Episode 30 Homes Under the Hammer


Episode 30

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Transcript


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Welcome to the programme. The weather has been quite changeable

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today. Tomorrow, who knows? A bit like the property market.

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And, yes, it can fluctuate, making it hard to spot a bargain.

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But you know what I am going to say, don't you? One way to find out and gauge the temperature of your local

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property market is to visit a property auction.

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Well, there is something for everyone's

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budget at a property auction, from flat to huge family homes.

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And some need lots of work and others not so much.

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Yeah, let's see what sort of projects we have on today's show.

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Coming up in Derbyshire,

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this gardener is using development to leave behind landscaping.

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It hasn't got a garden, what a shame.

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That is another reason why I bought it.

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And talking of things being left behind,

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there's plenty in this terrace in Kent. Wow!

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That's a whole lot of rubble in that room.

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Whereas things look on the up for this flat in London.

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Lovely high ceilings. An old-fashioned fireplace.

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And they've got central heating as well, so I'm impressed so far,

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very impressed.

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All these properties have been sold at auction.

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

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when they went under the hammer.

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I'm now off to the town of Ilkeston.

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Although officially in Derbyshire, Nottingham city centre is

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closer, being only eight miles away,

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while Derby city centre is nine miles away.

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Well, Ilkeston marketplace here is the location of a charter

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fair that was granted by King Henry III back in 1252.

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And it's actually one of the largest charter fairs in the UK.

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It is also older than Nottingham Goose Fair but, like today,

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when the charter fair's not in, there's a normal weekly market.

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Time to find out what is on offer in Ilkeston's property market.

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Well, just a mile or so from the marketplace is the property

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I'm here to see. Two-bed mid-terrace, had a guide price of 48,000 quid.

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Looks all right from the outside. Let's take a look.

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Oh, hello, that could catch you out,

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bit of a step down as you walk through the door.

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I was just about to say, it is not very big from the outside,

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but these kind of properties can often be deceptive on the inside.

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But let's carry on anyway. Stairs up to the bedrooms there.

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Well.

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I've never seen anything like that before.

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Wow, that is like an under stairs cupboard,

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but you've got this little sort of serving hatch.

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Answers to what you think that's all about on a postcard to the show, please.

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Very strange, but basically what you have is one large room here,

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probably knocked through at some stage.

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But, you know, it's a pretty good size.

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Kitchen, not so big, out the back there.

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A few signs of damp on the floors. Apart from that, yes, pretty...

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..pretty weird, actually.

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-# Ain't that peculiar?

-Ain't that peculiar?

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# Ain't that peculiar... #

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OK, maybe I'm being thrown by that strange under stairs

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arrangement, because, as terraced houses go,

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this is pretty standard and not in bad shape.

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The back garden is more of a yard, competently paved over.

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But there is enough room to hang your washing out there,

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and for a table and chairs for when it's sunny.

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And in fact, from the outside, the house looks pretty presentable, with

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UPVC double glazed windows and doors and the brickwork in good nick.

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So far, so good.

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Well, the one thing that is missing so far is a bathroom and loo,

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so the good news is it is upstairs somewhere, I've just got to find it.

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Front bedroom, not a bad size.

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Floors seem a bit, well, quite a lot all over the place, actually.

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But this is the second bedroom, and, oh, no.

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Ta-da! It's the bathroom.

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Well, the good news is at least it is upstairs,

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but really, accessing it off this bedroom isn't ideal.

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And I can't really see a solution.

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Normally you would look at putting some kind of corridor.

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The trouble is, if you did that, this room would become tiny. So I think...

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you're pretty much going to have to leave it as it is.

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However, keeping the current layout does make this property a less

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attractive proposition,

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especially for two people looking to rent a room each.

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They would have to be on pretty friendly terms.

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But overall, it is a solid little house that could be a good

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rental investment, if you can find a way around that problem.

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Time to find out what a local estate agent thinks of this two-bed

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house in Ilkeston, guided at £48,000,

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and if there is an issue with the bathroom through the bedroom set-up.

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With the bathroom in its current state, it would affect certainly

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the saleability of the property and also the rental proposition.

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It needs a new bathroom.

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While the bathroom is being installed, it would be a

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good idea to separate part of the back bedroom,

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to create a corridor, landing space, to give two good usable bedrooms.

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So, he favours convenience over the size of the bedroom,

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but what else needs doing here?

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It is ready for complete refurbishment.

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Will need an element of replastering.

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A new kitchen, a new bathroom,

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probably new central heating system, complete redecoration.

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The refurbishment of this property needs to be good, neutral,

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modern, contemporary fittings. Not over the top.

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Needs to appeal to as wide an audience as possible.

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But once done, what sort of returns could a renovated property expect?

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First, a resale value.

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The resale value of the property,

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once modernised to a good standard,

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and creating a landing space upstairs to give separate access

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to the bathroom, the resale value

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would be between £70,000 and £75,000.

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And the rental returns?

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Rental income, pounds per calendar month, would be £400 to £425.

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Well, there's a few modifications you would need to make,

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not least the bathroom and that strange under stairs thingy going

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on. But other than that, this is a really nice little starter

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home or rental property.

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

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We've got a guide price on this, 48,000. Start me where you will.

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Who will start me off on the guide at 48, may I say?

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45, bid me where you will. 44.

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44 I'm bid, we are away at 44. 45.

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46. 47 is bid.

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48. 49 is bid.

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49 I'm bid to my left. And a half.

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£49,500. 50. 50 is bid.

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And a half. 50,500 is the bid. One, sir. 51 is bid.

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And a half, sir.

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£51,000 away to my left. Looking for 51,500 elsewhere.

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If not, we are going to sell it. He is back in, and a half.

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It is yours, 52. 52 is bid. And a half, sir.

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And a half. 53.

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Shakes his head. £52,500 at the back of the room.

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We are going to sell it at £52,500 for the first time.

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We are all done with it at £52,500 for the second time.

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Third and final time, hammer is up. Gone, well done, sir.

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And that successful bid of £52,500 was made by Phil

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and his partner Julia.

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Julia wasn't able to come to the house,

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but we met up with Phil to find out his plans for this purchase.

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-Phil, good to meet you.

-And you.

-Congratulations.

-Thank you.

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Tell me why you wanted to buy this place.

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Well, we grew up in Ilkeston, lived 300 yards down the road that way.

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-Oh, really.

-And then when I was in my teens,

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-we moved 300 yards that way.

-Wow.

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-You met in the middle.

-Yes. So, kind of know the area rather well.

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It's got good schools, a nursery just across the road.

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So, you know, it is prime for rental.

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So it's the location more than anything else that first

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-attracted you?

-Yes.

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And we only live a mile and a half away as well, so, you know,

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because we do a lot of the work ourselves, so it is quite easy,

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we can finish work at night and come here and do a bit.

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-You'd obviously walked past it, I imagine, hundreds of times.

-Yes.

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And apparently it has been empty for three years, so to actually,

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you know, when it came to auction...

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We went for another property which was a priority,

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which we got that one.

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-And then this was the next one along.

-Wow.

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-So, we ended up with two.

-Oh, did you?

-Yeah.

-Oh, right, OK.

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Is this something you do?

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We've got three other properties that we've done,

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so this is our fourth.

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Sounds like the couple's rental portfolio is definitely growing,

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but for Phil this is still a sideline to his main day job.

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-What do you do at the moment?

-Landscape gardener.

-Oh, OK.

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It hasn't got a garden, what a shame.

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-I know, that's another reason why I bought it.

-MARTIN LAUGHS

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I've not got any work to do here on that.

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Yes, that will be the good thing.

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Before I come to meet you, I was 50 foot up a tree and, yes,

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and I don't fancy doing that that for...in another ten years' time.

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I struggle now, so... I'm not a youngster any more.

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-This will be your pension pot then, will it?

-Yes, definitely.

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I want to be retired before 60, so that is my aim.

