Episode 43 Homes Under the Hammer


Episode 43

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Transcript


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Hello. There's no set mould you have to fit when getting into property.

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You could be a young couple starting out,

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-or you could be a retiree making a new start.

-Yes.

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The end result should be exactly the same.

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-You're making the investment because you want to make some money.

-Yes.

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So where do you go to get the best possible deal?

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How about heading down to your local property auction?

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Buying wisely is the name of the game in property

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if you're going to get a great return.

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But did the buyers on today's show manage to do just that?

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Let's find out what they bought.

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In Liverpool, I like a development plan

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so much, I might have a new pad at this three-bed mid-terrace.

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I might keep in touch for a little bit of rent off you.

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HE LAUGHS

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In Cwmaman, Wales, I like the show home style I'm seeing,

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but it's so perfect, I have to ask...

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Is this the right house? I think it is.

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HE LAUGHS

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And in Glasgow, I like this shop, but I don't like the thought

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of clambering through the communal area to use the loo.

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Just to get to the loo? Not me.

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All these properties are bought at auction.

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We'll find out who got them

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

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Sold.

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Knotty Ash is an area in Liverpool with plenty of green spaces,

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loads of amenities, and if you're thinking of a buy to let,

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Alder Hey Children's Hospital is nearby,

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so workers there might be your clientele.

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The property I'm here to see is about five miles away from Liverpool's

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busy city centre, just a few minutes away from the A57, which has

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direct links to the motorways, which is great for commuters of course.

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In the catalogue, it says it's a three-bed,

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mid-terrace house with a guide price of £35-£40,000.

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I'm going to take a look.

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So the frontage has seen better days, but we'll come back to that.

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Don't be put off by first impressions. Think of the location.

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More or less straight into the lounge.

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A little small hallway here. Stairs going up to the bedrooms.

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And as you come into the living room area, you can

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see it's a little bit tired.

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I have noticed there's central heating there, so that's good.

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And there's a bit of debris which has been left. And...

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as I can see here, there's a little bit of bubbling underneath this wallpaper.

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And a bit of water stainage as well,

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so there must have been a leak or some kind of damp up there.

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As you can see, there's a bit of a mess underneath here as well.

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You'd need to get that sorted as soon as possible.

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So through into the kitchen, and you've got signs of previous owners again.

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It's a bit messy. You've got the bathroom there.

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Again, dated, would need changing.

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A bit further into the kitchen, which would all need changing.

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You'd have to start again in here.

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I can see the hob down here is smashed. So start again.

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It's a decent space here, actually.

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You could have a bit of a dining area there,

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put a brand-new kitchen in, tidy it up.

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I think you're onto a winner.

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You're going to need some skips here,

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but overall the space downstairs is good.

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So upstairs then, we've got three bedrooms.

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Two just at the back of the property, which look to be a good size.

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And into what would be the master bedroom.

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It is a bit messy, there's a bit of rubble around, but no toilet,

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no bathroom up here. Maybe you could stick a toilet and sink in there.

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Just an option. But it's a decent sized bedroom, when you get rid of all this mess.

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Apart from that damp downstairs, everything to me

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seems very superficial.

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Don't be scared, look past all the stuff that has been left,

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focus on the important things like that damp we saw downstairs.

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I just wanted to come outside and see

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if I can see where that water may be coming from.

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You can see there's definite water damage here.

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That's definitely more than what the weather has done.

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And I can just notice over here, it may have

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found its way into the masonry as well, and down here as well.

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There's more signs that it may have got into the masonry.

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So, get a specialist to look at that, get it sorted first time

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so you don't have to go back to it again.

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If you go back to it, it is going to cost you more money.

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And while you're at the front

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having the exterior's masonry fixed, why not keep up with the Joneses?

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As I look around the neighbouring houses, I can see a lot of them

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have turned their front gardens into driveways or off-street parking.

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And they've done the same here. The kerb's already been lowered just here.

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All you'd have to do is put some new gates up, maybe re-slab,

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get it looking nice and pretty and you would be done.

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Do check with your local council planners about the permeable

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materials you should use. As we know,

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flooding is a big issue these days.

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And while you're at it, you might want to consider

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applying for permission to get that bathroom upstairs.

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Out the back, I can see that all the houses along either way

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have an extension.

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My first thought was, can you build a double extension,

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maybe get that bathroom upstairs? But judging from what I

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can see, nobody else seems to have a double themselves, so can they do it?

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Can they not? But it's always worth asking the question.

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And it's the question we asked a local estate agent when she

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came to visit the property, guided at £35-£40,000.

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# There she goes

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# There she goes again... #

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You could put a bigger extension on the property,

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but what you pay out, you wouldn't get back when you sell.

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Oh, well, it was worth an ask. But fair point,

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maybe this needs a fair bit spent on it without an extension.

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What does the agent think?

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'To bring it up to modern-day standards, I think

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'you're talking about £20,000.'

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So get it near that guide price, it could be a £60,000 outlay.

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Is there profit potential in this popular part of Liverpool?

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On completion, I expect the property to achieve £110-£115,000.

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Sounds great. And rental potential?

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The rental value of this property, once it's completed,

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would be £475 per calendar month.

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This house does have its damp issues that would need to be sorted,

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but it has a lot of things going for it too.

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Great location, well built, close to all the amenities

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and the motorways.

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And if you get it for anywhere near the guide price, I think

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there's a tidy profit to be made.

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

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Lot 179. Start me...start me at 25,000.

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25 I have in the middle...of the doorway. 25. 26.

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26. 27. 28.

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29. 30. 31.

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31. Gentleman's bid, yes. 32.

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33.

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34. 35.

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36. He shakes his head.

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Your bid, on my right, with you at 35,000. 36 anywhere else?

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Gentleman here. 36. 37.

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I understand what you said, I'm only taking 1,000.

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A thousand. Thank you. 37.

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38. We just saw him taking the bid down, he is running out of steam.

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Thank you. Lady's bid, 38. That's more like it. 39, sir.

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Take a half this time. 38.5. 39, madam. And a half. No, OK.

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Lady's bid, sitting down at the back, at 39,000. First time.

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Second time. Third... And a half. 40.

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41.

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And a half. OK, shakes his head.

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It's now four times he's bid, I'm not sure I believe him yet,

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we'll soon find out, won't we? Lady's bid. At the back at 41.

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For the first time. Second time. Third and final time. 41,000,

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lady's bid. It's going to go.

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41,000. Thank you, madam.

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One of those cases where the bidder is not the buyer. That's Serene,

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the office manager for Adrian,

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who bought the property on behalf of Gary for £41,000.

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Confused yet? Let me help you place the face.

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# Got to know my name... #

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That's right, we last met Adrian in Warrington in 2014, where

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he was buying, renovating and renting

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properties on behalf of his clients.

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This time Adrian is acting on behalf of his investor, Gary.

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I met them to find out more.

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-Adrian, nice to meet you.

-You, too.

-How are you doing? Gary. Good to meet you.

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-Congratulations.

-Thank you very much.

-So, Gary, now you've seen it,

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-happy with it?

-Oh, yes.

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It is the first time I've seen it, though, today.

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-This is the first time you've been in your property?

-Yes.

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-Not frightened?

-No, no. No, it's...

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it's what I expected. So, yes.

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-I mean, it's not very good now, but it will be.

-Oh!

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He finds the houses...

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we agree on a price and then he tells me

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exactly how much it is going to cost to get it up to rentable standard,

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and then he manages it as well.

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So I don't really have to see them.

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Gary is happy to hand over his portfolio to someone else

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because he works offshore carrying out seismic seabed surveys.

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He's already had three properties developed by Adrian,

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-but why this particular house?

-It's got everything going for it, really.

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To be honest, it is the area, it is five minutes drive from the

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M62, it is near Alder Hey Children's Hospital. Bus routes.

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You know, it is a good location.

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-All the amenities...

