Episode 18 Homes Under the Hammer

Nowadays, people are deciding that investing in property is how you can

get the most out of your money.

Yes, and a healthy property investment always starts with buying wisely.

One place you might be able to do that is at your local property auction.

People buy at auction for all kinds of different reasons.

It could be a pension plan, or regular rental income.

Believe it or not, even for somewhere to live!

Yes, so what were the stories behind the properties at the auctions

on today's show?

I make a shocking discovery at this Derbyshire three-bed semi.

Right at the top of the stairs, the electrics...

Everything's going on here!

No shocks for me,

but the views from this Somerset bungalow take my breath away.

It's all about that! Oh, my word!

Not as spectacular, but plenty of open space for me in South London.

This is the main thing, for me. This big, massive feature window.

I like it.

All these properties have been sold at auction.

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

-when they went under the hammer.

-Too late, it's gone.

Ilkeston in Derbyshire is a popular commuter town

for both Derby and Nottingham.

It boasts plenty of local amenities,

with a new railway station due to open later in 2015.

Its thriving market is also the site of an annual charter fair,

which was granted by King Henry III in 1252

and is one of the largest street fairs in Europe.

Now, to a different kind of Ilkeston market.

This is Homes Under The Hammer, so of course,

I'm talking about the housing market.

We've got a three-bedroom semi on this nice, quiet cul-de-sac.

Here it is. It looks great from the outside.

The guide price, £50,000 plus.

I'm going to go and see what awaits us on the inside.

The stone cladding, well, might not be to everyone's taste,

but there is plenty of space for off-road parking on this driveway.

Oh, and, er...a big fridge! Definitely a plus(!)

Straight inside, stairs leading up and into the lounge.

Now, surprisingly, it's a little bit smaller on the inside.

You've got this huge driveway, this lovely big old garden

and then, not such a big house in the middle.

But double glazing, a big tick there, a nice little view

out into the garden, although that window seems rather odd.

It needs to be a bit bigger or moved into the middle,

which of course brings my attention to this -

lots of damp under the window areas, so I'd certainly get that seen to.

And over here, if you didn't get enough of it on the outside,

you've got some more stone cladding just here

and up here, some wood-effect cladding,

so you may want to give it a modern feel

because you have got quite a good space here

because look, you've just got wallpaper over wallpaper.

It really does need some decorating.

Let's hope the kitchen's a little bit better.

OK, the kitchen... You've really got to look beyond what's here.

You've got to imagine what this would be like once you've

put in a lovely shiny new kitchen and... Oh, downstairs bathroom.

Now, that space could definitely be put to better use, I think.

Dining table, French doors out to the garden.

But the big question is, could you house that bathroom upstairs?

Because currently, you've got this little bit of odd space through here.

I'm not even sure this is properly insulated.

This might have been the outside area at one point.

You've got a loo through there, and a little bit of storage space,

which I think might have been the coal bunker.

So you could fiddle around with that,

but I really need to see whether we can get that up there.

I'm going on a mission.

# Can't stop now cos I'm on a mission

# I am a woman on a mission... #

Yeah, it's a familiar cry on Homes Under The Hammer -

move the bathroom upstairs.

If you succeed with that, there's still the kitchen to revamp

and the decor to update.

Does it get any better?

Right at the top of the stairs, the fuse board... The electrics...

Everything's going on here!

It doesn't look safe and I'd certainly get rid of that and put

it somewhere where it looks a little more attractive and in-keeping.

So now, let's talk about the bathroom.

We want to get the bathroom upstairs, if possible.

You've got a couple of options. Now I've seen the bedroom spaces, you've got a double,

two singles here, a very small box room, in fact.

You could potentially bring that bathroom up here,

put it in the box room, but then you'd be losing a bedroom

and turning it into a two-bed house. Not ideal.

Another option would be, maybe you could find some room to

slot it into the big bedroom here,

but there's a great big chimneybreast in the way over there

and I'm not sure that would do any favours to the big bedroom.

Might damage the value of the house by then having another small room,

or you could just leave it where it is, downstairs.

I think it all depends on who wants to buy the house,

their budget and how they want to live.

Lots to think about here and lots of potential layout options,

but one thing's for sure, the whole house is in need of a complete

renovation to bring it into the 21st century.

Out back, there's a big garden, which does need some work,

but looks perfect for soaking up the summer sun.

Time to get the opinion of the agent from the auction house who sold it.

My first impressions of the property are it certainly is a mess.

There's a lot of work to be done here to bring it up to speed, ready for occupation.

It certainly needs a damp-proof course and a membrane to give it

some insulation, with regards to the flooring.

It's then going to need a kitchen, a bathroom

and possibly some remodelling of the room arrangements.

I would expect the work to cost somewhere in the region

of £20,000 to £25,000 to put this house back into a condition

that's suitable for modern occupation.

And with a guide price of £50,000, that could be a £75,000 outlay.

Would that be a worthwhile investment?

Once completed to a good standard, I would expect this property to

be worth somewhere in the region of £105,000 to £110,000.

And what kind of rental could you expect?

Once the work was completed, if the property were offered to let,

I would expect it to achieve somewhere in the region

of £575 per calendar month.

Well, there's certainly room for improvement with this house.

Does the bathroom stay downstairs,

or is it worth spending the money and moving it up there?

There's lots to do with the downstairs area too.

Let's find out exactly who wanted to take this project on at the auction.

