0:00:02 > 0:00:03Hello, and welcome to the show.
0:00:03 > 0:00:06Now, people buy property for all sorts of different reasons.
0:00:06 > 0:00:08To make money quickly, as a long-term investment
0:00:08 > 0:00:11or, let's not forget, also as their home.
0:00:11 > 0:00:14Just as there are many types of houses, there are so many different
0:00:14 > 0:00:16types of property market as well,
0:00:16 > 0:00:18depending on which area you're buying in.
0:00:18 > 0:00:21So, how do YOU find out what's happening in YOUR local area?
0:00:21 > 0:00:25One way could be to visit your local property auction.
0:00:50 > 0:00:53Well, it's not always easy to get yourself a bargain when
0:00:53 > 0:00:55it comes to buying properties at auction.
0:00:55 > 0:00:57You may well spot a bargain,
0:00:57 > 0:01:00but other people may have seen the property as well.
0:01:00 > 0:01:03So you could find yourself in a bit of a bidding war.
0:01:03 > 0:01:07So let's see what today's buyers bought when they went to auction.
0:01:08 > 0:01:12In Stoke-on-Trent, we return to a property we saw a while back.
0:01:12 > 0:01:15It surprised us then, will it surprise us now?
0:01:15 > 0:01:17I wasn't expecting that!
0:01:19 > 0:01:23And for me, the surprises just keep coming in a property in Bexleyheath.
0:01:23 > 0:01:28- SHE SQUEALS WITH LAUGHTER - Really?
0:01:28 > 0:01:33But in Cornwall, I surprise myself with my brute strength.
0:01:33 > 0:01:35SUCKS TEETH
0:01:35 > 0:01:38Ahem. Right. New ceiling and roof possibly required.
0:01:39 > 0:01:41All these properties are being sold at auction.
0:01:41 > 0:01:44We'll find out who bought them and what they paid for them,
0:01:44 > 0:01:47when they went under the hammer.
0:01:47 > 0:01:48Sold!
0:01:51 > 0:01:53We're going a little back in time now,
0:01:53 > 0:01:56out to Stoke-on-Trent in Staffordshire.
0:01:58 > 0:02:05So, terraced property, terraced property, terraced property. Gap.
0:02:05 > 0:02:08Terraced property...
0:02:08 > 0:02:10Not terraced property.
0:02:10 > 0:02:12Er, that's kind of interesting,
0:02:12 > 0:02:15because you'd expect that to continue, but, no.
0:02:15 > 0:02:20This big, cream building is the property that was up for auction
0:02:20 > 0:02:25and a terraced property of standard proportions it is not,
0:02:25 > 0:02:29hinted at by the guide price, £115,000-plus.
0:02:29 > 0:02:31Let's take a look.
0:02:35 > 0:02:41I wasn't expecting that. Wow. Look at the size of this room!
0:02:41 > 0:02:47Even a baby grand piano is lost in this space.
0:02:47 > 0:02:49It's enormous.
0:02:49 > 0:02:52Nice floor, looks to be in reasonable condition.
0:02:52 > 0:02:53HE LAUGHS
0:02:53 > 0:02:54This is incredible.
0:02:56 > 0:02:58I thought that was big, look at this!
0:03:00 > 0:03:03So, not your conventional terraced house.
0:03:03 > 0:03:06More like three knocked into one.
0:03:06 > 0:03:10It was vast, with large, unusually proportioned rooms downstairs.
0:03:11 > 0:03:15Whereas upstairs was more of a warren of rooms.
0:03:17 > 0:03:20For the life of me, I can't figure out
0:03:20 > 0:03:23what this building was previously used for.
0:03:23 > 0:03:26I mean, it's obviously been extensively refurbished
0:03:26 > 0:03:30and it is extensive in total.
0:03:30 > 0:03:32I mean, we've got more and more rooms.
0:03:32 > 0:03:34One there, there's another one over this way.
0:03:34 > 0:03:37You've got this big room here, which
0:03:37 > 0:03:41is almost a walk-through, which isn't ideal.
0:03:41 > 0:03:43So I mean, were these let as individual rooms?
0:03:43 > 0:03:47I mean, was there... I don't know. I'm really at a loss.
0:03:47 > 0:03:49Because you come in here, there's more rooms.
0:03:49 > 0:03:51There's one over there, there's one here,
0:03:51 > 0:03:55there's a separate little kitchen area there. Steps down to...
0:03:55 > 0:03:57..that's the kitchen area again, I don't... I'm not sure.
0:03:57 > 0:04:00It's very easy to get disorientated as you wander round.
0:04:00 > 0:04:02MUSIC: Confusion by ELO
0:04:02 > 0:04:05# Confusion You know it's driving me wild
0:04:05 > 0:04:09# Confusion It comes as no big surprise
0:04:10 > 0:04:13# You've lost your love and you just can't carry on
0:04:13 > 0:04:15# Can't carry on
0:04:15 > 0:04:17# You feel there's no-one there for you to lean on
0:04:17 > 0:04:20# To lean on... #
0:04:20 > 0:04:23Yes, there was room, after room, after room.
0:04:23 > 0:04:28With bedrooms, lounges, bathrooms, two kitchens. It was a maze.
0:04:28 > 0:04:31In fact, it was quite tricky to work out which direction
0:04:31 > 0:04:32I should be going in.
0:04:34 > 0:04:37MUSIC CONTINUES
0:04:39 > 0:04:45Should it be converted into flats, bedsits or just one humongous house?
0:04:45 > 0:04:49But, with what was a £115,000-plus guide price,
0:04:49 > 0:04:53I was fascinated to see who it would appeal to at the auction.
0:04:59 > 0:05:03Lot 91 is a substantial corner terraced building.
0:05:03 > 0:05:09Large accommodation, lots of rooms. Should we say 115, then? Lot 91.
0:05:09 > 0:05:14115, back left at £115,000. 120 going to say now.
0:05:14 > 0:05:20£120,000. 125, £125,000.
0:05:20 > 0:05:23130. 130,000. 135, £135,000.
0:05:26 > 0:05:30140? No, no. 135,000, by the door.
0:05:30 > 0:05:34136 anywhere else? 136, seated.
0:05:34 > 0:05:42137, 138, 139, 140. 141, 142.
0:05:42 > 0:05:45Shaking his head, 142 seated.
0:05:45 > 0:05:46143 anywhere else?
0:05:46 > 0:05:51If not, I'm selling it at 142,000 to the gentleman seated
0:05:51 > 0:05:53for the first time.
0:05:53 > 0:05:57At £142,000 for the second time.
0:05:57 > 0:06:01Third and final time. At £142,000...
0:06:01 > 0:06:04BANGS HAMMER You bought it sir, well done.
0:06:04 > 0:06:06And so the hammer fell at 142,000.
0:06:06 > 0:06:10And the successful bid had been made by Neil who had bought
0:06:10 > 0:06:13it as a joint purchase with business partner, David.
0:06:15 > 0:06:18Neil was an independent financial adviser
0:06:18 > 0:06:21and so will be sorting out the financial aspects of the work.
0:06:21 > 0:06:24While David was a builder and he was going to oversee
0:06:24 > 0:06:27and look after the practical side of the refurbishment.
0:06:27 > 0:06:29So I was intrigued to know what the pair have planned
0:06:29 > 0:06:33for this rather oversized terrace property.
0:06:33 > 0:06:36Neil, David. Good to see you both.
0:06:36 > 0:06:38What about this place, then?
0:06:38 > 0:06:41- Yeah, it's big, isn't it? - Why did you want to buy it?
0:06:41 > 0:06:45Simply the sheer size of the property made it an attractive option.
0:06:45 > 0:06:47OK, so what are you going to do with it, then?
0:06:47 > 0:06:51- Well, the intention is to put it into about ten flats.- Ten flats?
0:06:51 > 0:06:53See if we can get eight to ten flats, yeah.
0:06:53 > 0:06:55- What, individual, self-contained flats?- Yes.
0:06:55 > 0:06:57Upstairs is virtually divided into flats,
0:06:57 > 0:07:00it's just sorting out the downstairs.
0:07:00 > 0:07:04If David and Neil's plans to convert this into flats went ahead, they
0:07:04 > 0:07:08either plan to sell on the entire development to an investor, or to
0:07:08 > 0:07:12sell some of the flats individually and keep some to rent out.
0:07:12 > 0:07:13But whatever route they chose,
0:07:13 > 0:07:17it was all dependent on planning permission being granted.
0:07:20 > 0:07:24So, how would the ten flats work layout-wise?
0:07:24 > 0:07:26Well, there's two staircases into the building,
0:07:26 > 0:07:28there's three front doors.
0:07:28 > 0:07:31Potentially, the front door which is right in the centre
0:07:31 > 0:07:34will serve two flats on the ground floor.
0:07:34 > 0:07:37We've then got the two staircases which, hopefully,
0:07:37 > 0:07:42would serve probably four flats, two downstairs, two upstairs.
