0:00:02 > 0:00:03Hello and welcome to the programme.
0:00:03 > 0:00:06Now, the housing market is changing all the time and investing
0:00:06 > 0:00:10in property can be all about finding exactly the right house
0:00:10 > 0:00:11at the right time.
0:00:11 > 0:00:12Yeah, that's right, Martin.
0:00:12 > 0:00:15But how do you make sure you keep your finger on the pulse?
0:00:15 > 0:00:17Well, why not try the auction houses?
0:00:43 > 0:00:46Well, buying under the hammer can be a great way of getting
0:00:46 > 0:00:48the best out of the property market.
0:00:48 > 0:00:51And lots of people are looking at the auction houses around the UK.
0:00:51 > 0:00:54So let's see who bagged a bargain on today's programme.
0:00:56 > 0:00:59Coming up, I really hope these developers in Wales aren't
0:00:59 > 0:01:02- talking about their auction experience.- Tried it...
0:01:02 > 0:01:04Tried it, didn't like it and that's it.
0:01:07 > 0:01:09And in Dawley, Telford, there's no time to waste.
0:01:09 > 0:01:12Six weeks from this to finish?
0:01:12 > 0:01:15The minute you walk out, my people are walking in.
0:01:16 > 0:01:18Though a little run down,
0:01:18 > 0:01:21I find there's a lot to like about this terrace in London.
0:01:21 > 0:01:23I quite like it open-plan -
0:01:23 > 0:01:27it does give the feeling of a fantastic space.
0:01:27 > 0:01:30All these properties have been sold at auction.
0:01:30 > 0:01:32We'll find out who bought them
0:01:32 > 0:01:35and what they paid when they went under the hammer.
0:01:35 > 0:01:36Sold, 273.
0:01:40 > 0:01:43This is Tonypandy in Mid Glamorgan, South Wales -
0:01:43 > 0:01:46once an industrial coal mining town -
0:01:46 > 0:01:50and I'm here today in its central shopping area.
0:01:50 > 0:01:53Well, the property I'm here to see is just on the high street
0:01:53 > 0:01:58and a very interesting opportunity it would appear to be on paper.
0:01:58 > 0:02:02£68,000 was the guide price for two shops and three flats.
0:02:02 > 0:02:04Oh, and a cellar, wow!
0:02:06 > 0:02:10So, into the first of the shops, about 60 square metres,
0:02:10 > 0:02:11so a good size.
0:02:11 > 0:02:13Not in bad condition.
0:02:13 > 0:02:16I mean, obviously a bit of shop fitting required.
0:02:16 > 0:02:19Previously, I understand, a clothes shop
0:02:19 > 0:02:23and that would potentially influence what it was in the future.
0:02:23 > 0:02:26There is certainly a restriction which says you can't have it serving food
0:02:26 > 0:02:31or drink, which is going to limit your potential renter, if you like.
0:02:31 > 0:02:34It's not in bad nick and it all comes down to what you'd need to
0:02:34 > 0:02:36do to turn it back into a rental machine.
0:02:36 > 0:02:37But, bear in mind,
0:02:37 > 0:02:43this is only the start of what was quite the expansive lot.
0:02:43 > 0:02:47Yes, this was just the first of two commercial properties
0:02:47 > 0:02:49that come with this lot.
0:02:49 > 0:02:53So, let's pop next-door and take a look around at the second.
0:02:53 > 0:02:56So, into the second shop, and similar size to the first.
0:02:56 > 0:02:59In similar kind of state of repair as well.
0:02:59 > 0:03:01A few signs of damp on that wall.
0:03:01 > 0:03:05But in here, access, sort of, if you want to plummet,
0:03:05 > 0:03:09to one of the other really exciting things about this
0:03:09 > 0:03:12whole development and that is this cellar area here.
0:03:12 > 0:03:15I don't know what it's like down there, have a poke about,
0:03:15 > 0:03:16it looks pretty big to me.
0:03:16 > 0:03:19It all comes back to - before I started work on this project,
0:03:19 > 0:03:22the first thing I would want is an architect to come in here
0:03:22 > 0:03:24and actually show me what I've got.
0:03:24 > 0:03:27Do proper drawings, including the heights,
0:03:27 > 0:03:30because you've got a big drop off at the back, access and then
0:03:30 > 0:03:35start thinking about what you could potentially make of this place.
0:03:35 > 0:03:38So that's two commercial properties and a cellar that
0:03:38 > 0:03:41looks like it could be developed, sounds pretty good to me.
0:03:45 > 0:03:47Ah, so there is. How could I forget?
0:03:47 > 0:03:50There's still three residential properties up the stairs.
0:03:50 > 0:03:52Time to go and take a look.
0:03:55 > 0:03:58So the first of the flats, one-bedroom, bedroom there.
0:03:58 > 0:04:02You've got a really nicely renovated bathroom there
0:04:02 > 0:04:03and then into this room here,
0:04:03 > 0:04:06which is obviously your kitchen/living room.
0:04:06 > 0:04:09Views across the hills out the windows, so that's good.
0:04:09 > 0:04:12It's, all-in-all, not in bad condition.
0:04:12 > 0:04:15The other two flats are currently tenanted, so I can't go in there,
0:04:15 > 0:04:19but the good news is they're bringing in money already.
0:04:20 > 0:04:23This really is turning out to be a bit of a money-spinner.
0:04:26 > 0:04:29Having income coming in from the two flats already rented is
0:04:29 > 0:04:34certainly a bonus, but what I'd like to throw in is how difficult
0:04:34 > 0:04:38will it be to get commercial tenants for the downstairs properties?
0:04:38 > 0:04:40So we asked along a local estate agent
0:04:40 > 0:04:43to give us his opinion on the area.
0:04:43 > 0:04:46The likelihood of these shops being let is 50-50.
0:04:46 > 0:04:50Now, on this high street, you've got established shops which stay.
0:04:50 > 0:04:52You've got the ones that come and go.
0:04:52 > 0:04:55I wouldn't say it's just a lick of paint,
0:04:55 > 0:04:58I would say there's a bit more than that to get this ready to rent,
0:04:58 > 0:05:01and I should imagine you've got a chance of renting it.
0:05:09 > 0:05:11So, even with a good refurb,
0:05:11 > 0:05:15the expert thinks there's a 50-50 chance it will rent.
0:05:15 > 0:05:18On the other hand, he also said to us that the five properties
0:05:18 > 0:05:23could rent for between £300 and £375 per calendar month.
0:05:23 > 0:05:25If we take the conservative value,
0:05:25 > 0:05:28that would be a monthly income of £1,500.
0:05:28 > 0:05:31That would give you a yield of 26%
0:05:31 > 0:05:35if you bought the property for the guide price of £68,000. Wow.
0:05:35 > 0:05:38What about sales valuations?
0:05:38 > 0:05:40If you were selling the complete unit
0:05:40 > 0:05:42and they were done up to a decent standard, nothing amazing,
0:05:42 > 0:05:45just to a decent standard, the flat and the shop,
0:05:45 > 0:05:48you'd probably ask between £100-£110,000.
0:05:49 > 0:05:53Well, three flats, two shops, a cellar, this is definitely
0:05:53 > 0:06:00a mixed use opportunity and, I think, a potential gold mine, yes.
0:06:00 > 0:06:02Let's see who spotted it when it went under the hammer.
0:06:03 > 0:06:09Lot number 28 is a large, commercial/residential property.
0:06:09 > 0:06:12Guided at 68, start me somewhere near £65,000, somebody?
0:06:12 > 0:06:14Put your hand up. Got to be at £60,000 to start me.
0:06:14 > 0:06:17Shout a figure then if you want to. Make it £50,000, if you like.
0:06:17 > 0:06:19£50,000.
0:06:19 > 0:06:21You at 50, sir.
0:06:21 > 0:06:2351. 52 now.
0:06:23 > 0:06:2552. 52.
0:06:25 > 0:06:2752, 53, 54...
0:06:27 > 0:06:31Despite the slow start, the bids began coming in thick and fast.
0:06:31 > 0:06:34We rejoin the bidding at £70,000.
0:06:34 > 0:06:3870. 71. 72. 73.
0:06:38 > 0:06:4274. 75. 76. 76? No.
0:06:42 > 0:06:47At 75. At 75 and on my right-hand side for the first time.
0:06:47 > 0:06:51At £75,000 for the second time.
0:06:51 > 0:06:54At £75,000, one more if you like.
0:06:54 > 0:06:5776. 77, do you want it?
0:06:57 > 0:07:0077? 76 I've got.
0:07:00 > 0:07:0276 and a half then, if you like.
0:07:02 > 0:07:0376 and a half. 77, sir.
0:07:03 > 0:07:06One more, £500 might buy it, you never know.
0:07:06 > 0:07:0777. And a half back to you.
0:07:07 > 0:07:1077, he shakes his head.
0:07:10 > 0:07:12At £77,000 here then.
0:07:12 > 0:07:14By the aisle, for the first time.
0:07:14 > 0:07:16Second time.
0:07:16 > 0:07:19Third and last time at £77,000.
0:07:19 > 0:07:22There you go, that extra £500 was worth it.
0:07:22 > 0:07:25And the successful bidders were Martin and Jackie.