Lot number 19.

There is a proxy bid in on this one, ladies and gentlemen,

which I will field.

Start me where you like. £55,000 for it, may I say?

55? 52? Don't mind where we begin.

52,000?

52? I will start the bidding at 52,000 on a proxy bid.

At 52,000. 53 from somewhere else?

53. 54.

55. 56.

57. 58.

59. 60,000.

The proxy bid dropped out at £65,000

and it was left to two bidders in the room to fight till the end.

We rejoin with the price at £67,000.

67. Five. 68.

500. 69.

500. 70,000.

500. 71.

71,500, sir?

No?

£71,500 somewhere else?

At 71,000, once, twice, third opportunity...

Too late, it's gone. 71,000, thank you.

The successful bidders, at £71,000, were property developers

and best mates Richard and Paul.

I met them back at their new purchase to hear their plans.

# Oh, you're my best friend... #

-Paul and Richard, congratulations.

-Thank you.

What was it like for you on auction day? Did you expect to get this?

Well, not really.

We went a little bit over budget on this particular one.

Why didn't you contain yourselves? Whose fault really was it?

We tried to. Paul was bidding at the time and yes...

It went over a little bit.

Actually, it was four grand over their budget, meaning they have now

set themselves a limit of £12,000 to £15,000 for the renovations.

With Paul handling the project management

and Richard's 30 years in the building trade, these guys

certainly have enough experience to make this a successful venture.

-And Saturdays and Sundays off?

-No, no. Sundays and Mondays off.

Why do you take Sunday and Monday and not Saturday and Sunday?

Because we play golf on a Monday and it's cheap on a Monday

-and it's not so busy. So, yes, that's why.

-Hold on a minute.

You've made your own weekend a Sunday and a Monday

-because the golf course is cheaper on a Monday?

-Oh, yeah.

-Is that what you're saying?

-Yes, yeah. And it's a lot quieter as well.

-So, it works out all round, doesn't it, Rich?

-Yeah.

# We're the sultans of swing... #

I think it's safe to say these two get on famously

on and off the course

but they have a "fairway" to go to get out of the rough here.

So, what's the plan?

Strip it back to bare bricks, take the chimney breast out.

We need to make a little bit more space, both upstairs and downstairs,

so the chimney breast will come out, to get that bathroom upstairs...

Hold on a minute.

The big news is you are going to move that bathroom upstairs,

but that means surely, you're going to be reducing

one of the bedrooms or even taking a bedroom away?

-We'll keep it as a three-bedroom.

-How are you going to do that?

Obviously, the large bedroom, which it is at the moment,

that will be split, so we'll be able to still keep the larger

section of that room as a bedroom, so we'll still have three bedrooms.

-We'll get that bathroom upstairs.

-It'll be smaller.

-Where is the bathroom going?

In that big room at the back of the property

or at the front of the property?

At the back, as you walk through the door, that will be...

It'll be there, on the left-hand side.

It all sounds very tricky to make that bathroom move work,

while getting the best out of that main bedroom.

Guys, how can you do this on your relatively low budget?

-I'm intrigued.

-Working hard!

Working long hours. You might not even be able to play golf on Monday!

You might need to rein the Mondays in a bit, boys!

Well, I reckon happy Mondays will have to be put to one side

until this project is finished.

A timescale estimated to be 16 weeks,

but I don't think that will upset our bosom buddies too much.

So, come on, what is the secret to your long friendship?

You work together, you play together, golf...

I mean, really, it is

quite incredible that you two are such good mates.

We tend to play on each other's faults a lot and anybody else...

when we've worked for other people, tend to think we're doing

a lot of arguing and we're not, it's just how we do things, aren't we?

-That's right.

-To us, it's sort of not like coming to work.

It's sort of just meeting your best mate and having a laugh.

Guys, it really has been lovely meeting you today

-and I'm so excited to see the end result. Congratulations.

-Thank you.

-Thank you. Well done.

-Thank you very much.

So, Paul and Richard may have paid a little bit over the odds,

but they have grand plans for this place.

Let's hope they manage to do it on the 12 to 15 grand,

as they suggested.

It does sound quite tight to me

and all the work that's involved in moving that bathroom?

Let's hope the golfing duo stay on par with their budget

and they swing into action! Join me later in the programme

and you can find out how the chaps get on.

Portishead is a coastal town on the Severn Estuary,

only five miles from the city of Bristol.

In the 1860s, a pier and deepwater docks were built here to handle

ships too large to travel up the River Avon to the port of Bristol.

Today, the dock is well preserved

and has become the centre of the town's new marina development.

Well, it's a lovely part of north Somerset,

right by the side of the Bristol Channel,

easy access into Bristol, onto the M5,

with all those connections, down to the West Country and the like.

Some interesting housing estates as well

and it's on one of those...the property I'm here to see is this.

It's a bungalow, it's actually a linked to detached, which means

it's got a little bit connecting it to the neighbouring bungalow.

£200,000 plus was the guide price. Lots and lots of sort of...

Well, tarmac and stairs and concrete and things on the outside.

Intriguing. Intriguing, intriguing.

Described as a split-level bungalow arranged over ground

and upper ground levels, beneath a pitched roof, you can

see that someone at some point has put

a lot of love into the design and the upkeep of the building.

A few cracks here and there, but generally,

it's looking pretty smart. What have we got, then?

