Episode 73 Homes Under the Hammer

Hello and welcome to the programme.

Now, Martin and I love a bargain, but it's not always easy

spotting one in the housing market.

No, but one way to better your chances is to do your research

and, a good way to do that is to visit your local property auction.

In the auction room, you'll be spoilt for choice.

But, remember, other bidders may want your property, too.

The trick is to have a budget and to stick to it.

So, what caught the eye of the bidders on today's show?

First up, there's a surprise in store

in West Bromwich in the West Midlands.

Looking around and...

-BANG

-Whoa! What was that?

Whilst in Gillingham, Kent, there's plenty of space to play with.

Not enough to stable a horse,

but quite enough to take a more substantial property? Come on!

And in Telford, Shropshire,

it's time for the kids to earn their keep.

-Does Ella get paid?

-We feed her food at night, yes.

Oh, thanks, Dad!

All these properties have been sold at auction.

We'll find out who bought them and what they paid

when they went under the hammer.

One, two, three... HE BANGS HAMMER

If you're anything like me, when you hear the words "West Bromwich",

you immediately expect them to be followed with another word - Albion.

The town of West Bromwich, in the West Midlands, is of course

well known for its world-famous football team,

West Bromwich Albion, which,

along with its local rivals Aston Villa and Wolverhampton Wanderers,

was one of the 12 founding members of the Football League in 1888.

-# Can I kick it?

-Yes, you can

-# Er, you can

-Yes, you can

-# Can I kick it?

-Yes, you can...

-#

Well, sticking with the sporting theme,

West Bromwich is also the birthplace of Olympic heptathlete

Denise Lewis, so it is fitting that the property I'm here to see

is just a hop, skip and a jump away from the town centre.

And this is it. It's a three-bed end-of-terrace.

Guide price, £49,000-£54,000.

On your marks, get set... let's go inside.

Well, the first hurdle is the exterior.

And this one isn't looking bad at all.

But will the interior be a winner?

So, what have we got?

Double glazing for one thing, which is always a good start.

Entrance area here, stairs up to your bedrooms there.

Front sitting room looks to be pretty decent condition,

it's a pretty nice size.

And then, down this little corridor, to what is a bit of a joy.

Obviously been knocked through at some stage

to create this really lovely kitchen/dining/living area.

It is a very practical kind of room for modern living.

Yes, it needs a bit of work, yes, you want to

take all these units out, but it's got doors out onto the garden,

it's got the right amount of space, it feels solid.

Great start.

There's a lovely flow to the downstairs

and not too much obvious work to be done.

Plus, that kitchen-diner is bound to appeal to families. Good stuff.

Well, upstairs, and the very practical,

sort of liveable layout, continues.

Bathroom and loo at the top of the stairs, where you'd hope.

Nice-sized sort of landing area,

which gives a nice feeling of sort of space.

Three bedrooms, the one there at the front - not massive.

Another one there, which is a slightly better size.

And then a large double bedroom at the back, here.

And the great thing about ex-local authority properties,

it's all solidly built and lots of storage.

Hmmm.

Hmmm.

Here's a tip. When you're visiting properties, always make sure

you look in the cupboards, because that's a really nasty crack there.

Actually, now I start looking around, and...

-BANG

-Whoa! What was that?

Apart from the exploding floorboards...

what is that in the corner?

Erm, nasty crack in the wall!

I hope that wasn't the sound of this part of the house

collapsing a bit more!

Because it might actually happen. That is really bad.

That needs investigating. What a shame.

And it was all going so well!

# Till the walls come tumblin' down... #

Now, before any panic sets in, these cracks could well be historical

and not a sign of the dreaded subsidence.

Just make sure you get it checked.

So much for my assertion that all council houses are solidly built.

Well, there is always an exception to the rule.

I say this with some trepidation, but you can usually

rely on generous gardens in ex-local authority housing.

Well, out the back door of the property,

and a very ramshackle sort of lean-to thing.

You'd want to get rid of that.

A little greenhouse, and then, through to the garden.

The great thing about corner plots, is that, generally, you've got

a half-decent-sized garden and that's certainly the case here.

But you have only seen the half of it.

Look at this. Fantastic! It's massive.

But, better than that, is that gate. Why be so excited?

Because, that gate leads to an access road.

So suddenly, what is this?

Is not just a garden, it's a potential building plot.

Wow!

Yes, this house has definitely won me back over.

The potential in the back here is very exciting,

especially when you consider that all of this,

and the house, is on for a guide price of £49,000-£54,000.

What does a local estate agent make of the property?

There's various different options for the vendor.

There's some planning potential to the rear,

there's a very big garden.

There's cosmetic work that needs to be done to the property,

with the kitchen, bathroom, etc.

And, upstairs, there's cracking that needs to be looked at further.

What could this property sold for if it was renovated?

Once the house is fully refurbished, it could be worth

anywhere between £110,000 to £115,000, depending on

the condition of the refurbishments.

And rental?

Once refurbished, I think the property would command

a rental figure of £550-£600 per calendar month,

depending on the condition of the refurb.

So far, so straightforward. But what about that garden becoming a plot?

Would there be mileage in building, say, a two-bed bungalow?

A new two-bed bungalow would cost something between

£75,000-£90,000, depending on how, obviously,

the spec of the bungalow and the condition of it.

Well, apart from the cracks, it's a nice enough house.