0:07:29 > 0:07:32Originally from Kent, this married couple have lived in Wales
0:07:32 > 0:07:36for five years and have developed and sold property in the past.
0:07:36 > 0:07:39However, they've been on a bit of a hiatus recently.
0:07:39 > 0:07:42So I met up with them to find out what tempted them
0:07:42 > 0:07:48to part with £77,000 and get back into the property game.
0:07:48 > 0:07:50- Jackie, Martin, good to meet you both.- Hi, nice to meet you.
0:07:50 > 0:07:56Congratulations. Tell me why you wanted to buy this, well, opportunity?
0:07:56 > 0:07:59We've been looking around in the valleys for quite a bit,
0:07:59 > 0:08:01mainly at houses.
0:08:01 > 0:08:03Then this one came up we decided it was quite a good
0:08:03 > 0:08:06opportunity for the money and what we thought we could get it for.
0:08:06 > 0:08:08We'd never really done anything with shops before,
0:08:08 > 0:08:10we've done plenty of houses and things,
0:08:10 > 0:08:12so we thought we'd get the most return on our money really,
0:08:12 > 0:08:14that's more what it was about.
0:08:14 > 0:08:16Right, is this something you do then?
0:08:16 > 0:08:18Not now, we used to.
0:08:18 > 0:08:20We did quite a few buying and selling
0:08:20 > 0:08:22and living in the properties as we were doing it,
0:08:22 > 0:08:24but then we took on a stable yard
0:08:24 > 0:08:27- and that's what we've been doing since.- A stable?
0:08:27 > 0:08:28- A stable yard, yeah.- Oh, wow.
0:08:28 > 0:08:31With your own horses or just a place where you look after other people's?
0:08:31 > 0:08:34Yes, it's about 35 horses there,
0:08:34 > 0:08:38it's quite a big centre, and I'm going to run that
0:08:38 > 0:08:40- while Martin comes and sorts this out.- Right.
0:08:40 > 0:08:44So that's sort of taken your eye off the property development
0:08:44 > 0:08:45ball for a little bit?
0:08:45 > 0:08:49Yeah, definitely. I suppose the market went downhill a little bit five years ago.
0:08:49 > 0:08:53- It was just something else we got into, really.- And what do you do?
0:08:53 > 0:08:55I'm a trade plaster originally.
0:08:55 > 0:08:59- Oh,- OK.- Not with horses so much. - Can you ride?
0:08:59 > 0:09:01- No.- Oh, right, that's ironic.
0:09:01 > 0:09:04Surrounded by all these horses and you can't ride.
0:09:04 > 0:09:06It was more Jackie's sort of thing, horses.
0:09:06 > 0:09:09- You ever thought about learning? - Yeah, but, you know...- Tried it...
0:09:09 > 0:09:12Tried it, didn't like it and that's it.
0:09:21 > 0:09:24Ponies and properties, quite a combination.
0:09:24 > 0:09:28The plan is for Jackie to continue to manage their equine estate,
0:09:28 > 0:09:31while Martin will take the reins of the development.
0:09:31 > 0:09:35But can they turn this into a stable income?
0:09:35 > 0:09:38So, an interesting opportunity here then.
0:09:38 > 0:09:41Tell me what your thoughts are.
0:09:41 > 0:09:44Obviously two of the flats are already let.
0:09:44 > 0:09:46One of them just needs a bit of tidying up
0:09:46 > 0:09:47and then we'll get that let as well.
0:09:47 > 0:09:49With the shops, generally in
0:09:49 > 0:09:52Tonypandy, it seems that quite a few of the shops are shut.
0:09:52 > 0:09:54We will advertise them to try and get them let.
0:09:54 > 0:09:57But the main thing, I think, because of the size of the shops
0:09:57 > 0:09:59and there's quite a large basement as well,
0:09:59 > 0:10:03I'd look at converting part of the shops into maybe more flats
0:10:03 > 0:10:04and going along that sort of route if we can.
0:10:04 > 0:10:08Now, the local authority might have a bit of an issue about the closing
0:10:08 > 0:10:11of facilities, such as shops, in the high street especially.
0:10:11 > 0:10:15Have you approached them and broached the subject?
0:10:15 > 0:10:17Yeah, I looked into it.
0:10:17 > 0:10:20I wouldn't close the shop completely, I would more half the floor area
0:10:20 > 0:10:22of the shop and convert the back of it,
0:10:22 > 0:10:24so that would be more the thing.
0:10:24 > 0:10:27So the shop would still stay here, it would just be smaller.
0:10:27 > 0:10:29Martin plans to half each shop
0:10:29 > 0:10:32and use the rear half, along with the cellars,
0:10:32 > 0:10:37to create two maisonette flats, accessible using the rear foot path.
0:10:37 > 0:10:40I think it's a clever idea, giving the couple five flats
0:10:40 > 0:10:42and two smaller shops.
0:10:42 > 0:10:44But it doesn't really matter what I think,
0:10:44 > 0:10:47it'll be down to whether local planning will allow it.
0:10:49 > 0:10:52So, on a scale of nought-to-ten,
0:10:52 > 0:10:55how confident are you that you'll be able to rent the shops out?
0:10:55 > 0:10:58One, if I'm honest.
0:11:00 > 0:11:03OK. And in their reduced size?
0:11:03 > 0:11:06Much more likely because the rent would be smaller.
0:11:06 > 0:11:08That's the thing, I think.
0:11:08 > 0:11:11But even if it doesn't and we have to keep it as shops,
0:11:11 > 0:11:15it's still a good return, we think, for what we paid for it.
0:11:15 > 0:11:19We're really happy with what we got.
0:11:19 > 0:11:23Any idea of a budget for what you're planning?
0:11:23 > 0:11:24£2.50.
0:11:26 > 0:11:30No, for the actual flats themselves, there's not a great deal to do,
0:11:30 > 0:11:33it's probably a few hundred pounds really, just tidying up.
0:11:34 > 0:11:37And the boiler we've got to put in, that will put the price up.
0:11:37 > 0:11:40Yeah, it looks like flat three hasn't got a boiler,
0:11:40 > 0:11:42so we're probably looking at another £1,000 or so
0:11:42 > 0:11:45for that I should imagine for bits and pieces there.
0:11:45 > 0:11:48Right, and then the conversion. Give me an idea of what you've set aside for that.
0:11:48 > 0:11:51Absolutely no idea until we get plans in and that sort of thing.
0:11:51 > 0:11:52There's a lot of work here to do,
0:11:52 > 0:11:55so I really wouldn't have a figure off the top of my head.
0:11:55 > 0:11:57It wouldn't be something we were doing this year,
0:11:57 > 0:11:59it would be something for next year, really.
0:11:59 > 0:12:01- OK, that's the sort of timescale? - Yeah.
0:12:01 > 0:12:02Well, listen, congratulations.
0:12:02 > 0:12:07- I look forward to seeing how you get on.- Cheers.
0:12:07 > 0:12:10So this property could prove to be a very good investment with
0:12:10 > 0:12:13the budget for the immediate works at £1,500,
0:12:13 > 0:12:17there's lots of options for Martin and Jackie can mull over.
0:12:17 > 0:12:18Will they convert the basement
0:12:18 > 0:12:21and will they manage to rent out the shops?
0:12:21 > 0:12:22You can find out later in the show.
0:12:26 > 0:12:28I've got a quiz for you.
0:12:28 > 0:12:31Who was the first man to swim the English Channel?
0:12:32 > 0:12:35If you said Captain Matthew Webb, you would be right, well done.
0:12:35 > 0:12:40But did you know this hero of the Victorian age was born in Dawley -
0:12:40 > 0:12:43a small town just a few miles from Telford?
0:12:43 > 0:12:47He was so well thought of his monument stands in the high street
0:12:47 > 0:12:51with the inscription, "Nothing great is easy."
0:12:51 > 0:12:54Legend suggests that a pig stood up against the wall to watch
0:12:54 > 0:12:57the parade in Webb's honour that was held on his return.
0:13:05 > 0:13:08It may have taken Captain Webb 22 hours to reach France, but here
0:13:08 > 0:13:12in Dawley I'm just ten minutes away from Telford town centre.
0:13:12 > 0:13:15Now, sadly, there's no pig on a wall to greet me,
0:13:15 > 0:13:17but there is this, our property.
0:13:17 > 0:13:22It's a two-bed maisonette and has a guide price £50,000 plus.
0:13:22 > 0:13:24Let's take a look and get out the cold.
0:13:27 > 0:13:30A quick look at the exterior tells me that it's a pretty solid
0:13:30 > 0:13:34property on the outside, but will the inside be as good?
0:13:37 > 0:13:40What I have noticed is there's off-street parking,
0:13:40 > 0:13:42which is a great start,
0:13:42 > 0:13:45but it doesn't continue into the flat at all.
0:13:45 > 0:13:48This flooring is all falling off, in really bad condition
0:13:48 > 0:13:52and continues here into the sort of hallway area.
0:13:52 > 0:13:56This will be one of the bedrooms, which, again, the theme continues.
0:13:56 > 0:13:58There is a bit of plaster and wallpaper falling off,
0:13:58 > 0:14:00you'll have to change that.