Straight in to a really interesting sort of holding area, if you like.

I don't know what this bit is.

There's a little bit there, the sliding doors out to the garden.

And a sort of open plan feel kitchen. It's pretty pleasant.

You can imagine using this space, definitely.

A bit of a breakfast bar, which is good.

I mean, the kitchen is certainly dated

and would benefit from a bit of updating, but whatever.

There's bedrooms going off that way. Into...

A kind of classic layout of its era, I think. 1970s, my guess is.

Into this sort of dining area here, so nothing that extraordinary yet.

Through a little archway, again very 1970s,

into a really nice size living area there.

But I've actually been teasing you.

Not that exciting an entrance when you come in,

not that particularly brilliant an aspect.

Nice quiet road, or whatever.

Nothing too mind-boggling, in terms of the kitchen,

into that room there. You know what?

It's all about that!

Oh, my word!

What an extraordinary view!

The whole of the Bristol Channel stretching in front of you.

How fantastic is that?

# I can see for miles and miles

# And miles and miles and miles. #

It really is an absolutely stunning view,

but this bungalow can also let me see into the past.

It's funny how each era of architectural design

has its own signatures, isn't it?

When it came to the 1970s and early 1980s,

it was feature fireplaces.

Have you got one like this?

It's lovely(!)

At the rear of this split-level bungalow,

some steps lead up to three bedrooms.

Two are a good size,

with lots of light coming in through the bay windows.

There's also a box room, but, apart from that really dated bathroom,

everything else is in pretty good order.

Well, out through this little sort of side porch into the rear

of the property and yet more amazing amounts of landscaping.

This kind of stuff costs an absolute fortune

if you were to get somebody to do it.

The amount of material, soil, whatever, you're going

to have to shift, but you come down these steps.

Obviously the house is built on a fairly steep hill and,

as a result of that, it sort of slopes off towards the back here,

which gives you that amazing room upstairs with the views.

But also the way it's built,

it gives you also additional storage underneath, which is really nice.

The garden, it doesn't have the views but it's a nice space.

You've got a little pond, but it's just an additional bonus to

a house that's already got me well sold.

# Ooh, baby, here I am

# Signed, sealed, delivered, I'm yours. #

Yes, there's no denying this view alone is a fantastic selling point,

and, with the property in good shape,

this almost feels like the perfect package.

But time for a second opinion.

We asked along a local estate agent for his thoughts on this bungalow

that was guided at £200,000 plus.

I think it's a great property.

It has all of the things that the target market will like in it,

particularly for Portishead,

the flat garden, which is really, really rare,

and, of course, the fantastic view.

There are all sorts of things you could do with it

because it's a very, very flexible place.

They range from just refurbishing it as the place is,

through to extending it through to the roof space, that sort of thing.

The layout is great.

There's one thing I would probably change, which is

knock through the kitchen into the dining room and make that open-plan

so that you can get advantage of the views.

But, other than that, just finish it to a reasonable quality

and then resell it, I think.

So, what sort of returns could this bungalow make?

First the resale value.

Once renovated, the property could achieve between £360,000

and £380,000.

And the rentals?

Rental market somewhere, once it's renovated,

between £950 and £1,000 per calendar month.

Well, from a not THAT inspiring start,

this little bungalow has proved itself to be an absolute pearler.

I like the layout. Yeah, it needs a bit of modernisation,

but you would buy it for that, wouldn't you?

Well, let's find out who did when it went under the hammer.

On to Lot 152, it's Portishead.

Start me, if you will, telephone bid to my right.

160, that's a bit low, but why not?

160.

165? 165?

170.

175.

180.

185, 190.

195, yes?

200.

200 on the phone. And five?

205, 210.

210. 215, sir?

220. 225.

230, 235, 240.

245.

250.

55, sir?

Actually, I saw the lady by the pillar first. 255.

260, sir.

Lady's bid at 255. 260 anywhere else?

First time, second time, third and final time at £255,000...

Sold at 255,000.

And the successful bidder getting the lot for £255,000 -

£55,000 over the guide price - was Alison.

Alison lives in Portishead.

I met up with her and her fiance Chris back at the bungalow

to find out their plans for this estuary observatory.

Alison, Chris, good to see you both.

-Good to see you.

-Congratulations.

-Thank you.

-Thank you.

-What a great bungalow.

-It's wonderful, isn't it?

Yeah, absolutely amazing. Tell me why you wanted to buy it.

I think, first of all, because it's in the town where we live, so

that was a good selling point.

And then, when I looked at the guide price,

I realised that that was just a little out of kilter from

my understanding of the market around here,

so that sort of attracted me to come and look at it and, of course,

as soon as I walked in and saw the view,

-it was a wowee moment that says we've got to have it.

-The same for me.

Just extraordinary, isn't it? That view is, in some ways, priceless.

Absolutely.

So tell me about you two. What do you do? Is this something you do?

-Are you both property investors?

-Kind of.

I try to hold down a day job on a Monday to Friday, 9-5 basis,

and Alison works in procurement of buying stuff, I suppose.

Yeah, I have a consultancy business.

I've always been a buyer, so 20-odd years working for other people,

and I branched out and now I've got a limited company and do it myself.

Alison is not only a buyer in a professional capacity,

she has also bought up three other properties over the last

three years and has kept some as part of a small rental portfolio.