But, go round the back,

see that plot of land and suddenly,

it's a really interesting investment opportunity.

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

Three-bedroomed, freehold, end-terraced house.

Where shall we start, folks?

40. Thank you, sir. At 40,000, I am bid.

Is it 50, now? At 50, thank you, sir, at 50. Do I have 60, now?

55 is that, sir? Thank you, 55. First one to 60, then?

60 out at my left. Thank you, sir, at 60.

With this lot proving popular in a packed auction house,

we leave and rejoin at £85,000.

At £85,000...

86. 87.

He is saying no, that could be the killer blow.

At £86,000...

Whoa. Only because you've been such a good bidder.

86 and a half. 87. 87 and a half, no?

87,000, one, two, three,

that's yours. What a great contest. Congratulations, gentlemen.

The successful bid of £87,000 was made just out of shot,

and belonged to father-and-son team, Paul and Ryan.

Paul is an experienced property developer, so he must have known

what he was doing when he paid

over £30,000 above the guide price.

I met up with him and his son, Ryan, not forgetting Bella the Labrador,

back at the property to find out more.

-Paul, Ryan, great to meet you both.

-And you.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this house.

We've got a few properties in the area, so I know the street well,

-in fact, we've got one four doors down from this.

-Oh, great.

And we were aware of the property, but we literally, at the last minute,

decided to focus on the property

because of the large building plot at the back.

It's a bit of a classic auction lot -

if you hadn't come to see it,

you might not have realised the potential out the back.

Well, we did buy this one blind.

-You did?!

-Yes, we did, yes, yes. I don't advise it.

Done it twice now, and both times, sleepless nights...

not recommended to anybody. But, again,

because we've got a property close by, it was, sort of...

we generally know the knowledge of the properties anyway.

So, it was a hedged bet, for want of a better word.

And, er, luckily enough, we came in and...

-So, did you know about the plot, then?

-I was aware of the plot,

but I didn't realise it was as big as it was until, literally,

an hour before the auction, we stuck our head over the fence,

saw what it was, shot up there and, literally, an hour later,

-we were buying the property.

-Wow.

Well, they say fortune favours the brave, but trust me,

don't put that to the test when it comes to property.

# You win some

# You might get lucky now and then... #

Paul has been lucky here, even though he has paid

more than he would have liked. But he is extremely lucky

in that Ryan is an electrician.

Were you brought into the business, or did you just grow up with Dad?

No, I've done an apprenticeship. You gave me the opportunity

to come and work with you and that's when it started from, really.

-Great.

-I mean, your son wants to work with you, what a better team?

-Yeah, it's brilliant.

-Yeah.

-And is it going all right?

-Yeah, it's going well.

-Most of the time!

Ryan's a 17th edition electrician,

so, from an electrical point of view, he can cover all of those things.

He's now trying to expand his skill base,

learning to do the plastering, the plumbing,

helping fit the kitchens.

So, we generally work as a team.

So, tell me what the plans for the property are?

We're intending stripping it all back to the brick, dry lining,

new kitchen, new bathroom. And generally just bringing the property

up to date to where it is now.

There's a few investigations we've got to do,

there's been a bit of movement in the property.

What do you think's going on there?

I think they're historic, but, just to satisfy that there's nothing

sinister going on, we will excavate where we think

the common cause is, just to make sure everything is as it should be.

And, all being well, it should be a cosmetic fix-up, really,

-would be the best way to describe it?

-Yes.

And then we intend to put, hopefully,

-two semi-detached bungalows on the back of the property.

-Great.

-It lends itself perfectly to that.

-Any ballpark figures?

What it might cost to get the planning, to get the architects

and then to actually build?

I'd imagine about 50,000 per unit.

So, probably the total bill will be about £100,000,

and then, hopefully, a resale of about 250.

Great.

Paul is pretty confident, due to his local knowledge,

that he will get planning permission.

Once that's achieved, he hopes

to start the work on the bungalows within a year,

and envisages it taking around 12 months to complete the build.

For the house itself,

they've set a six-week timescale and a tight £6,000 budget.

And what's more, they already have a tenant lined up.

We have got a tenant,

she's waiting for us to refurb the property to move in.

-But how nice you've got somebody lined up already!

-Yes, yes.

She's a nice lady and I think she will live quite happily here.

-Well, congratulations.

-Thank you.

-Well done.

-Thank you.

-Really nice to meet you both.

-Thank you.

-Good luck with it.

-Cheers.

So, Paul and Ryan leaving it a little bit late to see

the property, just an hour before the auction. Tut-tut!

But at least during that time they saw the potential,

especially of the plot of land. But those cracks, they still worry me.

What will they find when they start digging around?

You can find out later in the show.

We go now to Gillingham, in Kent.

It was here, in July 2013, that I originally

looked around this detached, two-bedroom bungalow...

..that had a guide price of £190,000-£200,000.

As expected, in this little bungalow, look at this -

it needs decorating, it needs attention.

There's a big old crack along there, so I'd get that looked at.

But, on the positive side, what I do love is the fact

that I can see into every single room from standing here.

It makes it very welcoming and I do like a nice, open hallway.

I'd say that's a bedroom,

we've got a bathroom which will need completely updating.

A great kitchen, a lovely size.

I mean, there's a lot you can do with that.

