Episode 34 Homes Under the Hammer

Welcome to the show. If you're looking to make a good investment,

look at the property market.

Are you aware that you don't need ALL the cash -

you don't need to put all your money upfront when you buy at auction?

That's right, you can have a deposit and you can still get a mortgage,

but make sure you do thorough research

before you buy your home under the hammer.

If you want to start out in the property developing business,

the trick is not to bite off more than you can chew.

No, when you see a property,

look for potential that others might have missed.

OK, let's see what today's buyers invested in on today's show.

In Barry, in Wales, a lot with three flats

and one commercial unit has all the space you could want, but...

It'd be nice to have a few floorboards!

In Denham, Buckinghamshire,

we revisit a pub where there's also plenty of space.

Wow!

And planning permission gives it potential to expand.

And if it's potential you're after,

there's lots of it at this house in Gainsborough, in Lincolnshire -

lots of work too!

Floorboards are everywhere, there's piping that's been sort of cut.

All these properties were bought at auction.

We'll find out who got them

and how much they paid when these homes went under the hammer.

Well done, madam.

This is Barry Island in the south of Wales,

a seaside town that has good links to Cardiff

and is popular with both commuters and investors.

In recent years, Barry has come under the spotlight

with the popularity of comedy series Gavin and Stacey,

much of which was filmed in and around the area.

# Tell me tomorrow I'll wait by the window for you... #

Well, not far from Barry Island is the property I'm here to see,

and a really interesting one it is too.

A mixed-use development - basically, a commercial unit downstairs

and three flats ready for renovation.

Guide price was £28,000 plus. Let's see what's occurring.

Well, that's a nice surprise.

The shop unit, actually, in pretty good condition.

It looks like it's been relatively recently refurbished.

35 square metres is this main shop area.

It has got all new electrics, by the look of it.

I mean, it's fairly - what's the word? - bland in lots of ways.

It's white, it is, you know... as an office, ideal.

It doesn't look like it's got any central heating,

so you'd have to sort that out,

but what you have got is, to the back here,

this little, sort of...sink,

sort of utility greenroom kind of area.

As an office, it works perfectly, and that's just the beginning.

# And said, "You ain't seen nothin' yet

# "B-B-B-Baby, you just ain't seen n-n-nothin' yet

# "Nothin' yet, you ain't been around..." #

The toilet at the back of the commercial unit needs finishing,

but aside from that, it's all looking in pretty good condition.

Can the same be said for the flats upstairs?

So, this is the first flat - it's a maisonette,

so basically, on two levels.

Downstairs, quite a lot of space.

Up here, yes, definitely very spacious.

Unfortunately, it looks like it has been subject

to a bit of fire damage in the past.

So, all the ceiling's gone.

There's always a bit of a worry in terms of the structure,

how badly has it been damaged by that fire?

Um...

It'd be nice to have a few floorboards!

Apart from that, yeah, it's a good start. Let's carry on!

Big difference from the commercial unit then,

with everything needed to be done here.

Plus, a thorough structural survey is essential.

However, in the right hands, this could be a sound investment.

But, yes, get some floorboards - sharpish!

# I've got a feeling from the floorboards up

# Call it a calling if you like that touch... #

So, upstairs to the second flat and, before I get there,

stairs up to the third flat.

A bit like downstairs, it's in a bit of a state,

but a good size, again.

I mean, you are going to have to start from scratch.

I mean, it's a case of, you know,

stud partition walls need replastering,

new roof, new electrics.

I mean, moving through here - ha! - it is...

You know, floorboards are up, and ceiling's down.

But it doesn't smell damp.

Um, it doesn't look like there's been any water ingress.

Yes, there's work to be done, but a fantastic opportunity

and, actually, although it looks like it's a mess,

not that much...money to be spent

for a potentially pretty big return on your investment.

Yes, I know it's hard to believe,

but this ISN'T a hugely expensive job.

Especially when you see that the third flat

is in much the same state as the other two.

But the structure seems basically sound and issues such as damp,

that can turn a property like this into a money pit,

don't seem to be a problem.

And think of what you get - two two-bed flats on the second

and third floors and a two-bed maisonette at the back,

accessed from a door beside the commercial space,

all for a guide price of £28,000.

Let's find out what a local estate agent thinks of it.

My first impressions of the building,

it is fantastic in size and stature.

It needs central heating, electrics...

Every wall needs to be boarded up, plastered...

Flooring needs to be put down.

I believe each apartment/maisonette

needs to have £15,000 spent on them,

and I think, the shop, £5,000 will bring it up to a standard

that you can really go to work in.

A total £50,000 renovation seems like a realistic figure to me too

and the agent estimates all three flats would each rent

for £495 per calendar month.

So, if the flats were to be renovated for sale,

what could they fetch?

If the two apartments were placed on the open market for sale,

I believe they would achieve £50,000.

If the maisonette was placed on the open market for sale,

I believe it would achieve between £45,000 and £50,000.

Those numbers are sounding pretty good.

What about the commercial unit?

If the shop was put on the open market for sale,

I believe it would go for in the region of £40,000.

If the commercial unit was put on the open market for lease,

I believe it would lend itself to £400 per calendar month.

Well, this really is a fantastic opportunity -

a mixed-use development, the commercial unit downstairs

and those three flats ripe for redevelopment.

