Episode 30 Homes Under the Hammer

Welcome to the programme. The weather has been quite changeable

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

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

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

property market is to visit a property auction.

Well, there is something for everyone's

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

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

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

Coming up in Derbyshire,

this gardener is using development to leave behind landscaping.

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

That is another reason why I bought it.

And talking of things being left behind,

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

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

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

Lovely high ceilings. An old-fashioned fireplace.

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

very impressed.

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.

I'm now off to the town of Ilkeston.

Although officially in Derbyshire, Nottingham city centre is

closer, being only eight miles away,

while Derby city centre is nine miles away.

Well, Ilkeston marketplace here is the location of a charter

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

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

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

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

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

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

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

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

Oh, hello, that could catch you out,

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

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

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

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

Well.

I've never seen anything like that before.

Wow, that is like an under stairs cupboard,

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

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

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

probably knocked through at some stage.

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

Kitchen, not so big, out the back there.

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

..pretty weird, actually.

-# Ain't that peculiar?

-Ain't that peculiar?

# Ain't that peculiar... #

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

arrangement, because, as terraced houses go,

this is pretty standard and not in bad shape.

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

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

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

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

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

So far, so good.

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

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

Front bedroom, not a bad size.

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

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

Ta-da! It's the bathroom.

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

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

And I can't really see a solution.

Normally you would look at putting some kind of corridor.

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

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

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

attractive proposition,

especially for two people looking to rent a room each.

They would have to be on pretty friendly terms.

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

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

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

house in Ilkeston, guided at £48,000,

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

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

the saleability of the property and also the rental proposition.

It needs a new bathroom.

While the bathroom is being installed, it would be a

good idea to separate part of the back bedroom,

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

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

but what else needs doing here?

It is ready for complete refurbishment.

Will need an element of replastering.

A new kitchen, a new bathroom,

probably new central heating system, complete redecoration.

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

modern, contemporary fittings. Not over the top.

Needs to appeal to as wide an audience as possible.

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

First, a resale value.

The resale value of the property,

once modernised to a good standard,

and creating a landing space upstairs to give separate access

to the bathroom, the resale value

would be between £70,000 and £75,000.

And the rental returns?

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

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

not least the bathroom and that strange under stairs thingy going

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

home or rental property.

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

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

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

45, bid me where you will. 44.

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

46. 47 is bid.

48. 49 is bid.

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

£49,500. 50. 50 is bid.

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

And a half, sir.

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

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

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

And a half. 53.

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

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

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

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

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

and his partner Julia.

Julia wasn't able to come to the house,

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

-Phil, good to meet you.

-And you.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

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

-Oh, really.

-And then when I was in my teens,

-we moved 300 yards that way.

-Wow.

-You met in the middle.

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

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

So, you know, it is prime for rental.

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

-attracted you?

-Yes.

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

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

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

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

-Yes.

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

you know, when it came to auction...

We went for another property which was a priority,

which we got that one.

-And then this was the next one along.

-Wow.

-So, we ended up with two.

-Oh, did you?

-Yeah.

-Oh, right, OK.

Is this something you do?

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

so this is our fourth.

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

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

-What do you do at the moment?

-Landscape gardener.

-Oh, OK.

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

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

-MARTIN LAUGHS

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

Yes, that will be the good thing.

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

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

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

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

-Yes, definitely.

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

# I've been around too many years

# I've also shed too many tears

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

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

but he is still planning to get stuck into the entire

renovation himself, except for plastering and electrics.

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

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

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

-Oh, OK.

-Just bricking the kitchen door up.

-Right.

-And the serving hatch.

-Oh, don't you like that?

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

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

-Yes. So, that will be bricked up.

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

-Good.

But we try and do it with rentals.

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

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

accessible without creating a corridor in the second bedroom.

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

Jack and Jill style as it's known.

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

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

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

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

-if anything untoward appears.

-Right.

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

-Not really.

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

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

-Right.

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

-and forget about it for a little bit?

-Yes.

-So what is the timescale?

Three months hopefully,

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

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

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

And then onto more, perhaps.

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

hopefully, if I've got mortgages paid off,

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

-Right.

-That's our aim.

Well, listen, congratulations. Good luck with it.

-Thank you.

-Look forward to seeing how you get on.

-All right. Cheers.

Well, from landscape gardening to growing a property portfolio,

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

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

This is Sittingbourne in Kent.

In the 19th century, Sittingbourne helped fuel

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

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

Now it is Sittingbourne that is rapidly expanding, helped

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

# Brick by brick... #

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

high street. Here it is.

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

bedrooms. And it had a guide price at auction of

£180,000 to £185,000.

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

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

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

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

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

You can see the skirtings have already been ripped up,

and work has certainly started.