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# I've been around too many years

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# I've also shed too many tears

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# And I feel that old age coming on... #

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Phil may feel he's getting on a bit too much to be climbing trees,

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but he is still planning to get stuck into the entire

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renovation himself, except for plastering and electrics.

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So what exactly does he have in mind for the place?

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Coat it completely, everything will be replastered, new floors.

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-Central heating, rewire. Patio doors in that bit.

-Oh, OK.

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-Just bricking the kitchen door up.

-Right.

-And the serving hatch.

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-Oh, don't you like that?

-No, can't quite work out why that is here.

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-It is a bit strange, isn't it?

-Yes. So, that will be bricked up.

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-Going to move some of the radiators around and that.

-Good.

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But we try and do it with rentals.

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If you do them quite well, then you tend to get better clients in.

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And Phil has found himself a way to make the bathroom more

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accessible without creating a corridor in the second bedroom.

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He plans to put a doorway in the front bedroom into the bathroom,

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Jack and Jill style as it's known.

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A rejig of the bathroom layout will be required, but it will mean

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direct access into a shared bathroom and no lost bedroom space.

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Now, why didn't I think of that? So what is the budget?

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Around 7,000. Got a contingency of probably 1,000...

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-if anything untoward appears.

-Right.

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-Is there anything that might be an issue, do you know?

-Not really.

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There's a bit of a bow in the roof that... Might have to put

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-a joist in to support it, but nothing major has come up.

-Right.

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But you want to get it nice and then you can sort of rent it out

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-and forget about it for a little bit?

-Yes.

-So what is the timescale?

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Three months hopefully,

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so we're working on the other one that we bought first.

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We want to get that one done, because that doesn't need as much.

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Once that is done, it is full focus on here.

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And then onto more, perhaps.

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Our target was to get four, because at four, in ten years' time,

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hopefully, if I've got mortgages paid off,

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-I will be able to, you know, take things a bit easy.

-Right.

-That's our aim.

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Well, listen, congratulations. Good luck with it.

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-Thank you.

-Look forward to seeing how you get on.

-All right. Cheers.

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Well, from landscape gardening to growing a property portfolio,

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Phil is definitely on the way to getting his property so he can retire at 60.

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How will he get on with this one? You can find out later in the show.

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This is Sittingbourne in Kent.

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In the 19th century, Sittingbourne helped fuel

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the expansion of London by producing bricks by the barge-ful.

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Indeed, the bricks for London Bridge were all made here.

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Now it is Sittingbourne that is rapidly expanding, helped

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by the fact you can commute by train to London in just over an hour.

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# Brick by brick... #

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Well, I'm here to see a property quite close to Sittingbourne

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high street. Here it is.

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Now, originally it was a four-storey end of terrace, and it had three

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bedrooms. And it had a guide price at auction of

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£180,000 to £185,000.

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Looks great from the outside. I'm going in.

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Four stories is a whole lot of house and a whole lot of windows.

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But I've noticed the ones at the front at least are all

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double glazed. I've always loved this style of house,

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they are usually full of character. There's not so much in here.

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You can see the skirtings have already been ripped up,

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and work has certainly started.

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Wow, that's a whole lot of rubble in that room. But a good space.

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You've got a nice ceiling height,

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although there isn't much of a ceiling at the moment.

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The stairs going up, it is one of those tall, skinny houses that

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I always find you do lots of running up and downstairs.

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But you know, I'm always bashing on about the character.

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Look, some lovely old fireplaces! That's so nice to see.

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I hope they stay in this property.

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And one thing I absolutely love here, walled garden.

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Look at that, beautiful. Wow!

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Yes, a decent size garden is certainly a bonus,

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and that is what you have here.

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Up to the first floor

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and the property looks pretty much the same as the ground floor.

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And it continues upstairs onto the second floor, with partition

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walls missing, no ceilings and piles of rubble everywhere.

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The final floor in the property is the lower ground.

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And unfortunately it is more of the same.

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Now, the reason this property looks like a building site is that,

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well, it already has planning permission to

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convert into four one-bedroom flats.

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Now, that is one flat per floor, and work, as you can see,

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has already started.

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Now, each flat will have an open-plan kitchen,

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living room, one-bedroom and a shower room, so suddenly

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from developing one single property,

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you are now looking at four flats.

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Now that is a very tempting prospect.

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# That's a good idea

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# Yes, it is, babe

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# A real groovy idea... #

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Of course there will be higher costs involved in converting

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this into flats, rather than a three-bed house.

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Four flats means four kitchens and four shower rooms to install,

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and all manner of sound and fireproofing

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and installation needed to meet current building regs.

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Not to mention accessibility to all the flats.

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So do the sums stack up?

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Is converting this into four flats financially the best option?

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Remember, this property has a guide price of 180,000 to 185,000.

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Time now to ask a local estate agent for some facts and figures.

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I think the condition of the property, as it is, because it

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has been a bit neglected over the years, it is ideal for conversion.

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If it was in good condition, had been modernised, it would

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be ideal for a family because of the size of it,

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but there is a big demand for one-bedroom flats.

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If the house was left as a three-bedroom house,

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the rental markets would hold at probably 950 per calendar month.

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But as individual units,

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I'd say probably about 550 per calendar month.

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Wow, four flats at £550 per calendar month. It does seem that

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converting the property into flats is a bit of a no-brainer.

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But what about values?

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If it was renovated to a three-bedroom house, it is

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probably worth about £240,000, something like that.

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But if the whole place was converted into four one bed units,

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it would appeal to an investor.

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It is properly worth around £320,000, £330,000.

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So, this tall terrace will become four flats. After all, planning

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permission is already in place.

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The work to convert it has begun,

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so let's find out what happened at the auction.

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It is an end of terrace property with double glazing,

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and it is close to the high street, so lots going for it.

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Can I see, I don't know, 174 for it?

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170.

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Take 160, 160 I've got.

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160 I'm bid. 165 now do I see? 165 do I see?

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165 I have.

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170. 170. 172.

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172. 175.

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And with the bids slowly creeping up,

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we leave it there and rejoin with the bidding at £198,000.

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198 bid I have. 200 I'm looking for.

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At 198, then, for the first time...

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198 for the second time...

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Third and final time.

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200,000 I've got. 202, you will probably buy it with that.

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202, can I say? One more you going?

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At 202.

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At £202,000, then, for the first time...

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202 for the second.

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Third and final time at 202, you're not bidding, it is

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in the room at 202.

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Yours at 202, and it is J912. Thank you.

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That successful bid of 202,000 came from Dave, on the right here,

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and business partner Chris.

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# It takes two, baby

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# It takes two, baby

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# Me and you... #

0:18:020:18:03

Regular viewers may recognise them, as they've appeared

0:18:050:18:08

on the show before when they developed a property in Folkestone.

0:18:080:18:11

And it is them who have started gutting this property in preparation

0:18:110:18:15

for the renovation.

0:18:150:18:17

Dave has a background in finance, and Chris is a carpenter.

0:18:170:18:20

A perfect combo? We shall see.

0:18:200:18:23

Guys, congratulations, we meet again.

0:18:230:18:26

-Old friends now.

-Nice to see you again.

0:18:260:18:29

So what was it about this property that made you want to buy this,

0:18:290:18:32

and how much research did you guys do?

0:18:320:18:34

It was mainly because it already has planning.

0:18:340:18:37

It is all ready for the conversion to the four flats, which is

0:18:370:18:39

what we are trying to do.

0:18:390:18:41

And we can walk straight in on the day of completion and start work.

0:18:410:18:45

Because he's got planning, we had already pre-agreed with

0:18:450:18:48

our high street lender that we could borrow a percentage of the finances.

0:18:480:18:53

They will only lend on planning,

0:18:530:18:55

so we had to put up 50% of the cash, and our very friendly bank

0:18:550:18:58

manager very kindly stepped in and put the rest up.

0:18:580:19:01

Is this something that you really need to get your teeth into?