0:07:42 > 0:07:45And the other back door will probably serve
0:07:45 > 0:07:49- three upstairs, two downstairs. - Right.
0:07:49 > 0:07:52This area here, it'll be split into two flats.
0:07:52 > 0:07:54There's another flat at the front, there.
0:07:54 > 0:07:56There's another flat round the corner,
0:07:56 > 0:07:58and we should be able to squeeze another flat in next door.
0:07:58 > 0:08:00Right. What kind of cost do think
0:08:00 > 0:08:03there would be involved in creating ten flats?
0:08:03 > 0:08:07I think I'm looking at, or we're looking at, roughly around 200,000.
0:08:07 > 0:08:10And along with the £200,000 budget,
0:08:10 > 0:08:13David was hoping that, planning permission notwithstanding,
0:08:13 > 0:08:17his building team could turn the redevelopment round
0:08:17 > 0:08:18in just four months.
0:08:20 > 0:08:22Well, that was in April 2014.
0:08:22 > 0:08:25And when we returned, six months later, well,
0:08:25 > 0:08:27plans had changed a little.
0:08:30 > 0:08:33We've looked at producing eight flats, now.
0:08:33 > 0:08:36Originally we'd hoped to get nine or ten, reduced slightly,
0:08:36 > 0:08:40but it means each one's slightly larger than originally planned,
0:08:40 > 0:08:42and we think that's going to make them more attractive.
0:08:42 > 0:08:45But the delay in getting planning permission had meant
0:08:45 > 0:08:49work was not as far advanced as David and Neil hoped.
0:08:49 > 0:08:52Basically, there's one flat which is completely finished.
0:09:02 > 0:09:07Er, we've then got two flats which are ready for decorations.
0:09:10 > 0:09:13We've got one more flat which is ready for second-fix joinery
0:09:13 > 0:09:17and we've got three more flats which are ready for
0:09:17 > 0:09:20partition work going up, stud work going up,
0:09:20 > 0:09:23that's going to be complete in the next three or four weeks.
0:09:23 > 0:09:26Well, nice as it was to see one of the flats ready,
0:09:26 > 0:09:29there were still another seven to go.
0:09:29 > 0:09:33So, nine months after our first visit, we're going back again.
0:09:35 > 0:09:38And you can see how to turn one huge terraced property
0:09:38 > 0:09:43into eight one-bedroom flats, later in the show.
0:09:43 > 0:09:46MUSIC: A Kind Of Magic by Queen.
0:09:47 > 0:09:48# It's a kind of magic
0:09:48 > 0:09:51# Magic, magic! #
0:09:55 > 0:09:58Well, there might be some property magic going on in Staffordshire
0:09:58 > 0:10:01but I reckon if you're looking for an investment opportunity
0:10:01 > 0:10:04I've found a place that might just do the trick.
0:10:06 > 0:10:09Bexleyheath, in southeast London, has ideal rail links that will
0:10:09 > 0:10:14get you into the centre of the capital in just under an hour.
0:10:14 > 0:10:18And beautiful parks and houses make this a very appealing area.
0:10:18 > 0:10:21The old Roman road divides the suburb into two,
0:10:21 > 0:10:23a DA6 postcode to the south
0:10:23 > 0:10:26and a DA7 postcode to the north.
0:10:29 > 0:10:33Now, this property is in the DA7 section of Bexleyheath.
0:10:33 > 0:10:38It's two separate two-bedroom flats, two separate lots sold at auction,
0:10:38 > 0:10:41and they were sold one after the other.
0:10:41 > 0:10:43Are you keeping up?
0:10:43 > 0:10:47Now, the first thing that strikes me, it is a pleasant surprise,
0:10:47 > 0:10:50it's that this flat has its own front door
0:10:50 > 0:10:53and the bottom flat, well, it's just around the side.
0:10:53 > 0:10:57Most have to share a front door, so that is a big old bonus.
0:10:57 > 0:11:00Let's go into the first flat, come on!
0:11:00 > 0:11:04'This first flat is guided at 170,000-180,000.
0:11:04 > 0:11:08'From the outside, well, that looks like a pretty good deal.'
0:11:08 > 0:11:12It's freezing outside, luckily it's toasty warm in here
0:11:12 > 0:11:14and that's because the storage heaters are working,
0:11:14 > 0:11:16which says no gas,
0:11:16 > 0:11:19so that is something to bear in mind with this property.
0:11:19 > 0:11:22But it seems like it's in not bad condition.
0:11:22 > 0:11:25You've got a bathroom through here, all white and shiny so, yep,
0:11:25 > 0:11:27I could go with that.
0:11:27 > 0:11:29And right at the back of the property, well,
0:11:29 > 0:11:33a small kitchen but very functional indeed.
0:11:33 > 0:11:34The units look nice.
0:11:34 > 0:11:36So far, so good.
0:11:37 > 0:11:41So, straight off the landing you've got a bedroom next door
0:11:41 > 0:11:45and this really nice, sunny lounge.
0:11:45 > 0:11:49I am quite taken aback by how ready-to-go this flat is.
0:11:49 > 0:11:53It's spacious in here, you've got nice high ceilings,
0:11:53 > 0:11:54it's been freshly painted,
0:11:54 > 0:11:58you've got three fabulous big windows letting in loads of light.
0:11:58 > 0:12:01It'll all have been insulated and soundproofed.
0:12:01 > 0:12:05I mean, this flat really would be fantastic for renting
0:12:05 > 0:12:08because you could almost advertise this straightaway.
0:12:09 > 0:12:13Yes, you barely even need to decorate in here.
0:12:13 > 0:12:15The kitchen is in good order, as is the bathroom
0:12:15 > 0:12:18and the whole place, well, it's filled with light.
0:12:18 > 0:12:20Up a set of stairs there's a loft conversion
0:12:20 > 0:12:24that's a clever use of the space, turning a one-bed into a two-bed.
0:12:26 > 0:12:28Property number one gets the thumbs up from me.
0:12:28 > 0:12:31Now, let's go and have a look at the other lot.
0:12:38 > 0:12:41So, that was the upstairs two-bedroom flat.
0:12:41 > 0:12:43I'm going to take you now to the ground-floor flat
0:12:43 > 0:12:46in this building and my, oh, my!
0:12:46 > 0:12:49Wait till you see the spectacular entrance.
0:12:49 > 0:12:54Look at this! Electric gates that let you through to the other side.
0:12:54 > 0:12:55# Dun-dun-da! #
0:12:55 > 0:12:58Leading me through into the next flat.
0:12:58 > 0:13:01So, to have a private driveway is one thing,
0:13:01 > 0:13:03to have electric gates is another.
0:13:03 > 0:13:07To have a garage at the end is something really special.
0:13:07 > 0:13:10We've got a little garden here and look at the entrance.
0:13:10 > 0:13:15All for a guide price of £160,000-£170,000.
0:13:20 > 0:13:24And inside flat two, there's a lounge, kitchen, in good condition,
0:13:24 > 0:13:26and there's two bedrooms.
0:13:26 > 0:13:30Unlike upstairs, this flat does have central heating.
0:13:30 > 0:13:32What more could you want?
0:13:33 > 0:13:36But there's one thing I'm looking for and I can't find -
0:13:36 > 0:13:39and that is the bathroom.
0:13:39 > 0:13:41No, not in there.
0:13:41 > 0:13:42It's not in there.
0:13:42 > 0:13:46It's not this tiny little broom cupboard in here, is it?
0:13:46 > 0:13:48SHE LAUGHS
0:13:48 > 0:13:50Really?!
0:13:50 > 0:13:51Down those steep stairs?
0:13:52 > 0:13:53Wow!
0:13:55 > 0:13:58Now, the first flat made good use of space with the loft conversion
0:13:58 > 0:14:01but flat number two is plumbing new depths
0:14:01 > 0:14:04with this basement toilet conversion.
0:14:04 > 0:14:06Speaking of uses of the space,
0:14:06 > 0:14:08well, the flats are in the same building so
0:14:08 > 0:14:12if you were at auction you'd really want to buy both, wouldn't you?
0:14:12 > 0:14:14And if you got them for the guide price
0:14:14 > 0:14:19you'd be looking at around £330,000 for two London flats.
0:14:19 > 0:14:21We could be talking major profit here.
0:14:21 > 0:14:25But only one way to be sure would be to ask a local property expert.
0:14:29 > 0:14:32There's always the option to convert the loft and the basements, as well,
0:14:32 > 0:14:35so where you would have had two one-beds,
0:14:35 > 0:14:39they've done very well to utilise the space and create two two-beds.
0:14:39 > 0:14:41The only thing it would benefit from
0:14:41 > 0:14:43is having some gas central heating fitted,
0:14:43 > 0:14:44doing away with the storage heaters.