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

QUIET CHATTER

A substantial...building,

retail area and then other rooms up top.

Guided at £28,000, start me, somebody, will you,

someone here, 25, if you like?

It's going to go for that and an awful lot more.

Thank you, 25, I'll go to you there. At 25. And six, can I see?

25, 26. 27?

27, 28. 28, 29?

29 and 30.

30. 31. 31, 32.

33 seated.

Well, certainly a lot of interest in this lot,

guided at £28,000, with multiple bids coming from around the room.

36, thank you... 36.

We rejoin the action with bidding at £44,000.

44, 45, 46, 47...

47, 48. 49, 50.

50 standing. At 50, thank you. 50, 51.

51, 52.

52? At 51,000, seated then.

For the 52... Thank you, 52. 53. 53.

They keep coming, 53. 54. But you keep batting them away. 55. 56. 57.

57, 58. 59?

59? And 60. Still cheap, isn't it?

60,000. 61. 61? 61, 62. 63. 63?

Are you sure? You'll regret it tomorrow if you don't.

I've got 63 against you, you've been there all the way.

At 63,000, on my left-hand side... 64, new bidder. 65.

At 65,000 then... For the first time...

66, thank you. 66, 67? No.

At 66 then, standing towards the back, for the first time...

Second time... Shout if you want to change your mind... 67, new bidder.

67. 68 behind, do you want to?

68 behind, I've got 67 now with the lady.

At £67,000 then for the first time... Second time...

Third and last time, at £67,000...

-AUCTIONEER BANGS GAVEL

-Well done, madam, snucked in there at the end, your number please?

Number 75, thanks very much, we'll have somebody down with you shortly.

That well-timed solitary bid of £67,000 belonged to Mel.

Originally from Cardiff, Mel has overseen the renovation

of two previous properties and is eager to get cracking on her third.

-Mel, great to meet you.

-And you.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this place?

Um, I thought it would be a good project to earn some cash,

to be honest.

Tell me what you want it for.

Well, I've got an office downstairs and then the three flats,

three two-bedroom flats, I'm hoping to either sell or rent.

-Right, so what's the office for?

-My solicitor's practice.

-Oh, great, you're a solicitor?

-Yes.

-Fantastic, that's convenient.

-Yeah.

-Do you do conveyancing?

-I do, yes.

Very convenient then!

-So, can you act for yourself on things like this?

-Yes.

-So, you actually did the whole deal?

-I did.

-Brilliant.

Did you have to speak to yourself on the phone? Like...

"When's it going to be done?" "Oh, I don't know, Tuesday, yeah?"

Are you...property-type background?

I have bought a couple of properties at auction previously.

And this kind of project, daunting or what?

It is a bit daunting, but obviously, I'm not going to be doing the work,

I'll be getting builders in to do that.

# She's the boss

# She's the boss... #

Mel is sticking with her skill set and who can fault that?

And it does seem that she's definitely a mover and a shaker!

-Tell me about downstairs then. A lot of work has been done.

-Yes.

-When did you complete on the property?

-Today.

-You've completed today?

-Yes.

-So, you've had a busy morning, then!

-Yes!

How come you've done the work downstairs?

Well, the seller's allowed me to come in...

and that's why I did the work, really.

Of course, if you hadn't completed, or...for whatever reason

it hadn't gone through, then you would have lost all the effort that

you'd put in and the money you'd spent downstairs, wouldn't you?

I would have, but I was pretty confident I'd be able to complete.

This was an unusual situation.

Mel arranged for the completion to be extended

and did the work with the seller's cooperation.

This meant that the unit was ready for business

and her bank loan was conditional on this.

It's handy being a solicitor

to navigate your way through these things

and Mel has a brother, Richard,

who works in the building trade.

He will navigate the project

and oversee the contractors over a 12-week schedule.

I mean, the property's in a pretty bad way,

so, you know, it's literally everything, you know.

The contractors are coming in and stripping it back

and doing everything.

So, what kind of money are you having to spend to get them sorted?

Well, I spent, in total, 7,000 downstairs on the commercial unit...

-Right.

-..which was in a pretty bad way previously.

And I think it's going to cost between 40 and 50

for the three flats.

-Right, so about 15 per flat?

-Yes.

Yeah. And what do you think you might be able to sell them for?

Well, I have been advised by local agents

-that they should be worth about 70...

-Wow!

..each. Yeah.

-So, potentially, about 100 grand-ish profit?

-Well, I'd like to think so.

-Yeah.

-But, you know, I'd sell them cheaper than that to...

-Yeah.

..run away quickly.

-Good. Well, congratulations.

-Thank you.

-Good luck with it.

-Thank you.

-Look forward to seeing how you get on.

-Cheers.

-HE LAUGHS

So, Mel spotting the opportunity here, and on course to make

a tidy little profit - completely hands-off.

It's a good trick if you can do it! How will she get on?

You can find out later in the show.

Back in March 2013, I was in...

So, where am I? Go on, have a look around. Where d'you reckon?

A rural Kentish village? Wiltshire market town?

Nope, this is Denham, two minutes from the M40,

20 minutes by train into Marylebone station

and two miles from the nearest Tube station.

Yes, the London Underground - hard to believe, I know!

Down in the area of New Denham was the property I was there to see.

A charming English country pub, guided at 375,000.