-On hand, yes.

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-..that you need.

-Yes.

-Tell us, Adrian, what needs to be done, first and foremost.

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Just give us a bit of a run down. Let's start downstairs.

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Basically, we will strip everything out, Dion. We will strip the kitchen out, all the flooring,

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all the wallpaper, everything.

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And we'll renew. There's a couple of new windows required.

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New front and rear doors, electrics to be upgraded.

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Tell us about outside, the bay window,

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there's a little bit of work that needs doing there.

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We'll renew the roof on the bay window completely.

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There's been some water ingress from that and also we'll have the

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masonry checked, just to make sure everything's secure and sealed.

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-Good. Upstairs.

-Upstairs, same again. Completely strip it out.

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A couple of new windows needed upstairs, decor, flooring.

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Upgrade the boiler, if necessary.

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Are you going to change anything upstairs,

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regards a bathroom or toilet?

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No, the bathroom is downstairs in this property,

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but we don't find that has a negative impact.

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Tenants still go for the properties.

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there's no reason to add expense to move the bathroom upstairs

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and then of course, you'd lose a bedroom,

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which would bring the rent down, so we're better leaving

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it as it is, having three good size bedrooms upstairs.

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-I like the sound of it.

-Yeah, me too.

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I might keep in touch for a little bit of a rent off you!

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Might have found myself a little Merseyside crash pad.

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Adrian has his usual team of contractors ready to get started,

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but how much will it all cost?

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The total refurbishment for the whole property,

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inside and outside, will be 17,700, for the whole property.

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And you get all that information...

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Yes, I get it e-mailed to me, that's part of the information I get,

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which makes me decide if I'm going to go for the house.

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I know exactly what it's going to do,

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exactly how much it's going to cost.

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It's going to cost that much money, the budget's 17 and a few bits.

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-How long is it going to take?

-It's going to take four to six weeks.

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Six weeks at the maximum, but we may have it done in four weeks.

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Do you look for a particular yield between you?

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Yes, I would try and achieve in the region of 9 to 11% for the client.

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This one will be round the 10% on the gross yield, which is excellent.

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It is very good, isn't it?

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Better than money in the bank and you've got an income as well.

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-Good partnership. Adrian, take care, good luck.

-Thank you very much.

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-Gary, good luck.

-Thank you very much.

-Nice to meet you both.

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-Let me know if you need any digs!

-DION CHUCKLES

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Adrian's got all the credentials to turn this property round, get

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it in tiptop condition, ready for Gary to rent out.

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My only concern is that little bit of masonry around the bay window -

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I don't think it's going to be a problem.

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

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Aberdare is a bustling town and it's around 20 miles from Cardiff.

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But I'm heading up a mountain to a village called Cwmaman,

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that's Welsh for Amman Valley.

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Oh, and the village is the home of the Stereophonics.

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Well, not far from the centre of Aberdare,

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with good road links to Cardiff

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and access to the beautiful Brecon Beacons National Park,

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is the property I'm here to see and it is a three-bed mid-terrace,

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fairly traditional, guide price £35,000.

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Let's have a look.

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So, what do you get for your money?

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Um, so, entrance hall here, which is quite nice.

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Sometimes it does open straight into your lounge, that's not ideal,

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so this is a good thing to have.

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Ah, now here's an interesting thing.

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Looking up at the fuse box here,

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you might be of the mind that it's fairly new cos you've got

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these circuit breakers, but in fact, it's a really, really old...

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If I pull these out, lights go out, um...

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Old style um, sort of, cartridge type fuse board

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and they've stuck those ones in, um...

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So, that leads me to think the electrics will definitely

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need updating. Through into the lounge and it's really nice.

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It's a....

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Is this the right house?!

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I think it is! Um...

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Sorry, I'm slightly bemused by the fact it looks like somebody's

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living here. We've got sofas and chairs and tables.

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Wow. OK.

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Well, we'll carry on, in the hope that it is actually the right house.

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No, it is, really.

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Nice open plan living/dining area. I love that. Double aspect.

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Beautiful view out the back there.

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So, a really good start and there's a choice. We go down or we go up.

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Let's go down.

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# Something strange is going on

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# In my house, I do believe it is. #

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So, quite an interesting layout we've got here. Good size bathroom.

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Perfectly serviceable.

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Looks all right to me. And then the kitchen - what a nice space this is.

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Um... And again, everything just here. Salt, pepper... Wow.

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Nice space, again, I like it. Nice views out the window. Um... Pink?

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Well, it might not be everyone's choice, but it's kind of happy.

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Um... So...

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Um... Oh, hang on a minute. What's that?

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Just noticed that. Some nasty damp going on here.

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Oh, heck. Well, we are in a sort of lower room.

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So, I'm a bit concerned about the fact that's on an internal wall.

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My guess is it's rising damp from there,

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but apart from that, you could pretty much move in, couldn't you?

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It's lovely.

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# Move in, watch me move in... #

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Well, it does feel a bit like the Marie Celeste,

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but the contents could be part of the deal,

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saving a packet for any buy-to-let investor.

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That damp is a minor worry and other than that,

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the salt shaker needs to be refilled.

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Factor that into your budget... I'm joking.

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One thing for sure, if you plan to rent this out,

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something you would need is a safety check on all the appliances.

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So, let's see if the show home look continues upstairs.

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Well, judging by that bedroom, it definitely does.

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You've got all the linen on the bed, wardrobes and the little telly. Wow.

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Landing area here. I wonder what's in here. Cupboard maybe. Oh, no.

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a little loo. That's quite sweet.

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It's quite useful to have that upstairs, for sure.

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Tiny third bedroom, to be fair.

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But it's in reasonable condition.

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Through into your final bedroom and once again,

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almost straight out of a catalogue, isn't it?

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You've got a house, I guess,

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you could pretty much move into as it is, rent it out as it is, and

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that's brilliant cos you can start getting the money straightaway.

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And if you get it for a reasonable price at the auction, I think

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there's scope to make a bit of cash on this one.

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But as ever, do read the legal pack.

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A show home it may seem, but only by knowing all the background details

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can you know if your prospective property has any hidden nasties.

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Well, at the back of the property,

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you've got a really quite nice-sized garden and look at those views.

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So, what a lovely place to spend some time.

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There's a bit of a patio area here, too.

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And I guess one of the only things that I can see a bit negative,

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along with the damp inside,

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is it looks like there might have been a few problems with that

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guttering up there cos you can see the black

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staining down the pebbledash there, so definitely check out

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the rainwater goods, make sure they're OK.

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But apart from that, I think

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you could see yourself living there, couldn't you?

0:17:360:17:40

So, not quite perfect, but it does have its advantages.

0:17:400:17:44

We asked a local estate agent along to tell us about the local market.

0:17:460:17:50

Who does he think this mid-terrace would appeal to?

0:17:500:17:53

Investors will buy in the location

0:17:530:17:55

because property prices are fairly reasonable, but you'll also

0:17:550:17:58

attract the first-time buyers and the families themselves.

0:17:580:18:03

The agent thinks the resale market is very slow,

0:18:030:18:05

so what about rentals then?

0:18:050:18:08

The rental market seems to be at probably its highest peak

0:18:080:18:12

since it has been for many years.

0:18:120:18:15

So, with the stagnant sales market and this place almost ready

0:18:150:18:19

to rent right away, I think this looks like a rental, don't you?

0:18:190:18:23

With minimal work done,

0:18:230:18:24

the agent thinks it could achieve £55,000 on the sale market.

0:18:240:18:29

Not bad, against the £35,000 guide price,

0:18:290:18:33

but how about those rental figures?

0:18:330:18:35

Without doing any work to the property,

0:18:370:18:39

you'd achieve figures in the region of £400 per calendar month.

0:18:390:18:42

You could be looking in the region of probably 430 per calendar

0:18:420:18:46

month if any upgrading was done to the property.