This is her fourth purchase and, having lived in Portishead,

she obviously has some handy local knowledge of the property market

here, but what does she know about the history behind the bungalow?

We know that the previous occupant had lived here for a good period of

time, sadly passed away and, hence, why the property went to auction.

He was apparently, according to neighbours,

a bit of an amusing person.

There's a flag pole out there

and apparently had a big box of flags so, whenever it was someone's

birthday or a special day, he would put a different flag up.

-Was he something to do with boats?

-Yeah, he was a captain.

He was a captain of these big tankers that you sometimes

-see out of the window...

-Wow.

..which is lovely, so he had a huge array of flags

and he was a man of the sea.

We did find some sailing paraphernalia around the place

and it was lovely.

We both sail so we had a little connection with

the theory of the house as well.

Well, the couple may have found a bond with the place,

but I've got a feeling they won't be holding on to it

in its current layout for too long.

Originally, the plan was that we would decorate throughout,

new bathroom, new kitchen, possibly knock through the kitchen

into the dining room and make a nice big room there with the views out.

Although, having picked up the keys and come here

and spent a bit more time here,

we've realised there's a huge amount of potential with it

and maybe it's actually better to leave it for somebody else

-to come along and buy it as is...

-Oh, really?

..and then decide what they want to do with it,

so we're at that decision point, really, as to what we do.

That implies that you think you got a snip at the auction?

-Yes, I think so.

-Potentially.

So, you paid 255. What do you think it would achieve?

At the moment, through talking to some of the local estate agents,

scarily, they're talking it may go up to something like 325,

which is far higher than I had calculated on all my sums.

So you could potentially make 70 grand profit,

in, out, boom, thanks very much?

Just by managing the money and maybe a wee haircut of the lawn

and stuff like that.

That's incredible.

They can make a £70,000 profit by doing nothing at all

and the new buyer could still get a decent return

if they did the renovations.

A win-win all round.

# I'd take you just the way you are. #

It just goes to show what bargains you can sometimes

get at the auction,

but if they decide to renovate the bungalow, Alison reckons the works

will take two to three months, with a budget of £15,000,

but is it worth it?

So if you spent 15, 255, that's 270,

what would you be able to sell it for, having done that work?

I think, initially, we were looking at about 345, would be

the target market to, again, just bump that figure up again.

And how are you going to decide?

-Toss a coin.

-Really?

We go on holiday on Saturday morning so we've got a couple

of weeks to see what happens with the marketplace.

It's getting a little bit warmer.

We've taken some advice from an estate agent,

so we come back from holiday and we see if there's any interest.

Well, listen, good luck.

Congratulations, and can't wait to hear what you decide to do.

-Absolutely.

-Nice to meet you.

-Thank you.

-Pleasure.

So, potentially, a very healthy and quick profit for Alison and Chris

if they decide to sell.

See, those bargains are there every now and again

when you visit the auctions. How will they get on?

What will they decide to do? You can find out later in the show.

Still to come, there's some negotiation

to be done in Streatham Hill.

Whoever wants to take on this property will have to

negotiate with the current landlord on the price of that lease.

And in Portishead, Alison and Chris have come to a decision.

I think, we'll always wonder whether we did the right thing.

But first it's time to go back to Ilkeston in Derbyshire, where,

earlier, we saw this three-bedroom semi being snapped up at auction by

best buddies and seasoned property developers, Paul and Richard.

The guys paid £71,000

and were looking at a long list of tasks to turn this place around,

including the tricky prospect of moving the bathroom upstairs,

whilst retaining all three bedrooms.

Obviously, the large bedroom, that will be split,

so we'll be able to still keep the largest section of that room as

a bedroom, so we'll still have three bedrooms,

-and we'll get that bathroom upstairs.

-It'll be a smaller bathroom.

When the boys are not working on building projects,

they're playing golf together, but only on a Monday.

It's cheaper on a Monday and it's not so busy, so, yes, that's why.

Moving their weekend about to save a few quid - well,

I wonder if they've been as careful with their £15,000 budget?

Five months have passed since our last visit.

It's time to reveal all.

The house is unrecognisable from what we saw before.

Paul and Richard have stripped back to the brick,

installed a damp-proof membrane, replastered, rewired and replumbed.

To save money, they've kept all the old windows,

except they moved them about a bit.

The dining room window originally was here in the living room,

so we moved the living room window, which is now the dining room window.

That window was the bathroom,

so that's moved upstairs into the new bathroom that we've created,

which meant we only needed to do one thing and that was make the aperture

bigger for the French doors, where the living room window was,

so that's how we did the whole process.

After that game of musical windows, there was another puzzle to solve.

How did they get on with moving the bathroom upstairs?

Basically, this used to be the old doorway into the bedroom

and we've taken that out, created another doorway.

Took the chimney breast out and put the partitioning up and,

as you can see, it's created a good-sized bedroom, still,

and a very, very nice bathroom.

So they successfully juggled the space upstairs to add

the family bathroom and retain that third bedroom.

Mission accomplished.

Downstairs, the extra space gained by moving the bathroom has

given the kitchen a more open-plan feel.

And an added bonus is the retention of the small downstairs loo.

The toilet was separate to the downstairs bathroom,

so that gave us the opportunity to leave a toilet downstairs and,

although we had one or two arguments over it, it did stay downstairs...

-Got your way again.

-..and it worked out pretty good, I think.

Not content with refurbishing the inside of the property,

the boys have gone to town in the back garden.