The outside was ideal, with a large car park,

and the inside impressed me too.

Wow! It's huge!

With a vast bar area, plenty of space for enjoying a quiet pint

and a good-sized commercial kitchen, it had everything.

But unfortunately, last orders had been called

and the pub wouldn't pour another drop.

# Closing time

# One last call for alcohol

# So finish your whisky or beer... #

But there was good news -

planning permission for four flats had already been granted.

# Every new beginning comes from some other beginning's end. #

There's going to be two flats on the ground floor -

one on the left and one on the right of the building.

The bedrooms are going to be to the front.

The kitchen, living room and open-plan space

is all going to be at the back.

Now, the same layout will be upstairs but a little bit smaller.

And each flat has got its own little garden at the back,

which is really nice, and the facade of the pub will remain unchanged.

Wandering through the top floor,

I could see there was plenty of space to play with

and a local estate agent thought the high local demand for flats

might generate a sales price of 210,000 per property.

So, plenty of potential profit.

Let's remind ourselves who fancied the challenge

when it went to auction.

Right, lot 31... is The Nine Stiles, Denham,

a well-located former public house.

You've got planning to convert to four two-bedroom flats.

Uh, I'll start at 350, go upwards from there.

I'm not going to go below 350. 355?

355? 360.

365. 370.

375. 380. 385.

385, 390. 395.

400. 405. 405. 410.

415. 415, right at the back.

420. 425.

Right at the back, 425. 425. 430...

435 at the back.

435, got you, just.

440. 445.

445, 450.

455. 460. 465?

Yes, 465?

Yes/no? 460, with you...

Anyone else? First time... Second time...

Third and last time... If you are all done?

-HE BANGS GAVEL

-Sold, 460, to you, sir.

Paying £85,000 over the guide price of 460 grand,

Simrit was the pub's new owner.

The London-based developer had renovated many times before,

but not on this scale.

So, were you sort of waiting for something like this to come along?

Um, what I've been used to in the past is either getting

commercial space above shops and making them into flats

or just renovating derelict flats and houses.

So something...

Some construction work like this,

this is kind of what I wanted to progress to anyway.

So, tell me a little bit about yourself, your history.

-So, I... I left university, I read law at university...

-Yeah.

..and then I worked in politics for several MPs,

just doing casework and research for them.

And then I left to...

I bought my first property, did it up, sold it.

I made some money, and then just carried on doing that.

Well, as a former law student,

Simrit knew a thing or two about - the bar!

# I'm taking a bar exam

# Under a neon sign... #

But as for this bar, his plans for it did not chime with

the approved planning permission that came with the auction lot.

So, what are your plans for this site?

My architect is in the process of drawing up some new plans...

For four new three-bedroom houses.

So, three roughly where they're in a terrace, where this is,

and one at the back, at the back of the car park.

Gardens and parking as well.

So, why have you decided to change the plans that, you know,

-came with this, cos it was for four two-bedroom flats?

-Yeah.

It was just to maximise the potential of the plot, really.

And also, the way it was set up,

-it was to redevelop this current building as it was...

-Mm-hm.

..and that would prove very expensive,

cos we'd need to get a lot of structural steel in

and it would effectively mean demolishing the whole thing,

-just leaving the front wall...

-Mm.

..but repositioning all of the windows as well,

which is effectively demolishing it anyway, but keeping everything.

So, it kind of doesn't make any sense.

So, my idea was just to raze it to the ground and start again.

-You really are coming in here with your developer's head on, aren't you?

-Exactly!

And you need to get your money's worth from this site, and you'll utilise all of the space around.

That's the plan, exactly.

Four new three-bedroom houses and, as we know,

there's a huge shortage of housing everywhere.

And people need housing.

Simrit thought it would take 12 months

and a budget of 350,000 to build the four properties.

However, when we returned over 18 months later,

although the pub had been razed to the ground,

there was no sign of Simrit's project being near completion.

# I'm working on a dream

# I'm working on a dream... #

His original plan had initially been rejected, but accepted on appeal,

costing him 12 months to finally get the permission to push on.

His dream of his first major development was taking some time.

# I'm working on a dream

# Though sometimes it feels so far away... #

This is where the pub used to be.

That's the road that the pub used to front.

And now, as you can see, the pub has been demolished.

And here, what we have is...

We've done...dug the foundations, we've poured the concrete

and now we've built up the brickwork up to damp-proof course level.

And the black blocks here give you a good indication

of where the houses end as well,

so this will be the rough floor area of one of the houses.

After such a long delay, finally having something here,

tangible to look at, it's a relief as well as quite exciting, as well.

Simrit might have faced a long journey to get here,

but he was enthusiastic about his plans.

Um, so, these are the plans for the current terrace of houses.

As you can see, they're just a very simple design,

in keeping with the rest of the road, as the planners requested.

Uh, this is the plan for the ground floor.

You walk in the front door, you have stairs right in front of you.

Kitchen on the left with an open-plan dining and reception area.

Parking, one parking space at the front for each house

and also one spot at the back.

Moving on to the first floor,

we have two bedrooms - one with an en suite and one family bathroom.

And also a utility room there on the landing.

And finally, moving on to the second floor, we've got a third bedroom

with a dormer window facing towards the rear of the property.

