Episode 1 Homes Under the Hammer

Hello and welcome to the show.

Over the years, Martin and I have met thousands of developers

who have bought, sold and rented, all with various degrees of success.

Yes, it's not easy.

But get it right and it's a really rewarding

and fulfilling world to be in.

And somebody who knows all about it is Dion Dublin.

-Hello, Dion.

-Great to be here.

As you know, property can be incredibly rewarding,

but can hold some unexpected surprises.

We've seen many of those on Homes Under The Hammer.

Leaky roofs, dry rot, wet rot, plumbing issues, do I need to go on?

You get the picture.

Were there any surprises that sprung up on today's show?

Well, let's find out. Here are the properties we are featuring.

In Dartford, I can see straightaway what needs to be done

in this '80s throwback semi.

Knock this through, get rid of this.

But in Llanelli, Wales,

a pub and flat need rather more mulling over.

You need to sit down in a darkened room

and figure out what you're going to do with it.

In Croydon, there was space in this semi,

until someone tried to squeeze in an extra bedroom.

This isn't quite what I was expecting upstairs.

All these properties were bought at auction.

We'll find out who got them and how much they paid

when these homes went under the hammer.

Sold, 180.

With the M25 and Bluewater shopping centre on its doorstep,

Dartford in Kent certainly ticks the boxes

when it comes to transport links and shopping facilities.

And the area is earmarked as one of the government's key growth zones

in the Thames Gateway, with plans for 20,000 new homes

and 50,000 new jobs to be created in the area over the next 25 years.

And with it, it will bring in more people

and the demand for family homes is likely to increase.

The property I'm here to see could be just that -

a lovely family home with good garden space.

At a guide price of £215,000 plus, it's this three-bed semi.

But before I go in, let me give you a quick stat.

In the 1960s, properties like these were going for £2,800.

As far as the price goes, things have certainly moved on from the 1960s.

But some other aspects of the property

haven't quite reached the 21st-century.

Right, good-sized hallway. Nice and bright.

And this banister, this is definitely an '80s-style banister.

Had one of those back in Leicester when I lived at home.

Nice and sturdy though, still in good condition.

Through to here, the lounge/living room area,

which seems to be a nice long, decent-sized space.

Through to the kitchen.

Needs an overhaul in here, again, that's a running theme

from the banister through to here, same-coloured wood.

'80s kitchen again, just needs a refurb.

And possibly knock through and give yourself a kitchen/diner.

You could even...

Wait there.

You could even put this wall back in

to give yourself a separate lounge/living area with your TV here.

And you could put a table and chairs in here. Knock this through,

get rid of this, knock it through to a table and chairs,

or even better still, you could put an island in

which would give you your work surface space

and somewhere you could have your breakfast as well.

Two stools either side, Bob's your uncle,

I can watch the football in here undisturbed.

Yes, for once, I think this might actually benefit

from dividing the room.

You could put in a pair of glass-panelled doors to give you

the option of dividing up the space when you want to watch the footie.

And it would still keep a light and airy feel to the room.

But I think turning the back lounge into a kitchen/diner

is a definite. As is the upgrading of the kitchen.

And the fireplace and its surround

should probably follow the old kitchen out of the door.

Right, you've got the running theme of the banister here,

the '80s style banister.

And look, an outwardly opening door, which is quite strange.

That takes a bit of space on the landing.

Bathroom, take it out and start again, and that will be fine.

Three further bedrooms here. There's one here of a decent size.

Another bedroom here, of a good size, that one.

This is the smaller of the three, the box bedroom there.

What I have noticed is three outwardly opening doors here

onto the landing. That just takes up space, as I said before.

I'd be inclined to get those opening inwards into the bedrooms,

create a bit more light as well,

but apart from the three doors, not a lot to do.

This could be a lovely family home.

# My door is open

# My door is open... #

This is a bit of a weird one.

The doors opening out restrict space in the landing area.

Anyway, it's not a big deal to fix.

I've noticed there is central heating,

though you'd need to check it.

However, the windows look in good nick.

So far, this is an '80s hit for me.

So time to venture out the back door.

Nice little garden here.

You've also got a bit of decking there, table and chairs,

nice cup of tea, perfect family garden.

An afternoon with a mower, a wood sander

and some wood preservative and you could bring a lot of this up to spec.

And there's yet another door. It leads directly into the garage.

And there's also a handy side gate.

Although perhaps this house is a bit of a throwback to the '80s,

I still think it's got a lot going for it.

But what can a local estate agent tell us about the house

and the area it's in?

Geographically, we're a mile and a half from Dartford town centre

and equally a mile and a half in the other direction towards Bluewater.

There's a local store at the end of the road.

The Darent Hospital, which is adjacent to the development,

is only a stone's throw away.

So personnel who work there find this particular locality popular.

So, most of the things you'd want from a location.

But does the property match its surroundings?

The property is a typical standard, three-bedroom semi.

In its present condition, it needs some modernisation.

But it shouldn't take too much to bring it up to modern standards.

Let's talk money.

How would this house, that was guided at £215,000 plus,

fare as an investment?

If the property was refurbished, under the current climate,

we'd probably achieve in the region of £270,000 for sales

and around £1,100 per calendar month for rentals.

So, potentially, this is a lovely three-bed family home.