0:19:010:19:04

Because, as it stands at the moment, it is a bit of a dirty old

0:19:040:19:07

place, and there is lots of dust flying around and brick dust.

0:19:070:19:10

How are you going to be changing this and how quickly is it going to

0:19:100:19:13

-take shape?

-This will take us about three months.

-OK.

0:19:130:19:16

And you're not going to tweak the plans at all? I mean,

0:19:160:19:18

you are going to work with what you've got.

0:19:180:19:20

It is exactly what we need. It's cut into four one-bedroom flats.

0:19:200:19:23

There's not much more, other than leaving it as a single house,

0:19:230:19:26

that you can do with it, so it is ideal for what we need.

0:19:260:19:29

But there's still quite a bit of work to do.

0:19:290:19:31

I know you've got a couple of separate entrances to create, haven't you?

0:19:310:19:35

There is another one coming into the first floor from the rear,

0:19:350:19:38

so there is two front doors to the basement and the first floor,

0:19:380:19:42

and then the two on the top use the original front doors for entrances.

0:19:420:19:46

OK. I mean, that is going to be lovely, having another separate entrance at the back.

0:19:460:19:50

And that garden, I think that is such a special walled garden.

0:19:500:19:54

-It is not listed, this building, is it?

-No, it's not.

0:19:540:19:57

It's not in a conservation area.

0:19:570:19:58

It's got none of the usual problems that come with buildings.

0:19:580:20:02

There is no parking with it but because it is so close to the town,

0:20:020:20:05

the high street and the station,

0:20:050:20:07

there's no requirement for planning to have parking.

0:20:070:20:09

And there is a large car park, if needed, out the back.

0:20:090:20:12

So it looks like Dave

0:20:130:20:14

and Chris have landed on their feet with this property.

0:20:140:20:17

Not having to go through planning permission is not only a time

0:20:170:20:21

saver but a money saver too.

0:20:210:20:23

And what's more, they already have an agreement with a housing

0:20:230:20:26

association through Kent County Council to rent all

0:20:260:20:29

the properties over a five-year period once they're complete.

0:20:290:20:33

Wow, they really are a bit of a dream team.

0:20:330:20:35

Both of your heads together, I mean, this really is such a great

0:20:370:20:40

business for you two together because you offer something so different.

0:20:400:20:44

Yes, 100%. I mean, for me, when we go speak to the bank manager

0:20:440:20:47

and we get a load of gobbledygook, I'm kind of all right with it.

0:20:470:20:51

I've always been involved in the building side and I understand

0:20:510:20:54

the building contracts, what needs to be done in the building itself.

0:20:540:20:58

And on the financial side, yes, I understand it,

0:20:580:21:02

but I don't understand it all. But it is nice to have somebody who does.

0:21:020:21:06

So it is obvious, great teamwork.

0:21:060:21:08

Let's now talk about the properties, the flats, what they're going to

0:21:080:21:11

look like and what they are going to have, what's the finish going to be like.

0:21:110:21:15

-Magnificent.

-Finishes... Shower rooms rather than bathrooms.

0:21:150:21:19

There are single bedroom units.

0:21:190:21:22

But they're going to be of a good quality.

0:21:220:21:25

We never do anything that isn't, because we work on the principle that

0:21:250:21:28

if it is nice when they take it over, hopefully they will look after it.

0:21:280:21:32

And what are they going to be like internally?

0:21:320:21:34

Internally, they've got quite a large kitchen, fitted kitchen in...

0:21:340:21:38

which, I think, on two of the floors, comes into the rear

0:21:380:21:41

of the building, and the other two floors into the front.

0:21:410:21:44

Bathrooms are all in the centres.

0:21:440:21:46

The staircase, we are going to retain as it looks at the moment.

0:21:470:21:51

-Because I think it is quite pleasant.

-I love it, it is beautiful.

0:21:510:21:54

You're the money man, tell me how much you're going to be spending.

0:21:540:21:58

-I don't always tell him everything.

-Do you not?

0:21:580:22:00

-No, the budget is about 65, 65,000.

-Yeah.

0:22:000:22:04

To do all the work here?

0:22:040:22:06

-Oh, I'm quite surprised at that.

-Well...

0:22:060:22:09

-it is quite a tight budget but...

-Yes, I would say.

0:22:090:22:12

So how much would they be worth, do you think, if you were to market them and sell them on?

0:22:120:22:16

To market and sell them on in this area, we think about 70, £75,000.

0:22:160:22:20

-But that's not what you're going to be doing?

-No.

0:22:200:22:23

Listen, it's been fantastic seeing you guys again, and I'm glad that

0:22:230:22:26

your business really is up and running and you're doing really well,

0:22:260:22:29

and I can't wait to see the outcome of this, so, congratulations.

0:22:290:22:32

-Thank you.

-Thanks.

0:22:320:22:34

Well, David and Chris's partnership seems to be

0:22:340:22:36

going from strength to strength.

0:22:360:22:38

They are buying and doing up properties at such a rapid rate,

0:22:380:22:42

and they've already got a client lined up to rent out these flats.

0:22:420:22:46

But will it all go smoothly for them,

0:22:460:22:48

or will there be problems ahead?

0:22:480:22:51

You can find out how this dynamic duo get on later on in the programme.

0:22:510:22:56

Still to come, in London, these developers took their time.

0:22:570:23:00

Ten years later, I walked into Frank' office and said, "I'm going

0:23:000:23:04

"to try and go and buy a place," and he was, "Let's do it."

0:23:040:23:07

And it is time for us

0:23:080:23:10

to check out how the four flats in Kent are coming along.

0:23:100:23:13

They already are magnificent and they're not finished yet.

0:23:130:23:16

MUSIC: No One Knows by Queens Of The Stone Age

0:23:190:23:22

We're back in Ilkeston in Derbyshire now,

0:23:220:23:25

where I was looking at this two-bed mid-terrace, guided at £48,000.

0:23:250:23:30

It looked solid from the outside, but when I stepped inside,

0:23:300:23:33

it had a few surprises.

0:23:330:23:36

I've never seen anything like that before.

0:23:360:23:39

Wow, that's like an under stairs cupboard,

0:23:390:23:41

but you've got this little sort of serving hatch.

0:23:410:23:44

Answers to what you think that's all about on a postcard

0:23:440:23:47

to the show, please.

0:23:470:23:49

# No-one knows... #

0:23:490:23:51

Well, I guess that'll just have to stay a mystery, then.

0:23:510:23:55

The quirky layout extended upstairs as well,

0:23:550:23:57

where the bathroom was only accessible via one of the bedrooms.

0:23:570:24:01

However, despite this, it seemed a solid enough house

0:24:010:24:04

and had enough appeal to tempt Phil

0:24:040:24:06

and Julia into paying £52,500 at auction.

0:24:060:24:11

Phil was a landscape gardener by trade, but had begun to

0:24:110:24:14

cultivate, ha-ha, a rental portfolio with one eye on the future.

0:24:140:24:19

Before I come to meet you, I was 50 foot up a tree.

0:24:190:24:22

Yeah. And I don't fancy doing that in another ten years' time.

0:24:220:24:27

-This will be your pension pot, then, will it?

-Yes. Definitely.

0:24:270:24:30

# It's just a young man's game... #

0:24:300:24:34

He had £7,000, a three month timescale

0:24:380:24:41

and intended on completely gutting the place,

0:24:410:24:44

including replastering and new central heating.

0:24:440:24:47

He was going to do as much of the work as he could,

0:24:470:24:49

so it would be hard going.

0:24:490:24:51

Still, at least there was no landscape gardening to do.

0:24:510:24:55

Just over four months later, we've returned to see if Phil

0:24:570:25:00

and Julia have put in the hard work, and if it's paid off.

0:25:000:25:04

What a difference! And I don't just like it

0:25:110:25:14

because that hatch isn't there any more.