0:18:460:18:50

Well, it certainly is an interesting one this, isn't it?

0:18:500:18:54

Yes, a few bits of superficial damp to sort out,

0:18:540:18:57

but pretty much ready to either move in to or rent out straightaway.

0:18:570:19:01

That's good news on the one hand.

0:19:010:19:03

On the other hand, in terms of adding value,

0:19:030:19:05

sometimes it's good to find a place that you can replace things like

0:19:050:19:09

kitchens and bathrooms, so you pays your money, you takes your choice.

0:19:090:19:12

Let's see who did just that when it went under the hammer.

0:19:120:19:15

Mid-terraced house. Accommodation over three floors.

0:19:170:19:20

Guided at £35,000. Start me somewhere near... I don't know.

0:19:200:19:23

Start me at 30, somebody, please?

0:19:230:19:25

Wave a hand at me at 30. Make it 25 then, if you like.

0:19:250:19:27

Thank you, 25 there. 25. 6 now, can I see it? 25, I've got.

0:19:270:19:30

26, I'm looking for. 26. 27. 27?

0:19:300:19:33

27. 28. 28. 29.

0:19:330:19:35

No surprises, there were a number of interested parties in this

0:19:350:19:38

house, with bids coming from around the room.

0:19:380:19:41

We rejoin the action with the bidding at £43,500.

0:19:410:19:44

At 43 and a half then, seated. Against you at the back.

0:19:470:19:50

At 43 and a half then for the first time.

0:19:500:19:53

Second time. Third and last time.

0:19:530:19:55

At 43... 44. 44 and a half, sir?

0:19:550:19:58

44 and a half. 45 now.

0:19:580:20:00

At 44 and a half then, seated, for the first time.

0:20:000:20:03

Second time. Third and last time. At £44,500.

0:20:030:20:07

Yours, sir. Well done. Your number is number 125.

0:20:070:20:11

For 44,500, Mervyn snapped up this wannabe show home.

0:20:110:20:15

Hailing from the Valleys, he knows the local market well

0:20:170:20:20

and he came along with his wife Pam to let me know what they plan to do.

0:20:200:20:25

If anything.

0:20:250:20:26

-Pam, Mervyn, great to meet you both.

-Good morning.

-Congratulations.

0:20:260:20:30

-Thank you.

-Well, maybe.

-What do you mean "Maybe"?

0:20:300:20:33

-What doubt do you have about this place?

-It was too good to be true.

0:20:330:20:38

-What did you think when you first came in?

-Um...

0:20:380:20:41

I didn't realise at the time that the outgoing owner was going

0:20:410:20:45

to leave everything here, but with everything in as well,

0:20:450:20:50

it's too good to be true, really.

0:20:500:20:52

Well, you own it. You've completed now.

0:20:520:20:54

-You own everything in it as well.

-All done and dusted.

0:20:540:20:57

Wow. You've got some salt cellars and some deodorants...

0:20:570:20:59

Even a mountain bike.

0:20:590:21:01

Even a mountain bike, which is very convenient for around here.

0:21:010:21:05

The previous owner has used this as a holiday home and was happy

0:21:050:21:09

to sell everything to Mervyn for £600, so happy days all round.

0:21:090:21:14

Tell me why you wanted to buy it.

0:21:150:21:17

Well, it was the right price

0:21:170:21:19

and we were just looking for another one to...

0:21:190:21:22

-Add to the collection, really.

-Add to what we've got.

0:21:220:21:24

You've done this before then, have you?

0:21:240:21:27

-Yeah, we've got nine or ten others.

-Oh, well done.

0:21:270:21:30

-In this kind of area, or...?

-Yes, all in the valley.

0:21:300:21:32

-Yes, all in the valley.

-All in the valley.

0:21:320:21:34

-The first one in this actual village.

-In this village, yeah.

0:21:340:21:37

-But they're all rented out, are they?

-All rented out, yeah.

0:21:370:21:41

-A bit of a pension pot and a bit of an income?

-Yeah. And something to

0:21:410:21:45

-do.

-Do you have other jobs? Or is this what you do now?

0:21:450:21:48

Well, I was a bookmaker.

0:21:480:21:50

Small village bookmaker and had half a dozen properties,

0:21:500:21:55

but small bookmakers, unfortunately, like small shops and small anything

0:21:550:22:00

- small is no good now and we just had to close them down and...

0:22:000:22:03

That's a shame.

0:22:030:22:05

There was nothing to do then. So, you can't sit in the house and...

0:22:050:22:09

Oh, no.

0:22:090:22:10

-That's a nightmare.

-He has to have a project, don't you?

0:22:100:22:14

So we decided we'd buy a few properties and I'd look after them.

0:22:140:22:18

-And, Pam, what was your background?

-I used to work as an estate agent.

0:22:180:22:22

-Oh, did you? That's useful.

-Many years ago now.

0:22:220:22:25

But, yes, basically, I've done very little since I met Mervyn.

0:22:250:22:30

-Right, are you a kept woman?

-Yes, I am and loving it.

0:22:300:22:34

And I always say - well, he earns the income, but I can spend it.

0:22:340:22:39

-Well, that works perfectly then.

-Perfect arrangement, isn't it?

0:22:390:22:42

And if you think all that sounds too good to be true,

0:22:420:22:45

it turns out Pam has a very unique property purchase incentive scheme.

0:22:450:22:50

Mervyn was nudged into exceeding his top budget by 500 quid.

0:22:500:22:55

Nudged or elbowed, you decide!

0:22:550:22:58

She was going, holiday, holiday!

0:22:580:23:01

-Holiday, holiday?

-Yeah.

-Why?

0:23:010:23:03

Cos if I get a property, she gets a holiday.

0:23:030:23:06

-Oh, is that the deal, is it?

-Yeah, yeah.

0:23:060:23:08

Yeah.

0:23:080:23:09

-That's what they pay for.

-That's what they pay for, that's right.

0:23:090:23:13

Right, so your income from your houses helps you to go on holiday.

0:23:130:23:17

-Yes.

-Oh, great.

0:23:170:23:19

Well, having sold off the bookmaking business,

0:23:190:23:21

the couple now rely on their property portfolio

0:23:210:23:23

and a small wholesale electrical business for their income.

0:23:230:23:27

I've got fellas who run that. I don't do anything towards that.

0:23:270:23:30

But it comes in handy, when you want bits and pieces.

0:23:300:23:32

One of the things I noticed

0:23:320:23:34

when I came here was the electrical fuse board needs replacing.

0:23:340:23:37

That's right, yeah.

0:23:370:23:38

-So we'll be able to do that.

-Get that sorted, no problem.

-Yeah.

0:23:380:23:42

So, what are you planning to do to the place?

0:23:420:23:44

We've got a little bit of paintwork round the back,

0:23:440:23:47

the guttering, sort the garden out, and we're ready to go.

0:23:470:23:49

-That's it.

-So, what about the damp in the kitchen?

0:23:490:23:52

What do you think is causing that?

0:23:520:23:54

Well, I don't know whether it's condensation down there...

0:23:540:23:56

I don't think there's any underlying problem,

0:23:560:23:59

but we'll have the painters in and they'll take the wall

0:23:590:24:02

back to the plaster and maybe we'll have to replaster them and stabilise

0:24:020:24:06

the wall or something, but I don't think it's a big problem, anyway.

0:24:060:24:11

-And the kitchen's staying pink?

-Kitchen's staying pink.

0:24:110:24:15

-Show your feminine side, is it?

-Yes.

-Show the feminine side off.

0:24:150:24:19

That's it. We're not looking at 300 or 400 quid and we're away to go.

0:24:190:24:24

And how long do you think it'll take?

0:24:240:24:26

Literally, I'm going to advertise it for tenants straightaway and get

0:24:260:24:30

on with the work and hopefully, have someone in in a week or a fortnight.