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

You've got a nice ceiling height,

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

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

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

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

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

I hope they stay in this property.

And one thing I absolutely love here, walled garden.

Look at that, beautiful. Wow!

Yes, a decent size garden is certainly a bonus,

and that is what you have here.

Up to the first floor

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

And it continues upstairs onto the second floor, with partition

walls missing, no ceilings and piles of rubble everywhere.

The final floor in the property is the lower ground.

And unfortunately it is more of the same.

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

well, it already has planning permission to

convert into four one-bedroom flats.

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

has already started.

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

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

from developing one single property,

you are now looking at four flats.

Now that is a very tempting prospect.

# That's a good idea

# Yes, it is, babe

# A real groovy idea... #

Of course there will be higher costs involved in converting

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

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

and all manner of sound and fireproofing

and installation needed to meet current building regs.

Not to mention accessibility to all the flats.

So do the sums stack up?

Is converting this into four flats financially the best option?

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

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

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

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

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

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

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

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

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

But as individual units,

I'd say probably about 550 per calendar month.

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

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

But what about values?

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

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

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

it would appeal to an investor.

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

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

permission is already in place.

The work to convert it has begun,

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

It is an end of terrace property with double glazing,

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

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

170.

Take 160, 160 I've got.

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

165 I have.

170. 170. 172.

172. 175.

And with the bids slowly creeping up,

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

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

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

198 for the second time...

Third and final time.

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

202, can I say? One more you going?

At 202.

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

202 for the second.

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

in the room at 202.

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

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

and business partner Chris.

# It takes two, baby

# It takes two, baby

# Me and you... #

Regular viewers may recognise them, as they've appeared

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

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

for the renovation.

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

A perfect combo? We shall see.

Guys, congratulations, we meet again.

-Old friends now.

-Nice to see you again.

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

and how much research did you guys do?

It was mainly because it already has planning.

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

what we are trying to do.

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

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

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

They will only lend on planning,

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

manager very kindly stepped in and put the rest up.

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

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

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

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

-take shape?

-This will take us about three months.

-OK.

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

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

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

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

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

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

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

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

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

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

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

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

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

-No, it's not.

It's not in a conservation area.

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

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

the high street and the station,

there's no requirement for planning to have parking.

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

So it looks like Dave

and Chris have landed on their feet with this property.

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

saver but a money saver too.

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

association through Kent County Council to rent all

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

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

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

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

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

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

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

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

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

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

So it is obvious, great teamwork.

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

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

-Magnificent.

-Finishes... Shower rooms rather than bathrooms.

There are single bedroom units.

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

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

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

And what are they going to be like internally?

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

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

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

Bathrooms are all in the centres.

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

-Because I think it is quite pleasant.

-I love it, it is beautiful.

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

-I don't always tell him everything.

-Do you not?

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

-Yeah.

To do all the work here?

-Oh, I'm quite surprised at that.

-Well...

-it is quite a tight budget but...

-Yes, I would say.

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

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

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

-No.

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

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

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

-Thank you.

-Thanks.

Well, David and Chris's partnership seems to be

going from strength to strength.

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

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

But will it all go smoothly for them,

or will there be problems ahead?

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

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

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

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

And it is time for us

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

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

MUSIC: No One Knows by Queens Of The Stone Age

We're back in Ilkeston in Derbyshire now,

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

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

it had a few surprises.

I've never seen anything like that before.

Wow, that's like an under stairs cupboard,

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

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

to the show, please.

# No-one knows... #

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

The quirky layout extended upstairs as well,

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

However, despite this, it seemed a solid enough house

and had enough appeal to tempt Phil

and Julia into paying £52,500 at auction.

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

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

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

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

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

-Yes. Definitely.

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

He had £7,000, a three month timescale

and intended on completely gutting the place,

including replastering and new central heating.

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

so it would be hard going.

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

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

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

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

because that hatch isn't there any more.

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

giving it a bright, modern feel.

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

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

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

The concrete and paving that was outside was all sloping

towards the house.

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

sit in water which, over time,

was just seeping through into the kitchen,

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

to take the water away from the actual brickwork.

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

What about the bathroom door dilemma?

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

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

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

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

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

the whole floor looks great.

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

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

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

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

the channelling out for the electrics,

some of the plumbing work,

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

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

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

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

Craig is an accountant, so to actually see him

doing some manual work was quite funny.

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

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

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

# You better do what I say... #

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

Phil must have real powers of persuasion to go along with

that work ethic of his.

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

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

Outside, not had a great deal to do,

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

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

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

Like all experts, he makes it sound so easy.

Phil originally hoped to have the work completed

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

At the time I bought this property at auction,

we also bought another one.

