for them.

The main argument is it's 12 o'clock in the morning

or 12 o'clock midday,

it's time to get out of bed, kids.

Once they're here and working, it's good, lots of tea breaks,

chocolate biscuits, bacon sandwiches.

That keeps everybody fed and watered.

Hence the expression, "bringing home the bacon".

Did they bring home a healthy budget?

Initially it was set out at 3,000 to 5,000.

We've spent just about £6,000 and that is

because we did replace the boiler.

We thought that was a good thing to do

and we also went for a slightly nicer spec on the bath

and the shower, just because it's a really nice bathroom

and we wanted to give it a feel of space.

£6,000 doesn't seem all that bad

but what will two local estate agents make of the family's efforts?

I think it's been renovated to a very good standard.

The three bedrooms is obviously a benefit.

It's got a good-sized third bedroom.

The kitchen and bathroom are very modern.

And the fact it has off-road parking is a bonus as well.

The standard of finish is right for the market we're going to be

appealing to.

It's been done to a high standard

and you can tell a lot of hard work's gone into it.

The house was bought for £42,000

and then has had £6,000 spent on renovation - a total of £48,000.

If the family wanted to sell, what could it fetch on the open market?

I feel the property could resale between £65,000 and £70,000.

If I was to put this property onto the market,

I'd recommend an asking price of £70,000.

-At £70,000, that could mean a pre-tax profit of £22,000.

-Wow!

-That's good.

-That's pleasing.

-That's great.

-That's very pleasing.

Yeah.

But of course, Kate and Charlie are going to rent this

property as part of their portfolio and already have a tenant.

So, what kind of rent should they have been looking for?

If this property was to be on the rental market,

I'd recommend an asking price of £400 per calendar month.

I feel the property could achieve £425 per calendar month.

-Got it rented at £425, so that's fair enough.

-That's great.

£425 per calendar month gives the family a yield of 10%.

# Bringing home the bacon... #

Their fourth property is sure to put even more

pennies in their piggy bank. And what an interest rate.

But will the kids continue property development when they're older?

I think I'd need four children to go into property developing cos

otherwise I don't know how I could afford it.

Yeah, all the free labour.

We must have saved Mum and Dad a couple of grand helping out here.

-On each house.

-On each house, yeah. But the money's good.

I can see it's a worthwhile investment, so...

I have lost track of how many times I've visited the Stoke area

for Homes Under The Hammer.

But let me tell you, it's a lot!

And the lot I'm here to see is in Bucknall, which is

about 1½ miles from Hanley.

So far, so familiar.

At this point, you're probably expecting me

to say I'm off to see some two-bed terrace, or maybe a three-bed semi.

But no. No, no, no!

I'm here to see...this - a 43-bedroom former care home,

sitting on an acre-and-a-half of land.

So much to see, I don't know where to start.

On the face of it, it seems like a bargain,

for a guide price of £200,000.

Now, clearly we are entering the realms of fairly specialist

opportunity scenario here,

but I shall try and inspire you with the options.

Through what is a temporary door at the moment,

into what, I guess, was the main community area. It's a big space.

You kind of get a feeling when you come in here of...

Well, there's a lot of clearing out to do

and also the age of the building, and so you've got to be aware

of some of the building practises of the era in which this was built.

One thing I'm definitely looking out for is signs of asbestos.

Other than that, let's just see what we find.

The building was built in the late '60s, early '70s,

at a time when asbestos was commonly used as a fire retardant

and insulation. So, there's a reasonable chance it could be

hidden behind ceilings or walls.

So, I'd advise that the building was checked for asbestos.

Electrics and plumbing probably aren't up to modern standards

either, so a lot of rooms, but potentially a lot of cost.

It's quite hard to get a grasp, and even worse,

trying to explain the kind of layout of this place, but I'll do my best.

Back there, sort of an industrial kitchen.

More sort of staff areas, and just...facilities here.

As you progress down this corridor,

we're moving towards where the bedrooms are.

In fact, this is quite useful. A map, a layout of the actual place.

Here's where I came in. There's that big lounge area there.

Through here, the kitchen.