0:14:44 > 0:14:48But in terms of the decor, the carpets, the kitchen, bathroom,
0:14:48 > 0:14:52I don't think you'd need to change anything, if it's for rental or sale.
0:14:54 > 0:14:55So, for this upper flat
0:14:55 > 0:14:58what would you expect for the resale and rental?
0:14:59 > 0:15:02This property should achieve anywhere in the region
0:15:02 > 0:15:07of £215,000-£225,000.
0:15:07 > 0:15:08The rental for this property,
0:15:08 > 0:15:10if you was to put it on the open market now,
0:15:10 > 0:15:14you'd be looking somewhere between £900-£950 per calendar month.
0:15:15 > 0:15:18So, there really is potential for some profit here.
0:15:18 > 0:15:21How about the second flat?
0:15:21 > 0:15:22Similar money.
0:15:22 > 0:15:24215-225 for the downstairs apartment.
0:15:24 > 0:15:26Rental for this property,
0:15:26 > 0:15:30somewhere in the region of 900-950 per calendar month.
0:15:30 > 0:15:33These flats are an ideal investment.
0:15:33 > 0:15:36I mean, come on, how can anybody resist these electric gates?
0:15:36 > 0:15:38They're ready to rent out but I would, potentially,
0:15:38 > 0:15:43take the gas upstairs in this flat and rip out those storage heaters.
0:15:43 > 0:15:46So, any hungry developers might be interested in these.
0:15:46 > 0:15:48How can you lose?
0:15:48 > 0:15:50Let's see what happened when we went to auction.
0:15:53 > 0:15:55We move now to lot 95.
0:15:55 > 0:15:58Got a guide of 160-170. Start me where you will.
0:15:58 > 0:16:00160,000, bottom end of the guide?
0:16:01 > 0:16:04In your hands, 150, then.
0:16:04 > 0:16:05Got to be worth 150. Thank you very much, sir.
0:16:05 > 0:16:08£150,000, I'm bid.
0:16:08 > 0:16:10152 do I see?
0:16:10 > 0:16:11152.
0:16:11 > 0:16:13And 5? And 5.
0:16:13 > 0:16:14And 8?
0:16:14 > 0:16:16And 8. 158 at the back.
0:16:16 > 0:16:18And 60? Is that 1?
0:16:18 > 0:16:21159, I don't mind. 160.
0:16:21 > 0:16:23161? No?
0:16:23 > 0:16:26At 160,000 at the very back of the room,
0:16:26 > 0:16:28at £160,000.
0:16:28 > 0:16:30For the first time at 160,000.
0:16:31 > 0:16:35For the second time at 160,000.
0:16:35 > 0:16:40For the third and final time at 161,000, are you all done?
0:16:40 > 0:16:41Sold at 160.
0:16:41 > 0:16:46And, standing on the right, the smiley buyer of the lower-floor flat
0:16:46 > 0:16:49is Johnny, paying the 160,000.
0:16:49 > 0:16:52Now for the next lot, the upper flat.
0:16:52 > 0:16:55Will he be lucky enough to secure this one, too?
0:16:55 > 0:16:57How would you like a pair?
0:16:57 > 0:17:00Lot 96, two-bedroom maisonette this time.
0:17:00 > 0:17:03Electric gates leading to a parking garage.
0:17:03 > 0:17:05It's got a guide of 170-180.
0:17:05 > 0:17:07Is that 160? Thank you very much indeed.
0:17:07 > 0:17:10£160,000 I'm bid, got my underbidder.
0:17:10 > 0:17:13At £160,000 I have,
0:17:13 > 0:17:15162 do I see?
0:17:15 > 0:17:17At 162...
0:17:17 > 0:17:20Well, it looks like Johnny is after the pair.
0:17:20 > 0:17:22Could be a shrewd move.
0:17:22 > 0:17:24At 170,000 for the first time.
0:17:26 > 0:17:29170,000 for the second time.
0:17:29 > 0:17:33170,000 for the third and final time, are you all done?
0:17:34 > 0:17:38Sold at 170,000 and that's the same buyer, A790.
0:17:38 > 0:17:39Thank you very much indeed.
0:17:41 > 0:17:44# Two for the price of one... #
0:17:46 > 0:17:49So, that's £330,000 for two London flats.
0:17:49 > 0:17:51Time to find out Johnny's plans.
0:17:54 > 0:17:57- Johnny, congratulations.- Thank you. - Fantastic meeting you.
0:17:57 > 0:18:01Wow, you got a bit greedy buying yourself two flats, didn't you?
0:18:01 > 0:18:04- Well, yeah, we got a bit carried away.- How carried away?
0:18:04 > 0:18:06Did you do much research with these?
0:18:06 > 0:18:09- No.- Any research?
0:18:09 > 0:18:12- No.- Did you read the legal pack?
0:18:12 > 0:18:15- No. Not at all.- Did you view them?
0:18:15 > 0:18:19- No.- Did you know you were going to buy them?- Not at all.
0:18:19 > 0:18:22- # Let me hear you say yeah - Yeah!
0:18:22 > 0:18:25# No, no, no, no, no, no
0:18:25 > 0:18:26# No, no, no, no... #
0:18:26 > 0:18:30Well, having managed to say no to every rule
0:18:30 > 0:18:32in my Homes Under The Hammer check list, well,
0:18:32 > 0:18:35Johnny is a lucky boy to get two fantastic properties
0:18:35 > 0:18:39but he's been developing properties since he was just 16 years old
0:18:39 > 0:18:41as part of a family business.
0:18:41 > 0:18:44Johnny's very experienced and that is why I am going to give him
0:18:44 > 0:18:48an extra hard clip round the ear for buying blind.
0:18:48 > 0:18:50No, no, no.
0:18:53 > 0:18:55Johnny, I've heard of people taking a risk once at auction
0:18:55 > 0:19:00but twice, buying two flats that you've not even seen?
0:19:00 > 0:19:02Well, the way I look at it, if you buy in London you can't lose.
0:19:02 > 0:19:04That's why we bought it.
0:19:04 > 0:19:05So, what happened when you got the keys
0:19:05 > 0:19:08and you walked through the front door, what did you think?
0:19:08 > 0:19:11- Well, I had the biggest smile ever! - Happy days!- Happy days. Yeah.
0:19:11 > 0:19:14You know, because I've bought some bad ones in the past
0:19:14 > 0:19:16and this one's turned out very nice.
0:19:17 > 0:19:19Mm-mm. Very nice.
0:19:19 > 0:19:22So nice, in fact, Johnny doesn't think anything needs doing
0:19:22 > 0:19:26except installing central heating in the top flat.
0:19:26 > 0:19:29So there's no budget and Johnny's a qualified electrician and plumber
0:19:29 > 0:19:32so he can do all the repair work that's needed.
0:19:34 > 0:19:37Why don't you see the point in maybe tarting them up,
0:19:37 > 0:19:40doing a bit of painting, putting in a new fridge, a new washing machine?
0:19:40 > 0:19:42Are you not even going to go to that extent?
0:19:42 > 0:19:45I don't think I need to, in the condition they're in.
0:19:45 > 0:19:48I feel that, you know, OK, there's washing machine etc there,
0:19:48 > 0:19:50we'll probably leave them in for the tenant
0:19:50 > 0:19:52but the tenant can have them, it's not a problem.
0:19:52 > 0:19:54OK, now this flat is the smaller flat but you've got that
0:19:54 > 0:19:57fantastic entrance, you've got a driveway,
0:19:57 > 0:19:58you've got electric gates!
0:19:58 > 0:20:01I know it's a bit silly but I got so excited
0:20:01 > 0:20:04when I saw that amazing grand entrance.
0:20:04 > 0:20:07I mean, how lovely for a downstairs flat to have that?
0:20:07 > 0:20:08Well, it's beautiful.
0:20:08 > 0:20:11And also there's plenty of space outside, the gates are closed,
0:20:11 > 0:20:14it's nice and safe, both flats can have a garage each.
0:20:14 > 0:20:16There's a lot of ticks in boxes with this property.
0:20:16 > 0:20:18- And it all works.- And it all works!
0:20:18 > 0:20:20That's the great thing about it, it all works.
0:20:20 > 0:20:24So, have you had a chance yet to get an estate agent to value them
0:20:24 > 0:20:27and do you think you bought undervalued property?
0:20:27 > 0:20:30I have had them valued, hence why I'm so happy.
0:20:30 > 0:20:33Come on then, tell me. So, how much do you think you've made profit
0:20:33 > 0:20:35already before you've done anything?
0:20:36 > 0:20:39- Worst-case scenario, about 70,000.- Wow.
0:20:40 > 0:20:43Well, it looks like Johnny stands to make a fantastic profit
0:20:43 > 0:20:46but I can't emphasise enough that you should never buy
0:20:46 > 0:20:50without viewing a property, nor without reading the legal pack.