However, the fourth detached house at the back of the plot

was still in the early stages of the planning process.

The fourth house, uh, we've just put in planning.

Actually, today,

I believe my architect's put in planning for that.

It's actually going to be a two-bedroom house, that one.

The contract is for £369,000 -

for the building of the terrace of three houses

that we're doing at the moment.

And at the moment, everything's going to budget.

With huge sums of money at stake, his £460,000 purchase price

and that 360-grand build cost totalled £830,000.

Now, this was a huge undertaking

and we'll find out how it turned out later on in the programme.

Coming up in Gainsborough, in Lincolnshire...

I'm not missing a beat.

And in Denham, it seems Simrit may have hit the right note.

It's always nice to be proven right.

Back to Barry now, a town in South Wales,

where I saw an intriguing lot guided at £28,000 plus.

This four-floor property certainly gave you a lot for your money,

starting with a good commercial unit

on the ground level.

And then upstairs, a maisonette flat that wasn't in such good condition.

Definitely very spacious.

Unfortunately, it looks like it's been subject

to a bit of fire damage in the past.

So, all the ceiling's gone. But it's, you know... Um...

It'd be nice to have a few floorboards!

-# Don't look down!

-Oh-Oh

# Down... #

But upstairs you found two flats across two floors,

and all this space for a low guide price

persuaded Mel to part with £67,000 at the auction.

She was so eager to get started, she had contractors in

fixing up the commercial unit before sealing the deal.

But as she was a solicitor, she wasn't worried about completion.

-Do you do conveyancing?

-I do, yes.

Very convenient, then!

-So, can you act for yourself on things like this?

-Yes.

-So, you actually did the whole deal?

-I did.

-Brilliant.

Did you have to speak to yourself on the phone? Like...

"When's it going to be done?" "Oh, I don't know, Tuesday, yeah?"

Mel's brother Richard is in the building trade

and he was going to project manage it over a 12-week schedule.

Determined to be hands off, Mel was really only interested

in the commercial space for her business

and wanted to develop and sell the three two-bed flats,

one of which was a maisonette.

So, has Richard turned up trumps for her five months later?

We're back to see how this big project turned out.

A big, deep breath now!

MAN GASPS ON: Radioactive by Imagine Dragons

And let's begin in the commercial unit.

This area has been finished off with a toilet and new flooring put down.

But through the back, what shape is the maisonette flat in?

# Welcome to the new age

# To the new age Welcome to the new age... #

It's now a bright, modern space with a quality kitchen,

with an open-plan living area.

A bathroom and two bedrooms upstairs on the first floor.

And the two flats above are transformed as well.

Both are similar in layout and style.

And the quality of finish throughout is exceptional.

There are a few remaining jobs to be done,

but with the project 95% there, Mel must be pleased with the results.

We wanted a high spec, so we got spotlights in, nice new kitchens,

everything is new, so it has been done to a very high standard.

The fire damage meant that there weren't any internal walls upstairs

and the builders therefore had to replace everything.

There's been a great deal of work carried out on the property.

We've replaced all of the windows, the doors, the floors, the walls.

Basically, everything's been replastered, rewired, replumbed.

New bathrooms, new kitchens, everything really has been replaced.

Mel originally intended to move her business into the commercial space,

but she's been looking at other options too.

I did make a pre-application for planning permission

to turn the commercial unit into a one-bed flat,

and when the chap came out, he was very positive.

But actually, in the end, they said no.

There is a regeneration project in Barry,

in the Vale of Glamorgan at the moment.

They paid for work to be done on the front of the building,

as they have for the rest of the road, and that looks pretty good.

In terms of downstairs, in the shop front,

the reason I haven't spent any money dealing with that

is because that is also going to qualify for a grant

and I'm just waiting for that to come through.

So, if I had spent it, it would have been wasted money, really.

It always pays to look out for regeneration money

through grants and loans.

All the work inside is near complete,

thanks to some brotherly love.

My brother Richard, he used to work with my dad, who was a builder.

Um, he doesn't do that now, but obviously, having a hand in,

he's got experience, he was a plasterer as well,

so he sourced the contractors for me and basically, took over

and has been amazing just doing everything for me.

And I did ask him to come along but he refused.

Richard, you may be camera-shy, but take a bow, sir.

The team has done a great job. But what about time and the money?

The original timescale was 12 weeks, but it did take a little bit longer

cos there was a lot more work, actually, when we started it,

than we realised.

So, it's taken probably between about 15 to 20 weeks

finally to finish it.

In terms of the costings, we had spent around 7,000 downstairs,

but we hadn't quite finished, so I think we've probably spent

another 2,000 with the flooring and just finishing off down there.

Including the 9,000, the total of that was between 65 and 70,

so I'm not really sure how that is made up

in terms of each individual flat,

but Richard would know that, but he's not here, of course.

Richard's not here, but two local estate agents are,

including the agent who saw it first.

Will they be as impressed as I am?

It's a complete transformation from the first time.

They've done a fantastic renovation job.

Maybe overspent in places, in my opinion,

for the type of clientele it is going to attract,

but nevertheless, they've done a fantastic job.

Well, this is my first time inside the property.

After having a good look around, I think the current owner

has done a fantastic job here,

he's utilised the space really well.

He's done a lovely finish here. I think the layout flows really well.

I think the landlord's done a very nice job, nice spec.