Bathroom and kitchen need to be changed.

Those doors upstairs on the landing, for me, need to be put right.

Let's see who wanted to turn this property around

when it went under the hammer.

A semi-detached freehold house.

Start me, please, for this one at 180.

Yes, 180. Thank you. 85?

Yes, 85, thank you. 190?

190. 195 here behind you.

And 200 now. And five?

205. 210?

210. 215?

210 I have here sitting down. Against you. First time at 210.

Second time at 210. And a final time at 210. Are we all done?

Not quite there for Dartford.

And so the three-bed semi in Dartford didn't meet its reserve price.

But after the auction, local man Mike did the deal,

buying the house for the £215,000 guide price.

I met Mike and sister-in-law Lucia back at the house to find out more.

Mike and Lucia, congratulations first and foremost.

But tell us about the auction.

It didn't reach its reserve during the auction, so I had to contact

the auctioneer afterwards and find out what the reserve price was.

I made an offer and then I subsequently bought it

on behalf of our company for £215,000.

Mike, you mentioned a company, have you got a family business,

-or is it on your own?

-It's a family business with me, Paul and Lucia.

-And Paul is?

-Paul is Michael's brother.

And then my eldest son Jamie works with us as well.

Is it a property developing business, the family business, you've got?

No, initially we started off doing windows,

doing double glazing to property and stuff like that.

Then we evolved. I come from a building background

-where we do kitchens and bathrooms, voids and things like that...

-OK.

..for a local business.

One of the good points of buying a property here is

because we are literally around the corner.

It's our intention to use

some of our guys on an afternoon when they are quiet.

So you can keep on top of what's going on,

-keep on top of this property.

-It's easy to pop round, one of us.

Got you. So you can now get builders on this whenever you want them.

Yes, we've got our own builders that work for us so we'll do it

all ourselves and won't be employing anyone else outside of the company.

Other than that, normal blokes and normal subcontractors.

Mike and his brother Paul organise the work and the subcontractors,

while Lucia sorts out the bookings and the payroll side of the business.

With Mike's background as an electrician,

builder brother Paul's window-fitting skills

and Lucia keeping an eye on the budget and organising the goods,

they look like they have the near-perfect team for property refurbishment.

OK, let's talk the property. Let's talk about your budget.

-Have you got timescales?

-We haven't really got much of a timescale.

Er... Some of the jobs blow out, don't they?

-Yeah.

-On a day-to-day basis, residents let us down.

So the idea is to bring the blokes back here in the afternoon

rather than send them home on full wages.

You know, bring them back here and get them to do a bit of work.

-No rest then.

-No rest for the wicked.

So, not a long time scale,

but we should be able to turn it around pretty quick, say four weeks.

OK. And your budget?

Our budget is about £10,000 to do it up.

We are doing a new kitchen, bathroom,

new windows and strip it all out basically and refurbish it.

Lucia, the kitchen, are you going to change it majorly?

I had a look around and had my own ideas.

I wonder if my ideas match your ideas.

Well, we haven't actually discussed exactly what we are going to

do with it, but obviously it is going to be major

because the whole lot needs to come out.

We're going to do away with the back door

because you get more workspace, get more units in.

You've got patio doors at the back to get out into the back garden.

Then we're going to get some drawings done up,

have it all ripped out, see what we're working with really.

-So you're having a kitchen/diner, correct?

-Yes, I think so.

-I think so.

So the family business, Lucia, is doors and windows.

This should be a doddle for you, this house.

Are you going to change them all or just tidy them up?

No, definitely replace them all with UPVC.

Will you transform this property

and then look to sell it as soon as possible, or will you rent it?

-What are your plans?

-I think we'll sell it, that's the idea.

-I think so.

-I think we'll sell it.

It's a small one, not a lot of work to be done to it.

Just feeling the market, then, depending how this one goes,

we might do a few more.

And as first development projects go, this is near perfect,

with no real structural work to do, just cosmetic changes.

And if they manage this on that £10,000 budget,

and make anything close to the £270,000 the estate agent suggested,

they would have £45,000 profit

to plough back into the business.

I've been in family businesses before, sometimes they work,

sometimes they don't. What's your dynamics like?

I think we're open and honest about everything.

We discuss everything, have regular meetings

to discuss good points and bad points.

Who's got the ideas for the house?

Who said we'll do this or do that or have you chatted?

I think it will be...

See, the boss has spoken now!

-It will be a joint decision.

-It's normally a joint decision.

There's Paul, Lucia and myself are the main directors,

there's three of us,

so we vote three ways. We say whether we like it.

Sometimes them two try not to... sort of, er, join up with me

cos they are husband-and-wife too many times.

But Lucia supports me a lot of times with decisions,

so it works quite well, really.

And she's quite good being the backup sometimes.

-The man in the middle.

-Yeah, well, you know.

The boss at the top, the three boys underneath. I understand that!

Mike, Lucia, very nice to meet you. I wish you all the best

and look forward to seeing how you get on in the future. Good luck.

-Lovely, thank you very much.

-Thank you, Dion.

-Good luck.

-Pleasure.

Mike, Lucia and the family business seem to have this project

completely under control.

The dynamics of the family are working perfectly, which is

really nice to see. But will the voting system work for them?

You can find out later on in the programme.