And through here, you've got the sitting room, the lounge area,

whatever you like to call it. You could have a dining room.

A lot of work to do, and it's very spacious. I do like it.

Yes, it was in need of some real elbow grease,

but it had plenty of positives, including a big front garden,

perfect for converting into off-road parking.

But, the real bonus was still to come.

SHE GASPS

Well, out the back is a significant parcel of land,

0.388 acres, in fact! Look, it's huge!

Not enough to stable a horse,

but quite enough to take a more substantial property?

Come on, we're all thinking it.

This is a perfect plot for a bigger and better house than this bungalow.

Now, you could renovate, you could extend,

it's worth thinking about, but knocking this place down

and making the most of this plot

is more than worth a thought, as well.

My creative juices were flowing.

So my first thoughts,

a straightforward refurbishment of the bungalow -

barking up the wrong tree!

As with everything in the property game, it always comes down to maths.

Say you bought the bungalow for the guide price, around £200,000.

You knocked it down, built a four or five bedroom place, did it nicely,

high-spec. How much are you going to spend? 200K? Maybe more?

So, you're into a £400,000 project.

If you go by the rule that you should spend a third

on your land, a third on your build costs

and you walk away with a third as profit,

you'd be hoping to sell for £600,000,

and I simply can't see a house here making that sort of money.

You can pick up a large family home

for well under 500 grand on this road,

which makes me think maybe this bungalow is worth working with.

So a new build or the bungalow on a huge

and pleasant plot seemed the right way to go.

Do you renovate, do you demolish? What would you build here? Hmm.

Let's see who had some ideas at the auction.

Really, really super lot, this one.

Detached bungalow on a really large plot, over a third of an acre.

Where d'you want to start me on this one?

190 would be a good place to start. Start me on 180, then.

180. 180, I'm on the way.

I've got you on the left-hand side, 180. And five?

185. 185. 190, and five.

195, and two.

The bids came in fast and furious, With several bidders involved.

We rejoined at 244,000.

Coming back again now, you need to do it quickly.

245? 245 I have. 246, it's against you on the internet. 246.

It's in the room, it's not on the internet,

but just to let you know, at 245, for the first time,

245 for the second.

Third and final time, you're sure you're all done?

It's yours, sir, at £245,000 in the room.

MUSIC: A Town Called Malice by The Jam

That successful bid of £245,000 belonged to Joe.

He had worked in IT for 25 years

before becoming a teacher for five years,

and then deciding on another career change,

into property developing, in which he already had experience.

It was a couple of months after the auction that I met Joe,

back at the property.

-Joe, congratulations.

-Thank you.

What a fantastic plot.

So, what are you going to do here?

When I first looked at the property,

I was looking at keeping it as it is, and then extending it slightly,

renovating and going upwards and backwards.

And then, possibly, putting something at the back with a side access.

We've come up with a few other ideas as well, and one of those

is my other half would like to keep it

for our own personal residential home, as well.

She likes the size of the plot, we've got a Doberman

and he loved it when he came down after we got the keys and everything.

I'm still try to convince her with a couple of other options, keeping

the plot but maybe alternatives at the back, at the moment.

So, do you think you'd like to build your own house here,

or would you this develop this bungalow?

At the moment, I've got somebody drawing up plans

to come up with a new build, so, knock this down,

and build a new one on top of this

or just a little bit further back, a larger family home, which would be

at least, if not slightly bigger than the one we've got at the moment.

Joe had a budget of no more than £250,000 for the new build,

which, along with his paid price of £245,000,

already meant a total spend of £495,000,

which would have been fine if he went along

with his wife Camilla's preferences and lived here!

But, as a property development proposition,

it didn't look good in my book.

Demolition costs can really stack up.

And a new build can quickly run away with you in terms of budget.

So, is Joe ignoring the best option, sitting right under his nose?

Now, the bungalow, as it stands, is fantastic.

It's got lovely, wide rooms.

You could go up, you could go out,

just with permitted development and make this a fantastic space.

Surely that's the better option for you?

And THEN try and get planning permission to build

a separate house in the garden?

It is, and that's another one I'm seriously considering

and have been considering and I'm trying to convince my wife

that we can still do that and get away with

a reasonable-sized house, even if I go back another couple of metres

and apply for planning permission, that shouldn't be a problem.

So much of what Joe could do depended on planning permission.

Plus, there was a covenant on the legal pack

that set restrictions on what could be built.

And he needed to sell his current home

to release the equity for the work needed here.

Whether he would renovate or build,

Joe was hoping to have it all done in six months.

What are you going to be doing in the next few months?

In the next three months, it's going to be getting the plans drawn up,

submitting the plans,

whether it's a new complete build, or an extension to this.

And, hopefully, get some agreement with the planners

about what we can do at the back,

what options there are and what they would be happy with.

Just under a year later, we returned to find that Joe and his team

were halfway through renovating the original bungalow

into a chalet bungalow.

But why a renovation and not a build?

We originally want to go with the option of a house,

basically extend the bungalow upwards,

and also build a couple of properties at the back of the garden.

We didn't get that option from the planners,

so I decided I would go for a side extension and chalet bungalow,

which is what he eventually got passed by the planners.

So we've gone about four metres to the right-hand side,

half a metre or so on the left-hand side,

and we knocked down the front because it looked rather ugly,

to make it a little bit more appealing

and give it a wider hallway and an entrance area.