Down here to where I was just a second ago. I'm now at this point.

You can see the bedrooms spreading out down this long corridor,

here and down here.

So, you get an idea - a really extensive building.

And that starts you thinking about what you could potentially

use this for.

That needs to be mulled over, but for now, as I said,

one long corridor going down that way, let's head this way.

This place is vast.

Along with 43 bedrooms, there's washrooms, hair salons,

six offices, a kitchen/dining area, three sitting rooms,

and seemingly miles and miles... and miles and miles of corridor!

Well, this place has certainly got my developer's mind racing.

So, let's just look at the options.

First of all, you could leave it pretty much as it is.

Obviously, you'd have to spend a bit of money doing it up, but converting

it back into a care home or some kind of residential care facility.

That's number one.

Number two, you could think about keeping the existing building

but putting it to alternative uses.

Thirdly, what about the option of developing it?

I've been going through

some kind of back-of-an-envelope calculation in my head

and I reckon as an average in the UK at the moment,

between 12 and 17 houses per acre, ballpark,

so you've got an acre-and-a-half,

so that's between 18 and, say, 25 houses on here.

Let's say each of those houses would be worth £150,000

and let's say each of them cost around about £50,000 to build.

Take off the cost of buying the land, social housing you might

have to build, putting in utilities, general bits and pieces,

architects' fees, blah, blah, blah...

I reckon, ballpark, if you built houses on here, the

profit could be anywhere between £1.5 million and £2.5 million.

Mm...

Numbers like that are eye-watering.

But there's an awful lot of hoops to jump through before you'd

get to see any returns.

You might not get planning consent, for a start, and then what

you've got is a big building that might be hard to do anything with.

So this investment wouldn't be without its risks.

What does a commercial property agent think is the best

use of this former care home?

My opinion would be that whoever subsequently buys this property

continues to use it on an existing use basis.

That will obviously require a lot of refurbishment and investment,

but in doing so, the existing Planning (Use Classes) Order will not

need to be adjusted, which obviously makes life a lot more simple.

Simpler, indeed, but could there be any money in it?

It is a tricky property to value as a completed project

because the value of the care home largely depends on the revenue

it produces once it's fully occupied.

But knowing what we do about the size of the property

and the revenue it's likely to generate,

I would estimate that the value completed and fully

occupied will be somewhere in the order of approximately £1 million.

So, what do you think?

A tantalising opportunity,

or a project that's just too big to even think about?

Depends who bought it, I guess.

Let's find out who that was, when it went under the hammer.

Lot number six is a former residential care home.

Has onsite parking, with gardens. Kitchens and lounge.

Site area of 1.5 acres. So, lot six.

170, going to say? 170, bidding?

Yep. £170,000. Standing left.

At £170,000. Looking for 175 now.

At 175. At 175.

180, right at the back.

At 180. 185? 185.

Maybe not surprisingly, this was a popular lot,

and we rejoin the bidding at £350,000.

350.

355.

360.

365.

370.

375.

Shaking his head. 375.

Bid's seated, right.

At £375,000.

Bid is seated, right. At £375,000, then, for the first time...

At £375,000 for the second time...

Third and final time, at £375,000...

You've bought it, sir. Well done.

And so, for £175,000 over the guide price, at £375,000,

the new owners of the former care home in Hanley

are father-and-son team Bill and Phil.

I met them back at their new purchase to find out what

they hoped to do with this extensive building.

-Bill, Phil, great to meet you both.

-And you.

-Congratulations.

-Thank you.

Why have you bought this place?

It's a good business proposition.

Tell me more about the business proposition.

Well, we're going to convert it back to its old self.

Right, so, old self being a care home.

It'll be a care home with particular interest to those who have

got dementia and Alzheimer's.

OK. A very worthwhile project, then.

Tell me more about your involvement in this sphere.

We've been involved in it for 26 years.

We now have five and this will be our sixth.

And we're hoping that this will be a success,

as the others have been as well.

Right. How much demand is there for what you're providing?

We have looked into it quite a bit

and there is quite a lot of demand in the area.

Residents won't like to travel too far from where they're

normally based.