0:24:300:24:33

All the furniture and everything, it's probably not worth a lot,

0:24:330:24:37

-but it's hassle to get it, isn't it?

-It's ideal.

0:24:370:24:40

If you could find a couple, a boy or a girl, leaving home,

0:24:400:24:43

-starting together...

-Oh, yeah.

0:24:430:24:45

They would be ideal to come in here because they don't...

0:24:450:24:48

They can manage with all the furniture for a while.

0:24:480:24:51

-They can manage with whatever's here.

-Yeah, superb start.

0:24:510:24:53

-So, what's next on the agenda?

-Oh, she'll be booking a holiday next.

0:24:530:24:58

-Yes.

-That's the next thing on the agenda.

-Where are you going to go?

0:24:580:25:02

-We'll see, I don't know.

-They go away in threes.

0:25:020:25:05

It's my wife, my daughter and my credit card.

0:25:050:25:07

And I stay home.

0:25:070:25:09

And do the work.

0:25:090:25:11

-You don't go on the holidays?

-No.

-What?!

-No.

0:25:110:25:14

-So, you buy the properties, make the money out of them...

-Yeah.

0:25:140:25:17

And I spend it.

0:25:170:25:18

-And the family goes and enjoys the holidays.

-Yeah.

0:25:180:25:21

-You seem very happy about this.

-Yeah, that's fine.

0:25:210:25:23

-I'm happy with that.

-Wonderful arrangement.

-Yeah.

0:25:230:25:26

-That's a good arrangement. That's OK.

-Congratulations.

-Thank you.

0:25:260:25:30

Really good to meet you both. I don't know how long we need to

0:25:300:25:33

-leave it before we come back. Probably a week?

-We'll let you know!

0:25:330:25:36

Yeah. We'll let you know. It won't be long.

0:25:360:25:39

Well, Pam and Mervyn really recognise that they have been

0:25:420:25:46

lucky here, but these kind of bargains do come up at the

0:25:460:25:49

auction and to have it completely kitted out like this, what a bonus.

0:25:490:25:54

Just a few days' work and it'll be up for the rental market.

0:25:540:25:58

I mean, can I build up any interest as to what happens

0:25:590:26:03

later in the show?

0:26:030:26:04

Oh, just come back later and see anyway!

0:26:040:26:07

Coming up in Glasgow, small shop,

0:26:090:26:11

big budget, for a beauty parlour.

0:26:110:26:13

-So, come on, how much is one of the machines?

-£25,000 to £30,000.

0:26:130:26:17

-And you're looking at buying...?

-Four to five.

0:26:170:26:21

And Cwmaman, big house, tiny budget,

0:26:210:26:23

but Mervyn really isn't saving any money, thanks to wife Pam.

0:26:230:26:27

I do the work, she spends the money.

0:26:270:26:29

Earlier on in the show, I was in lovely Liverpool,

0:26:340:26:36

where I met businessman Adrian and his client Gary.

0:26:360:26:39

Adrian is a professional developer, buying,

0:26:410:26:44

renting and renovating properties for his clients.

0:26:440:26:48

He bought this three-bed mid-terrace for Gary for £41,000.

0:26:480:26:51

But Gary's fourth investment property was in need of modernisation, so

0:26:550:27:00

eight weeks on, have Adrian and his team managed a successful renovation?

0:27:000:27:04

An impressive finish here.

0:27:240:27:26

Adrian and his team have done a great job for Gary.

0:27:260:27:29

Adrian can take us through the changes.

0:27:290:27:32

Let's start with the exterior.

0:27:320:27:34

The roof and guttering, we've just replaced parts of it where

0:27:340:27:38

needed, so there's some new downspouts on the front.

0:27:380:27:41

We've replaced the bay window roof, we've painted the board,

0:27:410:27:44

renewed some guttering, downspouts.

0:27:440:27:46

The main work - a new front door,

0:27:490:27:51

and then we've done the block paving, new fencing.

0:27:510:27:54

So it's really smart and it's got great appeal now.

0:27:540:27:58

It's not only the front garden

0:27:580:28:00

that's had the easy-to-care-for approach.

0:28:000:28:02

The back garden has also been sorted out, so any tenant

0:28:020:28:04

moving in won't be needing to get their gardening gloves on.

0:28:040:28:08

So, outside there, we've cleared all the undergrowth out,

0:28:090:28:13

all the soil.

0:28:130:28:15

There was actually tree stumps which we had to have ground out,

0:28:150:28:18

a tremendous amount of undergrowth and rubbish.

0:28:180:28:22

Actually about nine or ten skips just from the back alone.

0:28:220:28:26

And then the team levelled the ground, they put the step in,

0:28:260:28:30

new gate, new fence in, a lovely block paving for the tenants,

0:28:300:28:33

which is really low-maintenance.

0:28:330:28:35

It's a nice place to sit out in the sunshine, really.

0:28:350:28:38

OK, that's the outside, how about the inside?

0:28:390:28:43

I'm loving the look of the kitchen in particular.

0:28:430:28:45

So, in the kitchen, we've totally taken out the old units,

0:28:500:28:53

we've taken off the old wall tiles, new white-gloss units,

0:28:530:28:57

nice black tiling and the matching oven, hob and extractor.

0:28:570:29:00

So it's a really modern, practical kitchen for the new tenants.

0:29:000:29:04

So what about the rest of downstairs?

0:29:050:29:08

On the downstairs, we've decorated throughout.

0:29:080:29:11

We've put in a new, nice electric fireplace, totally new kitchen

0:29:110:29:14

and bathroom, lovely wall tiling,

0:29:140:29:17

it just gives it a nice uplift to the house,

0:29:170:29:20

it's really modern.

0:29:200:29:21

And what about that bay window?

0:29:220:29:26

The damp wasn't really an issue, it wasn't actually rising damp or anything.

0:29:260:29:29

There was some round the bay window, which was coming from the

0:29:290:29:32

bay window roof, which needed replacing,

0:29:320:29:34

so that's had a complete new roof and the top just dried out

0:29:340:29:37

and it's been painted and it's eradicated the problem.

0:29:370:29:41

Upstairs, the decor being spruced up has really lifted

0:29:420:29:45

the appeal of the bedrooms.

0:29:450:29:48

Adrian also saved a little in the budget.

0:29:480:29:51

It turned out the laminate flooring was in better condition than expected,

0:29:510:29:54

which was just as well, as there was an unexpected expense.

0:29:540:29:58

We have put a new boiler in.

0:29:590:30:01

When we purchased the property, even though it did

0:30:010:30:04

have a modern boiler, we don't know if it's serviceable

0:30:040:30:06

until our gas engineer gets the gas on and tests it,

0:30:060:30:08

and it was found that the pump and the circuit board was gone,

0:30:080:30:11

so it's much more economical to pay a bit more and change the boiler and have a brand-new one.

0:30:110:30:15

When we replaced the boiler, it was a good opportunity to move it,

0:30:150:30:18

because it was very close to the rear window,

0:30:180:30:20

and it was placed in the middle of the bedroom.

0:30:200:30:22

So, one of my joiners built a nice housing cabinet for it,

0:30:220:30:25

so it's now behind closed doors and it's in a much better position.

0:30:250:30:28

It's always a good idea to have a carbon monoxide alarm,

0:30:280:30:31

wherever you put your boiler.

0:30:310:30:33

They finished slightly over their four-to-six-week timescale at eight weeks,

0:30:330:30:38

but I'm a bit worried Adrian has gone over their budget.

0:30:380:30:41

The original budget we had was 17,700, and it came £300 over.

0:30:410:30:45

We spent just on the 18,000 for the whole project.

0:30:450:30:48

-That's pretty impressive.

-Thank you.

0:30:480:30:51

It is though, isn't it?

0:30:510:30:53

Judging by that praise, sounds like Gary's a happy man.

0:30:530:30:57

I've only seen the property twice, once was before, and this time.