0:25:140:25:16

The whole place has been painted and carpented in neutral shade,

0:25:160:25:19

giving it a bright, modern feel.

0:25:190:25:22

The new kitchen looks great too, but it has not just been cosmetic.

0:25:220:25:26

They've also fitted a new central heating system and boiler,

0:25:260:25:29

and Phil has sorted out some damp that was in the living area.

0:25:290:25:33

The concrete and paving that was outside was all sloping

0:25:370:25:40

towards the house.

0:25:400:25:42

The bottom corner, where the patio doors now are, just used to

0:25:420:25:45

sit in water which, over time,

0:25:450:25:47

was just seeping through into the kitchen,

0:25:470:25:50

causing the damp issue. So we have put drains in, you know,

0:25:500:25:54

to take the water away from the actual brickwork.

0:25:540:25:57

So that's the hatch gone and the damp disappeared.

0:25:570:26:00

What about the bathroom door dilemma?

0:26:000:26:02

This is the room where we put the second doorway into the bathroom.

0:26:040:26:09

We didn't want to lose any space out of the second bedroom, so the

0:26:090:26:13

easiest solution was to put a Jack and Jill door configuration, which

0:26:130:26:18

means that both bedrooms have got access through into the bathroom.

0:26:180:26:23

It's an inspired solution, and with the new bathroom suite,

0:26:230:26:26

the whole floor looks great.

0:26:260:26:28

But don't underestimate the work that went into do this.

0:26:280:26:31

In order to fit the door, Phil had to remove a chimney breast and fit

0:26:310:26:35

a steel support across the top, and he didn't employ builders to do it.

0:26:350:26:41

Most of the work that we've done in here, all the demolition,

0:26:410:26:45

the channelling out for the electrics,

0:26:450:26:47

some of the plumbing work,

0:26:470:26:49

you know, we did, me, my partner Julia. Both very hands-on people.

0:26:490:26:53

I had a lot of help and support from family and friends.

0:26:530:26:57

Chris, my mother-in-law, she's been rounds glossing everywhere.

0:26:570:27:01

It is a job I hate and I get runs everywhere. Sarah and Craig.

0:27:010:27:04

Craig is an accountant, so to actually see him

0:27:040:27:07

doing some manual work was quite funny.

0:27:070:27:11

Especially when he had been out on the beer the night before.

0:27:110:27:14

Sam the plasterer, he came round and hung a few doors as well.

0:27:140:27:18

# I'm tired of you trying to do what I do

0:27:180:27:21

# You better do what I say... #

0:27:210:27:23

Blimey, mother-in-law's glossing and plasterers hanging doors.

0:27:250:27:29

Phil must have real powers of persuasion to go along with

0:27:290:27:32

that work ethic of his.

0:27:320:27:34

Sometimes it seems he can't help but get stuck in.

0:27:340:27:38

Remember how he wasn't going to touch the garden? Well...

0:27:380:27:42

Outside, not had a great deal to do,

0:27:430:27:46

so laid some Indian paving that I got left over from a job.

0:27:460:27:50

And just re-laid some of the three by two slabs to the top end

0:27:500:27:54

and put a bit of slate down, just to add a bit of colour.

0:27:540:27:57

Like all experts, he makes it sound so easy.

0:27:570:28:00

Phil originally hoped to have the work completed

0:28:000:28:03

in three months, but it has now been four, so why the delay?

0:28:030:28:08

At the time I bought this property at auction,

0:28:080:28:10

we also bought another one.

0:28:100:28:12

We spent a bit longer doing the first house up, which has

0:28:120:28:17

sort of impacted on that we are month later in finishing this one.

0:28:170:28:21

Although we actually completed this in nine weeks, again,

0:28:210:28:25

down to the support we've had from family and friends.

0:28:250:28:29

It's been a great, you know, a great experience.

0:28:290:28:32

Phil also went over on his budget.

0:28:340:28:36

He had made an estimate of £7,000 with a £1,000 contingency,

0:28:360:28:41

but ended up spending a total of £9,000,

0:28:410:28:44

as he didn't take into account the time and cost of getting all

0:28:440:28:48

his work checked according to local authority building regulations.

0:28:480:28:52

That is why you should always have a contingency fund.

0:28:520:28:56

So, he and Julia have now spent £9,000 on top of the £52,500

0:28:560:29:01

they paid at auction. Are they still in line to make a profit?

0:29:010:29:05

We've asked along two local estate agents to get their opinion.

0:29:050:29:09

I think the property flows very well as you come inside,

0:29:090:29:12

and it is fantastic how you've got the Jack and Jill

0:29:120:29:16

doors into the bathroom from each bedroom.

0:29:160:29:18

Since my last visit to the property, the house has changed dramatically.

0:29:180:29:22

The quality of the fixtures and fittings is fantastic.

0:29:220:29:25

Lovely bathroom, lovely kitchen.

0:29:250:29:27

Lovely rear garden, done a really good job with the very small space.

0:29:270:29:31

Well, the estate agents sound very impressed,

0:29:310:29:34

so let's get those all-important valuations.

0:29:340:29:38

I would recommend an asking price between £75,000 and £80,000.

0:29:380:29:43

In the current market,

0:29:430:29:44

I would estimate the property to be worth £75,000 to £80,000.

0:29:440:29:48

If I was to place this property on the rental market,

0:29:480:29:51

I would recommend an asking price o £450 to £475 per calendar month.

0:29:510:29:56

The rental valuation on this property,

0:29:560:29:58

in the current market, would be £425 to £450 per calendar month.

0:29:580:30:03

Having spent a total of £61,500,

0:30:030:30:06

that top sales figure would give Phil and Julia a pre-tax

0:30:060:30:10

profit of 18,500 grand, but this was always to become part

0:30:100:30:15

of their rental portfolio, so what does Phil think of those valuations?

0:30:150:30:19

The high one's about right,

0:30:210:30:24

we have already rented the property at £475 a month.

0:30:240:30:28

Due to the spec and everything. The client is more than happy.

0:30:280:30:32

Well, Phil always maintained putting a higher spec would mean he

0:30:320:30:36

would be more likely to get a better rent, and he's been proven right.

0:30:360:30:40

That rent will give him and Julia a yield of over 9%.

0:30:400:30:44

That will certainly help towards his retirement.

0:30:440:30:47

So does he have any advice for others thinking of taking on a development?

0:30:470:30:52

Best advice I can give to anyone who is

0:30:520:30:54

thinking of taking on a project like this, do be prepared, long hours.

0:30:540:30:59

We were here to 12.30 last night.

0:30:590:31:02

I think Julia is ready for the holiday that we are going on.

0:31:020:31:05

This is South Norwood in the south-east of London,

0:31:110:31:13

in the borough of Croydon. It's popular with the city professionals

0:31:130:31:17

because of its excellent transport links, with families

0:31:170:31:19

because of its parks and good housing, and if you're

0:31:190:31:23

a Crystal Palace fan, then Selhurst Park is just on your doorstep.

0:31:230:31:27

# Glad all over

0:31:270:31:28

# Baby, I'm glad all over

0:31:280:31:32

# So glad you're mine... #

0:31:320:31:35

Conveniently located just a short walk away from Norwood Junction

0:31:370:31:41

station, this ground floor studio flat I'm here to see had

0:31:410:31:44

a guide price of £80,000.

0:31:440:31:46

Now, it looks like somebody has already started clearing out.

0:31:460:31:50

I'm going to take a look.

0:31:500:31:52

Nice bit of space here in this studio flat,

0:31:570:31:59

I wasn't expecting it to be so spacey.

0:31:590:32:01

OK, we've got a bathroom through there. And a big space for a kitchen.

0:32:010:32:05

There's a sink there on the floor, I think they've got to start from scratch there.

0:32:050:32:10

But a nice big space for a kitchen.

0:32:100:32:11

Into the lounge, which, again, lovely high ceilings, some

0:32:110:32:15

of the character features around the edge and around the light as well.