The town of Llanelli is just ten miles from Swansea.

It was once known as Tinopolis

because it was so important in the 19th-century tin industry.

Nowadays, with lots of regeneration funding,

it may be more of a goldmine for investors.

So, what was up for auction?

Well, relatively close to the town centre,

a former bar with a three-bed maisonette above it.

Guide price at £72,000 plus, let's take a look.

So, let's start with the ground floor bar area.

Really nice frontage,

which is really important for attracting custom, obviously.

And then into the sort of main bar area.

Now, this was apparently, until very recently, operating.

So it has that strange feel, slightly Marie Celeste-like.

Where are all the customers? But as a space, I really like it.

You've got this large area at the front,

then, as you progress through,

you've got the loos, an area at the back

where there could be a pool table.

And then, in the middle, this bar area.

As a layout, it works really well. Good start.

# But there's nothing so lonesome, so dull or so drear

# Than to stand in the bar of a pub with no beer. #

With no liquid refreshments being available here,

I'm hoping the real trophy will be the upstairs flat.

But things are not looking promising.

# You may find me

# Sneaking out the back door with a drink. #

That is weird.

Up the stairs - enclosed.

Outside - to go into the flat.

So it seems like that's not the only bit of strange design going on.

Wo-o-ow!

Wow! There's a lot of space.

But you've got this sort of patio doors

out onto that little balcony area there,

a huge, great fire thing. This strange...

Well, whatever it is. Then you go down this little corridor

which winds round here to a bathroom that...

Aaaah!

Fantastic if you want to play chess or backgammon,

but in terms of a peaceful bath, I'm not so sure.

And then the property extends back this way.

As you can see, it goes on and on and on.

You are certainly getting a lot of space,

and obviously the floor area matches what's downstairs.

But it's fine as long as you need to sit down in a darkened room

and figure out what you're going to do with it.

# Isn't it weird?

# Isn't it strange? #

Not the most conventional layout.

I think that's the best I can say.

But you're not short of space

because in addition to that bathroom and kitchen, you get three bedrooms.

But because it follows the shape of downstairs,

it does create a very weird layout.

What does a local property expert think of this unique auction lot?

It's an interesting property.

I think, at the guide price that's at auction,

it could be quite an interesting purchase.

What I do like about it is that there's living accommodation

on the first floor which can reduce the risk to an investor

if they buy the whole building.

So at least they can generate a steady income from the flat.

Apart from the bar downstairs.

I think the options are to change it into residential,

but I would have thought, looking at the shape of the property

and the cost of refurbishment,

I'd probably keep it, on balance, as a bar.

The living accommodation has got a difficult shape.

But it does provide a lot of accommodation.

What about values? Could you sell the flat and bar separately?

And what sort of rentals, commercial and residential, could you attract?

For the flat, around £425 per calendar month.

And for the bar itself, I would say around £12,000 per annum.

It would be difficult to sell the flat separately.

Many, or all of the mainstream lenders, in my knowledge,

will not lend high amounts on residential accommodation

over bars and public houses.

So it would be much better to sell it as one unit.

I'd have thought you'd be looking at a value of about £125,000.

Well, it's an auction lot with lots of potential, isn't it?

And what will happen - who knows? Will the bar remain as such?

Will it be converted into flats?

It all depends who bought it when it went under the hammer.

Lot number 21, guided at £72,000.

Will you start me, somebody? 70, somebody?

£70,000, can we see? Make it 65, if you like. Thank you, at 65.

And six and can I see from somebody? I've got 65. 66.

67. 68. 69?

69. And 70. 71. And two. 72. 73.

74. 75. 76?

76, no. Are you sure?

75 on my right-hand side. At 75, with you.

On my right, for the first time.

Second time. 76. 77? 77. 78?

79. And 80.

81. 82.

83. 84. 85.

86. 87. No.

At £86,000 on my left. You are now out.

At £86,000 here then, for the first time. Second time.

Third. £87,000.

88.

No. At £87,000. The killer blow. At 87,000. Are you sure?

87 then, for the first time.

Second time, third and last time, £87,000.

Yours, sir. Your number, please?

# It came like a killer blow

# Killer blow... #

That killer blow came from Wesley.

His successful bid of £87,000 knocked out the competition.

He came along with his cousin Kenny to tell me about their plans.

-Wesley, Kenny, good to meet you both.

-And you.

-Congratulations.

Tell me why you wanted to buy this place.

-Investment, really.

-Investment how?

Rent upstairs really and the pub downstairs.

-That's the plan, is it?

-Yeah.

I think what Wesley... Originally where he came from,

going back about 12 months ago,

Wesley purchased another property, which was a pub.

-I think he's got a bit of a bug really for the pub trade.

-Right.

So I'm here today to really help him along and show him which way to go

because my background is entertainment.

Have you still got the old...the other pub?

-Has that gone all right?

-Yes.

-Making some money?

-Trying.

-Trying.

-As I said, he's got the bug, he's making money now,

-so he wants to...

-Yeah, it's one of those things that seems

glamorous when you first look at it, the idea of owning a pub,

but I know there's a lot of hard work involved as well, isn't there?

-You've obviously not been put off.

-Give it a go.

-Give it a go.

What was it that attracted you both to this particular outlet,

if you like?