But there is a lot of demand.

'Bill is chairman of the care home company.

'It is a very highly regulated sector that involves

'a thorough knowledge of working practises,

'but for Bill, it wasn't his first career.'

So, how did your business start? Is this what your background is?

No, I started off in the entertainment business.

-What kind of thing?

-Discotheques.

I opened the first discotheque in the country in Hanley,

more or less 50 years ago this month, called The Place.

-1963.

-1963.

-And that was the first disco?

-It was the first disco in the country, yes.

So, what kind of music were you playing at the time?

-I suppose stuff of the era.

-The Beatles, Rolling Stones...

-Right.

You had a lot of live bands, though, too.

-Oh, we had a lot of live bands, yes.

-Like?

Well, there was Elton John, Rod Stewart, Drifters,

Four Tops... The Supremes, Martha Reeves And The Vandellas...

-All the Motown acts.

-Wow! And they were all playing in Hanley!

-They were all playing in Hanley, yes.

-In your disco.

-Yes.

So, how did that lead into what you do now?

I had a chap who was working for me

who suggested that I carry out a development on a house

and he felt that it would make a good nursing home,

-convert it into a nursing home.

-Right.

And I said, "I know nothing about nursing homes."

He said, "My fiancee's a nurse and it seems like a good prospect

-"and there's a great demand for nursing homes."

-Right.

So I looked into it and this is where we went from there.

-26 years ago.

-Yes.

So, in order to convert it to what you want it to be,

-what are you going to have to do?

-A lot of the rooms aren't large enough.

They've come at about nine square metres.

We have to make them a minimum of 12 square metres, which means combining

a lot, or the majority, of the rooms together, to make usable rooms.

So, how many rooms will there end up being?

-There will be 42 bedrooms.

-42 bedrooms.

-Does that mean 42 residents here?

-Yes, up to. A maximum of.

-Yes.

Are you going to do anything to sort of make your care home

-stand out?

-Well, we have speakers throughout the corridors,

playing soothing music...

-Oh, great.

-Maybe music of the era as well.

-Oh!

We might have a sensory area,

or a sensory room we might put in to the premises.

-Nostalgia, reminiscence.

-Reminiscence.

We'll have a sensory garden as well,

which will be a secure sensory garden.

What do you mean by sensory garden?

So the residents are able to sit down, relax, have...

Things that will heighten their senses.

So smells, visual things, so from floral plants to fruit plants

and fruit trees as well.

-That type of thing.

-Sounds like an expensive project.

-Slightly.

How much is it going to cost to get this place up and running?

Well, we reckon about £550,000 to £600,000 and we expect it's

going to take seven to eight months to complete the building works.

-Well, congratulations.

-Thank you.

-Good luck with it.

-Thank you.

-Pleasure.

-Thank you.

-All the best.

Thank you.

So, father-and-son team Bill and Phil taking on, well,

an ambitious project by anybody's standards.

However, they've got the experience to make it a success.

How will they get on providing a very valuable service for the area?

Let's find out later in the show.

We've seen how our first buyer got on, now what about the others?

Let's see if everything went as it should have.

Back now to Chaddesden, Derbyshire, where earlier I saw a three-bedroom

semidetached house which was bought for £67,500 to be

developed by Hemi, a property manager.

She has only recently gone into property management

and this was to be her first full-house refurbishment

for a rather special client.

Tell me a little bit more about your client.

Well, I manage all his portfolio at the moment,

so when he approached me and said he wanted to expand his portfolio,

I was the first person he thought of.

-Lucky for me, he also just happens to be my dad.

-Wow!

So, he's going to be doing that, so he's putting a lot of faith in me.

Do you think your dad has helped you sort of springboard into this

-business, really?

-I think it's been more than springboarding.

It's more sort of inheriting his passion for it.

The more he talked about it, the more I got interested in it

and thought, "Yeah, I'm going to give that a go, actually."

I think it's fair to say the house had a rather unconventional

palette of colours throughout.

# Green is the colour of the sparkling calm in the morning

# When we rise

# In the morning, when we rise

# That's the time, that's the time

# I love the best... #

So, you've got £5,000. Yes. How long have you got to do this up?