0:30:580:31:03

So, very pleased. I could live here.

0:31:030:31:06

To any tenant, I can't believe they'd say, "Oh, no," you know?

0:31:060:31:11

I don't think there's anything not to like.

0:31:110:31:14

But will two local estate agents like it?

0:31:140:31:17

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

0:31:170:31:20

I think the property has been transformed.

0:31:220:31:25

It's amazing, really, what he's done to it.

0:31:250:31:28

Their standard is a very high standard. I like all of it.

0:31:280:31:32

I could live here myself!

0:31:320:31:34

It is a really, really nice place.

0:31:340:31:36

They've made it a really good home.

0:31:360:31:38

I think the property's excellent,

0:31:380:31:39

I think the owner's done a brilliant job,

0:31:390:31:41

it's in a good residential area, so it's worth spending the money on.

0:31:410:31:45

I love the kitchen, I think he's done a spectacular job there,

0:31:450:31:48

it's very practical, it looks really modern and sharp as well.

0:31:480:31:51

He's bought it right, and that is the benefit of buying under the hammer.

0:31:510:31:55

But will buying under the hammer translate to profit?

0:31:550:31:58

The total spend so far, buying and renovating the house,

0:31:580:32:01

has been £59,000.

0:32:010:32:03

So what could it attract on the sales market?

0:32:030:32:05

So, sales-wise, I think you could comfortably achieve £85,000,

0:32:070:32:10

on the open market,

0:32:100:32:12

given the fact that he's done such a lovely job.

0:32:120:32:15

The sale value, I would put it on the market for in between £95,000 and £110,000.

0:32:150:32:21

I mean, the intention is not to sell, but it's good to hear that,

0:32:210:32:23

because of the nice finish,

0:32:230:32:25

that it's coming up as a higher valuation.

0:32:250:32:27

A very high valuation like that £110,000 could mean

0:32:270:32:31

a 51 grand pre-tax profit,

0:32:310:32:33

but it's letting valuations they'll be interested in.

0:32:330:32:37

What does the agent think?

0:32:370:32:40

For rental I would put it on the market for £550 per calendar month.

0:32:400:32:44

I think it would be very easy to achieve £520 per calendar month.

0:32:440:32:49

Yes, I would agree with those valuations.

0:32:490:32:51

We have actually already sourced a tenant, who's moving in next week

0:32:510:32:54

at a rent of 525, so I would totally agree with those.

0:32:540:32:58

I mean, at those figures, it is bringing in slightly under 11% gross rental yield,

0:32:580:33:02

which is an excellent result, so, very happy.

0:33:020:33:04

Proof that landlords prepared to go the extra mile to create lovely homes

0:33:050:33:09

can reap financial rewards. But does it get the thumbs up from Gary?

0:33:090:33:13

Today I'm in the East End of Glasgow, in the area that's called

0:33:300:33:34

Dennistoun, just north of the River Clyde in the East End of the city.

0:33:340:33:38

The area is mainly made up of tenements

0:33:380:33:41

and Victorian villas and terraces.

0:33:410:33:44

After the Second World War, most of Dennistoun's tenements were

0:33:440:33:47

extended and refurbished, rather than knocked down

0:33:470:33:50

and replaced by modernist high-rises like many of the neighbouring areas.

0:33:500:33:55

I do love these tenement buildings.

0:33:580:34:00

The red and blonde sandstone construction means

0:34:000:34:03

they are very impressive and substantial

0:34:030:34:05

and I also love the high ceilings and very generous proportions.

0:34:050:34:10

And right in the heart of Dennistoun's busy shopping street

0:34:110:34:14

is the property I'm here to see today.

0:34:140:34:16

It's this commercial property, formerly a greengrocer's

0:34:180:34:21

and it's right here on the ground floor of this four-storey

0:34:210:34:24

typical tenement block.

0:34:240:34:27

Now, it's a shop with a little room out the back.

0:34:270:34:30

It was up for auction for between £17,000 and £20,000.

0:34:300:34:34

On a busy street like this,

0:34:340:34:36

well, I think that is going to get some attention.

0:34:360:34:39

I'm going in.

0:34:390:34:40

A smaller space inside than expected. And in a bit of a state.

0:34:400:34:46

But what we really need to think about here is what this

0:34:460:34:49

commercial space could be used for.

0:34:490:34:51

Now, the exciting thing is there's lots of people

0:34:510:34:54

milling around outside, traffic,

0:34:540:34:56

so lots of footfall, so that's a great business opportunity.

0:34:560:34:59

But this shop, it needs a total refit. Look.

0:34:590:35:02

You've got a basement down there, which is great,

0:35:020:35:05

but there's no access outside so parking and deliveries, well,

0:35:050:35:09

there may be a bit of a problem there so that's not so good.

0:35:090:35:13

But here's something interesting.

0:35:130:35:15

You also need to pay factors' fees for the management of the building.

0:35:150:35:19

And, of course, the buildings insurance.

0:35:190:35:21

Now, those factors' fees could be between £500 and £1,000 per year,

0:35:210:35:26

so that is something you need to take into consideration.

0:35:260:35:30

The factor is the management company that sorts out repairs

0:35:300:35:34

and maintenance and the bills that are shared between the owners,

0:35:340:35:37

so definitely worth checking

0:35:370:35:39

if there are any big communal bills in the offing. Now to the basement.

0:35:390:35:43

Once you've got rid of everything, well,

0:35:430:35:46

it's big, but headroom is a real problem.

0:35:460:35:48

You couldn't use that for anything other than

0:35:480:35:50

storage at the moment.

0:35:500:35:52

# When I'm down here I could be anywhere

0:35:530:35:56

# It could be Vegas or I could be down in the basement

0:35:560:36:00

# In the basement... #

0:36:020:36:04

Now, looking around this little shop,

0:36:040:36:06

I've noticed there is no toilet.

0:36:060:36:08

Back in the day when these tenements were built, all the flats

0:36:080:36:11

within the tenement buildings shared one toilet out in the close.

0:36:110:36:16

Now, that is the communal lobby and stairway, by the way.

0:36:160:36:20

Can you imagine getting up in the middle of the night,

0:36:200:36:22

stepping over your nearest and dearest

0:36:220:36:25

and walking down those cement stairs in the dark just to get to the loo?

0:36:250:36:29

Not me.

0:36:290:36:30

Of course, you could put in a toilet facility at the back

0:36:300:36:33

of the shop where, at the moment, there is a sink and storage.

0:36:330:36:36

Food for thought, eh?

0:36:360:36:38

I asked a local property expert what he thought about this

0:36:380:36:41

interesting retail space and what its future might be.

0:36:410:36:44

The area has undergone a bit of a renaissance in recent times.

0:36:440:36:48

The local streets have become popular

0:36:490:36:52

from a retailing perspective.

0:36:520:36:54

So there's good demand within the area.

0:36:540:36:56

Businesses such as small cafes, groceries, newsagents which,

0:36:560:37:02

as I say, they're attracted to the area just

0:37:020:37:04

because of the residential market.

0:37:040:37:06

So a good area and with potential customers aplenty,

0:37:060:37:08

what could be done

0:37:080:37:10

to make this place a little more resourceful in terms of space?

0:37:100:37:13

Yes, the lower floor has got a very limited floor-to-ceiling height

0:37:150:37:18

so there's various ways you can look at it.

0:37:180:37:20

You could potentially raise the existing floor or you could drop

0:37:200:37:24

the existing floor and put two floors within the main ground floor area.

0:37:240:37:29

I suppose those really high ceilings would allow you to create two floors

0:37:300:37:34

that would still have lots of space.

0:37:340:37:37

We're used to juggling rooms around, but floors?

0:37:370:37:39

That's a very different kind of reconfiguration and expensive too.

0:37:390:37:43

But if done as a straight renovation,

0:37:430:37:45

what could this property sell for?