I think we knew... Wesley knows this pub very, very well.

-Did you used to drink here?

-Yes.

-Did you? Oh, wow.

-We both did.

Did you?

And I think he could see how good the pub was in its heyday,

as I said before, but I think, as I said, he's got the bug

because the pub he took over about 12 months ago has taken off really well.

Great.

-So, how did you make it successful?

-A bit of hard work, really.

It's got to be more than that.

You've got to get the right feeling inside, interior design.

-A bit of help from Kenny.

-Really?

Wesley is a landscape gardener, so having help from his cousin Kenny

has been handy in creating a success of the first pub.

And he did mention he'd been in entertainment. Doing what, I wonder.

-Singing.

-Oh, really?

-A bit of comedy.

-Great.

-But semi-retired now.

So Wesley asked me

if I'd give him a hand and give him some advice on what to do.

Right, so what advice did you give?

Basically, the same advice I'm going to give him here really.

Get the people that used to call you back, so we can get the trade going.

It's a wet-trade pub, it's not... No food or anything.

It really is a good drinker's pub, if you understand what I mean.

This part of Llanelli is... It's a nice part, closer towards the town.

And what kind of interior design are you going to go for?

Well, this pub, as you can see if you look around,

there's a lot of local... Above is now is the old rugby clubs.

-Yes.

-Which Wales is famous for.

So we are going to keep that sort of...the sporty type of thing.

But we've got some ideas I'm putting past Wesley, you know,

making it more of a music venue.

-Oh, OK.

-Get some memorabilia.

And, believe it or not, I know we're a bit behind the times here in Llanelli,

-but karaoke is still big.

-Is it?

Everybody thinks they can sing in Wales, so, you know...

# I'll be a karaoke queen

# It's not me you see

# I'm gonna take you down to a place I know you'd rather be... #

Sounds like karaoke will hit the right note here.

But I think the pub isn't really the problem,

it's that upstairs flat and its very unusual layout.

A general tidy-up up there and get it all back to as it used to be,

-I suppose.

-The layout is a bit strange, isn't it?

Yes, it's very long.

Plans to change the interior layout at all?

No, I'll just put it back as it was, really, and rent it out.

Wesley will be doing a lot of the work himself,

but has lots of friends in the building trade,

so his one-month timescale and his £5,000-£7,000 budget

for both flat and pub might just be achievable.

-So, pulling first pint in a month?

-Yeah. Less than that.

-Less than that, really?

-Yeah.

-Fantastic.

Big opening night, are you going to be playing, do you think?

-Maybe, we'll see.

-Come on!

-It depends how much they're going to pay me.

If I know Wesley, I will be.

And for free!

-Well, congratulations, good luck with it.

-Yeah.

-Look forward to seeing how you get on.

-Thank you.

So, Wesley keeping things simple, but even so,

can he really sort out the flat and this bar in just one month?

Will it be that amount of time

before there's pints being pulled here

and maybe Kenny singing on the opening night?

You can find out later in the show.

Coming up, in Croydon it's the same old song

about a downstairs bathroom.

Again, it's the big, old question - do we want to move that upstairs?

And in the land of song,

have Wesley and Kenny boosted the Llanelli's nightlife?

It just needed refreshing, and he's done a great job on it.

Back now to Dartford in Kent and is this three-bed semi

which Mike and Lucia bought post-auction for £215,000.

Lucia is married to Mike's brother Paul and the three of them

work together in the family business installing windows and doors.

They bought the semi through the company

as a way to keep their team of guys busy between jobs.

But it wasn't clear who would have the final say on things.

Who's got the ideas for the house?

Who says we'll do this or do that, if you chatted?

I think it will be...

I see, the boss has spoken now.

-It will be a joint decision.

-It's normally a joint decision.

There's Paul, Lucia and myself are the main directors,

there are three of us, so we vote three ways.

-Say whether we like it.

-That's good.

So, them two try not to join up on me

because they are husband and wife too many times.

Actually, Lucia supports me a lot of times

with decisions as well, so it works quite well, really.

The semi was in need of a complete overhaul,

and Mike and Lucia thought they might spend six weeks

and £10,000 on the renovation.

Five months after our first visit, Mike and Lucia are back

to show us how the decision process has gone.

# You've got to speed it up

# And then you got to slow it down

# Cos if you believe that a love can hit the top

# You've got to play around

# And soon you will find that there comes a time

# For making your mind up... #

Good job, guys, it looks like a completely different house.

Sure, there's still the back garden to finish off,

but the rest of the place is looking spick and span.

We've rewired it, replumbed it, central heating, new bathroom,

-new kitchen.

-New carpets all the way through.

We've done some changes to the garden. Took down the garden shed.

We'll put the grass down, but it's the wrong time of year.

I'm very glad to see they've rejigged the layout downstairs.

I reckon it works a treat now.

Well, if you remember, it was quite dated in here.

There was a big serving hatch here

and we decided to take it all away,

block the kitchen and the dining room off,

so it's a nice kitchen/diner.

There was an old patio door,

so we removed that, put some nice French doors in,

thought it would open it up and make it a bit brighter.

We've had to have a new boiler fitted.

Also, I don't know if you remember, we had a back door.

We've actually utilised that to block it off,

put a fridge-freezer in, so it gives you a bit more of a nicer kitchen.