0:14:00 > 0:14:04And bedroom two here, which, they're both of a good size the bedrooms,
0:14:04 > 0:14:07but they just need a total overhaul and freshening up.
0:14:07 > 0:14:10And the bathrooms here, again, put a new bathroom in there and
0:14:10 > 0:14:13it's fine but, at present, it's not looking the best.
0:14:13 > 0:14:17Into the kitchen, which, surprisingly, is a good size.
0:14:17 > 0:14:22It's dated, it seems to be stuck in the '70s a little bit.
0:14:22 > 0:14:24But you could turn it round, just take it out,
0:14:24 > 0:14:27put something new in, freshen it, modernise it and I think
0:14:27 > 0:14:31you'd have a nice kitchen to work your magic when you're cooking.
0:14:31 > 0:14:33I'm going to explore.
0:14:43 > 0:14:45As it is, it wouldn't pass...
0:14:45 > 0:14:47mustard with your Gordon Ramsays, but,
0:14:47 > 0:14:49along with the rest of this flat,
0:14:49 > 0:14:52it's a great size and has plenty of potential.
0:14:54 > 0:14:58So into the lounge, which, again, it's a nice room, it's a nice size.
0:14:58 > 0:15:02It's in keeping with the rest of the layout of the flat.
0:15:02 > 0:15:04But these windows here, I thought these were double glazing,
0:15:04 > 0:15:07but they're not. They're single glazed windows,
0:15:07 > 0:15:11which you would have to replace to keep the heat in, keep the sound out.
0:15:11 > 0:15:14Along with your floors, bathroom and kitchen,
0:15:14 > 0:15:16our costs are starting to mount.
0:15:16 > 0:15:18That budget is starting to get bigger,
0:15:18 > 0:15:21so I would want to get this property as close to the guide price
0:15:21 > 0:15:24of £50,000 plus as I possibly could,
0:15:24 > 0:15:26but I do like it.
0:15:35 > 0:15:37Whilst the costs are adding up, there are a couple of features
0:15:37 > 0:15:41in this maisonette that I do like.
0:15:41 > 0:15:44First off, there's this balcony coming off the living room, which,
0:15:44 > 0:15:47weather permitting, could be a nice little sun trap.
0:15:49 > 0:15:51But if you want to lay out the picnic blanket,
0:15:51 > 0:15:56you also have shared access to this good-sized back garden.
0:15:56 > 0:15:59Even though this property has seen better days,
0:15:59 > 0:16:01I do think it's got a lot going for it.
0:16:02 > 0:16:08And, like I say, if this sold for anything like the £50,000 guide price,
0:16:08 > 0:16:11it could be great investment.
0:16:11 > 0:16:13But will a local estate agent agree with me?
0:16:15 > 0:16:17First impressions of the property,
0:16:17 > 0:16:20it does need some work throughout, mostly cosmetic.
0:16:20 > 0:16:22It needs completely redecorating.
0:16:22 > 0:16:26One of the things I did notice, which can be missed sometimes,
0:16:26 > 0:16:29is the windows are uPVC but they're not actually double glazed,
0:16:29 > 0:16:32so I'd recommend those actually get replaced.
0:16:32 > 0:16:36And also possibly a tarting up or possibly changing
0:16:36 > 0:16:38the kitchen and the bathroom.
0:16:38 > 0:16:42Demand for this sort of property for letting would be very, very strong.
0:16:42 > 0:16:46There is a very, very strong rental market with a lot of outsiders
0:16:46 > 0:16:48coming into Telford, as well local people.
0:16:48 > 0:16:51In terms of sales, the sales side is very good,
0:16:51 > 0:16:54particularly for investors, because the yields in this area
0:16:54 > 0:16:58are very, very good for the actual purchase prices paid.
0:16:58 > 0:17:00Sounds like a great investment then.
0:17:00 > 0:17:02But let's talk numbers, rental first.
0:17:02 > 0:17:07Once the works have been carried out to the property for rental purposes,
0:17:07 > 0:17:12I would suggest a rental valuation of £500 per calendar month.
0:17:12 > 0:17:14And what about the sales market?
0:17:14 > 0:17:17If this was placed on the open market for resale purposes,
0:17:17 > 0:17:21I would suggest a marketing price £80,000.
0:17:21 > 0:17:24I like this place and I think the layout works,
0:17:24 > 0:17:25but there's a lot of work to be done.
0:17:25 > 0:17:27New windows, new floors
0:17:27 > 0:17:30and I would definitely put in a new kitchen and bathroom.
0:17:30 > 0:17:32This is a complete refurb.
0:17:32 > 0:17:36Let's see who wasn't afraid to get their hands dirty when it went to auction.
0:17:40 > 0:17:43It's a first floor apartment with two bedrooms.
0:17:43 > 0:17:47It is leasehold and it is in need of modernisation.
0:17:47 > 0:17:4940 to start me here.
0:17:51 > 0:17:5340 in the middle, thank you.
0:17:53 > 0:17:54At £40,000.
0:17:54 > 0:17:5641, can I see now?
0:17:56 > 0:17:57At £40,000.
0:17:57 > 0:17:5941.
0:17:59 > 0:18:0142.
0:18:01 > 0:18:0343. 44.
0:18:03 > 0:18:0545. 46.
0:18:05 > 0:18:0747.
0:18:07 > 0:18:0848.
0:18:08 > 0:18:1049?
0:18:10 > 0:18:12At £48,000, right in the middle.
0:18:12 > 0:18:14At £48,000.
0:18:14 > 0:18:1949 anywhere else? If not, I'm selling at £48,000
0:18:19 > 0:18:20for the first time.
0:18:20 > 0:18:23£48,000 for the second time.
0:18:23 > 0:18:2549, new bidder.
0:18:25 > 0:18:2749. 50.
0:18:27 > 0:18:2851.
0:18:28 > 0:18:3152, sir? 52.
0:18:31 > 0:18:3253.
0:18:32 > 0:18:3554? 54.
0:18:35 > 0:18:3755? 55.
0:18:37 > 0:18:3956.
0:18:39 > 0:18:4057.
0:18:40 > 0:18:4258? 58.
0:18:42 > 0:18:4459. 60?
0:18:44 > 0:18:46Yep, 60.
0:18:46 > 0:18:4861.
0:18:48 > 0:18:5062. A half.
0:18:50 > 0:18:5262 and a half.
0:18:52 > 0:18:5463. Another half.
0:18:54 > 0:18:5663 and a half.
0:18:56 > 0:18:5864. Another half?
0:18:58 > 0:19:00No.
0:19:00 > 0:19:0364 then. The bid is in the middle at £64,000.
0:19:03 > 0:19:05Are we all done?
0:19:05 > 0:19:07£64,000 once then.
0:19:07 > 0:19:10£64,000 twice.
0:19:10 > 0:19:13Third and final time at £64,000.
0:19:13 > 0:19:16In the middle then at 64.
0:19:16 > 0:19:20After a bit of a battle, the successful bid of £64,000
0:19:20 > 0:19:23belonged to seasoned property developer Ray.
0:19:24 > 0:19:28Regular viewers may recognise Ray, as he's appeared on the show
0:19:28 > 0:19:32twice before, the last time being back in 2009.
0:19:39 > 0:19:42Ray bought the property on behalf of business partner Hugo
0:19:42 > 0:19:47and it will be Ray who will be overseeing the project.
0:19:47 > 0:19:51- Ray, it's nice to see you.- Thank you, Dion.- Tell us about the auction.
0:19:51 > 0:19:53The auction was quite fine, actually.
0:19:53 > 0:19:55It's one of the quieter auctions we've been to in the last year.
0:19:55 > 0:19:58But, yeah, a few opportunities at this auction that
0:19:58 > 0:20:00I haven't seen in past auctions.
0:20:00 > 0:20:03Ray actually bought two properties on auction day
0:20:03 > 0:20:06and is something of a auction veteran.
0:20:06 > 0:20:09It's all about preparation, it's all about the maths.
0:20:09 > 0:20:13Emotion doesn't come into it. I'm not buying for myself to live in.
0:20:13 > 0:20:16This actually is for an investor friend of mine,
0:20:16 > 0:20:19who is cash rich but time poor.
0:20:19 > 0:20:21He did come up and view this,
0:20:21 > 0:20:24but I think, in the long-term, he's going to rely on me viewing
0:20:24 > 0:20:25the properties.
0:20:25 > 0:20:29I go to the auction and bid on his behalf,
0:20:29 > 0:20:31and then he pays me for my time
0:20:31 > 0:20:36and pays me for my time in renovating this property.
0:20:36 > 0:20:38And what are you going to do with it, Ray?
0:20:38 > 0:20:42- What's majorly needing to be done?- Everything.- OK.
0:20:42 > 0:20:45List the everything for us, Ray.
0:20:45 > 0:20:51New bathroom, new kitchen, new carpets, new cooker...
0:20:51 > 0:20:53We're going to strip all the wallpaper.
0:20:53 > 0:20:56It's going to need re-plastering throughout.
0:20:56 > 0:21:00New front door, new interior door,
0:21:00 > 0:21:03another interior door, double glazing...
0:21:03 > 0:21:07so it's quite a major project.