0:37:450:37:48

I would expect, if placed on the open market,

0:37:480:37:51

that a figure of around £40,000 could be achieved after refurbishment.

0:37:510:37:57

The agent said valuing the property

0:37:570:37:59

as two usable floors would depend on the final square footage

0:37:590:38:03

so any refurbishment budget would need to be kept under control.

0:38:030:38:07

What about rental potential?

0:38:070:38:10

I would expect this property to achieve

0:38:100:38:13

a rent in the region of £400 per calendar month.

0:38:130:38:17

In this up and coming area,

0:38:170:38:18

this is a definite business opportunity for someone, but it's

0:38:180:38:22

about finding the right business and the right owner to make it succeed.

0:38:220:38:27

Let's see who saw beyond the shabby shutters and broken tiles

0:38:270:38:31

when it went to auction.

0:38:310:38:33

Now, lot ten. Takes us all the way down to bonnie Glasgow.

0:38:330:38:36

Somebody start me off here. Where shall we start for this?

0:38:360:38:39

Let's try 35,000, I'm looking for. 30, then.

0:38:390:38:42

25. 15,000, then.

0:38:420:38:44

15 I have. 16, I've got. 17 I also have at the back, I hope.

0:38:450:38:49

17? 18. 19.

0:38:490:38:52

20.

0:38:520:38:53

With both rival bidders hidden from our view,

0:38:530:38:56

we return to the action at £48,000.

0:38:560:38:58

Looking for 48.

0:38:590:39:01

48. 48, I have.

0:39:010:39:04

48 going once, twice...

0:39:040:39:07

third and final time. Sorry.

0:39:070:39:11

Before I got the hammer down.

0:39:110:39:12

That was very late, but you just made it in.

0:39:120:39:14

49. 50.

0:39:140:39:16

50 I have. 51? No.

0:39:160:39:19

50,000, going once, twice, third and final time. Sold.

0:39:190:39:24

Gentleman stood at the back. Thank you very much.

0:39:240:39:27

Wow. For 30 grand over the guide price,

0:39:270:39:29

this shop went to businessman Mindy.

0:39:290:39:31

He already runs a store across the road from this lot

0:39:320:39:35

so I was intrigued as to why he wanted this one.

0:39:350:39:39

Mindy, congratulations on your purchase.

0:39:390:39:42

Now, I know you paid £50,000 on auction day.

0:39:420:39:45

What was the guide price, remind me.

0:39:450:39:47

-The guide was 17 to 22.

-So did you get caught up?

0:39:470:39:51

-Can you admit to me...

-I did.

-You got so excited?

-I did.

0:39:510:39:55

I did get caught up because the bidding...

0:39:550:39:58

when I took it to the third bid on the 48,000.

0:39:580:40:01

-I just had to get a bit of a sense of reality.

-A Mindy check.

0:40:010:40:06

-Hold on a moment!

-Just what was I doing here? Where was I?

0:40:060:40:10

But I thought I might as well finish on a round figure.

0:40:100:40:13

Well, yes, a round figure with a three in front

0:40:130:40:15

would have been so much wiser.

0:40:150:40:17

He isn't the first and won't be the last to get carried away at auction.

0:40:170:40:21

Remember, set a budget and stick to it.

0:40:210:40:24

Moving on...

0:40:240:40:25

Well, you have bought it.

0:40:250:40:27

What are you going to do with it here?

0:40:270:40:29

-What we are going to do is at first we can utilise the basement.

-Mm-hm.

0:40:290:40:33

Because of the height, but what we're going to do is the floor

0:40:330:40:36

that we are standing on right now,

0:40:360:40:38

-we're going to raise this by a metre.

-OK.

0:40:380:40:40

So raise this floor so it...

0:40:400:40:42

-So it gives us more downstairs and then gives us usage downstairs.

-OK.

0:40:420:40:46

We're going to be putting in a fully equipped sun lounge downstairs

0:40:460:40:49

with four to five sunbeds.

0:40:490:40:52

Up here, as we're moving the floor, we're going to build

0:40:520:40:55

a mezzanine floor here with three chairs and a cross-range

0:40:550:40:59

between rent the chairs out for eyebrows, an eye studio,

0:40:590:41:02

nail studio and maybe a hairdresser chair and just rent the chairs out.

0:41:020:41:05

-So a beauty lounge is what you're looking for?

-That's it.

0:41:050:41:09

-Beauty, sunbeds.

-Leisure industry.

-Fantastic.

0:41:090:41:12

-Is that something you've always wanted to break into?

-No.

0:41:120:41:15

Nothing that I knew about it but the more that I thought about it,

0:41:150:41:18

the more that we've got the use of this facility, this shop now,

0:41:180:41:21

the more eager I am to give it a blast.

0:41:210:41:23

And you think people that live and work around here, the footfall,

0:41:230:41:26

the locals that walk past the door, they're looking for sunbeds

0:41:260:41:30

-and eyebrows and hairdressing?

-It is my gut instinct, Lucy.

0:41:300:41:33

It's a no-brainer.

0:41:330:41:35

I really feel as if the feedback we've had, people...

0:41:350:41:38

is like, as if no-one's ever thought of it. I want to do it high-class.

0:41:380:41:42

I want to do it to a really good standard,

0:41:420:41:45

but rather than having the sunbeds nowadays with the flashy colours,

0:41:450:41:48

I want to have more of a laboratory look to it,

0:41:480:41:51

-a dental hygienist place.

-OK.

0:41:510:41:53

-And just keep basic core colours in here.

-OK.

0:41:530:41:56

That's a really good idea.

0:41:560:41:57

I mean, the only thing that worries me

0:41:570:41:59

is you have already spent quite a lot of money by just purchasing it,

0:41:590:42:02

let alone starting to raise up floors,

0:42:020:42:04

dig down deep, buy all the equipment, buy the sunbeds, employ the people.

0:42:040:42:08

I mean, how much more money do you need to spend on this

0:42:080:42:11

business venture?

0:42:110:42:13

These sunbed machines, once we've enquired about them,

0:42:130:42:16

they're very expensive bits of kit.

0:42:160:42:19

So come on, how much is one of the machines?

0:42:190:42:21

One of the machines is about £25-£30,000.

0:42:210:42:24

-And you're looking at buying...

-Four to five.

0:42:240:42:27

Four to five of those machines?

0:42:270:42:28

How much money have you got to spend on this project?

0:42:280:42:32

Another 200,000. We are looking to go a quarter mil.

0:42:320:42:35

-Really?!

-Yes.

0:42:350:42:36

Mindy sounds very determined,

0:42:370:42:39

but before he can embark on any of these expensive plans,

0:42:390:42:42

he's got to get change of use

0:42:420:42:44

and these things are often not as straightforward as you hope.

0:42:440:42:47

So I hope he's factored in some time for that planning process.

0:42:470:42:51

Subject to planning and public entertainment licence,

0:42:510:42:54

which are in the control of the council,

0:42:540:42:57

we're hoping that once we get the go-ahead, the green light,

0:42:570:43:01

-I'm going to turn this over in about three months from start to finish.

-Wow.

0:43:010:43:05

I mean, that is quite a quick sort of turnover.

0:43:050:43:07

We've got everybody in place, from joiners, builders, electricians.

0:43:070:43:12

Everybody's just raring to go,

0:43:120:43:14

but we need the green light from the council.

0:43:140:43:16

Can you see any problems there?

0:43:160:43:18

I can't see any problems, but I know there will be problems.

0:43:180:43:20

It's just one of those ones.

0:43:200:43:22

There will be stuff to encounter because it's a major upheaval.

0:43:220:43:25

We're taking...the floor you're standing on. It's not going to be there any more.

0:43:250:43:29

You're going to be a metre higher and to these people, it's normal,

0:43:290:43:33

it's their job, but to me, trying to envisage that,

0:43:330:43:36

but I have to just go with it.