So the planning department unfortunately scuppered

Joe's plan to build a house on the site.

But what, I hear you cry, is the difference

between a house and a chalet bungalow?

Well, a house, traditionally speaking, has two storeys

and possibly attic space,

whereas a chalet bungalow is one and a half storeys

and likely to have a roof that comes down to the first-floor level.

It will have, upstairs, four double bedrooms,

One a master bedroom, will be larger.

Two ensuite rooms, ensuite bathrooms,

one main bathroom upstairs, and downstairs

there will be three reception rooms, one large and two double rooms

and a large kitchen and a garage.

Joe is nearly a year on from when we first met him.

Delays with planning issues and having to find a new architect,

meant Joe's original six-month timescale

had gone completely out of the window.

But finally, things were moving on.

We are now into our ninth week.

So, we've made pretty good progress,

considering the fact that we've only two months at it.

We've spent approximately 45,000.

It's about 25,000 on materials

and probably around 20,000 in terms of labour costs.

It's just a basic split, we still have quite a bit to spend.

Yet, back in June 2014,

Joe had a long list of jobs ahead before the house was complete.

And what's more, he still wasn't sure whether he'd be selling it,

or he and his wife Camilla would be moving in.

Well, my wife still says yes, but what I said to her,

what we would do is, we'd put both our property

and this one up for sale at a price we'd like, and if somebody

buys either one of those two at the price, then we'll go on that basis.

So, if somebody offers me the right price for this,

then I probably will sell, although I'd like to move into it,

because I think it's got a lot more potential. We'll see what happens.

Well, we'll find out exactly what did happen

when we return later in the programme.

Still to come -

in Telford, Shropshire, young Ella is pointing the way.

-So you bid on the strength of what your research said?

-Yeah.

-That's it, basically, yeah.

-Wow.

And in Gillingham, Kent, after a year and a half,

has Joe finally completed his project?

We return to West Brom now, where earlier, I looked around this

three-bed end of terrace, that had a guide price of £49,000-£54,000.

It was a good-sized property,

although some cracks in an upstairs bedroom were a little worrying.

But the potential at the back of the property

certainly had me singing its praises.

Now, the great thing about a corner plot is that, generally, you've got

a half decent sized garden. That's certainly the case here.

But you have only seen the half of it. Look at this. Fantastic!

It's massive!

But, better than that... is that gate!

Why am I so excited?

Because that gate leads to an access road. So suddenly, what is this?

Is not just a garden, it's a potential building plot.

Wow!

It was bought on auction day for £87,000

by experienced property developer Paul, who, along with son Ryan,

had plans to renovate the property, then rent it out.

Paul was, however,

guilty of breaking one of Hammer's golden rules.

It's a bit of a classic auction lot.

If you hadn't come to see it,

you might not have realised the potential of that bit out the back.

-Well, we did buy this one blind.

-You did?!

-Yes, we did, yes, yes.

I don't advise it very often.

I've done it twice now and both times, sleepless nights,

not recommended to anybody.

Paul had aspirations to build two bungalows in the space

at the back, but that was his long-term plan.

And in the short term, he was going to renovate the existing property

and already had a tenant waiting to move in.

Two months later, and we returned to see how it's all gone.

The downstairs is refreshed and contemporary,

with the kitchen particularly improved, as Paul explains.

The kitchen required a considerable amount of work.

We ripped out all the old kitchen,

we replaced it with some quality units, new worktops,

new cooker, new hob, and we also put a new dividing wall in.

The old kitchen didn't really work before.

But I think the kitchen now, the way it's been designed,

is good from a family point of view.

Upstairs, and there is still a little bit of work to be done.

But, the transformation is clear to see.

The cracks in the front bedroom are gone and were thankfully historical.

All the bedrooms are looking very clean and professionally done.

Ideal for prospective tenants.

The back of the property hasn't been touched, as planning permission

is pending for Paul's plan to eventually build two bungalows.

We bought the property from the auction,

purely based on the fact that we may be able to put

some bungalows on the rear of the property.

It does sit on rather a large plot.

But during the course of next year,

we hope to be able to build two bungalows on the rear.

The work we've done in the property has been a complete rewire,

we've hacked all the plaster off the walls, new plumbing,

new bathroom, new kitchen, new laminate floors, new doors.

A complete revamp and obviously complete new declaration of the property

and just brought it up to date to where it should have been, really.

We're 95% there with the work, there are some outstanding

little issues to deal with and we need to put some staircarpet in.

Well, with the property almost complete, Paul has spent

around £7,000, which, considering the finish here, is very impressive.

Plus, it's taken him and his team eight weeks to get to this point,

just two weeks over his original estimate.

When we first met Paul,

he was with his son Ryan, who was training on the job.

So, how did he get on?

Ryan's a quick learner, and I think he's a chip off the old block.

And he's quite enjoying...he enjoys the variety of the work we do here.

Some days, we do have our fall-outs, like every family do.

But we understand what we're doing and we tend to...

We go home friends, at the end of the day.

Paul has so far spent around £94,000, buying and renovating

the property, and whilst plans for the pair of bungalows

are on the back burner, it will be interesting to hear

what two local agents think of the work he's done.

This is my second visit to the property and, obviously,

a lot of work has been done to the property since my first visit.

They've done a very good job, it feels like a family home, very warm.