0:21:07 > 0:21:10So you've mentioned new, new, new.
0:21:10 > 0:21:13Everything's got to new. Everything's got to be taken out and started again.
0:21:13 > 0:21:15Skimming everything, wallpaper's coming off.
0:21:15 > 0:21:17How much is that going to cost you?
0:21:17 > 0:21:19Well, I've got a budget of about £12,000.
0:21:19 > 0:21:21I think I'd be disappointed if I go above that.
0:21:21 > 0:21:25We may well keep it well within the £12,000.
0:21:27 > 0:21:31But that still works quite well within the figures,
0:21:31 > 0:21:35with a 9% rental return and hopefully some capital gain as well.
0:21:35 > 0:21:37And where is most of that going to go, Ray?
0:21:37 > 0:21:40You've got a £12,000 budget, where is the majority going to be spent?
0:21:40 > 0:21:43The kitchen and the bathroom are always the two big ones
0:21:43 > 0:21:45because that's what the clients like.
0:21:45 > 0:21:48And if you present them with a nice kitchen and a nice bathroom,
0:21:48 > 0:21:50you're three quarters of the way there
0:21:50 > 0:21:52to selling or letting your property.
0:21:52 > 0:21:56- The skimming itself isn't going to be cheap.- It's time, isn't it, Ray?
0:21:56 > 0:21:59Yeah, it's probably a good £800-£1,000 to skim all the walls.
0:22:01 > 0:22:05So it's a combination of things, and we're also going to put
0:22:05 > 0:22:08blinds up around the windows and things like that.
0:22:08 > 0:22:12- So, 12 grand.- Yep.- How long is it going to take you to spend that 12 grand?
0:22:12 > 0:22:14About six weeks.
0:22:14 > 0:22:16Six weeks from this to finish?
0:22:16 > 0:22:20The minute you walk out, my people are walking in.
0:22:20 > 0:22:22Is that a cue to stop the interview?
0:22:22 > 0:22:25No, we've got everybody lined up.
0:22:25 > 0:22:29I've got carpenters coming to give me quotes on Monday,
0:22:29 > 0:22:33I've got decorators that can move in on Tuesday,
0:22:33 > 0:22:36I've got a plasterer coming to give me a quote on Monday,
0:22:36 > 0:22:38so we'll get on with it as quick as we can.
0:22:38 > 0:22:41It may take a little bit longer, but it shouldn't do.
0:22:50 > 0:22:53Sounds like Ray has it all under control
0:22:53 > 0:22:58and the key to getting everything done in six weeks is organisation.
0:22:58 > 0:23:02It's all organised, it's as simple as that. It's all organised.
0:23:02 > 0:23:05Myself, I tend to project manage it.
0:23:05 > 0:23:08My job is to make sure that they've got the money
0:23:08 > 0:23:11and I go and buy the materials, source the kitchen,
0:23:11 > 0:23:13that sort of thing.
0:23:13 > 0:23:15And making sure that the lads have everything
0:23:15 > 0:23:17they need to do a good job.
0:23:17 > 0:23:19Love the confidence, love the experience.
0:23:19 > 0:23:21I know you'll get it right.
0:23:21 > 0:23:23- Thank you, Dion.- Good luck.- Cheers.
0:23:23 > 0:23:27So, a regular to this show, Ray, has got a job on his hands.
0:23:27 > 0:23:30He's got to skim the walls, he wants to put new flooring down,
0:23:30 > 0:23:31not to mention a new kitchen
0:23:31 > 0:23:35and a new bathroom, and he hasn't got a huge budget.
0:23:35 > 0:23:36But, if anybody can do it, Ray can.
0:23:36 > 0:23:39You can find out how he gets on later in the programme.
0:23:41 > 0:23:43Still to come, this developer in London has been
0:23:43 > 0:23:45planning for quite a while.
0:23:45 > 0:23:47I started probably when I was 14 years old,
0:23:47 > 0:23:50when I suggested some of the upgrades to my parents' house.
0:23:52 > 0:23:53Whilst in Dawley, Telford,
0:23:53 > 0:23:56sounds like Ray has planned it all just right.
0:23:56 > 0:23:59Unusually, I've hardly lifted a paint brush or anything
0:23:59 > 0:24:00on this particular project.
0:24:04 > 0:24:07Welcome back to south Wales and the town of Tonypandy,
0:24:07 > 0:24:13where I was getting quite excited about a very intriguing property.
0:24:13 > 0:24:18£68,000 was the guide price for two shops and three flats.
0:24:18 > 0:24:20Oh, and a cellar, wow!
0:24:27 > 0:24:30I couldn't wait to have a look around these properties
0:24:30 > 0:24:32and there was a lot to like.
0:24:32 > 0:24:35Though needing work, the shops were in decent condition
0:24:35 > 0:24:38and also had cellars underneath that looked a good size
0:24:38 > 0:24:41and had access from the outside.
0:24:41 > 0:24:45Upstairs, two of the three one-bed flats already had tenants,
0:24:45 > 0:24:49which meant there would be an immediate income for the new owners.
0:24:49 > 0:24:51This was looking like a good investment.
0:24:57 > 0:25:00Martin and Jackie certainly thought it would be a good investment
0:25:00 > 0:25:04when they bought the property for £77,000 at auction.
0:25:04 > 0:25:07But, despite having tenants upstairs,
0:25:07 > 0:25:10they were worried about getting tenants for the shops.
0:25:11 > 0:25:14So, on a scale of nought to ten,
0:25:14 > 0:25:17how confident are you that you'll be able to rent the shops out?
0:25:17 > 0:25:19Oh, one, if I'm honest.
0:25:33 > 0:25:36Yes, the couple will need to get their shops rented out
0:25:36 > 0:25:40if they want to maximise the potential profit of this place.
0:25:40 > 0:25:43But, for the moment, they had around £1,500 to update the flats
0:25:43 > 0:25:47and the shops, and were looking to get started as soon as possible.
0:25:51 > 0:25:55So, will there be two new shops on the high street of Tonypandy,
0:25:55 > 0:25:56thanks to Martin and Jackie?
0:25:56 > 0:26:00Well, six months have passed and we're back to find out.
0:26:17 > 0:26:19There certainly are. They're bright, clean
0:26:19 > 0:26:22and the new tenants have brought them back to life.
0:26:23 > 0:26:27Upstairs, the redecoration of the flat we saw last time is the sign
0:26:27 > 0:26:30that there are tenants living there,
0:26:30 > 0:26:33as there are now for all three flats.
0:26:33 > 0:26:36Time to catch up with Martin and Jackie to get their full story.
0:26:36 > 0:26:38In the flat we're in here, there was just a little
0:26:38 > 0:26:41bit of decorating to do, there wasn't an awful lot of work.
0:26:41 > 0:26:43The main work was done in the top floor flat,
0:26:43 > 0:26:47which was decorated throughout and carpeted as well.
0:26:47 > 0:26:50The other flat across the way, that was left as it was.
0:26:50 > 0:26:52There wasn't an awful lot to do with that.
0:26:52 > 0:26:56With the shops, because they've been divided into two shops previously,
0:26:56 > 0:26:57the electrics hadn't been,
0:26:57 > 0:27:01so we needed to sort that out because you turn the lights on in one shop
0:27:01 > 0:27:03and the other shop's lights come on, that sort of thing.
0:27:03 > 0:27:06So that was all swapped around so it was done properly.
0:27:06 > 0:27:09But what happened to Martin and Jackie's plan of possibly leaving
0:27:09 > 0:27:12the shops empty and concentrating on the income from the flats?
0:27:14 > 0:27:17To be quite honest, when we took it on, we were going to not worry
0:27:17 > 0:27:22about renting the shops because we could see that the high-street had
0:27:22 > 0:27:25a lot of empty shops, so we weren't really going to worry about that,
0:27:25 > 0:27:28but then we found out about the business rates.
0:27:28 > 0:27:30With the business rates, basically,
0:27:30 > 0:27:32if the shop's empty you get three months exemption,
0:27:32 > 0:27:35where you don't pay, and then after that you're liable for business
0:27:35 > 0:27:38rates, even if the shop is empty, which we didn't realise.
0:27:38 > 0:27:41Martin and Jackie decided to rent the shops out at a low rate -
0:27:41 > 0:27:43just enough to cover the business rates -
0:27:43 > 0:27:46which made it much more appealing for prospective tenants
0:27:46 > 0:27:49and left them much better off than leaving the shops empty.
0:27:49 > 0:27:52For us, financially, obviously we got an income and we didn't
0:27:52 > 0:27:56have to pay the business rates, so it was a win-win for everyone really.
0:27:56 > 0:28:00Business rates are like the commercial property equivalent of council tax,
0:28:00 > 0:28:03only, as Martin and Jackie found out,
0:28:03 > 0:28:05they are generally a lot higher and it's
0:28:05 > 0:28:09the responsibility of the owner to pay them if the property is vacant.
0:28:10 > 0:28:14I think Martin's decision to ask for a lower rent in order to get
0:28:14 > 0:28:16tenants into the shops is a sensible one.
0:28:16 > 0:28:19As he says, everyone wins.
0:28:19 > 0:28:22But I think it's a good reminder that if you're buying any property,
0:28:22 > 0:28:25remember to find out about all the taxes
0:28:25 > 0:28:27and costs that you're liable for.