0:43:360:43:38

Well, I'm really excited for you, Mindy.

0:43:380:43:40

I can't wait to see your business up and running.

0:43:400:43:42

It's going to be an exciting project. Thank you so much.

0:43:420:43:45

-Thank you, Lucy.

-Lovely to meet you.

-It's been a pleasure.

0:43:450:43:48

So, he might have paid over the odds, but Mindy has an inkling

0:43:480:43:51

that he is on to a winner

0:43:510:43:54

with this little beauty on the sunny side of the street.

0:43:540:43:57

But he paid £50,000 on auction day

0:43:570:43:59

and how's he going to get on with

0:43:590:44:02

that small issue of raising this whole floor?

0:44:020:44:05

I'm excited to find out what happens.

0:44:050:44:07

Join me later in the programme and you can find out, too.

0:44:070:44:10

Renovating a property often ends up costing you more money

0:44:130:44:16

-and taking longer than you think.

-Yep.

0:44:160:44:18

Well, we know how one of our buyers got on

0:44:180:44:20

-but how did the other two fare?

-Let's find out.

0:44:200:44:23

We head back to Cwmaman near Aberdare in South Wales now.

0:44:250:44:29

This three-bed mid-terrace was guided at £35,000

0:44:290:44:34

and I headed in ready to roll up my sleeves and plan a major renovation.

0:44:340:44:39

Is this the right house?

0:44:420:44:44

I think it is!

0:44:440:44:46

Sorry, I'm just slightly bemused by the fact

0:44:460:44:49

it looks like somebody's living here.

0:44:490:44:52

'Yes, barring a small spot of damp in the kitchen

0:44:520:44:55

'and some staining on the exterior wall, the house was in the pink.'

0:44:550:45:00

You could pretty much move in, couldn't you? It's lovely!

0:45:000:45:03

'And Mervyn decided the perfectly presented property

0:45:030:45:06

'would be perfect for his portfolio

0:45:060:45:08

'and parted with the price of £44,500,

0:45:080:45:13

'but wife Pam was getting a good deal, too.'

0:45:130:45:16

Cos if I get a property, she gets a holiday.

0:45:160:45:19

-Oh, is that the deal, is it?

-Yeah, yeah.

0:45:190:45:22

That's what they pay for, isn't it, my holidays?

0:45:220:45:27

'We left it a generous two months before we came back,

0:45:280:45:31

'but did they encounter major problems?

0:45:310:45:34

'Did they decide to do a massive overhaul instead?

0:45:340:45:36

'Answer - no.'

0:45:360:45:39

# The way I've got it figured out

0:45:400:45:43

# I ain't missed a thing

0:45:430:45:46

# And I can't find a reason to change

0:45:460:45:52

# No, I can't find a reason to change... #

0:45:520:45:58

'OK, it's time to play

0:45:580:45:59

'the Homes Under The Hammer spot the difference game.

0:45:590:46:03

'Any changes here?

0:46:030:46:06

'Any in here?

0:46:060:46:08

'Oh, I think that rug looks a little different in here.

0:46:080:46:11

'Well done if you've spotted that new tenants have already moved in.

0:46:110:46:15

'So, what did Pam and Mervyn actually do

0:46:150:46:17

'to get it ready for rental?'

0:46:170:46:19

We just fixed the guttering on the back of the house.

0:46:190:46:22

The garden, we just cut back the ivy off the back, off the wall

0:46:220:46:27

and the young lady that moved in,

0:46:270:46:30

she has resurfaced the garden and cut a couple of trees down

0:46:300:46:34

and we had an electrician in to check it right through.

0:46:340:46:36

He fitted a new fuse board and a couple of smoke alarms

0:46:360:46:41

and there was a bit of painting,

0:46:410:46:43

there was a bit of condensation on the walls

0:46:430:46:45

and it was done and dusted.

0:46:450:46:46

'The smoke alarms are a safety requirement for any landlord,

0:46:460:46:51

'but the only major problem was that damp.

0:46:510:46:53

'So, how did they get that fixed?'

0:46:530:46:55

Well, I had a painter in and he felt

0:46:550:46:58

because it's a three-storey property

0:46:580:47:00

and there wasn't a lot of air in here,

0:47:000:47:02

it was a bit of condensation so we just rubbed it back

0:47:020:47:05

and put damp resistant paint on and if it comes back,

0:47:050:47:08

we'll have to have a further investigation

0:47:080:47:11

and see what it needs from there.

0:47:110:47:13

But it seems to be holding up OK now, anyway.

0:47:130:47:16

'And while we shouldn't underestimate their hard work,

0:47:160:47:19

'I can't imagine it took that long.'

0:47:190:47:22

Well, my work was literally a day

0:47:240:47:28

and the electrician, when he came in,

0:47:280:47:31

they were sort of half a day to a day,

0:47:310:47:33

sort of two days and it was done and dusted.

0:47:330:47:35

Just about a fortnight, wasn't it, before the people moved in?

0:47:350:47:39

Yeah, probably in total from when we had the keys,

0:47:390:47:42

by a fortnight, they were in.

0:47:420:47:44

'The definition of a quick turnaround!

0:47:440:47:47

'There are pit stops in Formula One racing that take longer

0:47:470:47:51

'than this renovation did.

0:47:510:47:53

'Their total spend was £300 and they even made £100 back

0:47:530:47:57

'selling the mountain bike on the internet,

0:47:570:47:59

'so they should have plenty of money for Pam's holiday.'

0:47:590:48:02

Yes, I've already booked the next one! I'm going to Turkey.

0:48:040:48:08

-Not with me.

-Oh, no!

0:48:080:48:11

I'm off with my sister, very rarely with Mervyn.

0:48:110:48:15

I do the work, she spends the money.

0:48:150:48:17

Well, if it works for you, Mervyn!

0:48:170:48:19

But I sense with a good purchase price and a low-budget spend,

0:48:190:48:23

there could be some profit that could fund some more holidays.

0:48:230:48:27

What do two local estate agents

0:48:270:48:29

think are the selling points of this place?

0:48:290:48:32

The property is three-storey, it's got three bedrooms,

0:48:340:48:37

it's got plenty of living space.

0:48:370:48:40

The bathroom is on the bottom floor.

0:48:400:48:42

However, there is an upstairs cloakroom,

0:48:420:48:44

which is an advantage for a three-storey property.

0:48:440:48:48

I think the kitchen and bathroom could do with updating,

0:48:480:48:51

as it is looking very tired, the kitchen in particular.

0:48:510:48:55

I would say that this would really stand out

0:48:550:48:56

because of the access to the rear garden.

0:48:560:48:58

It is three storeys and the garden is nice and flat.

0:48:580:49:02

'The couple's total spend is around £45,000.

0:49:020:49:06

'The agents thought the property

0:49:060:49:08

'could rent for around £450 per calendar month,

0:49:080:49:10

'giving them a 12% yield,

0:49:100:49:12

'and that's what Mervyn and Pam are getting just now.

0:49:120:49:16

'But could the sales value force a rethink of their plan

0:49:160:49:20

'and would it add value to upgrade the kitchen and the bathroom?'

0:49:200:49:23

In the current condition, I would expect this property

0:49:260:49:29

to go on the market for about £60,000

0:49:290:49:32

and achieve very close to that.

0:49:320:49:34

If the work in the kitchen and bathroom were done,

0:49:340:49:36

for sale purposes, I would expect it to be put on the market

0:49:360:49:39

for about £67,000-£68,000 and achieve about £65,000.

0:49:390:49:44

If the property was sold in its current condition,

0:49:440:49:47

it would sell in the region of around about £60,000-£65,000.

0:49:470:49:52

If the work was to be done to the property

0:49:520:49:55

to upgrade the kitchen and the bathroom,

0:49:550:49:57

we would be looking to sell the property

0:49:570:49:59

between £65,000 and £75,000.