Open-plan living, very in demand at the moment,

certainly with first-time buyers.

Four properties, four thumbs up from the agents.

So, four valuations for this formidable building.

Firstly, the agents believe that the commercial space could attract

a maximum rental of £5,400 per annum and a sales price of around £40,000.

But what about the maisonette flat?

I would expect the maisonette to fetch

somewhere in the region of £70,000 to £75,000.

The maisonette would achieve in the region of £65,000.

Both agents agree that the resale value of the other two flats

is between 60,000 and 65,000.

# Come on, y'all... #

Those figures mean the total top value of the whole shebang

would come to £245,000,

giving Mel a possible pre-tax profit of 108 grand!

I'm very happy with that, and in time, keeping the properties

and renting them out, I'm sure the value will go up.

And also, the regeneration of Barry and the Vale of Glamorgan

means that again, there is another chance for the profit to go up.

So, it looks like it might be rental.

Adding the top rentals for the whole lot together

would give Mel a yield of nearly 17%, which is impressive.

I think it sounds like a good decision,

but could she be tempted to go back to her original plan and sell?

I think that if I could sell it all up quickly,

and just run away with the profit, I probably would,

but I think I'd rather just put some tenants in

and let the mortgage be paid off.

A huge project and a potentially huge profit.

What has Mel learned from her largest development to date?

I think I've learned from this experience

to always have my brother involved...

And let him deal with all the stress.

The town of Gainsborough in Lincolnshire is also known

as the capital that never was.

When Sweyn Forkbeard was declared King of England in 1013,

he and his son, Canute, made Gainsborough their base.

However, Sweyn was killed weeks later

and Canute decided to wave goodbye to Gainsborough.

It's a town with wonderful historic buildings,

so what can possibly be in store for me?

The property I'm here to see has an extraordinary low guide price,

which tells me you're not going to get a lot for the money.

But before I tell you how much that is, it's a three-bed terraced house.

The guide price is - wait for it - £12,000.

Right, so what do you get for your 12 grand?

Firstly, I'm a bit surprised at the size of your lounge,

your living room area.

You've got a fireplace over here, which has obviously been

blocked up somehow, but usable -

you'll have to get that swept out again.

You could make a feature of that, but it's a good start.

And go through here to the kitchen area,

you've got stairs going up to the bedrooms.

Now, this has surprised me, this is a nice-sized kitchen.

Yes, you would have to change the units, make it new,

spruce it up a little bit.

In there you've got a cupboard area, a bit of a pantry there.

And you've got a bathroom through there with a sink and toilet.

Now, you could move that upstairs, depending on what we find.

And a little bit of a back garden yard over there,

and a sink, or is it?

DION'S RATTLING ECHOES

It's a drum.

I know, but I have a bit of a fascination for drums.

There are two bedrooms on the next floor. Did I say floor?

Well, the floor seems to be absent, I'll come back to that,

but I have noticed another set of stairs.

Is this bedroom number three?

So, more space.

Again, you could have it as a kids' bedroom,

a bit of a lounge area here with the sofa.

But again, it's another addition to what you've got downstairs.

I think it's OK, I like it, I like it, let's continue.

So that's a bonus.

Now, into the second bedroom, floorboards are everywhere...

And damp as well, look at that. It's even...

I get it on my fingers, you can even feel the damp.

And there's four, five specks of this damp everywhere.

Even over there on the far wall as well, there's more damp.

But take a closer look down here.

There's piping that's been sort of tampered with and cut,

and even the electric cables as well.

It's not the prettiest

and it's a bit of a house full of mystery.

So, we called in a man used to solving mysteries...

A local estate agent.

He may not be able to give us the reason why the flooring's up,

but he will give us some all-important valuations.

The property's a typical good purchase for a first-time buyer

or a buy-to-let investor.

Obviously, needs some remedial works carrying out to the property.

But generally speaking, it is ideal for this part of the town

and I'm sure will sell very quickly.

If someone was buying to let,

what sort of rental income could they expect from the property?

In my opinion, once renovated,

the property would be worth £300 to £325 per calendar month.

And if they WERE to get this three-bedroom property

for the guide price of £12,000, refurbished to its full potential,

what could it resell for on the open market?

In my opinion, once renovated, this property would be worth £35,000.

So, at a guide price of £12,000, you would get yourself a decent-sized

house with great potential, but there are a few issues you have to address.

The pipework, the electrics that have been cut and that damp.

But if it goes for anywhere near the guide price, you would have

yourself a tidy investment.

Let's see who agreed when it went to auction.

Three-bedroomed Victorian mid-terraced house

which does require modernisation

and the guide price on this one is just £12,000.

Who'd like to start me at this one at £12,000? £12,000 I'm bid.

At 12,000, 13, at 13, 14, 15.

16. 17. 18.

At 18. 19. 20...at 21.

At 21,000, 21,500.

22, sir?

22. At 22,000 seated at the front.

Do I hear 500 anywhere? 22,500. 23.

23,500. At 23,500 on the left.

At 23,500, have another think about it.

The bid is on my left at £23,500.

24, anywhere?

£23,500 once, twice, for the last time...

selling at £23,500.

Thank you, sir. Your number, please?

The successful bid came from Flavio.

A builder for two years now, he's branching out

with his own property development.