0:28:27 > 0:28:31Other than the electrics, Martin's done most of the work himself,
0:28:31 > 0:28:34but that does mean he's been on site every other day.
0:28:34 > 0:28:39Hopefully though, that will have helped them keep to their budget.
0:28:39 > 0:28:42The original budget was about £1,500.
0:28:42 > 0:28:44We went over it, probably by about £600,
0:28:44 > 0:28:46purely because of the electrics in the shops and things
0:28:46 > 0:28:49because we didn't realise we were going to have to redo those.
0:28:49 > 0:28:52But for everything else we were about where we should be.
0:28:52 > 0:28:53The timescale was about six months
0:28:53 > 0:28:56and I think we've managed it in six months.
0:28:56 > 0:28:58There's still little bits to do.
0:28:58 > 0:29:01We're getting there, we think. Fingers crossed.
0:29:02 > 0:29:05Well, having spent £77,000 at auction
0:29:05 > 0:29:09and £2,100 on renovating it, let's see if some local property experts
0:29:09 > 0:29:14think Martin and Jackie need to keep their fingers crossed.
0:29:14 > 0:29:16I think the property is not too bad.
0:29:16 > 0:29:18They've done some work to it,
0:29:18 > 0:29:20although the finish is a little bit basic, shall we say.
0:29:20 > 0:29:22If I were the owner of these properties,
0:29:22 > 0:29:25I would have done exactly the same thing - keep them separated.
0:29:25 > 0:29:28You can get more money renting out two smaller shops
0:29:28 > 0:29:30than you could do just renting out one concern.
0:29:30 > 0:29:35Having spent a total of £79,100, what could Martin and Jackie
0:29:35 > 0:29:39expect were they to put all five properties on the market again?
0:29:41 > 0:29:44If you're going to sell the whole job lot as a going concern,
0:29:44 > 0:29:48you would probably market this place at around £80-£85,000.
0:29:48 > 0:29:51I think if you were to sell the building as an investment with
0:29:51 > 0:29:56it fully let, you'd probably achieve a figure in excess of £90,000.
0:29:56 > 0:30:01That would give the couple a pre-tax profit of up to £10,900,
0:30:01 > 0:30:04but Martin and Jackie bought this to rent the spaces out,
0:30:04 > 0:30:08so how do the figures look for renting?
0:30:08 > 0:30:11Let's start with the shops and then the flats.
0:30:11 > 0:30:14The rental valuation on the two properties would easily
0:30:14 > 0:30:18achieve £300-£350 per calendar month on each shop.
0:30:18 > 0:30:21I think the flats would rent for about £300-£350 per calendar month,
0:30:21 > 0:30:23at the moment.
0:30:23 > 0:30:27Those upper values would mean, if all five units were filled,
0:30:27 > 0:30:31Martin and Jackie would get an income of £1,750 per calendar month,
0:30:31 > 0:30:35giving them a yield of over 26%.
0:30:35 > 0:30:37That's brilliant.
0:30:37 > 0:30:40So, it all seems to have come good for Martin and Jackie,
0:30:40 > 0:30:43but they'd previously thought about applying to convert the cellars
0:30:43 > 0:30:47and the back of the shops into more residential space.
0:30:47 > 0:30:49Would they still consider it?
0:30:49 > 0:30:52I couldn't really see in the future there would be much point
0:30:52 > 0:30:55changing it because I think, with the amount of people we've had
0:30:55 > 0:30:57trying to rent the flats and the shops,
0:30:57 > 0:31:00I think there's going to be a market there for quite a while.
0:31:07 > 0:31:10Welcome to Forest Gate in east London.
0:31:10 > 0:31:13As the name suggests, there used to be gates here to prevent
0:31:13 > 0:31:15cattle from straying into Epping Forest,
0:31:15 > 0:31:18which once covered the whole area.
0:31:18 > 0:31:21These gates came down in 1881
0:31:21 > 0:31:23and today there aren't as many trees or cattle,
0:31:23 > 0:31:27but there is a busy residential area with great restaurants,
0:31:27 > 0:31:29shops and transport links across the city.
0:31:35 > 0:31:39So, let's see if I can see the wood for the trees for the property
0:31:39 > 0:31:41that was up for auction.
0:31:41 > 0:31:43Now, it's this three-bed terraced house
0:31:43 > 0:31:48and it had a guide price of £230,000 plus.
0:31:48 > 0:31:51I'm going to go in and have a good look around.
0:31:51 > 0:31:53A little bit scruffy on the outside.
0:32:00 > 0:32:02Oh, good morning!
0:32:02 > 0:32:04I wasn't quite expecting that.
0:32:04 > 0:32:07Now, on the inside, a bit scruffy too.
0:32:07 > 0:32:10You can already see how the room would have been configured.
0:32:10 > 0:32:13There would have been a wall across here to create one room,
0:32:13 > 0:32:15perhaps a corridor down here.
0:32:15 > 0:32:17A second reception room over this side.
0:32:17 > 0:32:20Although I quite like it open-plan,
0:32:20 > 0:32:23it does give the feeling of a fantastic space.
0:32:23 > 0:32:25Now something else that's really interesting,
0:32:25 > 0:32:29you've got a big dry cellar down there, so fabulous for storage.
0:32:29 > 0:32:32And right at the back of the property,
0:32:32 > 0:32:36this kitchen with this rather unusual little lean-to,
0:32:36 > 0:32:40so you could extend the property out here.
0:32:40 > 0:32:43Sadly, you've got no fabulous view of the garden
0:32:43 > 0:32:45and I can't even get out into the garden today
0:32:45 > 0:32:49because we've got no keys and this door is well and truly locked.
0:32:49 > 0:32:51You've got a downstairs bathroom -
0:32:51 > 0:32:53I would like to see if we could move that upstairs.
0:32:53 > 0:32:56I would also like to think we could maybe have some patio doors
0:32:56 > 0:33:00or a nice window at the back with the door leading outside.
0:33:00 > 0:33:03So, I would try and reconfigure this space here because,
0:33:03 > 0:33:06at the moment, it's not really working.
0:33:06 > 0:33:10Yep, as problematic as the layout is, it wouldn't take a lot to
0:33:10 > 0:33:13sort and, if you could get a little bit of extra sunlight in
0:33:13 > 0:33:18with the access to the garden, well, this could be a great living space.
0:33:19 > 0:33:21So upstairs here, we have three bedrooms -
0:33:21 > 0:33:24one at the back. I'm wondering, "Could we put a bathroom there?"
0:33:24 > 0:33:28Is it worth losing a bedroom over? Another bedroom here.
0:33:28 > 0:33:32I have seen this done before, where you slot the bathroom in along here,
0:33:32 > 0:33:35between these two walls, and you move the doorway along.
0:33:35 > 0:33:39So it could go in there, but you've got to weigh up the costs.
0:33:39 > 0:33:41Is it going to be worth it?
0:33:41 > 0:33:42And right at the front of the property,
0:33:42 > 0:33:44you've got your master bedroom.
0:33:44 > 0:33:46It's what you'd expect really, this space.
0:33:46 > 0:33:49But...hmm, very interesting wardrobes.
0:33:49 > 0:33:53Behind these, I'm not sure whether you can see, let's try this side.
0:33:53 > 0:33:56It's a little bit awkward because they don't go all the way back.
0:33:56 > 0:33:57Look at this.
0:33:57 > 0:34:00You could have quite an interesting little fireplace here.
0:34:00 > 0:34:02Maybe a little feature in here.
0:34:02 > 0:34:05You've got to get rid of these polystyrene tiles.
0:34:05 > 0:34:07So you could tidy it up.
0:34:07 > 0:34:09It's just a little bit on the small side.
0:34:10 > 0:34:13So I'm yearning for that bit of extra space.
0:34:13 > 0:34:16Now, don't forget, you can always go up.
0:34:16 > 0:34:20Building a loft conversion can easily and quickly add living space
0:34:20 > 0:34:22and it can add value to your property.
0:34:22 > 0:34:25But, don't forget, it will mean you will eat into this landing
0:34:25 > 0:34:29area here and you'll need to think about space for stairs,
0:34:29 > 0:34:30up here, perhaps.
0:34:30 > 0:34:33But the good news is the precedent has been set along the road here,
0:34:33 > 0:34:37so this property can only go one way, which is up.
0:34:37 > 0:34:41But, first of all, I need to go down because something is bothering me.
0:34:41 > 0:34:43Excuse me.
0:34:50 > 0:34:53I can just imagine it, a lovely big master bedroom in the loft space
0:34:53 > 0:34:56at the top of the house, and then you could use the
0:34:56 > 0:35:01smaller bedroom here as a bathroom and still have another two bedrooms.
0:35:01 > 0:35:03But, before I get all carried away,
0:35:03 > 0:35:05come outside and have a look at this.
0:35:05 > 0:35:08Now, something that's just niggling me, I noticed it earlier.
0:35:08 > 0:35:10Take a look up there.
0:35:10 > 0:35:14A large deep crack above that bay window - huge.
0:35:14 > 0:35:17Now, this little end of terrace has possibly moved.