They've built the wall in the kitchen

to make a breakfast room and the kitchen slightly bigger.

They've done a very good job.

The standard of the finish of the property is excellent.

Particularly when you go into the kitchen,

you've got the open-plan kitchen-diner.

It really is quite striking and that's going to really appeal

to any tenants or buyers of the property.

And I think that's obviously going to be key.

In terms of resale value,

I'd expect this property to sell for around the £110,000 mark.

The property would go on the market for me at £115,000.

The valuations are pretty much what I expected.

I've got good knowledge of the area,

so there's no real surprise with the valuations.

The top valuation could give him a pre-tax profit of £21,000.

Very impressive. However, with the property already let,

it will be interesting to hear the rental valuations.

The rental value right now would be £575 per calendar month.

In terms of rental value, I'd expect this property to command

a figure of around £550 per calendar month.

So, the rental value is pretty much what was expected,

the tenants moving in will be paying £550 per calendar month.

That gives Paul a yield of just over 7%. Very nice indeed.

But Paul has his eyes set on what's next.

Obviously, we've done the property up, but for me, the real excitement

will come in the next chapter, when we do the bungalows,

obviously, subject to planning, so, who knows, keep your fingers crossed.

I'm in Telford, the largest town in Shropshire,

a place steeped in the Industrial Revolution.

Its most famous landmark is arguably the Iron Bridge,

the first arch bridge anywhere in the world to use cast iron.

True to its pioneering past,

Telford is now one of the fastest-growing towns in Britain.

# Oh, any old iron Any old iron

# Any, any, any old iron. #

Well, I'm in the popular residential suburb of Trench,

close to the centre of Telford.

Here to see a three-bed mid-terrace, had a guide price of £70,000.

This is it. Off-street parking, that's a good start.

Double glazing. Looking good.

So, what have we got?

Stairs up to the bedrooms there, and then into your front living room.

Good news - central heating, that's good. Space for an open fire.

We'll have that checked out,

you don't know if it could actually be used for that,

so get an expert in just to check that, but it's a nice sized room.

But you ain't seen nothing yet.

cos, come through here,

and you enter a most monumentally, massive kitchen.

Really 2014 in terms of big space.

Kitchen, place for the kids to play, put a sofa up there,

put a telly on the wall, it really works as a kind of living thing.

It's not in the best of condition,

you definitely want to replace the units.

But you've got a lot of space, lots of light coming in

from the windows there, bit of storage over there.

All in all, a really good start.

# This could be the start of something good

# Na-na-na, na-na-na Na-na-na-na... #

Central heating - check.

Double glazing - check.

Big kitchen with extra storage - check.

It's ticking all the boxes, but what about the rest of the house?

So, upstairs and three bedrooms. One pretty good-sized one,

two slightly smaller ones. Got a bathroom and loo.

A bit like the kitchen, it could do with a bit of modernisation.

But it's a half decent size.

When you are looking round properties like this,

don't ignore the cupboards, they can reveal all sorts of things.

Often there's damp, they can be in a right old state

or they could sometimes reveal a bit of a hidden treasure.

In this case, a pretty brand-new boiler.

If you were thinking about the budget for this place,

you might think, well, I'm going to have to factor in 1,000 quid,

maybe 1,500 quid for a new boiler,

well, you don't, cos there's a brand-new one.

It's likely to be fuel-efficient so that is really good news.

# It's good news week. #

That boiler is a bonus.

Two, three good bedrooms that just need redecorating.

The bathroom needs an update, but other than that, it's all good.

At the back of the property, you've got this strange little extension,

which currently contains this little sort of area and a downstairs loo.

Well, the loo's good, but surely, you could make more of this space,

because, to my mind,

this would be perfect for some kind of single-storey extension,

which you could get under permitted development rules.

Or maybe even a double-storey extension.

The only thing to question is that nobody else along here

has done that, so, mmm, maybe they know something I don't.

But while I'm at the back here, look at this - fantastic, massive garden.

Gosh. Could do with a bit of design, couldn't it?

But apart from that, what a great additional space.

All good news.

Well, at least I think it is, but what does an agent

from the auctioneers who sold it

think of this three-bed house, guided at £70,000?

My first impressions of the property, I was quite surprised, actually,

that the rear garden is very large, which is a big, big bonus.

The downstairs accommodation works well,

cos it's got a good-sized kitchen.

Upstairs maybe isn't the largest,

the three bedrooms are quite average, but it does work quite well.

I mean, in terms of what could be done to the property, it really is

just general decor, the kitchen could be enhanced and many more

units could be put in there, maybe a breakfast bar or something like that.

I should imagine that the property could be renovated

on quite a tight budget of approximately £5,000.

What would be best for this property - sell or rent?

If it was my property, I believe it would actually rent out

very quickly, but I also believe with this one, it's got so much potential,

it could possibly sell it on at a profit as well.

In terms of rental potential,

I'd estimate its worth to be £595 per calendar month.

With regards to sales, I'd say £105,000.

Well, you know me,

I will always spot problems in the properties I visit.

But in this case, I really don't think there are any.

It's a solid house, in a nice location at a good guide price.

No doubt about it.

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

It's a mid town house with three bedrooms.

It is in need of modernisation. What shall we say for this one?

Say 60 to start here? Lot number 43.

60 bid, thank you, at £60,000.

65, can I see now?