This £23,500 purchase is his first project.

-Flavio, nice to meet you... and congratulations.

-Thank you.

-Tell me about the auction experience because it's all new to you.

-It is.

I was a bit nervous, something new, but it went well at the end.

And now you've got it, what's your feelings now?

-Did you view the property first?

-No, I didn't.

So it was...first property I made at the auction and I didn't see

the property so everything is pretty much new and hopefully it will turn out well.

Well, I hope so for you.

Now...this is not your area, is it? This is not where you live?

-It isn't, no.

-Where are you from?

-Boston, originally. So...

I don't know the area as well, which is a small issue.

-A bit of a gamble then, really?

-Fingers crossed it will end up well.

So, what made you actually go, what made you gamble, was it the price,

was it because you're a builder and you know you can turn things around?

Because of the price, it ended up quite cheap.

Cheaper than what I expected.

Flavio, in fact, was prepared to pay up to £30,000 for the property,

so 23 and a half grand was well within his budget.

Being a builder means saving on labour and materials, however,

this is no doddle.

It looks like a rewire and replumb upstairs might be called for.

And Flavio lives in Boston, which is over 50 miles away

and that means he's got some petrol to tot up.

There is quite a bit to do here, so is he working alone?

I will drag a few of my friends to help me out with the building.

-So it gets done faster.

-And what are you going to do, sell it?

Just sell it, yeah. Just refurbish and sell it.

I would say about, hopefully,

two or three months in total then back on the market.

-That would be pretty sharp.

-Hopefully, yeah.

-What's your budget?

It's between £10,000 and £15,000 for this property.

Which is quite a lot for the work that needs to be done, but

I want to give it a high finishing, so...so it will probably look good

because I want people to come inside the house and they will go "Wow".

It will maybe take longer to sell because it will be more expensive.

But I hope people will be happy when they buy it

because it will look nice.

I do hope Flavio is right about making this house high spec.

You should always do research on ceiling prices in an area,

especially if it's new to you.

Remember, the agent reckoned this house could sell for £35,000

and Flavio has already paid 23.5 grand.

If he spends £15,000, he's over that valuation.

So, tell us exactly what you're going to do,

-how you're going to turn it around.

-Well, pretty much do everything new.

Take everything apart and do everything new.

New kitchen, new bathroom, floors, doors.

Everything, pretty much everything.

Are you changing the layout of anything at all?

No, not the layout because there's not much I can do

on the layout and I quite like the layout of the house.

-It will look nice at the end.

-Are you happy?

Yeah, I've got some good ideas for the attic room.

I'm sure it will look nice.

Flavio seems to be inspired by doing something well and so is this

what made him take the plunge into developing property?

I normally do this kind of job for other people.

They buy the houses, we go renovate and then they sell it and

I thought to myself, well, if they can make money on it, why not me?

So, worth trying to do myself.

I want to see how this first project does.

If it does well, I'll buy another one.

So, instead of making money for everybody else, you want to

-start making money for yourself?

-Yeah.

Flavio is clearly a bit of a risk-taker.

Not seeing the property beforehand other than on the net

and he's not read the legal pack either.

Then deciding to go for high-spec finishes

and he's doing it all on his own, with a little help from his friends.

So, what's his game plan for property development?

Well, the first few properties just buy and sell, then after a few

properties, I might keep one to rent and buy one, keep doing same thing.

Are you going to try and buy anything near where you live, or...?

Will do, yes. Yes.

Because it is quite far from where I live, I'll need to travel a lot.

Maybe next time I'll buy something closer as well.

How long is it going to take to get here? You're going to have to spend time turning it around.

It takes about an hour and a half, an hour and 45 minutes to get from my house to here.

And, yeah, every day, it's not easy.

That was no issue when you were at the auction and you seen it?

No, because normally I take about an hour every day to go to work.

So, it's only half an hour more.

And your building friends,

have they got to come a long way to help you out, or are they near?

No, they come a long way as well.

Yeah, we bring a few vans down and we'll get it done.

Let's hope Flavio's friends give him a good deal because he'll have

to cut costs if he wants to see a profit and a high-spec finish.

What about the day job as a self-employed builder

working for other clients and companies?

I'll do both things at the same time.

I'll take a few days off to come and work at the property.

And I'll do a few days for the company as well.

Yeah, that's why I give it two or three months to do it

-because I won't be doing it every day.

-OK.

So, I'll give it more time to get it sorted and done.

I'd love you to make a nice profit on this.

What's your, what's your ideal?

If you sell it, you do it up and sell it,

you get it at a high spec, what are you hoping to go away with?

Well, I don't know. The properties around this road vary.

Like, next door I think was sold for 70 grand a few months ago.

The one around the road was sold for 40 grand so that's a big difference.

That's why I'm trying to give a high spec to this one

so it goes a bit higher, between 60 and 70 grand.

Will you go back to auction again to get your next property?

After I sell this one.

-And start all over again?

-Yes.

Will you try and go for something of the same size or would you try and go bigger, same sort of style?

No, I like this style, three-bedroom house.

Well, I think, for what you,

what you've paid at auction I think you've got a good property.

-It's a lot bigger than what you see from the outside, from the road.

-Yeah.

And I think, with your building head and your building skills...

-and all your friends that you're going to pay very little to...

-Ideal, yes.