0:20:50 > 0:20:51# Don't-Don't-Don't
0:20:51 > 0:20:53# Don't-Don't do it, baby
0:20:53 > 0:20:54# Baby. #
0:20:54 > 0:20:57Now, I don't want you putting all my lovely viewers off
0:20:57 > 0:20:59and making them think that's what everybody should do because
0:20:59 > 0:21:03- that is not what you should do when you go to auction.- Not at all.
0:21:03 > 0:21:05Obviously, coming from our background,
0:21:05 > 0:21:09if they were really bad we could have done them up.
0:21:09 > 0:21:11You know, our profit margins would be down to 20,000
0:21:11 > 0:21:15- so there is always the rough with the smooth, shall we say.- Yeah.
0:21:15 > 0:21:16We've just been very lucky.
0:21:16 > 0:21:19Well, I'm really excited to see what happens when we come back
0:21:19 > 0:21:21and view the situation
0:21:21 > 0:21:24and to see if you have still got that smile on your face.
0:21:24 > 0:21:27- OK. Thank you very much. - Thanks, Johnny.- Thank you.
0:21:29 > 0:21:31Well, you get the kind of impression that Johnny,
0:21:31 > 0:21:35with his experience, is going to make easy work of this one.
0:21:35 > 0:21:36Remember his maxim -
0:21:36 > 0:21:39if it's in London, it's going to make money.
0:21:39 > 0:21:42Hm. Is that right, Johnny?
0:21:42 > 0:21:46Well, this is in London and it didn't really cost the earth.
0:21:46 > 0:21:48Surely, this is a cash cow,
0:21:48 > 0:21:50or is it?
0:21:50 > 0:21:55Join me later in the show and you can see if Johnny does cash in.
0:21:56 > 0:21:57Coming up -
0:21:57 > 0:22:01on a trip to Cornwall it's time to get your thinking caps on.
0:22:02 > 0:22:04It's worth some thought.
0:22:07 > 0:22:10We return to Bexleyheath in South London
0:22:10 > 0:22:12to get some advice from Johnny.
0:22:13 > 0:22:16I wouldn't recommended it at all. We've been very lucky.
0:22:19 > 0:22:22But next, we're back to Staffordshire
0:22:22 > 0:22:26and Stoke-on-Trent to see a property we first saw in 2014.
0:22:26 > 0:22:31And it was a rather unusual lot, as it was not one, not two, but
0:22:31 > 0:22:36three terraced properties combined to make one enormous property.
0:22:40 > 0:22:43# What's that coming over the hill?
0:22:43 > 0:22:47# Is it a monster? Is it a monster?
0:22:47 > 0:22:49# What's that coming over the hill?
0:22:49 > 0:22:53# Is it a monster? Is it a monster?. #
0:22:53 > 0:22:56This is incredible!
0:22:56 > 0:23:00I thought that was big! Look at this!
0:23:02 > 0:23:07While downstairs was on giant proportions, upstairs was
0:23:07 > 0:23:11a maze of rooms, with kitchens, bathrooms, lounges, bedrooms...
0:23:11 > 0:23:14It certainly wasn't short of space.
0:23:17 > 0:23:20And it was bought for £142,000 by property developing duo David
0:23:20 > 0:23:22and Neil.
0:23:22 > 0:23:24Neil has now retired,
0:23:24 > 0:23:28but all his experience as a financial adviser is invaluable
0:23:28 > 0:23:31when it comes to balancing the budget and sorting materials.
0:23:31 > 0:23:33While David is a builder,
0:23:33 > 0:23:37so it was down to him to take this building in hand.
0:23:37 > 0:23:41OK, so, what are you going to do with it, then?
0:23:41 > 0:23:44Well, the intention is to put it into about ten flats.
0:23:44 > 0:23:48- See if we can get eight to ten flats. - Individual, self-contained flats?
0:23:48 > 0:23:50Yes.
0:23:50 > 0:23:52But when we returned six months later,
0:23:52 > 0:23:57only one flat was ready and their plan had altered.
0:23:57 > 0:24:00# You've had a chance of heart. #
0:24:00 > 0:24:04We've looked at producing eight flats now.
0:24:04 > 0:24:06Originally, we'd hoped to get nine or ten.
0:24:06 > 0:24:08Reduced slightly,
0:24:08 > 0:24:11but it means each one is slightly larger than they'd originally
0:24:11 > 0:24:14planned and we think that's going to make them more attractive.
0:24:14 > 0:24:18So, with a large chunk of their £200,000 budget still to spend,
0:24:18 > 0:24:20we left them to it.
0:24:20 > 0:24:24But now, nine months after our first sighting of the monster,
0:24:24 > 0:24:28we're back to see if it's now in eight bite-sized pieces.
0:24:32 > 0:24:35What had been a troublesome gable wall is now repaired
0:24:35 > 0:24:37and there are now four entrances.
0:24:37 > 0:24:41Three leading directly into the ground-floor flats and one
0:24:41 > 0:24:45leading into a central stairwell with the upper floor flats off it.
0:24:45 > 0:24:48But what do they look like inside?
0:24:52 > 0:24:54Wow! That's more like it!
0:25:00 > 0:25:03And not only are the eight one-bed flats now complete,
0:25:03 > 0:25:05two of them already have tenants.
0:25:05 > 0:25:09So David really has been busy in the last few months.
0:25:09 > 0:25:11There was a lot of planning went into the job.
0:25:11 > 0:25:15Once I'd got it set in my own mind, it seemed to flow reasonably well.
0:25:15 > 0:25:19We worked through it pretty systematically.
0:25:19 > 0:25:21We had two teams on, we were tackling the first floor
0:25:21 > 0:25:24and the ground floor, new walls, new partitions,
0:25:24 > 0:25:27and then we just finished it off and worked through it.
0:25:27 > 0:25:29With the building being a corner plot
0:25:29 > 0:25:31and originally three properties,
0:25:31 > 0:25:34all the flats are slightly different shapes and proportions.
0:25:34 > 0:25:36So, does David have a favourite?
0:25:36 > 0:25:38Here we are in flat four.
0:25:38 > 0:25:41I know all the flats in this project are different,
0:25:41 > 0:25:44but out of all of them, I think this is my favourite.
0:25:44 > 0:25:47It's got the dual aspect, it's that little bit lighter,
0:25:47 > 0:25:50little bit airier, it's a good size lounge and kitchen,
0:25:50 > 0:25:55but it just gives you that little feel of being that little bit bigger.
0:25:55 > 0:25:57I think it's all looking pretty good.
0:25:57 > 0:26:00Well worth the slight delay caused by having to reapply
0:26:00 > 0:26:04for planning and the extensive structural work on the gable end.
0:26:04 > 0:26:07How do they feel overall about this project?
0:26:07 > 0:26:12This property has probably been an easier one to work with,
0:26:12 > 0:26:15but then, I'm not here every day.
0:26:15 > 0:26:19David has more of the practical problems on a day-to-day basis.
0:26:19 > 0:26:21I think it's nice
0:26:21 > 0:26:25when you actually get involved in the building for several months
0:26:25 > 0:26:28and you're in the one place and it's been very satisfying
0:26:28 > 0:26:32when we took it back to almost bare brick, to actually bring it
0:26:32 > 0:26:35forward and bring it into eight very habitable properties.
0:26:35 > 0:26:39Even so, eight properties at once is quite a challenge,
0:26:39 > 0:26:44but they do say there is economy in scale, so is that true?
0:26:44 > 0:26:48Having a large empty building actually lends itself to
0:26:48 > 0:26:52being a lot easier to work than if you're in a smaller crowded
0:26:52 > 0:26:55position where you have to import everything.
0:26:55 > 0:26:59Kitchens were all bought at the same time, at a very competitive price.
0:26:59 > 0:27:03Same with the showers. It was eight of everything.
0:27:03 > 0:27:08And you're in a much stronger position when you're negotiating.
0:27:08 > 0:27:11# Living by numbers
0:27:11 > 0:27:13# Living by numbers now. #
0:27:16 > 0:27:21OK. Well, speaking of numbers, they bought the property for £142,000.
0:27:21 > 0:27:25So, how many pieces of eight has the whole development cost them?
0:27:25 > 0:27:27From day one,
0:27:27 > 0:27:33our total costs were targeted in the £340,000-350,000 area.
0:27:33 > 0:27:37That was the project costs from day one and it looks like we're
0:27:37 > 0:27:41going to fall within that level with the final cost.
0:27:43 > 0:27:49A £340,000 total spend to get eight flats equates to £42,500 a flat,
0:27:49 > 0:27:51which seems like a good deal to me.
0:27:51 > 0:27:54But what did two local estate agents make of what David
0:27:54 > 0:27:57and Neil have achieved here?
0:28:01 > 0:28:06I think to achieve eight apartments from the development is very good.
0:28:06 > 0:28:08It's probably the most they reasonably could have
0:28:08 > 0:28:11achieved from the size of the property.