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

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

Although we actually completed this in nine weeks, again,

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

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

Phil also went over on his budget.

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

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

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

his work checked according to local authority building regulations.

That is why you should always have a contingency fund.

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

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

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

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

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

doors into the bathroom from each bedroom.

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

The quality of the fixtures and fittings is fantastic.

Lovely bathroom, lovely kitchen.

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

Well, the estate agents sound very impressed,

so let's get those all-important valuations.

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

In the current market,

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

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

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

The rental valuation on this property,

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

Having spent a total of £61,500,

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

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

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

The high one's about right,

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

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

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

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

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

That will certainly help towards his retirement.

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

Best advice I can give to anyone who is

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

We were here to 12.30 last night.

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

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

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

because of its excellent transport links, with families

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

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

# Glad all over

# Baby, I'm glad all over

# So glad you're mine... #

Conveniently located just a short walk away from Norwood Junction

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

a guide price of £80,000.

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

I'm going to take a look.

Nice bit of space here in this studio flat,

I wasn't expecting it to be so spacey.

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

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

But a nice big space for a kitchen.

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

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

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

if you could re-store that.

Obviously somebody has started work already, or intend to.

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

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

Let's explore more.

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

I knew that was going to be a false wall.

Now the bath is on the other side of that,

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

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

Just have a shower, a toilet and sink.

You could possibly turn this into a one bed.

Not too sure, personal preference.

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

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

and what I would suggest, is knock this window out

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

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

# Bring us in good ale Bring us in good ale

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

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

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

would definitely add value to this flat.

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

creating a separate bedroom is a way to do it.

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

the freeholder for any structural changes before you get started.

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

and all its options.

It is quite a good size studio flat.

You have got a really large front room,

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

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

turned into the bedroom.

Refurbishment wise, it will need a full redecorate throughout,

maybe a bit of plastering, certainly a new kitchen

and a new bathroom, and flooring throughout.

Let's compare prices then.

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

Once renovated as a studio flat,

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

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

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

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

But what would the effect on rentals be?

As a studio flat, this property could rent

for around the £700 per calendar month mark.

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

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

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

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

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

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

And move on now to Lot 152.

A ground floor flat in need of modernisation.

100,000 anywhere?

If not, you tell me.

Looking for 100,000.

What about 80, then? Try and help.

Thank you, 80 I've got.

81. 82.

83.

Try and get you something today. 83.

84. 85.

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

with several people putting in bids.

We rejoin the bidding at £117,000.

117.

118.

119.

It's £119,000.

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

Anybody else for Lot 152?

If not, 119 for the first,

119 for the second,

120.

121.

122.

123.

124.

Go through it again.

123 for the first.

123 for the second.

123 for the third and final time.

We all done?

Sold, 123.

It was a fiercely contended battle,

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

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

-Frank, nice to meet you.

-Hi.

-Same with you, Roy.

-How you doing?

-Congratulations.

-Thank you.

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

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

We decided to go along after watching a programme for

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

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

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

-For the whole day, we was.

We started many, many years ago because Frank

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

"Shall we go into the housing business?"

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

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

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

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

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

"That's far enough for me."

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

No, what happened was we had a budget,

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

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

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

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

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

tensing and he was like...

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

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

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

-A little bit of a shock for me.

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

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

"OK, going once, going twice,"

and the guy comes back in again!

So in the end it got to 123,000.

And we took it.

These guys really are excited about their purchase.

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

# Ten years are gone

# Part of ten years from today...#

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

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

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

So what are they planning here?

It is a studio flat

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

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

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

-What are you going to do to change it?

-We've changed mind about...

-Four times.

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

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

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

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

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

high spec, the kitchen is going to be moved,

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

and the kitchen is going to be separate.

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

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

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

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

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

But they're both onboard now.

The main plan of getting rid of this wall

and reworking the space makes sense to me.

But how will they create garden access?

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

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

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

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

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

direct to the garden, without any problems.

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

in regards to budget.

Well...

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

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

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

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

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

that's what we were hoping for.

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

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

-Splitting.

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

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

getting everything and come out.

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

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

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

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

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

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

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

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

We need to make the profit.

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

because we know we actually think alike

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

-You can bounce off.

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

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

especially when you're dealing with so much funds.

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

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

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

-Yeah, most definitely.

You seem happy. You seem happy, boys.

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

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

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

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

I believe the same. I love the enthusiasm.

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

-Thanks, Dion, cheers.

-Good luck to you, boys.

-Thank you very much.

-You'll make it work.

-Absolutely.

-Indeed we will.

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

but they're finally here with their first property.

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

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

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

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

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

-We've seen how one project turned out.

-But what about the other two?

Yes, have they had time to get them sorted?