What we did is we put a very simple patio, which is

leading into the kitchen and then where the French doors are,

we thought it would be nice to put a decked area and, of course,

once we got rid of the two sheds, it's opened it all up

and we've finished with a nice big garden.

The price for all this work?

Well, they only had to find another £2,500 to top up

their original £15,000 budget,

which brings their total spend to £88,500.

To me, it looks like they've done a fantastic job,

but has this been a wise investment?

Let's call in two local estate agents to find out what they think.

First impressions of the property are fantastic.

Very, very smart looking.

They've done a wonderful job to neaten it up outside,

which is followed through internally.

It's a smart house. This has been really lovingly done.

The finish is excellent.

The garden's finished. It's ready to go.

I think the thing that is going to sell this property

and set it aside from any other is the sheer quality of the workmanship.

It's just the same to fit a kitchen, whether it's done badly or poorly,

but this one's been done well.

So that's really going to help it to sell.

There is one thing that I think may put people off

and that is the size of the bedrooms.

There's two smaller bedrooms and one large double.

So it could potentially put some people off,

but a young family won't have a problem in this house.

Paul and Richard have been careful to research the local market

before embarking on this project

and know that a well-finished property could achieve

upwards of £120,000.

Do the estate agents' valuations match up to this?

I would market this property at £115,000.

And I would rent the property for up to £550 per calendar month.

I think if we were to put this property on the market for sale,

we'd be looking at achieving offers in the region of £120,000.

To put it up for rent,

a typical property of this size would rent for £550 per calendar month.

A sale at £120,000 would net the boys a healthy profit

of £31,500 before the usual deductions of taxes and fees.

-Yes, that's what...

-We were expecting.

That's the average price for houses in this particular area.

We've always found it's been our experience that

a well-renovated property will be able to exceed that a little bit.

-But that's OK.

-We're happy.

-We're quite happy with that, aren't we?

-Yeah.

And that high-end finish has proved the guys right,

as after filming, they sold the house for £128,000,

giving them a profit of nearly 40,000 before taxes and expenses.

So, all worth it, then?

It's been a great project, we've really enjoyed it.

We've got to say thank you to Sandra, our next-door neighbour,

for all the cake and the hot sausage rolls.

-And cups of tea, yeah.

-That's right.

We head over now to Streatham Hill in south London.

A popular area with fantastic public transport links

via bus or train to central London.

Plus, it's home to Streatham Common.

# Park life... #

The property I'm here to see is

just under a mile walk from Brixton and Clapham.

It's a three-bed second-floor flat with a guide price of £170,000 plus.

Yes, we've seen blocks of flats like this before in London,

but I'm struck by how well maintained this one is

with plenty of expansive grounds and everything looking pristine clean.

It's up just two flights of stairs,

and so far I'm not seeing anything I don't like.

Let's head in.

OK, it's nice and bright.

It's a small hallway, but a lot of light coming in here.

OK, we've got a shower room and toilet with a small sink.

In here we have a small bedroom.

Two further rooms in there,

but I'd like to investigate that a bit further.

There might be something you could do with that from what I can see.

In here, the kitchen just needs a bit of a spruce-up.

Nice cupboard space, though.

Through to here, which I imagine would have been the lounge.

You'd get a sofa in here, a couple of chairs.

But maybe they tried to use it as a bedroom

because this is a freestanding wardrobe of some size.

But this is the main thing for me.

This big, massive feature window

which looks onto a communal piece of grass. I like it.

Yes, we're off to a flyer with this one.

But it pays to remember, properties such as this can be liable to

all manner of shared costs.

You certainly don't want any hidden bills after buying a property.

Whilst it's a nice-looking flat so far, with a great location,

I can't help but feel it's not fulfilling its potential.

Let's investigate these two rooms just a little bit further.

Firstly, this is a waste of space.

You've got a small bedroom here and a small bedroom just here.

Now, this partition wall would have been put in

because somebody would have wanted to get maximum rental income.

Not needed. Get rid of it.

Have this as your lounge, put your sofa in here, your two chairs,

maybe even a dining table as well if you could squeeze it in.

But it's definitely a lounge because I can see the TV points over there.

You'd have a nice big lounge area, you've got a bedroom next door,

which would be your master bedroom with a freestanding wardrobe.

There you have a smaller guest bedroom, perfect flat.

Have a rethink about the layout,

tidy up the kitchen and bathroom

and you could have a highly appealing property.

However, there is a fly in the ointment.

The present landlord has been served with a section 42

to extend the lease on this property.

Now, whoever wants to take on this property will have to

negotiate with the current landlord on the price of that lease.

And negotiations are never as straightforward as you think.

# Oh, boy, you lose your head

# Oh-ho, boy... #

Another reason to do your research before buying.

Landlords could ask for huge sums of money to extend the lease here.

We've asked along a local property expert for his opinion on that

and the flat itself,

which is guided at £170,000.

Well, a section 42 has been served on the freeholder,

which means that any buyer coming and buying this property has a benefit,

knowing that they can ask for a lease extension.

What has to be considered is the cost of that.

So it could range from anywhere between £5,000 and £100,000.

That cost would need to be negotiated with the freeholder.

Assuming that the negotiations were all plain sailing,

what does he think about the property itself?

At the moment, the property is laid out as a three-bedroom.

I don't think it suits a three-bed.