0:28:11 > 0:28:15One downside is the lack of off-road parking, of course.
0:28:15 > 0:28:18However, there is on-street parking nearby.
0:28:18 > 0:28:20I feel that the developers have done well to fit eight
0:28:20 > 0:28:22apartments into this space.
0:28:22 > 0:28:26Certainly, the specification and the size of the rooms are all
0:28:26 > 0:28:29in proportion with what you'd expect for a one-bedroom apartment.
0:28:29 > 0:28:33Parking issues aside, can this stack up as an investment, with David
0:28:33 > 0:28:37and Neil looking to sell some flats, as well as rent out others?
0:28:37 > 0:28:39In the current resale market,
0:28:39 > 0:28:43what values could each individual flat achieve?
0:28:43 > 0:28:45In today's market, I'd expect,
0:28:45 > 0:28:48again dependent on whereabouts the property is on the development,
0:28:48 > 0:28:54resale prices from in the region of £47,500 up to the region of £55,000.
0:28:54 > 0:28:59For resale, I would anticipate an average price of around £50,000.
0:28:59 > 0:29:01Again, this may vary slightly,
0:29:01 > 0:29:05depending on the different sizes of apartments available.
0:29:05 > 0:29:10An average price of £50,000 would see a grand total of £400,000,
0:29:10 > 0:29:14giving them a potential pre-tax profit of £60,000.
0:29:14 > 0:29:18- So, how do they feel about that? - Yeah, we're comfortable with that
0:29:18 > 0:29:21and it's entirely in line with what we'd expected.
0:29:21 > 0:29:24But this is a mixed development, with some flats already
0:29:24 > 0:29:27rented out, so are they getting their market value?
0:29:27 > 0:29:29For rental purposes,
0:29:29 > 0:29:32I would anticipate an average of around £400 per calendar month.
0:29:32 > 0:29:36Depending on where the apartment is on the development,
0:29:36 > 0:29:39I would suggest that the rental value
0:29:39 > 0:29:42is in the region of £350 up to £415 per calendar month.
0:29:42 > 0:29:49It's roughly about where we allowed for. We've let two out already.
0:29:49 > 0:29:52One is at 420.... 430, I think.
0:29:52 > 0:29:55And the other one is at 360, which is
0:29:55 > 0:29:58one of the smaller ones on the ground-floor.
0:29:58 > 0:30:02So, yes, it appears to be what the market's dictating.
0:30:02 > 0:30:05Well, that's encouraging because if they couldn't sell any of the flats
0:30:05 > 0:30:07and needed to rent all eight out,
0:30:07 > 0:30:11then an average of £400 per calendar month would generate
0:30:11 > 0:30:15an annual rental yield of around 11%, which is pretty healthy.
0:30:15 > 0:30:18So, what's up next for Dave and Neil?
0:30:21 > 0:30:26Very short-term, we've recently purchased a bungalow,
0:30:26 > 0:30:30which we're going to be working on and then in the longer term,
0:30:30 > 0:30:33more projects, probably similar to this one.
0:30:37 > 0:30:39Now, if that place was certainly worth the wait,
0:30:39 > 0:30:43I'm travelling to a place I can't wait to see.
0:30:43 > 0:30:46This is Gunnislake in the Tamar Valley,
0:30:46 > 0:30:51now designated an Area of Outstanding Natural Beauty.
0:30:51 > 0:30:52It certainly is that.
0:30:52 > 0:30:56Of course, the Tamar forms the boundary in-between Devon
0:30:56 > 0:31:00and Cornwall. We're just on the Cornish side.
0:31:00 > 0:31:02# Is this the place
0:31:02 > 0:31:04# We used to love? #
0:31:04 > 0:31:07Formerly a quarrying and mining area,
0:31:07 > 0:31:11Gunnislake's streets are now lined with plenty of attractive
0:31:11 > 0:31:15residential properties and that all-important railway station,
0:31:15 > 0:31:18with Plymouth only 45 minutes away.
0:31:18 > 0:31:23Well, it's a charming little street, full of lovely looking homes,
0:31:23 > 0:31:25but it's not a home I'm here to see -
0:31:25 > 0:31:29it's actually one of the strangest retail combinations I've
0:31:29 > 0:31:33come across since I last had a key cut in a kebab shop.
0:31:33 > 0:31:38It was actually an estate agents come drapery.
0:31:38 > 0:31:41That's weird. The guide price, though, 20 to 25,000.
0:31:41 > 0:31:43Looks OK from the outside,
0:31:43 > 0:31:47let's hope the interior is cut from the same cloth.
0:31:47 > 0:31:51Yes, curtains and soft furnishings don't usually sit beside lettings
0:31:51 > 0:31:55and sales, but as commercial units go, it's a good size.
0:31:55 > 0:31:59But on a quiet street like this, what kind of business would work?
0:31:59 > 0:32:04And is a retail outlet really the best use for the space?
0:32:04 > 0:32:08So, I guess the first question you've got to think about is - are
0:32:08 > 0:32:11we considering this as a potential commercial opportunity,
0:32:11 > 0:32:14as in turning it into or back into a shop,
0:32:14 > 0:32:18or does it have the potential to be something else, such as residential?
0:32:18 > 0:32:20Well, what have we got?
0:32:20 > 0:32:26Not a lot! About 30-35 square metres on this side. Um...
0:32:26 > 0:32:28Main shop area here.
0:32:28 > 0:32:30At the back, just a bit of storage,
0:32:30 > 0:32:33what was obviously a little office area.
0:32:33 > 0:32:35Good news, you've got a toilet there.
0:32:35 > 0:32:38It's in a right state, but at least you know that you do have the
0:32:38 > 0:32:41sewerage or whatever connected and water.
0:32:41 > 0:32:44And obviously, electricity, which is obviously potentially...
0:32:44 > 0:32:48Sorry, got a bit sidetracked by the large puddle thing on the floor.
0:32:48 > 0:32:51That's not good. Yeah. As I was saying, the...
0:32:51 > 0:32:55Yes, the fact you've got utilities connected is really going to
0:32:55 > 0:32:58save you a lot of money, but that really is bad!
0:32:58 > 0:33:00That doesn't look too good.
0:33:00 > 0:33:02Oop.
0:33:02 > 0:33:06Ahem. Right. New ceiling and roof possibly required.
0:33:06 > 0:33:11Roof problems can prove costly, so that will need investigating ASAP.
0:33:14 > 0:33:16Anyway, moving on,
0:33:16 > 0:33:21through to what I imagine was the drapers side of the shop.
0:33:21 > 0:33:25Much bigger space. Probably about 40, 45 square metres in this side.
0:33:25 > 0:33:28A lot less in here too. It is good.
0:33:28 > 0:33:31Again, the ceiling looks a bit dodgy.
0:33:31 > 0:33:34But what strikes me much more when you come in here is,
0:33:34 > 0:33:38as you enter the rear part of the shop, the lack of light.
0:33:38 > 0:33:42There is only one window. You don't know what it overlooks.
0:33:42 > 0:33:45But if you wanted to put a bedroom back here, or a kitchen,
0:33:45 > 0:33:48or a loo, you're going to need more light and more ventilation,
0:33:48 > 0:33:49so that's something to consider,
0:33:49 > 0:33:52cos you don't know what's behind this wall. Is this a party wall?
0:33:52 > 0:33:54Is it part of somebody else's house?
0:33:54 > 0:33:57Does it overlook somebody who would object to whatever you might
0:33:57 > 0:34:02consider? So, lots of things to think about, but you know what?
0:34:02 > 0:34:04It's worth some thought.
0:34:04 > 0:34:07If you did decide to turn this into a residential property,
0:34:07 > 0:34:10you would need to apply for change of use
0:34:10 > 0:34:12permission from the planning department,
0:34:12 > 0:34:16but with lots of properties in this street already residential,
0:34:16 > 0:34:18it shouldn't pose too much of a problem.
0:34:18 > 0:34:22However, how would it be done and would it be cost effective?
0:34:25 > 0:34:28So, I think you're really starting to get an idea
0:34:28 > 0:34:31for the potential of this place when you come outside and just look.
0:34:31 > 0:34:33Look at that roof. That is really interesting.
0:34:33 > 0:34:36One option would be to put roof lights in there, I suppose.
0:34:36 > 0:34:39But it looks to me to be in a pretty poor state,
0:34:39 > 0:34:43so my thoughts would be to talk to the planners about
0:34:43 > 0:34:47whether or not you could do some double-storey kind of thing.
0:34:47 > 0:34:51That suddenly opens up all sorts of potential cos rather than
0:34:51 > 0:34:54just maybe a one-bedroom flat, yeah,
0:34:54 > 0:34:58something much more exciting is potentially on the cards.
0:35:00 > 0:35:03Yes, at a guide price of £20,000 to £25,000,
0:35:03 > 0:35:08it does offer potential, subject, of course, to planning permission.