I like the layout, I like the look.

I'm really pleased with it, you know.

The other benefit of the new partition wall

is the large second lounge.

We changed the lounge completely.

Obviously it was a through lounge,

so we put the wall up to divide the kitchen,

took out the hideous fireplace that was here

and as part of the rewire we put in some new downlighters.

New windows, new timber flooring.

And brighten the place up, so I'm quite pleased with it really.

I was a little bit unsure if the front room would be big enough,

but there's plenty of room.

So, how has the family dynamic worked out during the project,

with Mike, his brother Paul and sister-in-law Lucia?

I can't answer that on telly.

-No, no.

-No, it's gone quite smoothly.

-We are quite...

-Yes, we are very close,

we sort of trust each other implicitly

because we are family, you know, so we're very close, so it's gone well.

The guys were delayed in starting here due to a heavy workload

in their main business of installing windows and doors.

But once they did get stuck in, the work,

apart from finishing the garden, was completed in about ten weeks.

But what about that £10,000 budget?

Unexpected rewiring, you know, central heating, plumbing,

replumbing, new windows, obviously new kitchen and bathroom,

we've actually gone over budget.

Oh, dear! How much over?

I don't know how far, you can spend a lot on the garden if you want to,

so somewhere between 25,000, maybe 30,000 maximum.

A renovation cost of £30,000 on top of a purchase price

of £215,000 would bring their total spend here

to £245,000.

We asked along two local property experts

to get their thoughts on the renovated semi.

I feel that the layout is particularly good,

with the kitchen open to the back room,

so they have a kitchen/diner rather than separate galley kitchen,

which a lot of these houses are nowadays.

Personally, I'm more of an open-plan person.

I would like it all to be knocked through if I had an option.

But the way they've done it, they've separated it,

so if anybody has children, for instance,

it's going to be a perfect setup for them.

And what do they think the renovated property

would fetch on the rental market?

The rental value, I feel, on this

would be between £1,100 and £1,200 per calendar month.

The rental value, £1,200 per calendar month.

Those rental valuations would bring in a yield of 5%-6%.

What about the resale market?

I would be suggesting an asking price in the region of £280,000,

with the expectation of selling in the region of £275,000.

I would value this property at £260,000.

Those resale valuations would give a profit before tax and expenses

of between £15,000-£30,000.

They were unsure before whether they'd sell or rent the semi.

Are things any clearer now?

-I don't know.

-We were thinking of selling.

-We were thinking of selling, yeah.

-And then going after another one.

Yeah.

So it looks like the decision to go from installing windows and doors

to doing full-scale renovations was a good one for these guys.

I'm certainly glad we bought it.

It was lucky it was just around the corner from our office,

so it's been a good one to start on because we can just

walk around the corner and see how things were going with it.

-Rightly or wrongly, so to speak, but...

-Yes, definitely.

I feel the same.

I'm pleased that we bought it and it's gone how we wanted it to.

-So, yeah, very happy.

-Very good.

# Oh, baby, won't you come back home to Croydon

# Where everybody feels at home... #

Croydon in South London is a boom town,

already a major area for business and shopping.

The tramline to central London means it's popular with commuters

and those who want to be part of its major regeneration.

But all that comes at a price.

In the past year, it's been reported that the average price

of a first-time buyer property in London costs over £306,000.

Now, to me, that makes it sound very difficult to get on the ladder

for the first time in the capital.

But I might just have the solution.

The property I'm here to see had a guide price of £190,000,

and for that, you get this.

Yes, the whole three-bed house and not just a pokey little flat.

With all the changes going on in Croydon at the moment,

I don't think guide prices like this will be around for too long.

Straight in, easy option. Whoopsie!

So, here we are in the lounge.

First things first, what do I feel about that? Go on, have a look.

Don't like it.

Gosh, that would take your fingers off if you were to touch it.

And it's everywhere.

So, as you can see, a lot of renovation work to do.

But a good space.

And you've got the stairs right in the middle of the two areas.

Now, I've seen this, where the stairs have been turned around

and lined up against this wall here, which can work

because then it really does stop the separation.

You've got one big room.

But I suppose it depends on how you want to live.

Second reception area here.

Old gas fire, you have got gas central heating in here as well,

which is good. You've got access there which leads out to the garden,

so, nice to have an access point.

And a long sort of galley kitchen at the back

with a disappointing downstairs bathroom.

So you'd need to do a bit of tweaking.

It certainly needs upgrading.

Again, it's the big old question -

do we want to move that bathroom that's down here upstairs?

I'm going to investigate.

# Honey, put me where you want me and I won't bother you no more... #

Now, this isn't quite what I was expecting upstairs.

Lots of rooms, lots of different areas,

so you've got one little bedroom here, with a rather peculiar shape,

it's sort of a boxy area in the corner which needs to go.

Very narrow corridor, you've got the chimney breast here,

squeezing around here to a second room which is even smaller.

Again, a little cupboard in the corner which needs to go.

I think the way to get round this would be to...open that up.

You can put a wall across here,

so you'd have a much better space in that room.

And do we want to move the bathroom up here?

I think, if you do these little tweaks,

you would have three not bad sized bedrooms.

And I think that is potentially the way to go.