..I think you'll turn it around, I think it will be a really good

-project for you. Congratulations, young man.

-Thank you.

-Good luck.

Thank you. Cheers.

So, Flavio has got lucky with this property.

He's landed on his feet but he didn't read the legal pack

and he didn't view the property.

So, for his first one, fingers crossed he's chosen right.

Now, will his friends help him out?

What about that distance of about an hour and a half from where he lives?

Will it work for him? Will it be high spec?

You can find out later on in the programme.

So, how did our buyers do today?

Have their efforts at improving their properties paid off?

Let's take a look.

I first visited Denham in March 2013,

to see a traditional English country pub guided at £375,000.

The charming old bar was to be stripped out.

It seemed the planning permission, for four flats,

already granted, was a desirable project.

But buyer Simrit had other ideas.

Having paid £460,000 at auction, the London developer wanted to

maximise the space and the return on his investment.

My architect is in the process of drawing up some new

plans for four new three-bedroom houses,

so, three roughly where they're in a terrace, where this is.

And one at the back at the back of the car park.

Gardens and parking as well.

We returned 18 months later

and planning permission problems had meant Simrit had only been

able to lay foundations for three terraced houses.

After such a long delay, finally having something here

tangible to look at, it's a relief as well as quite exciting as well.

Simrit also applied for planning permission to build a two-bedroomed

detached house at the back and then it was just a matter of waiting.

This was Simrit's first new build from scratch

and he was learning it was more complex than a renovation.

We went back two years after the project started and, well,

I think you've waited long enough to see it.

MUSIC: Lifted Up (1985) by Passion Pit

Fantastic and well worth the wait.

The terraced houses are almost complete, with one finished

and the others just about there.

Simrit's overseen the build over all this time

and he can explain the layout of each house in the terrace.

So, here we have three three-bedroomed houses

with two bathrooms and a WC downstairs.

Open plan living and dining area

and a separate kitchen on the ground floor.

Up on the middle floor, we have two bedrooms, one with an ensuite

and one family bathroom.

On the top floor, we have another double bedroom.

It's hard to visualise what it's actually going to look like

from the plans, but when you come in, they're really roomy

and there's lots of space and light and it's exactly what I...

You know, it's more than I could've wished for.

Everything's coming together, kind of, really well at the last minute.

Like you saw when you were here last time,

it was just the foundations, but everything came together pretty

quickly from there and now it's just the last finishing touches to do.

One house is complete, but the other two still require a few odd jobs,

ranging from fittings to dropping the kerb outside,

but the quality of finish is superb.

It's taken a long time for Simrit to get here,

over two years in fact, but planning wasn't the only cause of delay.

There was a couple of variations we had to go to the council for.

So that took a little bit of time and also

we had some bad weather, so that delayed it by a couple of months.

It took a bit of time to get the roof on.

We had a little bit of extra brickwork to do

and because of the damp conditions, it was hard to get that done.

But all those problems haven't put Simrit off doing more building.

Last time we saw him, he had just submitted planning

for a fourth house on what was once the car park

and that's something he's still pursuing.

So, as you can see, there,

that's quite a large plot at the back, there, which was originally...

Made up part of the car park for the pub.

And what I'm trying to do now, is vary the planning permission that

was granted when these houses were permitted to be built,

because the original planning permission had a provision

for some parking spots at the back,

which I'm trying to vary, so they're no longer required.

Therefore, that would make that plot a lot larger

and I can get planning permission for one, maybe two houses there.

That's all for the future, though.

For the three terraced houses, his build budget was

originally 350,000, rising to 369 grand by the time he started.

So, how are his sums going now?

So, it ended on probably about 380, to be honest,

with the extra spec I pushed up, like the quartz worktop, cost me

an bit extra, the carpet, obviously, a bit extra,

so that pushed it up a little bit everywhere.

So about 380, we ended up on.

But the key question - is he happy with the results?

I'm incredibly happy with the results, actually.

There are a couple of things I probably would've changed,

for example, maybe the brick colour,

I would've gone for a darker brick, maybe.

Other than that, I'm pretty happy with the results.

I mean, the internals, I think, are excellent.

Everyone who's seen them, loves them,

and I'm very happy with the finish.

But will two local estate agents love them?

What do they make of these Denham delights?

Let's start with the agent who saw it the last time.

The finished development is quite impressive.

I think the finish is very good.

The choice of floor coverings, bathrooms, kitchens, etc,

all very much in keeping with the market.

So, yeah, very good.

First impressions of the property is they're absolutely stunning,

really great, really bright and airy.

I think they've done a very good job.

Simrit's total spend now stands at £840,000, so what do the agents

think these terraced houses could fetch on the open market?

With these properties, I think to put them on the market at a guide

price of £425, that's £425,000 with achieving £450,000.

Once completed, I would estimate that we would be recommending

a marketing price of between 445 and 450,000 for the two

end of terraced properties and slightly less for the mid-terrace.

And the good news for Simrit is that he's already sold the middle

and one of the end terraces for £435,000 each.

Yeah, that's about right and, hopefully, when this one

goes on the open market, maybe can reach the higher end.

If he sells the third house for that suggested 450,000, his total

will be 1.32 million, giving him a pre-tax profit of £480,000.

And, of course, there is

still that possible further development to consider.