I'd actually remove the dividing wall between the two bedrooms behind me

and that would make a really nice, large bedroom to the rear

and one to the side as well, which would be a great size.

So, whichever layout you choose,

you will have two good-sized rooms to the front of the flat.

What kind of a valuation would he put on this property

if it was renovated and made into a two-bed?

Once renovated, preferably as a two-bedroom,

this property would achieve approximately

between £290,000 and £300,000.

And if it was rented?

Renting this property as a two-bedroom flat would achieve

around the £1,250 mark per calendar month.

This is a great little flat.

There is the issue of that lease,

but if it goes anywhere near the guide price,

you could get a good return on your investment.

Let's see who fancied taking the chance when it went to auction.

Nice purpose-built lot.

Who'd like to start off on this? 150 anywhere?

Start low, 150, 155.

155 anywhere?

155 standing up.

160. 165.

170. 175.

180.

After a slow start, the bids pick up and we rejoin after £196,000.

196 straight at the back.

197. 197 sitting down.

198 anywhere else?

It's a good buy, this.

197 sitting down.

First time.

Second time.

198. 199. 200?

If not, 199 sitting down. First time.

Second time.

Third and last time, if you're all done. Two?

Sold, 199.

Hidden from view was Emily,

who along with sisters Katie and Ellie,

successfully bought this property for £199,000.

# Sisters are doing it for themselves... #

If they look familiar,

it's because they appeared in the show back in July 2014.

That was their first project together, this is their second.

So let's see exactly what their plans are this time.

-Ladies, nice to meet you and congratulations.

-Thank you.

-Emily.

-Thank you.

-Katie.

-Yeah.

-And Ellie. I got it right first time.

-Firstly, tell us about the auction experience.

-Very scary.

What was scary about it?

A couple of times at first I wasn't sure...

A few other properties, I wasn't sure if he was looking at me or not.

So I kept on looking around like, that wasn't for me

because I haven't bid. Checking, like,

"Oh, no, I don't want that one!"

But, yeah, once it was actually our one,

the lot before actually got skipped.

So all of a sudden it was me and I was like, "Oh, I'm not prepared!"

But, yeah, I just kept bidding and I felt quite confident actually.

You went for it. Has she come up trumps for you?

Yeah, I think it's a really, really good bid.

This was our first choice in the auction.

Tell me the dynamics

because three young ladies going into property, it's quite unusual.

It's always... I mean, I've always,

always been kind of fascinated with the property market.

I was an estate agent for a couple of years

around this area, sort of Streatham, Clapham, Balham,

so when we got a bit of inheritance

we thought that was probably the best place to put it.

-You've got one property already.

-Yeah.

And obviously that works for you. Is that the three of you as well?

That's the three of us, we're renting it out at the moment,

so we're hoping to make a bit on it but we want to rent it out

for a couple of years first and we've got a really good tenant.

And tell me about this property. What's your intentions?

You've got it, it's yours, what are you going to do with it?

We need to do the lease.

The section 42 was served on this place before we got it,

so we saw all that in the legal pack

and it looked like a reasonable price.

It's kind of similar to what we've just secured on our other property,

which is just down the road.

And we're just in negotiations at the moment.

We only completed last week, so we're in negotiations

with the freeholder, who wants a crazy sum of money.

Will that be all three of you sat in the room? Overpower him?

We have a company that we are bringing in.

A local company that know

what things are worth and know what it should be.

They've already come in and are just drawing up their evaluation.

They did the last one for us, didn't they?

We had to negotiate the last one down as well.

So it's something you've done before.

-It doesn't frighten you, by the looks of it.

-No.

-No.

Yes, and no wonder they're not frightened -

the sisters have already built up a lot of useful knowledge

and experience to help them negotiate the property game.

So, with an eye on renting this property eventually,

what are their plans for this project?

We are going to change the bathroom and kitchen,

make it more nicer and modern, put a tiny bath in the bathroom.

Find one that fits!

Knock down the two bedrooms next door, make it all one.

So it will be a two-bed flat rather than a three.

But decent-sized bedrooms.

Take off the wallpaper.

-Paint it nice, beautiful colours.

-New floor.

Nice wood floor rather than this horrible laminate.

What budget have you given yourselves to do the bathroom,

put a bath in, and...?

We're thinking...we're hoping to land under the 40 mark

for both the lease and everything that needs doing.

We think probably no more than £30,000, £40,000

to do all the renovations.

And hopefully we'll land in the early to mid 20s for the lease.

How long from this to your dream flat?

-Six to eight weeks.

-Yeah, that's what we're thinking.

-Wow, quick!

We had the builder in already, looked around and told him all our plans.

He's pretty much ready to go.

We gave him a lot of notice because we had four weeks

from when we won it to when we completed,

so they cleared their schedules and they are ready to come in

and just start doing everything straightaway.

They're super efficient, aren't they?

So hopefully we can stick within that timescale.

Ladies, congratulations, I hope it works out how you want it to.

-Thank you.

-Good look, Ellie.

-Thank you.

-Katie, good luck.

-And Emily, good luck.

-Thank you.

So, three sisters clearly with their heads screwed on

investing in the property market.

Now, if they can get that lease and all the renovations done

within their budget, I think they're onto a winner.

You can find out how they get on later on in the programme.

Well, we've seen how one of our properties ended up.

How about the other two?

Have there been lots of changes or are they exactly the same?

Well, let's find out.