0:32:150:32:18

And an old-fashioned fireplace, which could look really pretty

0:32:180:32:22

if you could re-store that.

0:32:220:32:24

Obviously somebody has started work already, or intend to.

0:32:240:32:27

And they've got central heating as well, so I'm impressed so far, very impressed.

0:32:270:32:31

Oh, yes, and the skirting boards, I do like high skirting boards as well.

0:32:310:32:35

Let's explore more.

0:32:350:32:36

This is quite spacious for a studio flat. I am wondering that...

0:32:390:32:43

I knew that was going to be a false wall.

0:32:430:32:45

Now the bath is on the other side of that,

0:32:450:32:47

so you could actually knock that through, take your bath out,

0:32:470:32:50

because it is possibly taking up too much space in this studio flat.

0:32:500:32:54

Just have a shower, a toilet and sink.

0:32:540:32:56

You could possibly turn this into a one bed.

0:32:560:32:59

Not too sure, personal preference.

0:32:590:33:01

But what I do know, that's the communal garden

0:33:010:33:03

and there is no access to it, so what you would have to do,

0:33:030:33:07

and what I would suggest, is knock this window out

0:33:070:33:10

and put yourself some doors in there, or A door, so you can get

0:33:100:33:13

through, summer evening, have a nice pint of ale...sat with Dion Dublin

0:33:130:33:18

# Bring us in good ale Bring us in good ale

0:33:180:33:21

# For our blessed Lady's sake Bring us in good ale... #

0:33:210:33:26

But before any beer, you'll need to get a skip and a big shovel.

0:33:260:33:29

Fitting a new door, giving direct access to the communal garden,

0:33:310:33:34

would definitely add value to this flat.

0:33:340:33:37

And if it's a profit you're looking to make,

0:33:370:33:39

creating a separate bedroom is a way to do it.

0:33:390:33:41

But this is a leasehold property and you'll need to get consent from

0:33:410:33:45

the freeholder for any structural changes before you get started.

0:33:450:33:49

Time to find out what a local estate agent thinks of this flat

0:33:490:33:53

and all its options.

0:33:530:33:55

It is quite a good size studio flat.

0:33:550:33:57

You have got a really large front room,

0:33:570:34:01

which you could turn into an open-plan lounge and kitchen.

0:34:010:34:05

And the... What would have been the kitchen at one stage could be

0:34:050:34:10

turned into the bedroom.

0:34:100:34:12

Refurbishment wise, it will need a full redecorate throughout,

0:34:130:34:17

maybe a bit of plastering, certainly a new kitchen

0:34:170:34:20

and a new bathroom, and flooring throughout.

0:34:200:34:23

Let's compare prices then.

0:34:250:34:27

What about resale for the flat as a studio and as a one bedroom?

0:34:270:34:31

Once renovated as a studio flat,

0:34:320:34:34

this property could sell for around the £140,000 mark.

0:34:340:34:37

As a one-bedroom, once renovated, this property could sell

0:34:370:34:40

for in the region of £170,000 to £175,000.

0:34:400:34:45

So creating a dedicated bedroom could add £35,000 of value.

0:34:460:34:51

But what would the effect on rentals be?

0:34:510:34:54

As a studio flat, this property could rent

0:34:550:34:58

for around the £700 per calendar month mark.

0:34:580:35:01

As a one-bedroom flat, with access to a communal garden, this property

0:35:010:35:04

could rent for the £850 to £900 per calendar month mark.

0:35:040:35:10

Yes, it does need a bit of a face-lift, but if you can get

0:35:100:35:13

all that work done it could be a lovely studio flat or even a one-bed.

0:35:130:35:17

Sort the access out to the communal garden as well and you could be onto a winner.

0:35:170:35:21

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

0:35:210:35:24

And move on now to Lot 152.

0:35:240:35:27

A ground floor flat in need of modernisation.

0:35:270:35:30

100,000 anywhere?

0:35:300:35:32

If not, you tell me.

0:35:320:35:34

Looking for 100,000.

0:35:340:35:35

What about 80, then? Try and help.

0:35:350:35:37

Thank you, 80 I've got.

0:35:370:35:39

81. 82.

0:35:390:35:41

83.

0:35:410:35:43

Try and get you something today. 83.

0:35:430:35:45

84. 85.

0:35:450:35:48

Well, after that sluggish start, the auction kicked into life,

0:35:480:35:53

with several people putting in bids.

0:35:530:35:56

We rejoin the bidding at £117,000.

0:35:560:35:59

117.

0:35:590:36:01

118.

0:36:010:36:03

119.

0:36:030:36:05

It's £119,000.

0:36:050:36:08

Set against the gentleman standing up at the back on my left.

0:36:080:36:11

Anybody else for Lot 152?

0:36:110:36:13

If not, 119 for the first,

0:36:130:36:16

119 for the second,

0:36:160:36:18

120.

0:36:180:36:19

121.

0:36:190:36:20

122.

0:36:200:36:22

123.

0:36:240:36:26

124.

0:36:260:36:28

Go through it again.

0:36:280:36:30

123 for the first.

0:36:300:36:31

123 for the second.

0:36:310:36:33

123 for the third and final time.

0:36:330:36:35

We all done?

0:36:350:36:37

Sold, 123.

0:36:370:36:39

It was a fiercely contended battle,

0:36:420:36:44

but the successful bid of £123,000 came from old friends Frank and Roy.

0:36:440:36:49

I met them back at the property to find out their plans.

0:36:490:36:54

-Frank, nice to meet you.

-Hi.

-Same with you, Roy.

-How you doing?

0:36:540:36:57

-Congratulations.

-Thank you.

0:36:570:36:59

Tell us about the auction. What was that experience like?

0:36:590:37:02

It's thrilling, exciting. It was our very first auction.

0:37:020:37:05

We decided to go along after watching a programme for

0:37:050:37:08

so many years, we thought, "Let's give it a go.

0:37:080:37:10

"Let's see if we can buy our own property." And, yeah, it's exciting.

0:37:100:37:14

-We were there for the whole day, weren't we?

-For the whole day, we was.

0:37:140:37:17

We started many, many years ago because Frank

0:37:170:37:19

and myself work together, and ten years ago we actually said,

0:37:190:37:23

"Shall we go into the housing business?"

0:37:230:37:25

Which we did and we went our separate ways, we didn't do it together.

0:37:250:37:28

Ten years later, I walked into Frank's office and said,

0:37:280:37:31

"Look, I'm going to try and go and buy a place," and he was, "Let's do it."

0:37:310:37:35

We just took it from there and just went to the auction, and that was very exciting, actually.

0:37:350:37:39

It got to £113,000, £114,000 and I thought,

0:37:390:37:42

"That's far enough for me."

0:37:420:37:43

Frank said that's not quite far enough for him.

0:37:430:37:46

No, what happened was we had a budget,

0:37:460:37:49

the budget was £115,000, and the bidding started going up

0:37:490:37:54

and it was going up and we were always like, "Yep, yep, yep."

0:37:540:37:57

And then it stopped at about 115 and I was like,

0:37:570:37:59

"OK, we're at our budget now."

0:37:590:38:01

And I think Roy realised that inside because I could see his body

0:38:010:38:04

tensing and he was like...

0:38:040:38:05

And I was like, "No, Roy, we need to go more."

0:38:050:38:08

And I was doing the maths in my head and I'm thinking,

0:38:080:38:10

-"Yes, we do want to carry on."

-A little bit of a shock for me.

0:38:100:38:13

Roy's kind of sitting back like, "Why are you carrying on?"

0:38:130:38:15

So we're doing, we're doing it, and the auctioneer goes,

0:38:150:38:18

"OK, going once, going twice,"

0:38:180:38:20

and the guy comes back in again!

0:38:200:38:22

So in the end it got to 123,000.

0:38:220:38:25

And we took it.

0:38:250:38:26

These guys really are excited about their purchase.

0:38:260:38:29

And after a wait of ten years, who can blame them?