0:35:17 > 0:35:22Does it have signs of subsidence or is it just historical?
0:35:22 > 0:35:25These are all questions for a structural engineer
0:35:25 > 0:35:27and I would be making that call as soon as possible
0:35:27 > 0:35:30if I were looking to purchase this house.
0:35:32 > 0:35:35Well, hopefully any movement has been historical
0:35:35 > 0:35:37and that crack will be a simple fix.
0:35:37 > 0:35:40And with the opportunity to expand up into the attic,
0:35:40 > 0:35:44extra storage down in the cellar and a back garden, well,
0:35:44 > 0:35:47I think this terrace could be a winner.
0:35:47 > 0:35:49But what does a local estate agent think?
0:35:51 > 0:35:54I think the loft conversion is an ideal opportunity with this
0:35:54 > 0:35:56property because of the way the hallway is.
0:35:56 > 0:35:59I'd take it up from the hallway, directly up,
0:35:59 > 0:36:01transverse the staircase into the loft.
0:36:01 > 0:36:04I'd put two bedrooms up there and an en-suite bathroom.
0:36:06 > 0:36:08Wow, he's thinking even bigger than me
0:36:08 > 0:36:11and that there's room enough in the attic to get not one,
0:36:11 > 0:36:13but two bedrooms in.
0:36:13 > 0:36:14But without converting the attic,
0:36:14 > 0:36:17is there money to be made in this house,
0:36:17 > 0:36:21guided at £230,000?
0:36:21 > 0:36:23Leaving the property as a three-bedroom
0:36:23 > 0:36:24and just refurbishing it,
0:36:24 > 0:36:28I'd say you're going to be looking at round about £325-£340,000
0:36:28 > 0:36:31and a rental value of around about £1,500 per calendar month.
0:36:31 > 0:36:34In terms of rental value with the loft conversion,
0:36:34 > 0:36:37you'd be looking at somewhere in the region of £1,800-£1,900 per calendar month,
0:36:37 > 0:36:39with the additional two bedrooms.
0:36:39 > 0:36:41For sale value, you'd probably be looking in the region
0:36:41 > 0:36:44of about £425-£430,000.
0:36:46 > 0:36:48This is a house with many options.
0:36:48 > 0:36:52You could either do a very simple surface spruce up.
0:36:52 > 0:36:55Or, at the other end, a root and branch overhaul
0:36:55 > 0:36:58with the property growing up into the loft.
0:36:58 > 0:37:01It all comes down to how much you want to invest
0:37:01 > 0:37:03and what sort of return you're hoping to get.
0:37:03 > 0:37:06So, let's see who wanted to make the property blossom
0:37:06 > 0:37:08when it went under the hammer.
0:37:09 > 0:37:12Move on now to Lot 170.
0:37:12 > 0:37:15Three-bedroom house in need of modernisation.
0:37:15 > 0:37:17Who wants to give me start on this?
0:37:17 > 0:37:18250 anywhere?
0:37:18 > 0:37:21What about 230 then? I'll try and help.
0:37:21 > 0:37:22230 anywhere?
0:37:23 > 0:37:25230 I've got.
0:37:26 > 0:37:28235 anywhere?
0:37:28 > 0:37:30235.
0:37:30 > 0:37:31240.
0:37:31 > 0:37:32240.
0:37:33 > 0:37:35245.
0:37:37 > 0:37:38245.
0:37:39 > 0:37:41Yes or no at 245?
0:37:41 > 0:37:42245.
0:37:42 > 0:37:47The bidding was slow, but it was steady and the price soon rose.
0:37:47 > 0:37:51We rejoin the bidding at £270,000.
0:37:51 > 0:37:52270.
0:37:52 > 0:37:55271.
0:37:55 > 0:37:56272.
0:37:58 > 0:37:59272?
0:38:01 > 0:38:03If not, at the front.
0:38:03 > 0:38:05Bids £271,000.
0:38:05 > 0:38:07It's against you sitting down the back on my right.
0:38:07 > 0:38:09271 for the first.
0:38:09 > 0:38:11272, nearly. Back in.
0:38:11 > 0:38:12273.
0:38:14 > 0:38:16274.
0:38:16 > 0:38:18If not, 273 for the first.
0:38:18 > 0:38:20273 for the second.
0:38:20 > 0:38:22273 for the third and final time.
0:38:22 > 0:38:23Are we all done?
0:38:25 > 0:38:26Sold, 273.
0:38:27 > 0:38:31And the bid of £273,000 came from Thomas.
0:38:36 > 0:38:39Thomas is an IT project manager
0:38:39 > 0:38:42and this is his first development project, so I met up with him
0:38:42 > 0:38:45back at the property to find out what he had planned.
0:38:46 > 0:38:48- Thomas, congratulations.- Thank you.
0:38:48 > 0:38:51So, why was it this one in particular that stuck out
0:38:51 > 0:38:54enough for you to want to bid on it?
0:38:54 > 0:38:56The space, mostly.
0:38:56 > 0:39:00It has been basement, which is a great addition,
0:39:00 > 0:39:04and it has opportunity to convert the loft.
0:39:04 > 0:39:06Absolutely, I couldn't agree more.
0:39:06 > 0:39:09So what are you going to do to this house because, currently,
0:39:09 > 0:39:12it's not a bad property. It does need upgrading.
0:39:12 > 0:39:13Why have you bought it?
0:39:13 > 0:39:20We bought it as an investment, so we want to convert it to an HMO.
0:39:20 > 0:39:21An HMO property.
0:39:21 > 0:39:24So you don't see this as a good family house
0:39:24 > 0:39:28that you could let with a garden in a very up-and-coming area?
0:39:28 > 0:39:32Yes, it could be. But the return of investment is higher in an HMO.
0:39:33 > 0:39:37Houses of Multiple Occupancy, or HMO properties, require many
0:39:37 > 0:39:39more building regulations to be met
0:39:39 > 0:39:42before the council will grant a licence.
0:39:42 > 0:39:45While the return on HMO properties may be good,
0:39:45 > 0:39:48I do wonder if fulfilling all these regulations is a lot
0:39:48 > 0:39:51to take on for a first time developer.
0:40:00 > 0:40:03But, to be fair to Thomas, he has already spoken to
0:40:03 > 0:40:07people at the council and feels this is a good opportunity.
0:40:07 > 0:40:09So, what are his plans for the conversion?
0:40:11 > 0:40:14It definitely needs more bathrooms in here
0:40:14 > 0:40:19and this living space can be converted into multiple rooms.
0:40:19 > 0:40:22OK, so you're going to get two rooms downstairs, a kitchen at the back.
0:40:22 > 0:40:24What about upstairs?
0:40:24 > 0:40:26Upstairs we're going to keep the three bedrooms,
0:40:26 > 0:40:29but we're going to squeeze in a bathroom.
0:40:29 > 0:40:32So where are you going to squeeze in that bathroom?
0:40:32 > 0:40:33There's a few possibilities.
0:40:33 > 0:40:37One in the front room or the other possibility
0:40:37 > 0:40:39is in-between the front and middle room.
0:40:39 > 0:40:42- So, you'll keep the bathroom down here as well?- Yes.
0:40:42 > 0:40:46So you can have two bathrooms, three bedrooms and two rooms down here.
0:40:46 > 0:40:47That's right, two rooms down here.
0:40:47 > 0:40:50So tell me, Thomas, what are you going to do
0:40:50 > 0:40:53if you don't get permission and it doesn't work out?
0:40:53 > 0:40:55Do you have a plan B up your sleeve?
0:40:55 > 0:40:59The other plan B, as you mentioned, is to renovate
0:40:59 > 0:41:03and put it back on the market, and it will give a good yield as well.
0:41:03 > 0:41:05Well, it's so good to hear that Thomas has a backup plan,
0:41:05 > 0:41:09but what about that crack? Does he think it's going to be a problem?
0:41:10 > 0:41:14Did you notice the big crack above the bay window at the front?
0:41:14 > 0:41:15Erm...
0:41:15 > 0:41:20No, I didn't and I don't see that as a big issue
0:41:20 > 0:41:22because I'm going to do major redevelopment.
0:41:22 > 0:41:26So you think you're going to do such extensive work that it won't matter?
0:41:26 > 0:41:29Yeah, I did have an inspection from inside
0:41:29 > 0:41:33to see if there is any structural damage, but I didn't see it,
0:41:33 > 0:41:36so any cracks from outside will be superficial.
0:41:36 > 0:41:39You know what, you'd be wise to speak to a structural engineer,
0:41:39 > 0:41:41or somebody that might be able to advise you,
0:41:41 > 0:41:44because it is quite a deep crack. And I know, after this little chat,
0:41:44 > 0:41:46you're going to go straight out there and have a look.
0:41:46 > 0:41:50- HE LAUGHS - I'm probably going to deal with the experts about this.
0:41:50 > 0:41:52Well, that's a good idea, Thomas.
0:41:52 > 0:41:55There's a lot of work to be done here and, well, Thomas has
0:41:55 > 0:41:57given himself a budget of £15,000
0:41:57 > 0:42:00and a timescale of three-to-six months.
0:42:00 > 0:42:03He's obviously keen to make a good profit once the work is done,
0:42:03 > 0:42:06but how involved will he be in the renovation process?