At the moment, we've estimated between four and six weeks.

I have to be honest, sometimes I look around and think, "I don't need

"that long," and other times I think, "Well, actually, maybe, maybe..."

So, time to see if Hemi was right,

as we return eight weeks after our first visit.

Let's start by looking at the changes in the multicoloured

kitchen.

# So open your eyes and see

# The way our horizons meet

# And all the lights will lead

# Into the night with me... #

The once tired utility has been spruced up with a new paint

scheme and worktops.

The downstairs loo is now fully operational.

# All of these stars will guide us home... #

Back at the front of the house, the lounge has a new vista,

thanks to some hard landscaping.

Upstairs, the once orange box room has had a bright face-lift.

Lime green lovers need not apply any more,

as the neutral tones continue in this bedroom too.

The final bedroom had wall-to-wall bold wallpaper

and a dark imposing ceiling. Not any more.

# So open your eyes and see... #

Now, there's just wallpaper on one feature wall. Much calmer.

The bathroom is pretty much as was.

And finally, let's take a look around the outside,

where things are so much tidier.

Apart from the unsightly skip, which is going soon.

Quite a change, thanks to Hemi's hard work.

Did all go as planned?

I think really most of the work was expected.

There was a couple of little bits and pieces,

like when we did take off the wallpaper, all the plaster

came off the walls, so unfortunately we had to re-plaster all of that.

There was a lot of garden waste, so we ended up having to hire a skip.

And there was a couple of minor issues with the boiler,

where we ended up having to do some repairs and what have you.

But really speaking, I think

we've been quite lucky in that there haven't been any major expenditures.

Nothing significantly over budget. So that went quite well.

-How did the budget end up?

-So, the original budget was £5,000.

We managed to get it in to £5,155.

£155 over! Well, I always say, keep a contingency fund.

What about timescale?

It did take pretty much bang on the four to six weeks.

I did have some allowance in that timeframe to allow for any contracts

and scheduling issues and that kind of thing, but we did manage to finish

on deadline and within the timeframe we imagined, so that was quite good.

Hemi's dad has ruled out selling in the immediate future,

so to find out what his daughter's work is worth on the rental

market, we've invited two local property experts for their opinions.

I've had a good look round the property.

it's a very basic finish to the property, but ready to go.

The finish is fine.

It's perfectly adequate for particularly the rental market.

With a total outlay of just over £72,500,

what sort of return can he expect?

And we may as well get the sale valuations too,

just to find out if he would have made a profit.

The resale value of the property would be up to around £85,000

and the rental value would be up to £525 per calendar month.

I would anticipate the property reselling for somewhere

in the region of £85,000 and renting between £500

and £525 per calendar month.

That's a potential profit of £12,400, minus the usual taxes

and expenses. And taking the highest rental figure, nearly a 9% yield.

So, how do those figures stack up for Hemi and her client?

I think that's a little bit lower than the research that I've done.

I did do a lot of research before I recommended it to my client.

So the rental income that I'm expecting is around the £650,

if we're lucky, a bit more, towards £700.

It has been advertised at that level and I've had enquiries,

so that's why I'm managing it myself, really!

-So we'll see what return we get.

-I agree.

The market here, the research that we've done seems that we

might be able to achieve more like the £600-700.

Well, they say the client is always right,

and so it was with Hemi's dad.

His prediction of renting for £600 per calendar month came true

just after filming.

Something tells me it's not just a case of first time lucky

for Hemi's refurbishment future.

It was just a few miles from Stoke-on-Trent,

in the area of Bucknall where we first came across an auction

lot with loads of rooms, loads of space, and loads of possibilities.

A bit different to your average two-up, two-down -

a substantial former care home.

It's not often that you see properties like this going

under the hammer, needing a specialist purchaser.

Step forward father-and-son team Bill and Phil,

who, along with Phil's brother Will, bought it for £375,000.

And they knew exactly what to do with it.

Why have you bought this place?

-Well, we're going to convert it back to its old self.

-Right.