So I'd make those changes and leave the bathroom downstairs.

The larger bedroom at the end of the hall is a decent size.

I reckon this house might have been a two-bedder at one time,

but someone has tried to make it three. I approve of the idea,

but the layout they chose isn't working for me.

And there is some really worrying damp. The roof might need a check.

And it looks like a rewire could be on the cards, too.

Factor in possibly moving the bathroom and the stairs

as well as the upstairs rejig, well, the cost is beginning

to make that guide price of £190,000 look a bit realistic.

A really good point though is the garden.

Any outside space in London is prized.

But barbecue time in Britain is limited, as we know,

so it's the inside we need to focus on.

Now, does a local agent think it's worth rejigging that bathroom?

By moving the downstairs bathroom upstairs, you lose a bedroom.

So it depends on what the new owner would like to do, whether they are

pitching towards first-time buyers or if they want to rent it.

And the two are very different.

For resale, you'd move the bathroom upstairs to increase the value.

If you wanted to rent the property, I think

leaving the bathroom where it is would be fine.

Good advice, and it shows that with a bit of research you can

find your target market and develop the property accordingly.

With lots of regeneration in this area, could this be a good investment?

And what would it be worth for resale and rental?

House prices, we've already seen that they have been increasing

over the last few years, and I think they'll continue to do so.

Maybe up to 40%, maybe 50% in the next five or six years.

Once renovated, if the upstairs layout was slightly changed,

this property would resell for approximately £295,000-£305,000.

This property would rent

for approximately £1,400 per calendar month.

Oh, yes, there are improvements to be made,

starting with that first-floor layout

which doesn't work very well at the moment.

But once that's addressed, well,

this could be a really lovely home for someone.

And with that one of £190,000 guide price, well,

this could be an affordable way to buy a whole house in London.

Let's find out who agreed when we went to auction.

Move on now to lot 108.

Who'd like to get me started on this, lot 108? 220?

What about 200 then, try and help.

Thank you, 200, got you.

201, got you. 202. 203.

204.

The auctioneer started the bidding above that guide price of £190,000

and, going up in £1,000 increments,

we rejoin the bidding at £221,000.

221, more competition. 222.

223.

224.

225.

226.

227.

228.

229.

230.

230. 231.

232.

No? It's with you, sir, the bid's £231,000. Anybody else?

If not, 231 for the first...

231 for the second...

231 for the third and final time. All done?

Sold, 231.

Farhan and his business partner Mohammed paid £231,000.

Although this isn't Farhan's debut development,

this was the first time he'd bought property at an auction.

So, what did the auction room rookie have planned for this?

-Farhan, congratulations.

-Thank you very much.

Now, this had a relatively low guide price.

Is that what was the big attraction to start with?

The guide price, and I have been in Croydon for a while.

I was looking for the properties and this was one of them.

So I... I knew it would not go for 190, so I had my budget in my mind,

but still I'm happy with what I paid for.

So, how much research did you do?

Because that's one thing I do say to a lot of potential buyers -

do your research before you go to the auction,

check out the legal pack, try and get the house surveyed.

Did you do any of those things?

For this particular option, I had five or six other properties

in my mind, so I had done my research on those as well.

I read the legal packs, I'd been to those properties and all that.

-What about this one?

-This one, I've been here two times,

so I came here once and then I liked the property, so then I came again.

I did read the legal pack myself.

I didn't seek the advice of my solicitor,

but I had a read through myself, so I did read the legal pack, yes.

What was the point of buying this?

Have you bought this as a buy-to-let?

Are you going to sell it on straightaway?

This is a kind of investment.

I just want to buy and sell

and move on to these other ones, the second one.

So you need to make an instant profit out of this as quickly as you can.

Right, tell me, what are you going to do to this property

to really make it the best it can be?

It needs a new kitchen, new bath,

and the doors and windows, most of them, they need changing.

I'm not very happy with the layout upstairs,

so I think, ideally, that needs to be changed,

but I will seek some advice.

You know, I might have to bring an architect

because I'm not happy the way it is now.

We have two rooms which are kind of compromised, in terms of space,

so if we can have at least one of them a little bit bigger,

so we can have two doubles, one single and then two receptions.

# And that's music

# Sweet music to my ear... #

That is music to my ears.

Farhan is going to tackle the odd layout,

and if he wants to sell quickly, the consensus is

that having an upstairs bathroom is the right way to go.

So, is that what he's thinking?

I mean, we can do it only if we compromise on one bedroom altogether,

so we will have to give up one bedroom

to take the bathroom upstairs.

So the house will end up being a two bed house instead of being

a three bed house.

This is definitely worth considering all the options

that we have on the table.

I suppose a lot of the time it's dictated by your budget.

How much money have you got to spend?

If we don't change the layout upstairs

and do the bathroom, kitchen,

all the kind of decoration, floors,

we have to change the windows, doors,

-so I should aim for 15,000 maximum.

-15,000.

That's to keep the three beds upstairs, bathroom downstairs?

-15 grand for the lot?

-Yes.

-That's a reasonably tight budget.

These are the main bits that we have to cover.

If the layout upstairs, if we get it right,

for the time being to sell this property, that should be enough.

If Farhan's research and layout plans were music to my ears

then his 15 grand budget is more of an alarm going off.