0:35:08 > 0:35:13So, what does a local property expert think of it?
0:35:13 > 0:35:16As you come up the street, although it's kind of two units,
0:35:16 > 0:35:19you come in one door. It used to be an estate agents,
0:35:19 > 0:35:23while his wife ran the drapery from this side. It was so quaint.
0:35:23 > 0:35:27Almost Victorian in its way.
0:35:27 > 0:35:30Its destiny now is going to be commercial
0:35:30 > 0:35:34if someone fancies a go, or I think more likely residential.
0:35:34 > 0:35:38As I thought, it looks like residential could be the best
0:35:38 > 0:35:41option. But what kind of property could be created here?
0:35:44 > 0:35:48You could make a bungalow out of the floor space.
0:35:48 > 0:35:54I think the highest value in retail and rental terms is two parallel
0:35:54 > 0:36:01modest kind of studio/one-bed flatlet apartments.
0:36:01 > 0:36:05So, one large bungalow or two one-bed studio flats.
0:36:05 > 0:36:09What kind of numbers are we looking at for each?
0:36:09 > 0:36:15As a two-bedroom bungalow, you'd be looking at about £135,000.
0:36:15 > 0:36:18On a rental basis,
0:36:18 > 0:36:23it feels like about a £500 to £550 per calendar month property.
0:36:23 > 0:36:27If the building was split down the middle and two studio/one-bed flatlet
0:36:27 > 0:36:29apartments were created,
0:36:29 > 0:36:33I'd see the value of each of those
0:36:33 > 0:36:37being around £80-85,000
0:36:37 > 0:36:41and the rental value of each being
0:36:41 > 0:36:46£425, maybe £450 per calendar month.
0:36:46 > 0:36:49Well, this really is a tale of two cities,
0:36:49 > 0:36:51or rather a shop of two halves.
0:36:51 > 0:36:54If you can't find the yin and yang of the estate agents
0:36:54 > 0:36:57and a drapery, then you're going to have to do something else
0:36:57 > 0:37:00with it, although I think that's the right thing to do.
0:37:00 > 0:37:03Interesting opportunities, but I'm sure it perplexed a few
0:37:03 > 0:37:06potential buyers when it went under the hammer.
0:37:06 > 0:37:08OK, so lot 72. Was two shops.
0:37:08 > 0:37:12We've been talking to people, it could be one or two units, perhaps.
0:37:12 > 0:37:14Won't go any lower than 15.
0:37:14 > 0:37:18At 15,000, do I see? 15, I'm away. At 15. At 15.
0:37:18 > 0:37:2018, right behind you. At 18. At 18.
0:37:20 > 0:37:24At 18. And 20. 21 on the phone. We have a telephone bidder on my left.
0:37:24 > 0:37:2621.
0:37:26 > 0:37:30With the bids flying in, via the internet, the phone, not to
0:37:30 > 0:37:36mention bidders in the room, we'll leave there and go back at £30,000.
0:37:36 > 0:37:40At 30. At £30,000.
0:37:40 > 0:37:42There he goes 30,500.
0:37:42 > 0:37:45At 30,500... There we go. Fresh face. 31.
0:37:45 > 0:37:4931. So, completely against the pair of you now. 31 is in, by the pillar.
0:37:49 > 0:37:5031,500.
0:37:50 > 0:37:5232, I'll take, sir.
0:37:52 > 0:37:5432, he goes. At 32.
0:37:54 > 0:37:58And for the nice chap bidding in his home, 32,500, I'm taking.
0:37:58 > 0:38:03Yes, and there he goes. 32,500. At 32,500. At 33, do I see?
0:38:03 > 0:38:05At 33, do I see anywhere?
0:38:05 > 0:38:08At 32,500, on the internet, has it for the first time.
0:38:08 > 0:38:11At 32,500 for the second.
0:38:11 > 0:38:17At 32,500, third and final time. Selling at 32,500.
0:38:17 > 0:38:19Sold.
0:38:19 > 0:38:23The mystery internet bidder was in fact Alicia.
0:38:23 > 0:38:28Originally from China, Alicia has lived in the UK for some time and
0:38:28 > 0:38:32currently works in the financial services industry in London.
0:38:32 > 0:38:35She already has a couple of rental properties to her name,
0:38:35 > 0:38:40but this will be her first attempt at renovating commercial premises.
0:38:40 > 0:38:44I met her back at the property to find out more.
0:38:44 > 0:38:48- Alicia, great to meet you.- Nice to meet you too.- Congratulations.
0:38:48 > 0:38:52- Thank you.- So, tell me why you wanted to buy this place?
0:38:52 > 0:38:56Initially, I thought it was a bargain and also, it's a
0:38:56 > 0:39:01- great investment opportunity.- Right. - I have a look then, on the internet.
0:39:01 > 0:39:06On the picture, it looks pretty and the financial is affordable for me.
0:39:06 > 0:39:09You said on the internet - did you come
0:39:09 > 0:39:12- and visit it before you bought it? - No.- No?- No.
0:39:12 > 0:39:18- Why?- Because I live in London, so it was a short time to the auction date.
0:39:18 > 0:39:22- So, it wasn't enough time for me to come down.- Wow!
0:39:22 > 0:39:27But I made a few phone calls to check out. I have done some homework.
0:39:27 > 0:39:30So, who did you call?
0:39:30 > 0:39:36I have called the auction house and builders and estate agent.
0:39:36 > 0:39:40OK, so what is the plan? Tell me what you're going to do, ideally.
0:39:40 > 0:39:44OK, I'm going to turn it into two flats
0:39:44 > 0:39:48and the total square metres is about 70 square metres.
0:39:48 > 0:39:52So, probably one for 30 square metres
0:39:52 > 0:39:56and other for 40 square metres.
0:39:56 > 0:40:02For each one, I'm planning to do en-suite one-bedroom flats.
0:40:02 > 0:40:04Now, in order to get to that point, clearly,
0:40:04 > 0:40:07the first step is planning, isn't it?
0:40:07 > 0:40:10- Yes.- Have you spoken to anyone from the planning department yet?- Yes.
0:40:10 > 0:40:12I have called the local council.
0:40:12 > 0:40:17They need me to start from pre-application.
0:40:17 > 0:40:20I have talked to architects and they are planning to do it,
0:40:20 > 0:40:24so we are starting to prepare it from next week.
0:40:24 > 0:40:27Did they give any idea as to sort of
0:40:27 > 0:40:31whether or not kind of they might allow it?
0:40:31 > 0:40:34Yeah, there is a chance they will decline it,
0:40:34 > 0:40:40but I don't see why they should because on this street, they have
0:40:40 > 0:40:45many previous cases of people turning their shops into residential places.
0:40:45 > 0:40:50- And this shop has been empty for five years, from what I heard.- Right.
0:40:50 > 0:40:55So, I think the council would love to see any affordable residential
0:40:55 > 0:40:57places in this town.
0:40:57 > 0:41:02Right, OK. So, do you have an idea of a budget?
0:41:02 > 0:41:08Yes. I have set up a slightly tight budget for £20,000.
0:41:08 > 0:41:11- Per flat, or for both?- For both.
0:41:11 > 0:41:13- OK.- Yeah.
0:41:13 > 0:41:15Alicia is obviously confident she will get permission
0:41:15 > 0:41:18and if she does, she plans on renting the properties out,
0:41:18 > 0:41:22once they're complete, which she expects to take six months.
0:41:22 > 0:41:25Two months for the planning application process
0:41:25 > 0:41:29and the remaining time to convert and renovate the property.
0:41:31 > 0:41:34How much hands-on are you going to be?
0:41:34 > 0:41:38What involvement are you going to have in the project?
0:41:38 > 0:41:41I think I will pay and watch!
0:41:41 > 0:41:43I like your honesty!
0:41:43 > 0:41:47That's great! Pay and watch!
0:41:48 > 0:41:52Because I'm not good at the building work,
0:41:52 > 0:41:56so I will leave it to the professionals to do their job.
0:41:56 > 0:41:58I love that. That's charming.
0:41:58 > 0:42:02But you're an accountant, so you're about maximising the profit
0:42:02 > 0:42:04and stuff.
0:42:04 > 0:42:07You could get your hands dirty, come in here and do a bit of painting.
0:42:07 > 0:42:10- Yeah.- You might be able to keep the costs down a bit.- Yes.
0:42:10 > 0:42:14I did offer to paint the walls, if they need.
0:42:14 > 0:42:19- OK. Well, congratulations.- Thank you very much.- Good luck with it.
0:42:19 > 0:42:22And we look forward to seeing how you get on.
0:42:22 > 0:42:24OK, thank you very much.
0:42:24 > 0:42:27So, Alicia, hedging her bets with this space.
0:42:27 > 0:42:31It's a long way from home, but I love her concept of pay
0:42:31 > 0:42:34and watch as a renovation and restoration technique.