0:38:290:38:33

# Ten years are gone

0:38:330:38:35

# Part of ten years from today...#

0:38:350:38:39

So the decade long dream has finally happened for the guys.

0:38:390:38:43

Both of them work as a managers in the bus industry and hope this

0:38:440:38:47

property is a first stop in new careers and not the end of the route.

0:38:470:38:52

So what are they planning here?

0:38:520:38:54

It is a studio flat

0:38:560:38:57

and we want to actually maybe think about turning it into a

0:38:570:39:00

one-bedroom, try and get a bit more for your money for the property.

0:39:000:39:03

So how are you going to do that? How are you going to change it into a one-bedroom?

0:39:030:39:06

-What are you going to do to change it?

-We've changed mind about...

0:39:060:39:09

-Four times.

-Yeah, about four times we've changed our mind.

0:39:090:39:11

Have you come to a final decision yet? Is it still milling about?

0:39:110:39:15

It is going to be now, from what I believe...

0:39:150:39:17

I think today we realised that this is the way we want to go.

0:39:170:39:21

So this is going to stay as it is, just going to bring it up to a

0:39:210:39:25

high spec, the kitchen is going to be moved,

0:39:250:39:28

the bedroom's going to be turned into a bedroom en-suite

0:39:280:39:31

and the kitchen is going to be separate.

0:39:310:39:33

So we're going to have this as the living area,

0:39:330:39:35

then we're going to have a bedroom, one-bed,

0:39:350:39:37

and the kitchen separate, bedroom's going to have the en suite.

0:39:370:39:41

Well, it seems for Frank and Roy the choices here were like buses.

0:39:410:39:45

They waited ten years and then four came along at the same time.

0:39:450:39:49

But they're both onboard now.

0:39:490:39:51

The main plan of getting rid of this wall

0:39:510:39:54

and reworking the space makes sense to me.

0:39:540:39:57

But how will they create garden access?

0:39:570:39:59

That's something that we have been racking our brains over.

0:39:590:40:02

The only access is round the back to get to the garden,

0:40:020:40:05

so we were thinking about knocking down the window that's

0:40:050:40:09

already in a pretty bad state and maybe putting doors there.

0:40:090:40:13

Door there leading to the outside garden, and we have good access

0:40:130:40:16

direct to the garden, without any problems.

0:40:160:40:19

Now, tell us about how much you're hoping this is going to cost you

0:40:190:40:23

in regards to budget.

0:40:230:40:25

Well...

0:40:250:40:27

Our budget has gone from, we started out around 8,000,

0:40:270:40:31

we believe it's going to be costing anything between 10,000 and 15,000 now,

0:40:310:40:35

we're hoping that we don't go over that.

0:40:350:40:38

How long do you hope all this work's going to take?

0:40:380:40:41

Well, I think we were looking in the region of six weeks,

0:40:410:40:44

that's what we were hoping for.

0:40:440:40:46

We still need to get hold of the landlord because there's a few

0:40:460:40:49

-issues we need to sort out with the electrics and the...

-Splitting.

0:40:490:40:52

The splitting of the electrics, so we need to sort that out.

0:40:520:40:55

But we're looking at six weeks, hopefully, to be in,

0:40:550:40:57

getting everything and come out.

0:40:570:40:59

It could go over, and being the first one it's bound to maybe

0:40:590:41:04

trickle over as we're learning at the same time.

0:41:040:41:08

It's always good not to rush into things when you make mistakes,

0:41:080:41:11

and then think it through. As you've done already.

0:41:110:41:13

But I think you're right to do so, try

0:41:130:41:15

and get yourself a ceiling of time and a ceiling on your budget, and try

0:41:150:41:19

not to go anywhere near the top of that ceiling, if you can help it.

0:41:190:41:22

Indeed. And that's going to be my job, to try and keep it low.

0:41:220:41:25

We need to make the profit.

0:41:250:41:27

I think we've been talking about it for so many years

0:41:270:41:29

because we know we actually think alike

0:41:290:41:31

-and it's always good to have a business partner that...

-You can bounce off.

0:41:310:41:35

You can bounce off and, you know, you work together very well

0:41:350:41:38

and you can trust each other because trust plays a big part,

0:41:380:41:41

especially when you're dealing with so much funds.

0:41:410:41:43

When you have to leave somebody to do something for you,

0:41:430:41:45

you've got to know it's going to be done properly, as you'd want it done as a partnership.

0:41:450:41:49

-And that's what I can feel from you two as well.

-Yeah, most definitely.

0:41:490:41:52

You seem happy. You seem happy, boys.

0:41:520:41:54

We're happy boys, we're happy boys.

0:41:540:41:56

I mean, we're doing this, we've got our wives backing us,

0:41:560:42:00

which plays a big part as well, so, yeah, I believe it's going to

0:42:000:42:04

be a great venture and there's going to be some good things coming forward.

0:42:040:42:07

I believe the same. I love the enthusiasm.

0:42:070:42:09

-Well, good luck. I hope it works out, I really do.

-Thanks, Dion, cheers.

0:42:090:42:12

-Good luck to you, boys.

-Thank you very much.

-You'll make it work.

0:42:120:42:15

-Absolutely.

-Indeed we will.

0:42:150:42:17

This venture has been ten years in the making for Roy and Frank,

0:42:170:42:21

but they're finally here with their first property.

0:42:210:42:23

Now, they have changed their minds three or four times,

0:42:230:42:26

are they going to change it again? We'll have to wait and see.

0:42:260:42:29

But the enthusiasm that they've given me is incredible.

0:42:290:42:32

And if it's anything to go by, they will definitely be successful.

0:42:320:42:35

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

0:42:350:42:38

-We've seen how one project turned out.

-But what about the other two?

0:42:400:42:44

Yes, have they had time to get them sorted?

0:42:440:42:46

There is only one way to find out. Let's take a look.

0:42:460:42:49

Back to Sittingbourne in Kent now, where I looked at this end terrace

0:42:490:42:53

with a guide price of 180,000 to 185,000.

0:42:530:42:58

It originally had three bedrooms.

0:42:580:43:00

And why do I say originally?

0:43:000:43:02

Because inside it looked like this.

0:43:020:43:04

Yes, the interior had almost been competently ripped out, as planning

0:43:040:43:10

had been passed and work had begun on turning this

0:43:100:43:13

into four one-bed flats.

0:43:130:43:15

# Even though it's complicated

0:43:150:43:19

# We've got time to start again...#

0:43:190:43:24

It would be a complicated, expensive job, but the complete

0:43:240:43:27

redesign and break-up of this house could yield a massive profit.

0:43:270:43:31

And that's certainly what experienced developing partners Chris and Dave

0:43:310:43:35

hoped when they bought the property at auction for £202,000.

0:43:350:43:40

They had big plans.

0:43:400:43:41

-What's the finish going to be like?

-Magnificent.

0:43:420:43:45

We work on the principle that if it's nice

0:43:450:43:47

when they take it over, hopefully they'll look after it.

0:43:470:43:50

# Now let me blow your mind...#

0:43:500:43:53

They may well want to create flats that will blow our mind,

0:43:530:43:57

but the pair had a tight budget of just 65,000.

0:43:570:44:00

They've a lot of experience, as Chris is a carpenter

0:44:000:44:03

and Dave used to work in finance, and they'd already struck a deal

0:44:030:44:07

to lease the finished flats to a local housing association.

0:44:070:44:10

Could they complete the development and come in on budget?

0:44:100:44:14

Four months later, and we returned to find out.

0:44:170:44:21

MUSIC: Rock And Roll by Led Zeppelin

0:44:210:44:25

I think it's fair to say the change is staggering.

0:44:300:44:33

Let's hear the full story from Dave and Chris.

0:44:330:44:36

So we've got a flat per level.

0:44:380:44:40

There's a bedroom at the front, there's a kitchen-living room

0:44:400:44:46

at the back, with a bathroom in the middle of the flats.