The bid's at £60,000, lady's bid. £60,000.

Looking for 65 now.

At £60,000, £65,000 bid.

70, you're happy with 70?

£70,000, at 70,000.

75?

The bidding for this lot soon became quite a contest.

We rejoin it at £84,000.

84?

Yeah, 84...and a half.

85?

85.

Half?

85 and a half.

86, sir?

Yeah, 86.

Another half?

Yeah, 86 and a half.

87, yeah? 87. Half.

87 and a half.

Shaking his head. 87 and a half, in the aisle then, at £87,500.

88, anywhere else?

If not, 87,500 once, 87,500 twice,

third and last time, £87,500.

You've bought it, sir, well done.

The hammer went down on John's bid of £87,500.

Father of three, John, came along to this nearly perfect property

with his youngest daughter, 14-year-old Ella,

to tell me what he had planned.

-John, Ella, great to meet you both.

-You, too.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

Well, it's part of the portfolio, we just keep adding properties up to it.

I didn't look at this one myself, Ella came along with her mum

and looked at two or three on the day,

-and gave me a bit of a report on what they had seen.

-Right.

-This one actually seemed to come up trumps, really.

-Great.

-So, you were the scout party.

-Yeah.

What did you think of this place when you saw it?

Yeah, it's better than all the others

because most of it is just redecorating and stuff.

-Yeah, what was it you liked about it?

-Big rooms, nice kitchen.

-So, you bid on the strength of what your research said?

-Yeah.

-That's right.

-Quite right, too. Wow.

Your portfolio, you've been building that for a little while?

-I'm a greengrocer...

-Oh, right.

-..and I bought two shops and knocked them into one in 1992.

-Right.

It was about 2003 when we bought a property

that was going to become our family home.

But circumstances changed, so I ended up selling that,

made a modest profit out of it and decided that perhaps

-there was something to be made here, out of developing property.

-Right.

Enjoyed it that much that I ended up buying a site for three...

We just got outline planning for three properties...three new builds.

-Wow.

-We did that, but handed that over to a main contractor

to do all the work and unfortunately,

-didn't really leave me anything out of it in the end.

-Oh, right.

We went forward a little bit and started looking at

these kind of properties with the intention of buying and selling,

to start with.

And the first one that I bought, I was inundated with people wanting

to rent it, so that's what we do, we started renting from then on.

-So, when did you get involved, Ella?

-Ages ago.

Well, yeah, really, to start with... I don't do so much work now myself.

But the first one, I was doing an awful lot of work myself

-and roped them in.

-Rope them in to do work.

Rope them in to do work, that's it.

And Ella enthusiastically strips paper

and she still sticks with that, she'll strip the paper

off the property and then we usually get a contractor in to...

-or different subbies in to do the work...

-Right.

-..and then come back and clean up afterwards.

-Right.

-But you're a fan of property, though, are you?

-Yeah.

Yeah, I suppose it's been in your blood, since you were young.

# It's in the blood Yeah

# All about the family. #

This family empire covers a shop, a market stall and now property

but John often has 2am starts with his greengrocers,

so he'll really need Ella's help here.

So, what's the plan?

Mainly all cosmetic.

The windows are all fine,

although we are going to alter the one window in the kitchen,

because it's below the worktop, so to give the kitchen a better look,

we'll do that.

We'll replace the tiles in the kitchen.

They are quite good quality tiles

but they haven't been put on particularly well.

The garden needs a good sort out.

Bathroom, we'll bring up to date and the rest is really redecoration.

So, actually, what are you going to get to do with this one, Ella?

-I'll strip the wallpaper.

-Really? Anything else?

-Mmmmm.

-Possibly give her some cleaning to do at the end, I'm sure.

-Whoopee!

-Now, look, you're her mentor, right?

-That's correct, yes.

It sounds to me like the lessons have become a little bit limited,

you need to take her on to Stage 2.

You're probably correct there.

Unfortunately, school tends to get in the way,

so we've got to keep her education... But, yes, we will, obviously,

as time goes on, if she does consider this to be an occupation for her,

-then she'll be learning more, as she does, along the way.

-Yeah.

-Do you fancy that idea?

-Yeah.

-That sounds good, great.

So, what's the budget?

We'll do this on 4,000 to 5,000, yeah.

Timescale?

It won't take long, four to six weeks.

You know, that will include redecoration and carpets.

Ella is a budding apprentice in the property game,

and I seem to recall one greengrocer's daughter

-who became quite well known.

-HE CHUCKLES

But I've one question for John about his staff.

Does Ella get paid?

Yeah, we treat her to food at night!

-"Oh, thanks, Dad!"

-Yeah, that's it, we do treat her to a meal at night.

She does get a bit of pocket money for it.

Will you eventually give her a property of her own,

that can really be her own project?

That day will come, I expect,

when she actually goes out, I'll take her out

and I'll probably provide her with a deposit to go and find a property

completely from her own...

Go along, look at it, buy it and refurbish it completely.

But that's probably a year or two away yet.

Make sure you record this programme when it goes out

-and then you can show it to him later.

-I will.

-Well, listen, congratulations, good luck with it.

-Thank you.

-Look forward to seeing how you get on.

-Thanks very much.

Well, it seems like Ella did her research well

and John's got another good property to add to his rental portfolio.

Small budget to do it up.

You can find out how it all goes later in the show.