It's now back to north Somerset and the town of Portishead,

where earlier we saw this bungalow

that looked pleasant enough from the outside.

A decent, spacious living room, two good-sized bedrooms

and a kitchen and bathroom that were dated, but by no means unworkable.

But what really sells this place is the view to end all views.

A stunning expanse of the Bristol Channel.

And buying it for £255,000 were Alison and her fiance Chris.

Despite that fantastic vista out back, they planned to sell the place on

after spending £15,000 and two to three months renovating the place.

But then they discovered they might not need to do

any work at all to make a decent profit.

At the moment, through talking to some of the local estate agents,

scarily they're talking it may go up to something like 325,

which is far higher than I had calculated on all my sums.

So you could make potentially 70 grand profit -

in, out, boom, thanks very much.

Just by managing the money, maybe a wee haircut of the lawn

and stuff like that.

Chris and Alison were very tempted,

but with a holiday imminent on the Caribbean island of St Lucia,

the couple were taking time to ponder their next move.

We're back only four weeks later, and do we have a different bungalow?

No, of course not. Everything is as it was.

And that should be enough to tell you

what Alison and Chris's decision was.

We were umming and ahing as to

whether we would do the work or just put it on the market

and it was a bit of a head and heart conversation with ourselves because

for me, my heart was in doing the work, that's what I'd intended to do.

But our heads were telling us that financially

we weren't necessarily going to make a huge amount of different profit

if we'd done the work because of the timescale it would take.

So really we decided that let's put it on the market

while we're not in a position to do any work and see what happens.

And, not being a couple to waste time,

Alison and Chris got to work straight after our first visit.

The following day it was put on the internet

and the marketing proper started. And within three hours we had an offer

that frightened us a little bit

because we hadn't even got on our plane

to go and have a think about it while we were away on holiday.

So we mulled it over

and accepted the offer on the Monday from our holiday destination.

Which was more than we could have expected.

We were quite taken aback by it.

And the offer was bang on their asking price of £325,000.

What great news for Alison and Chris!

And while getting an offer so quickly might have given

the couple second thoughts that they'd undervalued the property,

the offer came from a cash buyer who wasn't in a chain,

meaning it could be a fast turnaround in the exchange process.

So, good news all round and all without lifting a finger

on refurbishing the bungalow. Well, not quite.

The only thing I can say we've actually done was

we borrowed our doormat from home rather than buying a new one

because we weren't going to need it at our house.

So that was just to make sure that when people came to view it,

kept it as clean as it was before we left.

In fact, some of the carpets did need a light clean,

but it was a far cry from the £15,000 renovation costs

that Alison and Chris had originally contemplated.

But that's not to say this has been a cost-free exercise.

Apart from the cost at auction of £255,000,

there were other costs, including the buyer's fee, solicitors' fees,

stamp duty and the bridging loan cost.

In total, those all arrived at around about £11,000.

And then five for the sale.

That would take their total outlay up to £271,000.

But when you consider that from buying the bungalow at auction

to exchanging contracts on the new sale took only ten weeks,

Alison and Chris have really cleaned up,

with an incredible profit of £54,000.

But are they still thinking - what if they did the work?

I think we'll always wonder whether we did the right thing

in selling it quickly and moving on, but I will be sad

to hand over the keys, I think it's a brilliant property.

But, having sold the place for £325,000,

it's time to find out from two local estate agents

their thoughts on this bungalow, starting with the agent

who not only first saw the property,

but also sold it for Alison and Chris.

Could they, with more time and money,

have got a better deal on the bungalow?

I think they've made the right decision.

It gives them the opportunity to move on,

take the profit they want and get on to the next project.

I like the property - exactly what I expected in this part of Portishead.

The design is very popular amongst the cul-de-sacs here.

And with the Channel view, it's absolutely tremendous.

But having sold the bungalow for £325,000, do the agents reckon

Alison and Chris could have got more out of the property?

This particular property, we decided,

because it was in an unusual situation,

to market it at a guide price of £325,000.

I believe the value today is in the region of £320,000-£330,000.

Well, I guess exactly where I thought they would say it would be.

And the good thing is that our offer that we received was for 325,

on the nose, and that's what we've accepted.

But how much more would a renovated property have sold for?

I believe, once work is completed,

the property value should be in the region of £370,000-£380,000.

You'd get somewhere in the region of

£360,000 to £375,000 once it's finished.

I think we're still happy with our decision

because obviously the speed with which we are then able to

recycle the money back out and then invest in another property.

So, no regrets from Alison.

But the agents reckon a rental return of between

£950 and £1,100 per calendar month could have given the couple

an annual yield of between 4-5%.

Appealing, Alison?

It was one of the things we looked at just in case everything went wrong

and we weren't able to find a buyer.

And I must admit my figures were based on £1,100 a month,

so I'm pleased that I was spot-on with that one.

This is all academic as the house is sold and awaiting its new owner,

who soon will be enjoying the fantastic views from the bungalow.

But, for Alison and Chris,

the quick, pain-free sale of this property

doesn't just mean an incredible profit,

it will hopefully also open up the door to a brand-new future.

The way this is going to affect our lives in the next 12 months,

at least, is it means that we can afford for me

not to have to go to work every day in the conventional manner

and I can spend that time looking for new investment properties.

So it has the potential of significantly changing

the way our lives are, going forward.