0:42:06 > 0:42:09So, tell me about the fact that you like to tinker with design.
0:42:09 > 0:42:13Well, it started probably when I was small, 14 years old.
0:42:14 > 0:42:18When I suggested some of the upgrades to my parents' house
0:42:18 > 0:42:19and, yeah, it started from there.
0:42:19 > 0:42:24It's kind of interesting to see my ideas coming to life.
0:42:24 > 0:42:27And do you absolutely love everything to do with starting
0:42:27 > 0:42:30a project, from the beginning right the way through to the end?
0:42:30 > 0:42:33Yes, the process is what matters, not the end result.
0:42:33 > 0:42:36- Just watching how it evolves. - Yeah.- Thomas, good luck.
0:42:36 > 0:42:39I can't wait to see the outcome. I hope it all works out for you.
0:42:39 > 0:42:40- Thank you.- Thank you.
0:42:42 > 0:42:44So, Thomas has got big plans for this place.
0:42:44 > 0:42:48An HMO is a lot to take on as a new property developer
0:42:48 > 0:42:51and I'm a little bit worried he didn't notice that large
0:42:51 > 0:42:52crack above the window.
0:42:52 > 0:42:55So let's hope there are no other hidden surprises that might
0:42:55 > 0:42:57spring up along the way.
0:42:57 > 0:43:01Join me later and you can find out how Thomas gets on.
0:43:06 > 0:43:08Well, we've seen how one of the properties panned out
0:43:08 > 0:43:10on today's show, but what about the others?
0:43:10 > 0:43:14Yes, let's see how two of our other auction buyers
0:43:14 > 0:43:17- got on with their purchases. - I can't wait to find out.
0:43:19 > 0:43:22Time to head back to Dawley in Telford now.
0:43:23 > 0:43:26It was here on a chilly day that I had a look around this two-bedroom
0:43:26 > 0:43:31maisonette that had an attractive guide price of £50,000 plus.
0:43:31 > 0:43:34It was a well-proportioned flat with good-sized rooms
0:43:34 > 0:43:36and lots of potential.
0:43:36 > 0:43:39However, I did feel that money would need to be spent here.
0:43:39 > 0:43:43Along with your floors, bathroom and kitchen,
0:43:43 > 0:43:45your costs are starting to mount.
0:43:45 > 0:43:47That budget is starting to get bigger,
0:43:47 > 0:43:50so I would want to get this property as close to the guide price
0:43:50 > 0:43:53of £50,000 plus as I possibly could,
0:43:53 > 0:43:56but I do like it.
0:43:56 > 0:43:59The bidders also liked it on auction day, with two going head-to-head
0:43:59 > 0:44:02over this maisonette.
0:44:02 > 0:44:04In the middle then at 64.
0:44:04 > 0:44:07The successful bidder with £64,000
0:44:07 > 0:44:09was seasoned property developer Ray...
0:44:09 > 0:44:12who, on this occasion, had bought the property on behalf
0:44:12 > 0:44:16of his business partner and investor Hugo.
0:44:16 > 0:44:19Ray would be overseeing the project and he didn't plan
0:44:19 > 0:44:21on wasting any time.
0:44:21 > 0:44:25The minute you walk out, my people are walking in.
0:44:25 > 0:44:27Yes, although there was a long list of jobs,
0:44:27 > 0:44:31Ray predicted a six-week turnaround and a relatively tight
0:44:31 > 0:44:34budget of £12,000 on this project
0:44:34 > 0:44:38that was destined for the rental market.
0:44:38 > 0:44:40Almost six weeks to the day later,
0:44:40 > 0:44:45we've returned to see how this maisonette has changed.
0:44:47 > 0:44:51The mustard kitchen of old has been replaced with
0:44:51 > 0:44:53fresh contemporary units and slick black tiles.
0:45:12 > 0:45:16From top to bottom, this maisonette has been given a fresh start...
0:45:19 > 0:45:23..with new carpets, freshly painted and plastered walls
0:45:23 > 0:45:26and double glazing installed throughout.
0:45:28 > 0:45:31Even those shabby stairs are now looking perfect.
0:45:47 > 0:45:51The maisonette is looking absolutely ideal for the rental market,
0:45:51 > 0:45:53if that's still the plan.
0:45:53 > 0:45:57And another change here, which I wasn't expecting, is that Ray and his
0:45:57 > 0:46:01team have added another parking space at the front - very handy indeed.
0:46:04 > 0:46:06The work that we've carried out,
0:46:06 > 0:46:10if you start from the outside, we redid the parking area,
0:46:10 > 0:46:13laid decorative stones, cleaned that out.
0:46:13 > 0:46:16We put a new front door and fascia on.
0:46:16 > 0:46:21Inside the property, one of the big jobs was stripping all
0:46:21 > 0:46:23the wallpaper because some of it was woodchip.
0:46:25 > 0:46:29We had to plaster every single surface
0:46:29 > 0:46:31and we had to wait for the plaster to dry,
0:46:31 > 0:46:34so that probably took up to
0:46:34 > 0:46:37two and a half weeks for that process to go ahead.
0:46:37 > 0:46:41From there, we've obviously decorated the whole of the property.
0:46:41 > 0:46:45We've put in a new bathroom, fully tiled.
0:46:45 > 0:46:48New kitchen, new carpets.
0:46:48 > 0:46:52We've double glazed all the windows because they were single glazed.
0:46:53 > 0:46:56And every other ad hoc job that you can think of
0:46:56 > 0:46:59that would be needed to do a property up.
0:47:06 > 0:47:09Ray and his team have licked this place into shape and all
0:47:09 > 0:47:12within that six-week timescale,
0:47:12 > 0:47:16which is really impressive considering the transformation.
0:47:16 > 0:47:20However, how is his budget looking?
0:47:20 > 0:47:23The original budget was £12,000.
0:47:23 > 0:47:29We actually came in at £11,750, so we just made it,
0:47:29 > 0:47:31but included in that was my time.
0:47:31 > 0:47:37So if it was my own property, then the costs would be slightly cheaper.
0:47:37 > 0:47:40The main costs, as always, are in the bathroom and the kitchen,
0:47:40 > 0:47:45and obviously re-plastering the whole property wasn't particularly cheap.
0:47:45 > 0:47:50My role in the project was to project manage the work.
0:47:50 > 0:47:53Unusually, I've hardly lifted a paintbrush or anything on this
0:47:53 > 0:47:57particular project. I've had really good workers working for me.
0:47:58 > 0:48:02My job is to make sure that they've got the money, the equipment,
0:48:02 > 0:48:06the tools and direction that I want them to go in,
0:48:06 > 0:48:09and they followed my instructions almost to the letter,
0:48:09 > 0:48:11so I'm really pleased.
0:48:11 > 0:48:13Ray's partner is purely an investor
0:48:13 > 0:48:17and trusts Ray to get the job done to time and within budget,
0:48:17 > 0:48:18which he clearly has,
0:48:18 > 0:48:22making this a successful project for both Ray and the investor.
0:48:26 > 0:48:28However, before we get too carried away,
0:48:28 > 0:48:30it's time to check the thoughts
0:48:30 > 0:48:34and opinions of two local estate agents on this property that,
0:48:34 > 0:48:40including the purchase price, has seen a total investment of £75,750.
0:48:40 > 0:48:43I think the main selling point of here, I think,
0:48:43 > 0:48:44is definitely the kitchen and bathroom.
0:48:44 > 0:48:46If you can demonstrate that they've been done,
0:48:46 > 0:48:48I think they're really good selling points.
0:48:48 > 0:48:51But also, for here as well, he's got off-road parking
0:48:51 > 0:48:53so that tends to be a good selling point.
0:48:53 > 0:48:56Kitchens have been replaced, bathrooms have been replaced,
0:48:56 > 0:48:59freshly decorated, new carpets,
0:48:59 > 0:49:01all been very well done.
0:49:01 > 0:49:05But, overall, done to a very good standard for this type of property.
0:49:05 > 0:49:09With the agents impressed, let's hear their sales valuations first.
0:49:09 > 0:49:13I'd say probably resale value for here as being £75,000.
0:49:13 > 0:49:16If you were to put this on the open resale market today,
0:49:16 > 0:49:20I would value this property at £79,950.
0:49:20 > 0:49:22Slightly disappointed.
0:49:22 > 0:49:27Not necessarily in their valuation, which I'm sure was true and honest.
0:49:27 > 0:49:30I usually feel I do a better job
0:49:30 > 0:49:35for my investors than just making a maximum of £5,000.
0:49:35 > 0:49:36Oh, dear.
0:49:36 > 0:49:42That top valuation of £79,950 would mean a modest pre-tax
0:49:42 > 0:49:45profit of just £4,200.
0:49:45 > 0:49:48But, with the investor set on renting,
0:49:48 > 0:49:52let's hope those valuations are more positive.
0:49:52 > 0:49:54For rental purposes, I would say the property is
0:49:54 > 0:49:57worth in the region of £500 per calendar month.
0:49:57 > 0:50:02I would anticipate a rental income of £525 per calendar month.
0:50:02 > 0:50:07£525 per calendar month is what we've already got an offer for.