Well, we've already seen how one of our projects ended up,

but what about the other two?

Are our owners all happy?

Did they make the right decisions? Let's find out.

Time to return now to Gillingham in Kent, where, in 2013,

I first saw this bungalow.

Though needing a good modernisation, the rooms were spacious

and the guide of £190,000-£200,000

was even more tempting, when accounting

for the large plot of land it was on, which was 0.38 acres.

Was it worth building an entirely new house?

Say you bought the bungalow for the guide price - around £200,000.

You knocked it down, built a four- or five-bedroom place,

how much are you going to spend? 200K?

You can pick up a large family home

for well under 500 grand on this road,

which makes me think, maybe this bungalow is worth working with.

So, it had potential, but also limitations.

It was bought at auction for £245,000 by Joe,

who hadn't quite decided what he wanted to do.

I was looking at keeping it as it is and then extending it slightly,

renovating it, going upwards and backwards

and we've come up with a few other ideas as well,

and one of those is my other half would like to keep it.

-She wants to live here.

-She fell in love with it.

She likes the size of the plot.

He had a budget of no more than 250,000

and a timescale of six months.

However, when we returned almost a year later,

it seemed like work had only just begun.

We originally wanted to go with

the option of a house,

basically extend the bungalow upwards

and also build a couple of properties at the back of the garden.

We didn't get that option from the planners,

so I decided I would go for a chalet bungalow,

which is what we eventually got passed by the planners.

So, we've made pretty good progress,

considering the fact that we've only had two months at it.

Sorting planning issues along with some other unforeseen problems

had seen Joe's six-month timescale go out the window.

He'd spent £45,000 and he still hadn't decided whether or not

he was going to sell or move in himself,

but at least work was underway.

Six months later,

and 18 months since Joe first began the project, we're back.

Joe's chalet bungalow is now finished,

with three reception rooms downstairs,

along with a beautiful, high-spec kitchen.

Joe's upstairs is actually classed as a loft conversion,

keeping the property designated as a bungalow.

It has four spacious bedrooms, two being en suite,

and a family bathroom, all of which have modern, clean lines.

So, no sign of that tired, old bungalow at all.

And remember, this was a renovation of the original,

but, oh, dear, in there hangs a tale of woe!

As we started working on the inside

and started to knock through some of the doorways and windows,

that turned into a bit more of a nightmare,

because the brickwork just came apart

once we took the plaster and the render off,

which meant basically, we had to start rebuilding those walls

in the same locations, that we'd put in for planning.

So, it ended up with all of the walls basically being new,

the timber flooring was meant to remain in the original house.

When we looked at it, it was infested with woodworm,

so we had to take all that out and the floorboards,

which ended up having to basically redo the whole house -

flooring and walls and the roof as well.

# Don't depend on me

# Don't depend on me. #

Yes, it seems like even the parts of the original bungalow that Joe wanted to keep

have let him down and have had to be replaced anyway.

On the positive side,

replacing everything has meant the house has a beautiful finish.

But, now the bungalow is completed, what about that land at the back?

The intention is still to make use of the large garden at the back, to try

and see if we can put something else on there, possibly one, possibly...

Well, one detached, possibly two semi-detached bungalows at the back.

Joe found out that in order for planning to approve

any new development at the rear of his garden, it would need

to be accessible by land that's currently owned by his neighbour.

I will try and see if I can approach the one neighbour at the back,

and see whether there's any possible option

of buying access through there.

Otherwise, I'm going to be basically sticking with the garden as it is.

Well, that's certainly something that can be sorted at a later date,

but Joe still hasn't told me if he and his wife, Camilla,

have decided to move in.

I wasn't completely convinced whether we were going to move in

or whether we were going to sell, and it was my wife who carried on

convincing me that she would like to move into it rather than sell it.

So, she chose a lot of the units for the kitchen and the doors

and things like that. If she wasn't happy, then I couldn't put them in.

Well, it seems Joe set out to buy an investment,

but has bought a home instead.

However, his original budget was 250,000,

but that was for a bigger property with a double garage,

and it's credit to Joe, that despite those unforeseen building issues,

he was able to keep the budget for his revised plans down to 160,000.

Add that to his original purchase price of 245,000 and he's invested

a total of £405,000.

What do two local estate agents think about

what Joe has achieved here?

There's a lot of bungalows up this road, there's some houses.

But it's got a nice look to it from the front.

It doesn't cause any friction, it's got a good kerb appeal.

It's different, but it's nice.

The overall, when considering what it was and what it is now,

basically is no comparison.

It might have been easier if they'd been able to knock it down

and start again, but now they've got a really, really nice property.

Both of the estate agents said the property could rent

for up to £1,750 per calendar month.

Now it doesn't sound as if Camilla will let him sell,

but just for the nosiness, let's find out

if he could make a profit on his £405,000 investment.

Overall, I'd say the valuation of this property

is in the region of £500,000.

It might even push to £525,000.

If I was selling this property,

I would sell it between £580,000 and £600,000.

Wow! That topmost figure would give Joe a pre-tax profit of £195,000.

But this is to be Joe's home now, and of course,

there's still potential for a development

at the back of his garden, so I doubt he could be persuaded to sell.

Could he?

I would certainly be more than happy to sell at that sort of price,

but having said that,

I don't think my wife would be swayed by that too much at the moment.