0:44:460:44:49

We've dry lined the entire building, it's got insulation in.

0:44:490:44:53

We put firebreaks between the ceilings

0:44:530:44:56

and floors of all the flats and replaced everything,

0:44:560:45:00

rewired, plumbing, everything has been replaced.

0:45:000:45:02

Chris and Dave also amended the plans slightly to create

0:45:020:45:05

a staircase that connects the front door with the ground, first and second floor flats,

0:45:050:45:10

and giving the basement flat its own entrance at the rear.

0:45:100:45:14

They're looking absolutely great.

0:45:140:45:17

Though some, such as the top floor here, are closer to completion,

0:45:170:45:20

than, say, the basement flat. What's still to be done?

0:45:200:45:24

Well, they're nearly completed, we've got decoration going down

0:45:240:45:27

on the fourth, we've got carpets already down in two of them.

0:45:270:45:31

But we're not going too fast at it now because we're

0:45:310:45:33

waiting for the water board to come in and fit the water main in,

0:45:330:45:37

so then we can liven up all the plumbing and find out if it leaks.

0:45:370:45:40

The last thing you want is everything to be sealed up

0:45:400:45:43

and then discover you've got a leak.

0:45:430:45:45

Decisions like that come from having plenty of experience

0:45:450:45:48

in the property game, and is exactly the kind of thing

0:45:480:45:51

a good project manager should be thinking about.

0:45:510:45:54

Does Dave still think these flats will be magnificent?

0:45:540:45:58

They already are magnificent and they're not finished yet.

0:45:580:46:01

Who needs modesty, eh, Dave?

0:46:010:46:03

In fairness, I do agree.

0:46:030:46:05

I think they look fantastic.

0:46:050:46:07

So how did the pair decide to fit out their flats?

0:46:070:46:10

As far as choosing kitchens and decor and suchlike, we try and

0:46:100:46:14

stick to a standard template - all of the flats we've done in the

0:46:140:46:17

last year have got the same kitchens, they're all white,

0:46:170:46:20

they've all got very similar doors, and we try and stay with

0:46:200:46:24

a known and tried method.

0:46:240:46:26

It seems to work and we get the right prices.

0:46:260:46:29

A very logical approach for a developer to take.

0:46:290:46:32

But I've noticed some flooring that doesn't quite fit the brief.

0:46:320:46:35

What's all that about?

0:46:350:46:37

The green laminate floor, why I chose that, it was basically because of price.

0:46:370:46:41

The green laminate flooring is pretty grim.

0:46:410:46:44

It's no different to anything else.

0:46:440:46:46

If it's there at the right price, then we'll buy it.

0:46:460:46:48

Chris likes it.

0:46:480:46:50

I think he's got it through his own house, so that's important.

0:46:500:46:53

Dave loves it. I think he's got it in his house,

0:46:530:46:55

I haven't got any of it in mine.

0:46:550:46:57

Yes, yes, yes. Come on now, stop the bickering.

0:46:570:47:00

It's clearly a profitable partnership,

0:47:000:47:02

but it sounds like they enjoy themselves too.

0:47:020:47:06

Working with Dave, it's been great.

0:47:060:47:08

You know, we tend to make it quite fun.

0:47:080:47:11

We've been working together for two years now, we've got

0:47:110:47:14

seven projects on the go in different states of development.

0:47:140:47:17

Ultimately, it's all about getting the job done, getting it out to

0:47:170:47:21

housing or selling the land or doing whatever, you know what I mean?

0:47:210:47:24

We're here to make some cash, but also it can be fun the same time.

0:47:240:47:28

Well, property development is undoubtedly hard work,

0:47:280:47:32

but nobody said it needn't be fun.

0:47:320:47:35

Chris and Dave bought the property for 202,000

0:47:350:47:39

and have a projected spend of £85,000 to complete the project.

0:47:390:47:44

This will be 20 grand more than their original budget.

0:47:440:47:47

Chris said the additional cost was on the stairway amendment

0:47:480:47:51

and the cost of connecting new amenities to the flats.

0:47:510:47:55

Splitting the house was always going to be the more expensive option,

0:47:550:47:59

but we've asked along two local estate agents to see if all that

0:47:590:48:02

spend has been worth it.

0:48:020:48:04

There's a lot of thought gone into the conversion of this,

0:48:060:48:09

and they've used the space extremely well.

0:48:090:48:12

You could have probably got three flats in there

0:48:120:48:14

and it wouldn't have worked so well. But the four, because they're

0:48:140:48:18

all individually over the four floors, works really, really well.

0:48:180:48:21

So the standard of finish of the top floor flat has been done

0:48:210:48:23

to a very high standard.

0:48:230:48:25

I would expect that if the other flats are done to the same

0:48:250:48:28

standard, then the property will look very good throughout.

0:48:280:48:32

The estate agents gave a top sales value of 115,000 per unit,

0:48:320:48:38

or up to 400,000 if they were to sell all four flats as one property.

0:48:380:48:43

This could give them a pre-tax profit of anything between 113,000,

0:48:430:48:48

all the way up to 173,000, depending on what they decided to do.

0:48:480:48:53

However, Chris and Dave were always hoping to rent,

0:48:530:48:57

so what are those rental valuations?

0:48:570:49:00

Probably, because of the position and the condition of the flats,

0:49:000:49:04

you're probably around £625 per calendar month.

0:49:040:49:07

I'd expected each flat to achieve a figure

0:49:070:49:10

in the region of £595 per calendar month.

0:49:100:49:13

Having spent a total of £287,000,

0:49:130:49:17

this upper value would give Chris and Dave a total yield of over 10%.

0:49:170:49:23

But that's assuming all the flats are filled.

0:49:230:49:26

And let's not forget, that is a big assumption.

0:49:260:49:29

It's one of the reasons they've stuck to their plan of letting

0:49:290:49:32

the flats to the local housing association.

0:49:320:49:34

Obviously, we've locked in 550 a month with the housing association for five years,

0:49:340:49:38

so it's a guaranteed rent with no void period.

0:49:380:49:41

So as soon as these are done we can have some viewings

0:49:410:49:45

and we're very confident they're going to go.

0:49:450:49:47

After the five years it means we get even more,

0:49:470:49:50

so yeah, they're good. We're happy.

0:49:500:49:53

As you should be, Chris.

0:49:540:49:56

This was a big job, and it's been executed beautifully.

0:49:560:50:00

So with this being such a success,

0:50:000:50:02

how will they go about finding their next property?

0:50:020:50:05

We have a criteria, all we do is we look for a pub in the local area,

0:50:050:50:10

as soon as we find a pub, we then look for a project,

0:50:100:50:13

and we just keep walking out until we find one and then we go from

0:50:130:50:16

there. It works well every time.

0:50:160:50:18

Back to South Norwood in London now.

0:50:240:50:26

Where I earlier looked around a ground floor studio flat that had

0:50:260:50:30

a very attractive guide price of £80,000.

0:50:300:50:34

More spacious than expected

0:50:350:50:37

and boasting some nice character features, this little property

0:50:370:50:41

had a lot going for it, and the potential to be even better.

0:50:410:50:45

Now, this is quite spacious for a studio flat,

0:50:450:50:48

and I am wondering that...

0:50:480:50:50

HOLLOW BANGING I knew that was going to be a false wall.

0:50:500:50:53

Now, the bath is on the other side of that,

0:50:530:50:55

so you could actually knock that through, take your bath out,

0:50:550:50:57

cos it's possibly taking up too much space in this studio flat,

0:50:570:51:01

just have a shower, a toilet and sink.

0:51:010:51:03

You could possibly turn this into a one-bed.

0:51:030:51:06

Not too sure, personal preference, but what I do know,

0:51:060:51:09

that's the communal garden and there's no access to it.

0:51:090:51:12

So what you would have to do, and what I would suggest,

0:51:120:51:15

is knock this window out and put yourself some doors in there,

0:51:150:51:18

or a door, so you can get through.