And it's not just that tight budget.

He wants his building team to do it in six weeks. Wow.

He has renovated a property before but not on this scale. Yikes.

However, his move into property is backed with a bit of good

business know-how.

Farhan already owns two businesses, one which is a pizza shop,

so he knows a bit about earning a crust.

What is it you love so much about property developing

and why is this the business that you want to go into?

Come on, everybody loves pizza.

Yeah, but everybody, when it comes to money, they like property too,

because they know that pizza is about small money

and property is about big money.

Property prices are always going up.

So we are thinking that this is something that is working for you,

even if you are a homeowner, where you are living,

or if you have one property that you are letting out.

Normally, it is going to the positive direction for you.

Great stuff, so, less of the pizza, more of the developing.

-It's been lovely meeting you today.

-Thank you.

-Congratulations and good luck.

-Thank you.

It's an exciting time for pizza man Farhan who has jumped

onto the property developing wagon

and now hopes to ride along a successful new career path.

However, there is a lot of hard work to do first.

And let's not forget this is the first time he's tackled

a renovation of this size.

Will he have deep pan pockets and make some dough?

Or will he fail to deliver?

You can find out how he gets on later in the programme.

Well, time has passed

and we've seen how one of our developments has got on.

-Yes, but what about the other two?

-Let's have a look.

Back now to Llanelli where I went to the pub, not for a tipple,

but to see this large bar which was in good condition

and better yet, it came with an upstairs

maisonette three-bedroom flat.

Except the layout made you feel like you'd had more than a couple

with an entrance at the back, a covered stairwell,

out onto the patio and then into the flat.

So it seems like that's not the only bit of strange design going on.

A huge great fire thing.

This strange, whatever it is,

and then you go down this little corridor which winds round here to

a bathroom that's fantastic if you want to play chess or backgammon.

And then the property extends back this way.

As you can see, it goes on and on and on.

You're certainly getting a lot of space.

You'd need to sit down and a darkened room

and figure out what you're going to do with it.

Paying £87,000 at auction,

Wesley certainly knew what he wanted to do.

He wanted to reopen it as a bar and redecorate the flat

for a budget of £5,000-£7,000 for both and it looks like

there were many happy hours ahead as his cousin Kenny was going to

bring his entertainment experience gained over the last 30 years.

-Big opening night?

-Maybe, we'll see.

-Come on.

Depends how much you're going to pay me.

If I know Wesley, I will be.

And for free.

And so three months after we first visited,

have they had that big opening night?

So it's opening time here but what about that maisonette flat?

The flat is looking better. Much cleaner and much brighter.

And here's our new pub landlord Wesley and his cousin Kenny.

Wesley plans to rent this maisonette flat out

so what's he done to get it up to scratch?

MUSIC ON SOUNDTRACK DROWNS OUT SPEECH

In the flat, we have had it all painted out.

New carpets and a few leaks sorted out.

And the roofs and doors and stuff. Just little bits and pieces really.

Nothing major, just a bit of general maintenance.

So just a few fixes and it's ready to rent.

But for Wesley this auction buy was really about the pub downstairs.

It's now been up and running again for about two months.

What has he had to do to refresh it?

There's a few walls have been plastered. A bit of painting.

A bit of tidying up.

The floors have been re-sanded

and a bit of furniture in there really.

I work here myself and I've got people who work for me as well.

Every Saturday, we get different live acts in,

bands et cetera, vocalists.

It's been really good. It's really busy on Saturday.

And those live acts

are down to Kenny's knowledge of the entertainment scene.

What does he think of the bar and is he helping Wesley pull the pints?

# That's entertainment. #

The bar design hasn't changed a great deal, other than a lick of paint.

It just needed refreshing and he's done a great job on it.

The pub itself, you won't see me behind the bar.

You'll see me the other side of the bar.

I'll drink to that. Wesley did manage to get some mates in to help

and has kept to his one-month timescale.

But has he kept to his £5,000-£7,000 budget?

I have spent under £5,000 here

and I've saved quite a bit by doing a lot of work myself.

Well, I've done quite a bit to be honest with you

and kept an eye on the boys.

And with that budget saving, the next round is on Wesley.

There might be more cheer once the local estate agents

give their opinion.

What did they think of the bar and the flat?

I like the sports club thing.

I like the emblems on the ceiling from the football clubs.

There are some widescreen TVs for watching the soccer on TV

and the rugby. Yes, I'm very pleased with it, overall.

It's very attractive and I think it will do well.

So thumbs up for the bar. How about the flat?

It's nicely decorated. It's nice and fresh.

You can still smell the paint which is good.

It's all locked in natural light. Two good-sized bedrooms.

The attic room as well is nice

but my favourite feature is the private patio at the back.

Having now spent a total of £92,000,

Wesley plans to keep the pub going and rent upstairs.

What could they sell the whole building for

and what kind of rentals can they expect?

A resale on this building I would expect to fetch £110,000.

For the bar downstairs you would be looking to rent it for about £1,000 a month,

and the flat up here, because it's a good size, you could fetch £425 a month.

For the building as a whole, I would value it at £125,000 for sale.

If both parts of the property were rented out, I would value

the bar at £1,000 per calendar month

and the flat at £425 per calendar month.