Back now to Telford in Shropshire, where earlier, I looked around

this three-bed mid-terrace that had a guide price of £70,000.

With off-street parking at the front, along with double glazing

and what looked like a new boiler upstairs,

I was immediately impressed.

Come through here and you enter a most monumentally, massive kitchen.

Big space - kitchen, place for the kids to play,

put a sofa up there, put a telly on the wall,

it really works as a kind of living thing.

It's not in the best of condition, you'd definitely want to replace

the units, but you've got a lot of space.

All in all, a really good start.

A few too many feature walls for my taste

and the back garden wasn't achieving its potential,

but there were no big problems, and it was a good, solid house.

The bidders agreed with me on auction day,

with a drawn-out battle, resulting in the successful bid

of £87,500, which belonged to greengrocer, John.

You've bought it, sir, well done.

John has a small portfolio of rental properties and for this one,

he had a secret weapon, in the shape of daughter, Ella,

to tackle those bold wallpapers.

Ella enthusiastically strips paper and she still sticks with that,

she'll strip the paper off the property and then

we usually get a contractor in to...

Or different subbies in to do the work...

-Right.

-..and then come back and clean up afterwards.

-Right.

-But you're a fan of property then, are you?

-Yeah.

Yeah, I suppose it's been in your blood.

So, father and daughter team were looking at a cosmetic renovation

and had given themselves a £4,000-£5,000 budget

and a timescale of 4-6 weeks

before it would be ready for the rental market.

Six weeks later, we return to Telford to see how they've got on.

MUSIC: Changing by Sigma feat. Paloma Faith (Instrumental)

And the downstairs is now fresh, clean and appealing,

perfect for the rental market.

That great-sized kitchen has been revitalised

and the use of space seems so much better.

OK, I'm particularly pleased with this room.

It was a wide, open kitchen to start with, the worktops came,

I think, somewhere to roughly around about here.

The window was below the worktops, so what we did, we actually managed

to match the kitchen units from, obviously, the original supplier.

So, we returned the kitchen into a U shape,

which has separated the room,

giving this area room for the tenants to use as a dining area,

whilst all the kitchen work is kept completely separate.

And I think it has turned out really well.

Moving upstairs, and the clean lines and simple finish continues.

MUSIC: Changing by Sigma feat. Paloma Faith (Instrumental)

The bathroom is much improved, all thanks to a subtle rejigging.

Another room I'm particularly pleased with is the bathroom.

We've put a new bath in, in the opposite direction,

so that we can put a shower attachment off the bath

instead of electric showers, which means less maintenance for us.

It turned out really well and nice, nice and bright room.

At the front of the house, John has had a driveway installed

and the back garden has had the concrete slabs lifted and is being

laid to seed, so hopefully, that will be looking much better soon.

John and daughter, Ella,

have done a great job making this house the perfect rental property.

Well, it took us three weeks, when we actually started, cos we were

already on another project, and it took three weeks when we got started.

We actually only had tradesmen on-site

for 12 days of that three-week period.

It sounds as though they've been very organised to get all this done

and to get tradesmen in and out in such a short time.

So, what about that £4,000-£5,000 budget?

We don't actually specifically tie ourselves to a budget because

we just work with the property - whatever needs doing, gets done.

I did think it would be around about £5,000, but I've just spent...

I think it was £5,570.

Just over 3,000 was materials and the rest was labour.

Well, some of that labour was daughter, Ella,

who had a big job getting rid of those feature walls.

I was here for about two weekends and I stripped the wallpaper,

by putting the steamer on the wall and then using the scraper,

and it came off quite easy.

Ssh! Don't tell Dad it was easy, otherwise you might not be able

to charge him the full rate. Seriously, well done, Ella,

and well done, John, he's already managed to find a tenant to move in.

A great result.

With a total spend here

of just over £93,000, it will be interesting to hear the opinions

of two local property agents.

Starting with the one who saw it originally.

I like the property very much.

Obviously, I saw it beforehand,

I've now seen it and I think the improvements which have been made

have been done to a good standard.

The kitchen in particular is very good, the bathroom is very nice also.

And it's just got generally a very good, fresh feel to it.

I think they've done a great job.

They've gone for nice, neutral colours

and plain and simple all the way throughout.

It looks all brand-new and shiny, it's excellent.

In the current market,

I think it ought to be on the market for round about £120,000.

Now the property has been improved,

I would put an asking price of £120,000 on it.

Well, it sounds very good.

It certainly puts my new build experience into financial embarrassment.

Especially since it only took us three weeks to do.

That's wonderful, that is.

Yes, a potential pre-tax profit of £27,000 is very impressive indeed.

But having already rented the property,

will the agents' valuations match his own?

In terms of rental potential, I'd estimate £600 per calendar month.

I think the rental value is somewhere in the region

of about £575-£600 per calendar month.

Yeah, well, we've already got it tenanted at 595,

so that's spot on, really.

That gives John a very healthy yield of over 7.5%

and with the potential profit of around £27,000,

this project is a huge success.

So, how's it done, John?

Don't pay too much for the property in the first place

and work with it, don't go in with a blanket idea, just work

with whatever's necessary and don't do any more than is essential.

Martin and I look forward to seeing you for more auction action

-next time.

-Yeah, it's been fascinating, hasn't it?

-We'll see you then.

-Goodbye.

-Bye.