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

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

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

It originally had three bedrooms.

And why do I say originally?

Because inside it looked like this.

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

had been passed and work had begun on turning this

into four one-bed flats.

# Even though it's complicated

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

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

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

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

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

They had big plans.

-What's the finish going to be like?

-Magnificent.

We work on the principle that if it's nice

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

# Now let me blow your mind...#

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

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

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

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

to lease the finished flats to a local housing association.

Could they complete the development and come in on budget?

Four months later, and we returned to find out.

MUSIC: Rock And Roll by Led Zeppelin

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

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

So we've got a flat per level.

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

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

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

We put firebreaks between the ceilings

and floors of all the flats and replaced everything,

rewired, plumbing, everything has been replaced.

Chris and Dave also amended the plans slightly to create

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

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

They're looking absolutely great.

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

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

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

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

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

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

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

The last thing you want is everything to be sealed up

and then discover you've got a leak.

Decisions like that come from having plenty of experience

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

a good project manager should be thinking about.

Does Dave still think these flats will be magnificent?

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

Who needs modesty, eh, Dave?

In fairness, I do agree.

I think they look fantastic.

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

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

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

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

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

a known and tried method.

It seems to work and we get the right prices.

A very logical approach for a developer to take.

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

What's all that about?

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

The green laminate flooring is pretty grim.

It's no different to anything else.

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

Chris likes it.

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

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

I haven't got any of it in mine.

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

It's clearly a profitable partnership,

but it sounds like they enjoy themselves too.

Working with Dave, it's been great.

You know, we tend to make it quite fun.

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

seven projects on the go in different states of development.

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

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

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

Well, property development is undoubtedly hard work,

but nobody said it needn't be fun.

Chris and Dave bought the property for 202,000

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

This will be 20 grand more than their original budget.

Chris said the additional cost was on the stairway amendment

and the cost of connecting new amenities to the flats.

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

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

spend has been worth it.

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

and they've used the space extremely well.

You could have probably got three flats in there

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

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

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

to a very high standard.

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

standard, then the property will look very good throughout.

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

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

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

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

However, Chris and Dave were always hoping to rent,

so what are those rental valuations?

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

you're probably around £625 per calendar month.

I'd expected each flat to achieve a figure

in the region of £595 per calendar month.

Having spent a total of £287,000,

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

But that's assuming all the flats are filled.

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

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

the flats to the local housing association.

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

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

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

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

After the five years it means we get even more,

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

As you should be, Chris.

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

So with this being such a success,

how will they go about finding their next property?

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

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

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

there. It works well every time.

Back to South Norwood in London now.

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

a very attractive guide price of £80,000.

More spacious than expected

and boasting some nice character features, this little property

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

Now, this is quite spacious for a studio flat,

and I am wondering that...

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

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

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

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

just have a shower, a toilet and sink.

You could possibly turn this into a one-bed.

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

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

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

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

or a door, so you can get through.

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

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

and eventually it sold for £123,000.

We all done?

Sold, 123.

The successful bidders on this occasion were friends

Frank, on the right here, and Roy.

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

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

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

"Should we go into the housing business?"

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

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

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

With bags of enthusiasm,

the two friends were eager to make up for lost time

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

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

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

they were right to get into property renovation together.

Now that's a transformation.

It's now a modern kitchen-diner,

as Roy explains further.

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

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

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

as you can see here, in the living room.

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

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

By moving a stud wall back,

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

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

When creating the bedroom,

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

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

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

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

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

I think me and Roy had a few decisions

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

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

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

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

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

We definitely know that the front room works,

and the bathroom, it is what it is.

We also looked at what extra profit we could make

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

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

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

And the property came with a communal garden,

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

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

and go all the way around the property.

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

that was in the kitchen and put a whole door there

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

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

-Easy access.

-Yeah.

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

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

lovely bit of outside space.

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

Well, I'll let Roy answer that.

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

-Frank didn't do anything.

-I did a bit.

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

And I did everything.

No, I was here pretty much every day,

making sure that everything that we wanted to be done

and changes that was to be made was actually happening.

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

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

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

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

But, yeah, I was here every day.

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

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

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

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

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

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

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

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

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

It does have good space,

the bedroom is maybe slightly on the small side,

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

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

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

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

first venture into property been a success?

It's valuations time.

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

obtain offers over £185,000.

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

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

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

making this first venture into property development

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

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

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

That works for us. Definitely works for us.

So finally, having completed a property

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

Our long term aim is to not just purchase properties,

but to have a good amount of properties

-that we're going to be renting out.

-Definitely.

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

and live the good life.

Yeah, OK.

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

Join us next time for more property auction action.

Yes, we'll be following the

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

-See you then.

-Bye-bye.

-Goodbye.