At a top resale value of £125,000, Wesley could stand to make

a pre-tax profit of £33,000.

That's not bad for a month down the pub.

That's all right I suppose if that's what they say it is.

I expected a little bit more because it's up

and running as well now compared to what it was before.

But no, I think it's reasonable. Yeah.

# Have a drink on me

# Have a drink on me. #

A little bit of a sober reaction there but actually there is

reason for good cheer.

If Wesley were to rent both the pub and the flat out

he would make a yield of 18.5%. But of course running the bar

as a business and having the income from the flat

makes it a win-win situation.

This is his second bar so will he be buying any more?

-No, I won't be buying any more bars. Not at the moment.

-Yet.

THEY LAUGH

Now back to the London Borough of Croydon in the south of the city and

this three-bedroom property which had a guide price of just £190,000.

A potential steal for the area. But inside, the layout was a disaster.

There were three bedrooms but the configuration was all wrong.

But I came up with a plan.

I think the way to get round this would be to open that up.

You could put a wall across here,

therefore you'd have a much better space in that room.

I think if you do these little tweaks you would have

three not bad sized bedrooms.

And I think that is potentially the way to go.

Farhan thought the way to go was to the auction room

and snapped this up for 231,000.

He owns a convenience store and a pizza parlour.

Farhan and his business partner Mohammed saw property as a way

to make some extra dough.

What is it you love so much about property developing

and why is this a business that you want to go into?

Come on, everybody loves pizza.

Yes, but everybody, when it comes to money, they like property too,

because they know that pizza is about small money

and property is about big money.

We are back three months later to see what changes have been made.

The outside certainly looks much more appealing

and Farhan is here to show us

if he was able to figure out that layout inside.

You almost wouldn't recognise this house from before.

All the damp patches have gone and the whole house has been painted.

New flooring and carpets have been laid throughout.

The neutral tones give a light and spacious feel and the upstairs

still has three bedrooms and a fabulous new shower room.

So, the corridor, it kind of went from there and all the way down here

and then it went right towards that corner.

So we decided to change the layout in a way

that we can give this space to this bedroom,

which I've called bedroom two, with its size.

Then we moved that door to this side

so that we had this room in a square shape and this bathroom was

not here before so we managed to make some space for this bathroom as well.

I'm very pleased with the layout that we have now.

We've got two double beds, one single bed,

one shower room, which is my favourite in the property.

So, the layout works much better now than it was before.

As well as the shower room upstairs, Farhan also chose to keep

the bathroom downstairs just off the kitchen

and has renovated both with a few finishing touches still to add.

You can see that we have an entirely new kitchen and new bath.

We got rid of everything that we had when we started off.

The place, it needed replastering, reskimming, decor,

tiling, all the new units, everything new,

so we managed to do it in a way that I'm happy with.

I'm pleased Farhan went for a high spec finish.

I wasn't really sure he'd do justice to the house with just £15,000.

But how long did all this take?

It's been about three months and we are almost finished

although maybe three or four days' job, just finishing small

things that needs to be done yet.

Now this is the part I dread to ask on a high spec finished house.

What happened with the budget?

We started off with a budget of £15,000-£18,000 which would

have been very good news.

But unfortunately when you start you spot small things that needs doing.

Apart from that, we thought that we should try to finish with

a high spec job and whatever needed to be done

we didn't compromise on that either. So we tried to put the quality

stuff and whatever changes we needed to do in the layout. We did that.

So we have roughly spent about £30,000.

Pursuit of perfection has doubled Farhan's budget

but was it worth while?

Two local property experts can tell us

starting with the agent who saw it before the renovation.

There are loads of changes that the owner has made to this property.

Particularly the upstairs.

The most significant change is adding the upstairs bathroom.

For this type of property in this area that works really well.

Having a downstairs bathroom, to some potential buyers,

is a slight negative

so having the upstairs bathroom really does make a big difference.

Having had a look around the property, it is very nicely done.

There's a few little bits to be finished off, snagging, basically.

It's a nice sized property. They've done it really well.

It's neutral but the kitchen and the bathrooms give it

a little bit of style, its own sense of purpose which is good.

But when it's finished, what will it be worth

and will it justify Farhan's total spend of 261,000?

In terms of a resell price,

I believe that the property would achieve £335,000.

This property would sell for approximately £330,000.

At a top estimate of 335,000,

Farhan could see a profit of £74,000 before the usual taxes and expenses.

Yeah, quite pleased with the values, although I am a bit more optimistic.

I think it will sell probably a little more than that

but still with that valuation,

I can't be unhappy so I'm pleased with the valuation, yeah.

# But I just want a little "pizza" you... #

So, Farhan has taken a slice out of the Croydon property market

and stands to make a really good return on his investment.

But what does he prefer -

a "pizza" the property market

or running his pizza shop?

Sorry. Yeah, far too cheesy.

Pizza because I've been in that business for a few years now

and property I've just started.

So to start with the properties, I can't complain,

I'm happy with it but I have to save for a couple of years at least

before I can make it a full time business or something.

Different properties, different issues.

Yeah, the trick is to find them quickly and safely

-without blowing your budget.

-Yeah.

Well, we'll have more problem-solving for you next time

-here on Homes Under The Hammer.

-See you.

-Goodbye.

-Goodbye.

-Goodbye.