0:42:34 > 0:42:38Actually, though, I think she's going to do very well here.
0:42:38 > 0:42:41It all depends on planning, though. Will she get it?
0:42:41 > 0:42:43You can find out later in the show.
0:42:46 > 0:42:50Well, we've seen one property, but what about the other two?
0:42:50 > 0:42:53Weeks and months have passed.
0:42:53 > 0:42:56Do you think that's been enough time to get everything done?
0:43:01 > 0:43:04It was in the southeast London suburb of Bexleyheath
0:43:04 > 0:43:08where we first saw not one, but two flats up for auction,
0:43:08 > 0:43:10separated in two different lots.
0:43:12 > 0:43:16And they were sold one after the other. Are you keeping up?
0:43:18 > 0:43:23Now both these two-bedroom flats were in remarkably good nick.
0:43:25 > 0:43:30They also came with the bonus of a garage each and security gates.
0:43:30 > 0:43:33Not that trained electrician and plumber Johnny and his uncle Isis
0:43:33 > 0:43:37knew that when they managed to buy both of them at auction.
0:43:39 > 0:43:42Sold at 160. And your bidder's number is...
0:43:42 > 0:43:46Sold at 170,000 and that's the same buyer A790.
0:43:46 > 0:43:48MUSIC: It Takes Two by Marvin Gaye and Kim Weston
0:43:48 > 0:43:52# It takes two, baby It takes two, baby
0:43:52 > 0:43:54# To make a dream come true
0:43:55 > 0:43:58# Just takes two. #
0:43:58 > 0:44:02- Did you do much research with these? - No.
0:44:02 > 0:44:04- Any research?- No.
0:44:04 > 0:44:10- Did you read the legal pack?- No. Not at all.- Did you view them?- No.
0:44:10 > 0:44:13- Did you know you were going to buy them?- Not at all.
0:44:13 > 0:44:18As you can see, quite a few "no, no"s in this purchase.
0:44:18 > 0:44:20And Johnny and his uncle really got lucky here.
0:44:20 > 0:44:24So lucky in fact, that they felt to rent or sell the flats,
0:44:24 > 0:44:29they needed to spend, well, a big fat zero on them.
0:44:29 > 0:44:31MUSIC: Pompeii by Bastille
0:44:31 > 0:44:35And now, just a month later, we're back to catch up with Johnny,
0:44:35 > 0:44:39to find out what did, or more likely, what didn't happen.
0:44:39 > 0:44:41Firstly, in the ground floor flat...
0:44:43 > 0:44:46# If you close your eyes
0:44:46 > 0:44:51# Does it almost feel like nothing changed at all
0:44:51 > 0:44:53# And if you close your eyes
0:44:53 > 0:44:59# Does it almost feel like you've been here before
0:44:59 > 0:45:03# How am I gonna be an optimist about this?
0:45:03 > 0:45:07# How am I gonna be an optimist about this? #
0:45:07 > 0:45:10Well, yes, you've guessed it. Not much has changed here.
0:45:15 > 0:45:18# Oh, where do we begin...? #
0:45:18 > 0:45:20Let's start in the first-floor flat.
0:45:20 > 0:45:23So, what work, if any, has been done?
0:45:23 > 0:45:25In the upper flat, we haven't done nothing.
0:45:25 > 0:45:28We were looking to change the storage heaters
0:45:28 > 0:45:30to gas central heating...
0:45:30 > 0:45:33But lucky enough, a tenant's come along and they're in a hurry to
0:45:33 > 0:45:36move in, so they're quite prepared to live with the storage heaters.
0:45:36 > 0:45:40Which all work, we've all had them tested, so they're all fine.
0:45:40 > 0:45:42So we'll do that at a later date.
0:45:42 > 0:45:45And in fact, they haven't just rented the first-floor flat -
0:45:45 > 0:45:49he's got a tenant for downstairs, too! Don't be fooled.
0:45:49 > 0:45:51Johnny hasn't been totally idle.
0:45:51 > 0:45:53He hunted high and low,
0:45:53 > 0:45:57and he did find one area that needed his attention.
0:45:59 > 0:46:02Erm... I've just changed this light here. It took me 20 minutes.
0:46:02 > 0:46:05Very straightforward, very easy, just like everything here.
0:46:05 > 0:46:07It's been very straightforward.
0:46:07 > 0:46:10Wow. 20 minutes of blood, sweat and tears? Careful, Johnny.
0:46:10 > 0:46:14Don't go overdoing it. But he is a skilled tradesman.
0:46:14 > 0:46:18Now, how does he feel not to actually have to get so stuck in?
0:46:18 > 0:46:22I like it, but I also like getting stuck in and doing some work.
0:46:22 > 0:46:24We will still have to do some repairs to the roof.
0:46:24 > 0:46:27The roof will have to be repaired at a later date.
0:46:27 > 0:46:30But when it's a bit more warmer. It's a bit cold at the moment.
0:46:30 > 0:46:32MUSIC: Let The Sun Shine by Labrinth
0:46:32 > 0:46:34# Let the sun shine Let the sun shine, baby
0:46:34 > 0:46:37# Let it all go Let it all go... #
0:46:37 > 0:46:40So when there's better weather, we might catch him on the roof,
0:46:40 > 0:46:42keeping on top of things.
0:46:42 > 0:46:46And he also has that upstairs central heating to do at some point.
0:46:46 > 0:46:50So, he thinks he might spend around £10,000 at a later date.
0:46:50 > 0:46:52What about his costs for now?
0:46:52 > 0:46:58Well, I've spent here, in total about £36 on two lights.
0:46:59 > 0:47:03Ha-ha, well, with the total purchase price for the two flats
0:47:03 > 0:47:08being 330,000, that massive no-expense-spared £36 spend
0:47:08 > 0:47:14takes his total expenses to £330,036 to be precise.
0:47:14 > 0:47:16All sounds like a bargain to me,
0:47:16 > 0:47:18but what do two local estate agents think?
0:47:20 > 0:47:21Having come back and had a look around,
0:47:21 > 0:47:24I see nothing's changed since a month ago when I was last here.
0:47:24 > 0:47:26Erm...
0:47:26 > 0:47:28Yes. Same as it was before.
0:47:28 > 0:47:32Well, location to start with is a very, sort of, good location.
0:47:32 > 0:47:35Very convenient for the shops, train station's not too far away.
0:47:35 > 0:47:37In terms of size of the properties,
0:47:37 > 0:47:39Both, yeah...both good properties, both a good size.
0:47:39 > 0:47:42In my opinion, I think he should have fitted central heating
0:47:42 > 0:47:46and also just maybe touched up the painting here and there.
0:47:46 > 0:47:50Just to maximise the rental potential and clientele.
0:47:52 > 0:47:55Johnny has, of course, already rented the flats out.
0:47:55 > 0:47:58But if he and his uncle were offered the right price, well,
0:47:58 > 0:48:00they may sell them on.
0:48:00 > 0:48:04So what could they fetch in their current condition?
0:48:04 > 0:48:07Right, the ground-floor flat, in the condition it's in at the moment,
0:48:07 > 0:48:11I would recommend £210,000 to £215,000
0:48:11 > 0:48:13would be an achievable selling price.
0:48:13 > 0:48:17With the first-floor flat as it is at the moment,
0:48:17 > 0:48:21you're looking at around £220,000 to £225,000.
0:48:21 > 0:48:25Ground-floor flat, £195-£200,000.
0:48:25 > 0:48:28The first-floor flat, which is the better flat out of the two,
0:48:28 > 0:48:32I would suggest marketing it at £220,000.
0:48:32 > 0:48:37That's a total of 415-440,000 for the two flats.
0:48:37 > 0:48:42- So what does Johnny make of those values?- Very happy. Yeah, fine.
0:48:42 > 0:48:46Yeah, I'd sell them tomorrow, at that price.
0:48:46 > 0:48:49If he did sell them on almost immediately,
0:48:49 > 0:48:52they could see an eye-watering potential pre-tax profit
0:48:52 > 0:48:58of 85-110,000. Minus the usual taxes and expenses, of course.
0:48:58 > 0:49:02But what about rental values? Is he getting the current market rate?
0:49:03 > 0:49:06The ground-floor flat, for rental purposes, would be
0:49:06 > 0:49:12looking to achieve £850 per calendar month, to £875 per calendar month.
0:49:12 > 0:49:14The first-floor flat, in its current condition,
0:49:14 > 0:49:18you'd be looking around £900 per calendar month to £950.
0:49:18 > 0:49:24Ground-floor flat, I would probably say about £850 per calendar month.
0:49:24 > 0:49:29And the first-floor flat, I would probably say...950, at the moment.
0:49:29 > 0:49:30£950 per calendar month.
0:49:30 > 0:49:32If he was to spruce it up a little bit,
0:49:32 > 0:49:35in terms of cleaning the carpet, a little bit of redecoration,
0:49:35 > 0:49:38he could probably even ask £995 per calendar month.