0:50:07 > 0:50:10It's not a sealed offer yet in the sense that they're still
0:50:10 > 0:50:12doing the credit checks, etc,
0:50:12 > 0:50:16but that's what I would expect to get and I'm quite pleased
0:50:16 > 0:50:18because that gives us 8.5%.
0:50:18 > 0:50:21Again, not as much as I would normally like -
0:50:21 > 0:50:23we normally try for the nine -
0:50:23 > 0:50:28but I'm sure that my investor will find that perfectly acceptable.
0:50:28 > 0:50:33Yes, at just under 8.5%, Ray has achieved a very healthy yield.
0:50:33 > 0:50:38And with his latest project complete, Ray is looking to the future.
0:50:38 > 0:50:42My long-term objective is to make sure that I've got a decent
0:50:42 > 0:50:47pension pot, that I become self-sufficient on cash
0:50:47 > 0:50:50and time rich, so that I can enjoy my retirement.
0:50:56 > 0:50:58Time to return to east London now,
0:50:58 > 0:51:01and this three bed terrace in Forest Gate.
0:51:02 > 0:51:06It needed a thorough modernisation, but it was roomy and with
0:51:06 > 0:51:10both a cellar and a loft, it gave any developer a host of options.
0:51:14 > 0:51:17However, I had spotted a crack in one of the walls outside
0:51:17 > 0:51:21and I really hoped this wasn't a sign of a bigger issue.
0:51:21 > 0:51:26It was bought at auction for £273,000 by first-time developer Thomas.
0:51:26 > 0:51:30He had done his research and had a plan to maximises profits.
0:51:32 > 0:51:35We want to convert it to an HMO property, yeah.
0:51:35 > 0:51:39So you don't see this as a good family house that you could
0:51:39 > 0:51:41let in a very up-and-coming area?
0:51:41 > 0:51:46Yes, it could be, but return of investment is higher in an HMO.
0:51:46 > 0:51:49Taking on a House of Multiple Occupancy is a big job.
0:51:49 > 0:51:53Thomas would need to construct a second bathroom upstairs and rebuild
0:51:53 > 0:51:56the original walls downstairs to create an additional room.
0:51:56 > 0:51:59But it's his choice and he's absolutely right -
0:51:59 > 0:52:02there can be a good profit in HMO properties.
0:52:02 > 0:52:07He'd given himself £15,000 and six months to complete the project.
0:52:07 > 0:52:09How would the renovation rookie get on?
0:52:14 > 0:52:16Well, eight months later, we're back to find out.
0:52:27 > 0:52:29Well, it's looking very different.
0:52:29 > 0:52:32But there's no getting away from it, it's not quite finished yet.
0:52:32 > 0:52:35It looks like something hasn't quite gone to plan.
0:52:35 > 0:52:37I wonder if it's anything to do with that crack
0:52:37 > 0:52:39I saw above that window outside?
0:52:41 > 0:52:44Well, when we started working on the property,
0:52:44 > 0:52:47we found structural issues.
0:52:47 > 0:52:50The floors were not straight.
0:52:50 > 0:52:53The cracks in the walls also was
0:52:53 > 0:52:58part of the very old house settlement, so they had to fix it.
0:52:58 > 0:53:02So now the floors are level, how it should be.
0:53:02 > 0:53:04Dampness was another major issue in this house.
0:53:04 > 0:53:11We had to strip all the current rendering and put in a new one...
0:53:11 > 0:53:15so that was the other issue.
0:53:15 > 0:53:17That's exactly what I was worrying about.
0:53:17 > 0:53:20But looking on the bright side, the building didn't need
0:53:20 > 0:53:23underpinning, so it could have been worse.
0:53:23 > 0:53:26And looking on the even brighter side, there are new windows,
0:53:26 > 0:53:31new walls, a new staircase. You can even see a back garden now.
0:53:31 > 0:53:34Let's have Thomas talk us through the changes.
0:53:34 > 0:53:38In this floor we divided the bedroom,
0:53:38 > 0:53:43the large bedroom here, into a smaller bedroom and a bathroom,
0:53:43 > 0:53:47and we kept this bedroom the same size as it was before.
0:53:47 > 0:53:51Even though we added the new bathroom in here,
0:53:51 > 0:53:54we still have a quite sizeable bedroom,
0:53:54 > 0:53:57so I'm quite pleased with that.
0:53:57 > 0:53:59Yes, I'm not surprised he's pleased.
0:53:59 > 0:54:01He's managed to squeeze a bathroom upstairs
0:54:01 > 0:54:05and still have three good-sized bedrooms.
0:54:05 > 0:54:08Downstairs, Thomas has taken out the old kitchen, split the bathroom
0:54:08 > 0:54:12at the back and he'll install a separate shower room and toilet.
0:54:12 > 0:54:16He's got the second bathroom downstairs that he wanted too.
0:54:16 > 0:54:17So how about the rest?
0:54:19 > 0:54:25Well, we built a partition in here to separate the rooms,
0:54:25 > 0:54:27so this is going to be a living room
0:54:27 > 0:54:30and the other one will be a guest room.
0:54:30 > 0:54:31A guest room?
0:54:31 > 0:54:35Hang on, I thought Thomas was planning on making this into an HMO?
0:54:35 > 0:54:37Have things changed?
0:54:38 > 0:54:41Our family got a new member, so we have a little daughter,
0:54:41 > 0:54:44a second daughter.
0:54:44 > 0:54:47This is a bigger house than ours,
0:54:47 > 0:54:50so we're probably not going to let it.
0:54:50 > 0:54:52We'll probably live in it ourselves.
0:55:04 > 0:55:06That is wonderful news to hear
0:55:06 > 0:55:09and I always thought this would make a great family home.
0:55:09 > 0:55:12But Thomas was intending on doing a lot of the work himself
0:55:12 > 0:55:15and with the structural issues to sort,
0:55:15 > 0:55:18and a new baby to look after, he had to hire tradesmen.
0:55:18 > 0:55:21So how has that affected his £15,000 budget?
0:55:24 > 0:55:31We have already spent about £45,000 and probably another...
0:55:31 > 0:55:33with the kitchen and everything,
0:55:33 > 0:55:37we're probably going to go to probably £55,000.
0:55:37 > 0:55:38Ouch, whoa.
0:55:38 > 0:55:43Now that estimate is £40,000 more than his initial budget,
0:55:43 > 0:55:48on top of the £273,000 paid at auction,
0:55:48 > 0:55:50but it's an investment for his family now and,
0:55:50 > 0:55:52by making all those changes,
0:55:52 > 0:55:54he could well have added value to the property.
0:55:54 > 0:55:57So we've asked along two local estate agents to see what
0:55:57 > 0:55:59they think of Thomas's development
0:55:59 > 0:56:01and see if there's opportunities
0:56:01 > 0:56:04for further developments to the building.
0:56:04 > 0:56:09Having an upstairs bathroom is always a plus in a property,
0:56:09 > 0:56:13especially when the house is for a family.
0:56:13 > 0:56:15If the property is rented out then, again,
0:56:15 > 0:56:19a second bathroom is beneficial, so it is a plus.
0:56:19 > 0:56:25Er...having seen the kitchen, I would personally extend it
0:56:25 > 0:56:30and he has potential to do that as well.
0:56:30 > 0:56:34And if he would be looking to sell, that is what people are after.
0:56:34 > 0:56:36They like big kitchens.
0:56:36 > 0:56:38As his development costs are already quite high,
0:56:38 > 0:56:42Thomas has put any extra development on hold for the moment,
0:56:42 > 0:56:44but he hasn't ruled it out for the future.
0:56:44 > 0:56:50So let's get some valuations based on the lay out as it is now.
0:56:50 > 0:56:53If this property would be let out as a three-bedroom house,
0:56:53 > 0:56:58then the price would be in-between £1,350 per calendar month
0:56:58 > 0:57:01and £1,450 per calendar month.
0:57:01 > 0:57:07I would value this property from £1,600-£1,700 per calendar month.
0:57:07 > 0:57:14It could sell at a price in-between £370,000-£390,000.
0:57:14 > 0:57:23I would say that it could be worth from £375,000-£400,000.
0:57:23 > 0:57:27We're still making above what we spent.
0:57:27 > 0:57:29Thomas is absolutely right.
0:57:29 > 0:57:33Though it's been a lot of hard work, using those upper valuations,
0:57:33 > 0:57:38should Thomas want to sell, he could make a pre-tax profit of £72,000.
0:57:38 > 0:57:42But, for now, this is to be Thomas' and his family's home
0:57:42 > 0:57:44and he hopes to move in very soon.
0:57:44 > 0:57:46Does he have any plans after that?
0:57:50 > 0:57:53I'm looking for the next gem.
0:57:53 > 0:57:56Once we've found it, you never know...
0:57:56 > 0:57:58maybe we'll call you again.
0:58:03 > 0:58:04Well, as you've just seen,
0:58:04 > 0:58:08investing in property can be a steep learning curve.
0:58:08 > 0:58:10And we'll be back next time with more tips and advice.
0:58:10 > 0:58:13Yep, so make sure you join us then for more Homes Under The Hammer.
0:58:13 > 0:58:15- Goodbye.- Goodbye.- See you then.