0:51:180:51:21

Summer evening, have a nice pint of ale, sat with Dion Dublin.

0:51:210:51:25

Proving very popular on auction day, the bidders battled it out

0:51:260:51:29

and eventually it sold for £123,000.

0:51:290:51:33

We all done?

0:51:330:51:35

Sold, 123.

0:51:350:51:37

The successful bidders on this occasion were friends

0:51:390:51:42

Frank, on the right here, and Roy.

0:51:420:51:45

And the idea to buy a property together had been a long time coming.

0:51:450:51:48

I mean, we started many, many years ago because Frank

0:51:500:51:52

and myself worked together, and ten years ago we actually said,

0:51:520:51:56

"Should we go into the housing business?"

0:51:560:51:59

Which we did and we went our separate ways, we didn't do it together.

0:51:590:52:03

Ten years later, I walked into Frank's office and said,

0:52:030:52:06

"Look, I'm going to try and go and buy a place," and he was, "Let's do it."

0:52:060:52:09

With bags of enthusiasm,

0:52:090:52:11

the two friends were eager to make up for lost time

0:52:110:52:14

and had several ideas for making the most of the property they bought.

0:52:140:52:18

It's now 11 weeks after we first saw Frank and Roy,

0:52:200:52:23

and I can't wait to see if, after ten years of talking about it,

0:52:230:52:27

they were right to get into property renovation together.

0:52:270:52:30

Now that's a transformation.

0:52:430:52:45

It's now a modern kitchen-diner,

0:52:450:52:48

as Roy explains further.

0:52:480:52:50

Right, so, if you remember, this was the bedroom and the living room,

0:52:520:52:57

so we've taken up the carpet, we've put down wood flooring,

0:52:570:53:01

we've brought the kitchen in from where it was and it's now,

0:53:010:53:04

as you can see here, in the living room.

0:53:040:53:07

And we've changed all the walls and made them white,

0:53:070:53:11

easier to look at, and we've done that throughout the house.

0:53:110:53:14

By moving a stud wall back,

0:53:140:53:16

they've been able to create a bedroom where the kitchen once stood,

0:53:160:53:20

and they've created garden access with this newly fitted door.

0:53:200:53:24

When creating the bedroom,

0:53:270:53:29

they had to lose the bath in favour of a smaller shower room, but

0:53:290:53:32

in order to turn this from a studio to a one-bed flat, that's no great loss.

0:53:320:53:37

Frank and Roy have done a great job in realising the full potential

0:53:410:53:45

of this property, and now it really is a desirable one-bed flat.

0:53:450:53:49

We're pretty happy with it because, to be honest, at first,

0:53:530:53:56

I think me and Roy had a few decisions

0:53:560:53:59

whether to leave it as it is or to change it around.

0:53:590:54:02

First of all we were just going to leave it as a studio flat,

0:54:020:54:05

but then we looked at the space and we thought if we rejig just

0:54:050:54:09

a little bit, we can actually make it into a one-bedroom flat.

0:54:090:54:12

And that's what we've done and we think the bedroom works.

0:54:120:54:15

We definitely know that the front room works,

0:54:150:54:18

and the bathroom, it is what it is.

0:54:180:54:21

We also looked at what extra profit we could make

0:54:210:54:24

if we moved it around and made it into a one-bedroom, rather than

0:54:240:54:28

a studio, and I think we've pretty much managed to do that -

0:54:280:54:33

the extra profit between what it could have been and what it is now.

0:54:330:54:37

And the property came with a communal garden,

0:54:370:54:39

but the problem that we had was how do you get to the garden?

0:54:390:54:42

And there was only one access which really was to go outside the front

0:54:420:54:45

and go all the way around the property.

0:54:450:54:47

So what we did, we decided to get rid of the existing window

0:54:470:54:51

that was in the kitchen and put a whole door there

0:54:510:54:55

and steps that gave us access into the garden which, to be honest,

0:54:550:54:58

it works pretty well and it just makes it very nice and easy.

0:54:580:55:02

-Easy access.

-Yeah.

0:55:020:55:04

Frank and Roy really have got the most out of this property,

0:55:040:55:07

and once the garden has been cleaned up a bit it will be a

0:55:070:55:10

lovely bit of outside space.

0:55:100:55:13

So, let's get to the nitty-gritty. Who's done what?

0:55:150:55:18

Well, I'll let Roy answer that.

0:55:200:55:21

I mean, he was here most of the time, actually.

0:55:210:55:25

-Frank didn't do anything.

-I did a bit.

0:55:250:55:27

I did a bit of brickwork out the front. I did, honestly.

0:55:270:55:30

And I did everything.

0:55:300:55:32

No, I was here pretty much every day,

0:55:320:55:35

making sure that everything that we wanted to be done

0:55:350:55:38

and changes that was to be made was actually happening.

0:55:380:55:41

But Frank was always on the end of the phone line,

0:55:410:55:44

I was always telling him what was going on, so if he didn't agree...

0:55:440:55:47

We kind of bounced it off each other quite a lot to make

0:55:470:55:50

sure that we ended up with what you see now. It was quite good.

0:55:500:55:53

But, yeah, I was here every day.

0:55:530:55:55

Because of their decision to create a one-bedroom property,

0:55:550:55:58

their budget of £10,000 to £15,000 went up to £18,500,

0:55:580:56:03

meaning they've made a total investment here of £141,500.

0:56:030:56:08

But with eagerness to sell, was this first property a good investment?

0:56:080:56:12

We've asked along two local estate agents for their opinions.

0:56:170:56:22

My first thoughts are that it's a very good conversion,

0:56:220:56:25

it's in a lovely area, kept a lot of original features,

0:56:250:56:27

and I think this will sell very well in today's market.

0:56:270:56:30

I think it's a great idea to change this from a studio to a one-bedroom.

0:56:300:56:34

It does have good space,

0:56:340:56:36

the bedroom is maybe slightly on the small side,

0:56:360:56:39

but nevertheless, it's really nicely laid out, and I think it works very well.

0:56:390:56:42

Not having a bathroom is not a disadvantage, a lot of people

0:56:420:56:45

get up these days and shower and out straightaway, so it should be OK.

0:56:450:56:49

So, after ten years in the making, has Frank and Roy's

0:56:490:56:52

first venture into property been a success?

0:56:520:56:56

It's valuations time.

0:56:560:56:59

I think for this flat I would market it at £190,000 to

0:56:590:57:03

obtain offers over £185,000.

0:57:030:57:06

This property would go on the market at approximately £190,000.

0:57:060:57:11

Well, if Frank and Roy were to sell at £190,000,

0:57:110:57:15

that would mean a pre-tax profit of 48 and a half grand,

0:57:150:57:20

making this first venture into property development

0:57:200:57:23

a bit of a success. Wouldn't you say?

0:57:230:57:26

I'm happy with that because that is what we were actually looking for, 190.

0:57:260:57:30

So very happy with that figure there, and it's good to hear, actually.

0:57:300:57:34

That works for us. Definitely works for us.

0:57:340:57:37

So finally, having completed a property

0:57:370:57:39

and for it to be such a success, will Frank and Roy be continuing?

0:57:390:57:43

Our long term aim is to not just purchase properties,

0:57:430:57:48

but to have a good amount of properties

0:57:480:57:51

-that we're going to be renting out.

-Definitely.

0:57:510:57:54

And at some point to be able to sit on a beach somewhere

0:57:540:57:57

and live the good life.

0:57:570:58:00

Yeah, OK.

0:58:000:58:03

Well, that's about it for today's show.

0:58:050:58:07

Join us next time for more property auction action.

0:58:070:58:10

Yes, we'll be following the

0:58:100:58:12

highs and lows of investing in bricks and mortar, so join us then.

0:58:120:58:15

-See you then.

-Bye-bye.

-Goodbye.

0:58:150:58:17

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