0:49:38 > 0:49:40Right on the money. Quite happy with that.
0:49:40 > 0:49:44We're getting 850 for downstairs and 950 for upstairs.
0:49:44 > 0:49:48With a total rental income of £1,800 per calendar month,
0:49:48 > 0:49:53he's currently getting an annual rental yield of around 6.5%.
0:49:53 > 0:49:56So, boy, this has been a real winner all-round.
0:49:56 > 0:49:59But he broke every single rule in the book.
0:49:59 > 0:50:03Buying blind, not reading the legal pack, doing no research...
0:50:03 > 0:50:06Not really a recommended approach, Johnny.
0:50:06 > 0:50:09I'm very lucky, yeah. If this would be, sort of, 1 in 10
0:50:09 > 0:50:12that we've bought before where we haven't looked.
0:50:12 > 0:50:15I wouldn't recommend it at all. We've just been very lucky.
0:50:15 > 0:50:17Makes up for the ones that are not so nice.
0:50:17 > 0:50:19MUSIC: Break The Rules by Status Quo
0:50:19 > 0:50:22# But everybody has to sometimes break the rules
0:50:24 > 0:50:26# Well, everybody has to sometimes break the rules... #
0:50:26 > 0:50:28I completely agree.
0:50:28 > 0:50:32Be warned - that this property is the exception, not the rule.
0:50:32 > 0:50:40# Yes, everybody has to sometimes break the rules. #
0:50:47 > 0:50:52Ten miles north of Plymouth in Devon is the village of Gunnislake.
0:50:52 > 0:50:54And it was here, just off the high street,
0:50:54 > 0:50:57we found a commercial property that seemed to have
0:50:57 > 0:51:01a double existence, with one half previously being an estate agents,
0:51:01 > 0:51:04and the other half, a drapery.
0:51:04 > 0:51:06Perfect for those who like a well-dressed house.
0:51:06 > 0:51:09MUSIC: Shop Around by Smokey Robinson
0:51:09 > 0:51:13# You better shop around, whoa, yeah You better shop around... #
0:51:13 > 0:51:18But its double life was at an end. So what was it now cut out to be?
0:51:18 > 0:51:23London-based accountant Alicia bought it for £32,500 at auction,
0:51:23 > 0:51:25and had clear ideas.
0:51:25 > 0:51:29I'm going to turn it into two flats.
0:51:29 > 0:51:35For each one, I'm planning to do en-suite, one-bedroom flats.
0:51:35 > 0:51:37How much hands-on are you going to be?
0:51:37 > 0:51:41I mean, what...what involvement are you going to have in the project?
0:51:41 > 0:51:45I think I will pay and watch. THEY LAUGH
0:51:45 > 0:51:47I like your honesty.
0:51:47 > 0:51:50That's great. Pay and watch.
0:51:50 > 0:51:52MUSIC: Every Breath You Take by the Police
0:51:52 > 0:51:56# Every breath you take Every move you make
0:51:58 > 0:52:02# Every bond you break Every step you take
0:52:02 > 0:52:04# I'll be watching you... #
0:52:04 > 0:52:06And provided she got planning permission,
0:52:06 > 0:52:09her watching brief was going to be done by providing
0:52:09 > 0:52:13a local builder with £20,000 and hoping to get her two flats
0:52:13 > 0:52:16ready to rent out in six months' time.
0:52:20 > 0:52:23And now, 19 months later,
0:52:23 > 0:52:27we're back with Alicia to see what eventually she managed to achieve.
0:52:57 > 0:53:04I have divided it into studio flats. The two flats are almost identical.
0:53:05 > 0:53:11And there is open-plan living space, with the bathroom space and
0:53:11 > 0:53:14the bathroom, of course, a brand-new kitchen, in the living area.
0:53:24 > 0:53:27So, where once was a split shop, there are now two
0:53:27 > 0:53:31not-quite-identical one-bed studio flats.
0:53:36 > 0:53:37Phew, that's a relief.
0:53:37 > 0:53:41I was beginning to worry that this was going to still be an empty shop.
0:53:41 > 0:53:44But why has it taken so long?
0:53:45 > 0:53:48The majority of time has been spent on
0:53:48 > 0:53:50application of planning permission,
0:53:50 > 0:53:54which has taken 14 months.
0:53:56 > 0:53:59Yes, poor old Alicia had a tough time with planning,
0:53:59 > 0:54:03having to renegotiate the terms of the consent on several occasions,
0:54:03 > 0:54:07until eventually she got it passed with no strings attached.
0:54:07 > 0:54:10Phew. And she also ran into
0:54:10 > 0:54:12contractual problems with her builder
0:54:12 > 0:54:14that delayed the project further.
0:54:14 > 0:54:16And if that wasn't enough to contend with,
0:54:16 > 0:54:19the work hasn't been straightforward either.
0:54:20 > 0:54:28The roof was quite damaged, so spent about £10,000 to repair the roof.
0:54:28 > 0:54:32Another big cost is to change the front window.
0:54:32 > 0:54:36I was not allowed to change the looks outside,
0:54:36 > 0:54:39so I have to...tailor-made, this double-glazing window,
0:54:39 > 0:54:42which cost me a lot.
0:54:42 > 0:54:46She also had high costs on insulating the building,
0:54:46 > 0:54:48both thermally and for soundproofing,
0:54:48 > 0:54:51all of which hit her budget hard.
0:54:52 > 0:54:54At the end of the day, I spent
0:54:54 > 0:55:00about three times of money than the original budget.
0:55:00 > 0:55:05So in total, perhaps I have spent £67,000.
0:55:09 > 0:55:14Well, a £60,000 spend on top of a £32,500 purchase price
0:55:14 > 0:55:18has meant her total costs are £92,500.
0:55:18 > 0:55:21So, can this still be a worthwhile investment?
0:55:21 > 0:55:23What do two local estate agents think?
0:55:26 > 0:55:30My first impressions of the two properties is,
0:55:30 > 0:55:32"This lady's got the Midas touch. I want her to buy
0:55:32 > 0:55:34"my lottery ticket on Saturday."
0:55:34 > 0:55:36It's perfect.
0:55:36 > 0:55:42I think the lady has really maximised the space
0:55:42 > 0:55:45and I can imagine that it would be great for a young couple
0:55:45 > 0:55:49or first-time buyers, cos it's such a convenient little village to live in.
0:55:49 > 0:55:51There's a train station up the road
0:55:51 > 0:55:54and you've got everything that you need in the village.
0:55:54 > 0:55:59The conversion and the finish, I think, are...are on the money.
0:55:59 > 0:56:04No need to be too flashy, but equally, don't be too plain.
0:56:04 > 0:56:08Alicia intends to rent out the two studio flats, but having spent
0:56:08 > 0:56:12£92,500 on them, would they generate any return if she sold them on?
0:56:14 > 0:56:18If I was to market these properties in the current property market,
0:56:18 > 0:56:25I would be looking to market each property in the region of £75,000.
0:56:25 > 0:56:28They are both essentially the same
0:56:28 > 0:56:34and I'd see them on the open market at £82,500 each.
0:56:34 > 0:56:39£75,000 and £82,500,
0:56:39 > 0:56:41I think are a slight bit low.
0:56:43 > 0:56:46But if I can achieve it, I'm still happy.
0:56:46 > 0:56:50Well, she should be reasonably happy because those valuations
0:56:50 > 0:56:56would see a pre-tax profit of between £57,500 and £72,500.
0:56:56 > 0:56:58Less taxes and expenses, of course.
0:56:58 > 0:57:02So, how will they fare on the all-important rental market?
0:57:03 > 0:57:08In the rental market, I believe these properties would achieve
0:57:08 > 0:57:14something in the region of £475 per calendar month.
0:57:14 > 0:57:19On the rental market, I can see £500 per calendar month, each.
0:57:19 > 0:57:26I think 500, perhaps, is possible. 475 is a little bit low.
0:57:26 > 0:57:31Actually, this property is already on the market for 525.
0:57:33 > 0:57:36Even the lower £475 per calendar month would generate
0:57:36 > 0:57:40a healthy annual rental yield of 12%.
0:57:40 > 0:57:42So perhaps it was worth the wait, after all.
0:57:42 > 0:57:44What's next for Alicia?
0:57:48 > 0:57:52I will continue to do next property development.
0:57:52 > 0:57:58That's my purpose. I want to be involved in property business.
0:57:58 > 0:58:02And I'm happy I have finished this property. I want to continue.
0:58:04 > 0:58:07Well, that's all Martin and I have time for, today.
0:58:07 > 0:58:08Yes, but join us next time
0:58:08 > 0:58:11for more stories from the property auctions,
0:58:11 > 0:58:12here on Homes Under The Hammer.
0:58:12 > 0:58:14- See you then.- Goodbye.- Goodbye.