Old self being a care home.

It'll be a care home with particular interest to those who have

got dementia and Alzheimer's.

Many years ago, Bill ran a disco called The Place,

before his career change into care homes,

which he's now been specialising in for a quarter of a century.

Tell me more about your involvement in this sphere.

We've been involved in it for 26 years.

We now have five and this will be our sixth.

And we're hoping that this will be a success,

as the others have been as well.

Right. So how much demand is there, Phil, for what you're providing?

We have looked into it quite a bit.

There is quite a lot of demand in the area.

Residents won't like to travel too far from where they're

normally based, but there is a lot of demand.

The refurbishment will be an extensive one.

Bedrooms are required to be bigger than they were back in the day,

so some rooms were to be combined and reconfigured.

And they will be applying for planning permission to

extend the facility,

all in accordance with the Care Home Quality Commission's guidelines.

19 months later and we're back to check on progress.

OK, so not quite ready yet,

but with another care home refurbishment taking priority,

this refurbishment project was put on the back burner

and it's only in the last year the work has properly started here.

With Bill away in America, it was down to his son, Phil, to update us.

In this entrance area, we're going to have a cafe.

we're going to knock through the front area there, have a

bar with a coffee shop, with maybe even an "Other Place" coffee shop,

which will be nice. We're going to have seating through here,

maybe windows into the dining area over there.

And on the left here, we're looking at having an old sweet shop,

which should be really nice.

# Sweet, sweet memories you gave me

# You can't beat the memories you gave me... #

The home will have the latest in modern technology, like wi-fi,

but there will also be a focus on various reminiscence tools,

like visual images and music from the past, and even smell,

as these have been proved to help people living with dementia.

Looking at putting a sensory garden in,

which we're looking at putting some old-fashioned sensory items in,

such as a phone box and a bus stop, and we'll have raised flower beds

and it'll be a nice secure area for them to go into.

# Something old, something new

# Something borrowed, something blue

# I've still got memories to cherish... #

The Italian poet Cesare Pavese once said,

"We don't remember days, we remember moments."

And that's what Phil hopes the surroundings here will stimulate,

but how many residents will this building cater for once completed?

When the care home is complete, in about five or six months,

we hope, we're looking to have 47 bedrooms,

of which we'll have about four or five en-suites,

and we're looking at putting a large living area in with an extension,

and that's going in any minute now.

This is clearly a large project, and with an extension,

it's going to get bigger. What's it all going to cost?

So far, we've spent about £200,000 on the project

and we have another £500,000 to spend on the project.

We will look in total at spending about £1 million.

That £1 million includes the £375,000 it cost to purchase

the building at the auction.

So, they may end up slightly exceeding

their hoped-for £500,000 to £600,000 budget.

But will it be money well spent?

What does a commercial property expert think?

There's a lot of work that's been done over

the course of the last few months.

Some rooms have been altered and rearranged.

I understand there's a plan for an extension to be

added to the property.

Whilst there is still quite a lot of work that needs to be done,

what's been done looks to be done to a good standard, so I expect

they'll end up with a nice quality care home when it's all finished.

Phil and his dad Bill, along with his brother Will,

expect to have invested £1 million to get the care home up

and running, but what kind of value could the end product be worth?

Once this care home is finished,

I understand it's going to be converted into a 47-bedroom home,

the value will range from somewhere between £20,000 to £25,000 per

room, which will give us a range of values of somewhere

between £1 million to £1.2 million.

I think that the value of £1 million to £1.2 million

is on the low side, really.

We see it being valued more along the lines of £2 million

when it's full and operating.

I guess, as they say, only time will tell what the finished building

and the site will be worth.

But for Phil and his family, the business is

just as much about running the care homes as it is refurbishing them.

How do the family manage to work

so closely on such a big, expensive project without friction?

You've always got your problems working with your family

members, as I'm sure many family businesses would agree.

We cover different areas, so there is a little bit of overlap

but not much massive overlap, so it's working well as a team.

So, join us next time for more stories behind those auction

-properties.

-Yes, here on Homes Under The Hammer.

-Goodbye.

-Goodbye.