Simrit has definitely had to play the waiting game on this one,

but how does he feel now?

It's always nice to be proven right.

The delay was a problem, but in that time, the properties

have appreciated, as well, beyond 415, which is

what I had initially anticipated, so, every cloud has a silver lining.

Back to the nearly English capital of Gainsborough, where earlier I saw

a three-bed mid-terraced with a guide price of just £12,000.

Right, what do you get for your 12 grand?

Answer - you get a traditional two up, two down in not bad condition.

We've seen dozens of these types of properties on the show over

the years, albeit not for a dozen grand on the guide price,

but there was something different about this one.

So, more space.

Another addition to what you've got downstairs.

On the first floor, the two bedrooms had, well, no floors,

and possibly other missing parts.

There's piping that's been tampered with and cut

and even the electric cables, as well. And damp, as well.

Look at that. Even over there on the far wall, as well, there's more damp.

It's not the prettiest and it's a bit of house of mystery.

But we did solve one mystery. Who would buy this bargain house?

Drum roll, please.

Enter Flavio, who paid £23,500.

And this was the first project for this ambitious young builder.

-You viewed the property first?

-No, I didn't.

So, it was the first property I buy at the auction

and I didn't see the property, so, everything pretty much new

-and, hopefully, it'll turn out well.

-Oh, dear!

He broke the Homes Under The Hammer golden rules.

But he reckoned on a two to three month timescale,

he would have a high-spec property.

Five months later, we're back.

MUSIC PLAYS

It looks much better, so what has he done to the house?

On the ground floor, I had to put a new bathroom, new kitchen,

floor, tiling walls, new carpets on the stairs.

On the first floor I had to put new floors, as well,

paint the whole house, the ceilings.

On the attic, we had to put new staircase, new walls,

new lights, again, carpets.

Basically, I had to put everything brand-new.

There was an issue with dreadful damp

and it looks like Flavio has solved the mystery to its cause.

So, this is the wall that had damp everywhere.

We had a broken tile on the roof.

We had to go up on the roof, replace the tile, wait for the damp

to come out, so then we can re-plaster

and repaint the wall again.

When we first came, all the floor boards were up,

cutting the electric wires, all the copper pipe,

so we had an electrician and plumber down.

We rewired all the house, re-plumbed all the first floor, we put

the floorboards back on, skirting boards, new doors, radiators.

Had to put everything new again.

Flavio's original budget was £15,000,

but after he started the project, he did some research.

Well, when I first bought the house, I was thinking about the value

of the property, about 70 to £80,000.

But after I buy the house,

I did deeper research and I found out the maximum it was worth,

would be about 50 to 60,000, so I had a first budget of £10-£15,000.

Because of the value of the property,

we decided to try to do things cheaper.

I ended up only spending £5,000 to £6,000 on the property,

to do all this work.

I'm glad that Flavio took another look at the resale

value of this house.

Sometimes similar houses can differ hugely in a matter of a few

hundred yards, so it always pays to go deeper, as Flavio has.

He changed his plan, but is timescale also shifted.

Well, I was hoping to take about two or three months to complete

everything in the house, but because I'm quite busy on my day job,

I did this in a bad time.

It took me about six, seven months to do the job in the house.

I did it myself and with two friends of mine.

They come and help me out when I come to do the work.

Come on, Flavio, give your friends a name check.

A thanks on national TV goes a long way.

One of them is Carlos, a good friend of mine. The other one is Antonio.

He's a good friend of mine, as well. Thank you very much for the help.

Like I said, everybody needs good mates,

so has all the effort and Flavio's change of plan been for the best?

We asked along two local estate agents to tell us.

This is my second time inside the property.

Originally, the property was in a poor state of repair,

but the current owner has done well with the changes.

He's improved it to a good standard throughout.

The selling points are, modern fitted kitchen,

modern bathroom and a nice decoration throughout.

The standard of the finishing is good.

It is better than normal for the area.

Flavio plans to sell but having spent a total of £29,500

buying and renovating,

what sort of sale and rental figures can he expect?

If this property were to go on the market for sale,

I would expect it to achieve in the region of £40,000,

and if it was to go on the market for rent,

around £350 a calendar month.

If this property was to be put on the open market,

I would expect it to achieve a figure in the region of £40,000.

If this property were to be put on the rental market,

I would expect it to achieve £350 per calendar month.

£350 per calendar month would give Flavio a rather tempting

yield of just over 14%, but his game plan is to sell.

So what does he think?

Well, about the rental figure, I was thinking about 300 per

calendar month, so that is a bit higher than what I expected.

But, the plan for this property is to sell it on.

I think about the sales figure,

because of the research I've been doing these last few

weeks of the houses, I think I could sell the house for at least £50,000.

Even if I sell this for £40,000, I still get a profit.

# Get it right the first time

# That's the main thing

# Oh, la la la la la la la... #

Flavio should make a pre-tax profit of £10,500 if he sold at 40 grand.

So, will he be reinvesting that in his next purchase?

# Get it right the next time that's not the same thing

# Oh... #

I want to sell this property as soon as possible,

go back at the auction, buy another one

and then maybe rent it or sell it again, depending on the valuation.

We hoped you've enjoyed the show.

And perhaps got some inspiration from our buyers.

And we'll see you next time with more property stories.

-See you then.

-Goodbye.

-Bye.