Back to Streatham in south London, where I looked around a three-bed

second-floor flat that had a guide price of £170,000 plus.

It was in a good location and in pretty good condition, but for me,

the layout was all wrong and there was only one solution.

Got a small bedroom here and a small bedroom just here.

Now, this partition wall would have been put in

because somebody would have wanted to get maximum rental income.

Not needed. Get rid of it.

Have this as your lounge, so you'd have a nice, big lounge area,

a bedroom next door, which would be your master bedroom,

perfect flat.

Another potential problem was that the lease was up for renewal,

meaning any buyer would need to negotiate

with the existing freeholder a price for extending that lease.

However, despite that, the property proved very popular on auction day

and was bought for £199,000 by sisters Katie, Emily and Ellie.

Despite this only being their second renovation project together,

they seemed to know their stuff.

We are going to change the bathroom and kitchen

and make it much more nicer and modern.

Put a tiny bath in the bathroom. Find one that fits!

Knock down the two bedrooms next door and make it one

so it will be a two-bed flat rather than a three.

But decent-sized bedrooms.

So, armed with a budget of £13,000-£14,000,

and a timescale of six to eight weeks,

not to mention a trusted family friend recruited to do the work,

the three sisters were feeling confident.

Three months later,

we've returned to Streatham to see if that confidence was well placed.

What was once two pokey, impractical bedrooms

is now a spacious and attractive living room.

As Katie explains further.

So, in this...

This, now the lounge, used to be two separate, very small bedrooms,

which we found out later was only added

as a temporary wall and was a real bodge job

so they could sell it at the highest price at auction as a three-bed.

So our builders had to take the wall down

and then obviously we've made it into the large lounge area.

It's certainly far more appealing

and the good work continues into the rest of the flat.

Ah, they've managed to get that bath in here.

Not essential, but it's a real bonus in a flat this size.

The bedrooms are a work in progress, with carpets still to go down.

Overall, though, the flat has a far better layout

and now feels spacious and comfortable.

So, with Emily working and Ellie away travelling,

it's up to Katie to tell us how it's all gone.

First of all we had to look at all the piping and wiring

because it was a bit of a bodge job.

So we had to have everything completely replumbed,

new radiators and everything.

Once that was down, it really was just very neutral decor,

nothing major needed to be done.

We've done all the bedrooms in white

just because it's nice and neutral for tenants when they move in.

Kitchen as well, white

and then the bathroom just very white tiles with grey grouting.

Then the lounge, we wanted to add a bit more character to make it

more homely, so we've painted it grey and had a lovely feature wall.

And we've added an old reclaimed fireplace as well.

I really think the girls have made some good decisions here

and got the most out of the property.

But how was working together for just the second time?

We all got very involved.

We did the same thing as our first property we did together.

So we just have a WhatsApp group

and whoever looks at bathrooms, kitchens, tiles,

we just put our options on there

and then keep it nice and democratic and vote on what's what.

Usually we tend to agree,

but there's been a couple of disagreements.

But we got there in the end.

The girls, through a democratic process,

have spent around £13,000 on the property.

And due to the work in the living room taking longer than expected,

it's taken them around ten weeks to get to this point.

But what about extending that pesky lease?

We're negotiating at the moment backwards and forwards

with the freeholders.

We think we're almost at a point where we'll agree on a figure.

But it will probably take another couple of weeks, if not months,

if we have to go to tribunal, which we're hoping isn't the case.

But obviously we do want to get a fair price.

Quite right too.

But until they've got that lease,

they will be renting and not selling.

With a total investment so far of around £212,000,

let's hear the opinions of two local estate agents,

starting with the agent who saw it originally.

The layout is excellent.

Before, the layout didn't work very well, didn't flow very nicely,

but now it works really well and you've got a lovely lounge

and two decent-sized bedrooms.

The standard of finish of the property is very nicely done.

It's above the average for the area,

it's something which no buyers or tenants would walk in and say,

"I'd like this to be fixed or changed."

I'd say it's done very nicely, it's very much ready to move into.

All very positive.

So, with the girls eager to sell in the future, what kind of valuation

could they expect once they've negotiated that lease extension?

With a long lease, this flat would resell

approximately for £300,000-£310,000.

I'd say this property would achieve £350,000 on the sale market.

I don't agree with the bottom one. I was thinking 335 to 340.

You know, I think that's more the correct figure.

So, if the girls sold for £340,000,

that would mean a pre-tax profit of £128,000.

But don't forget,

they're still negotiating extending that lease.

So that will affect their profit.

Until they do manage that, they'll be renting.

The rental market in this area has picked up a little, so I think

this flat will rent currently on the market at £1,350 per calendar month.

On the rental market,

this property is a step above most of the competition.

So, as a result of that,

I'd say we could confidently achieve £1,450 per calendar month.

It's exactly what I thought as well. I was saying 1,350 to 1,400.

So pretty much what we expected and it gives us a good yield,

so I'm pleased with that.

If the girls did achieve £1,400 per calendar month,

that would mean a yield of just under 8%,

which, along with the valuations, must put a smile on their faces.

Absolutely.

We did very well on it, so I think, once we've extended the lease,

we'll still have a very sizeable profit.

So, yeah, another good investment, we're really pleased.

Well, what do you think? Would you have been tempted

to buy any of those properties on today's auctions?

I might well have, Lucy.

Well, there's plenty more where they came from

here on Homes Under The Hammer.