0:49:590:50:03

60,000, 44,500 paid, giving us a profit of 15,000 for nothing.

0:50:030:50:09

That's lovely, thank you very much!

0:50:090:50:11

'Of course, that is before taxes and expenses, Mervyn,

0:50:110:50:14

'but they are happy to stick with renting

0:50:140:50:17

'and building their portfolio and who can disagree with that plan

0:50:170:50:21

'if all the properties were this easy?'

0:50:210:50:24

It's not often when you go to auction,

0:50:270:50:29

you find something that's ready to go.

0:50:290:50:31

Normally, there is at least, you know,

0:50:310:50:34

5,000 or 10,000 quid to spend on a property.

0:50:340:50:37

This was just two days and a couple of hundred quid, which was lovely.

0:50:370:50:41

We head back to the East End of Glasgow now, to Dennistoun.

0:50:480:50:51

Earlier, I saw a commercial unit guided at 17,000-20,000.

0:50:530:50:56

There were positives,

0:50:570:50:59

like the heavy footfall of potential customers in the street outside,

0:50:590:51:02

but issues like factors' fees,

0:51:020:51:04

the only toilet being in the communal close

0:51:040:51:08

and the state of the shop itself all had to be considered,

0:51:080:51:12

but they didn't stop the enthusiasm of Mindy.

0:51:120:51:15

A local businessman, he paid over double the guide price at £50,000.

0:51:150:51:19

So, did you get caught up?

0:51:220:51:23

-Can you admit to me, on that day, you got so excited...

-I did.

0:51:230:51:27

I just had to get a bit of sense of reality.

0:51:270:51:30

-A Mindy check, hold on a moment!

-Yeah, just what was I doing here?

0:51:300:51:34

Where was I? But I thought I might as well finish on a round figure.

0:51:340:51:37

'Carried away at auction, but clear minded in his renovation plan,

0:51:370:51:41

'Mindy planned to raise the floor to utilise the basement

0:51:410:51:45

'and let the sunshine in down there, quite literally.'

0:51:450:51:48

We're going to put in a sort of fully equipped sun lounge downstairs

0:51:500:51:54

with four to five sunbeds.

0:51:540:51:57

Up here, as we're moving the floor,

0:51:570:51:59

we're going to build a mezzanine floor here with three chairs

0:51:590:52:02

and a cross range between rent the chairs out for eyebrows,

0:52:020:52:06

an eye studio, nail studio and maybe a hairdresser chair

0:52:060:52:09

and just rent the chairs out.

0:52:090:52:11

'Mindy was sparing no expense

0:52:110:52:13

'with the total quarter of a million investment planned.

0:52:130:52:17

'It was all predicated on getting the appropriate licence

0:52:170:52:20

'from the council, planning permission

0:52:200:52:22

'and all that ambitious work going to plan.

0:52:220:52:25

'Over one year on,

0:52:270:52:30

'we came back to find things hadn't quite gone according to plan.'

0:52:300:52:35

# And we've been taking care of business every day

0:52:350:52:39

# Taking care of business

0:52:390:52:41

# It's all right

0:52:410:52:43

# Taking care of business and working overtime... #

0:52:430:52:48

'Mindy has come along with his son to tell us

0:52:480:52:51

'what happened over the last year.'

0:52:510:52:54

Yeah, what's happened since last time I seen you

0:52:540:52:56

was we were going ahead with opening the shop as a sunbed shop,

0:52:560:53:00

but we had to apply for specific licences from the council

0:53:000:53:04

and, while applying for these licences,

0:53:040:53:07

we've also discovered there is a policy in place,

0:53:070:53:10

a regeneration policy, which has effectively not let us

0:53:100:53:14

get an application for the licence for a sunbeds shop

0:53:140:53:17

and that scuppered all plans.

0:53:170:53:20

The way it stands today is we've been rejected in our application

0:53:200:53:23

and our appeal has been refused, also.

0:53:230:53:25

'Mindy's plans were rejected

0:53:250:53:28

'because the council's regeneration policy is wanting to encourage

0:53:280:53:31

'more bakers and greengrocers, rather than beauty salons.

0:53:310:53:35

'So, while regeneration can have many boons for business,

0:53:350:53:39

'you can always get a nasty bump if you don't do your research.

0:53:390:53:42

'So, what is plan B, Mindy?'

0:53:420:53:44

Plan B - because of other multiples and supermarkets

0:53:440:53:48

that are successful in the discount range,

0:53:480:53:50

we're going to change it now into a pound concept sort of shop,

0:53:500:53:54

a Smart Shop or Happy Shopper sort of concept into the shop,

0:53:540:53:58

so that's the plan.

0:53:580:54:00

'Mindy doesn't need to go for change of use for this plan

0:54:020:54:05

'so that will be simpler, as is his decision

0:54:050:54:08

'not to get into that ambitious building work

0:54:080:54:11

'with moving floors up and down.

0:54:110:54:13

'But he has made a number of changes.'

0:54:130:54:16

So we've put a brand-new floor in, we've put a cladded floor in.

0:54:170:54:22

The staircase is becoming centralised.

0:54:220:54:24

It was more to the right of the shop and therefore,

0:54:240:54:29

if we centralise it, we can then use both walls.

0:54:290:54:32

The shop's narrow so we centralise the staircase,

0:54:320:54:35

then we can use both sides of the walls

0:54:350:54:36

for shelving and hanging products.

0:54:360:54:38

'Downstairs will be used for storage

0:54:380:54:41

'and of course a fair bit of work has been done

0:54:410:54:44

'to the front of the building.'

0:54:440:54:46

Brand-new aluminium shop fronts, electric roller shutters

0:54:460:54:49

and we've still got lots more to do.

0:54:490:54:52

'During the renovation,

0:54:520:54:54

'Mindy discovered the shop was previously a butchers

0:54:540:54:56

'and he had to remove some equipment still built into the ceiling.

0:54:560:55:00

'He also discovered these beautiful original tiles

0:55:000:55:04

'and tried to replace or restore the broken ones, but to no avail.

0:55:040:55:08

'With the renovation having taken 15 months so far,

0:55:080:55:11

'how much has he spent?'

0:55:110:55:14

I've spent nearly £20,000 for trying to use up-to-date,

0:55:150:55:19

the best of stuff.

0:55:190:55:20

In the retail industry, customers are looking for a bit of standards.

0:55:200:55:26

'Mindy clearly wants to work to a high standard,

0:55:260:55:28

'but this has been a protracted and so far pretty costly project.

0:55:280:55:33

'Has he enjoyed it?'

0:55:330:55:34

So far, there's been highs and lows,

0:55:340:55:36

but we paid over double the guide price for the shop.

0:55:360:55:40

I'm a great believer of what's to be's to be

0:55:400:55:43

and I've great confidence in what we do

0:55:430:55:45

and I'm a professional in the retail industry.

0:55:450:55:48

'So, from a retail pro to two experts in the local property market,

0:55:500:55:54

'let's start by asking the agent who saw it the first time

0:55:540:55:58

'what he thinks of the work.'

0:55:580:55:59

There's been a reasonably significant amount of work

0:56:010:56:04

and they've stripped out a lot of the redundant space at the back

0:56:040:56:07

and, having been down in the basement,

0:56:070:56:09

there's a lot of the rubbish been taken away

0:56:090:56:11

so it's a big improvement to what was there before.

0:56:110:56:15

It's my first time inside the building.

0:56:150:56:17

The work that has been done,

0:56:170:56:18

they have stripped out the previous fittings,

0:56:180:56:20

although there's still some work needing done to it.

0:56:200:56:22

'Both agents were agreed that the property would need

0:56:220:56:26

'a further five to ten grand spending on it to bring it up to standard.

0:56:260:56:30

'An added 10,000 would take Mindy's spend to £80,000

0:56:300:56:35

'so what value would the agents put on the completed shop premises?'

0:56:350:56:39

I would estimate the property would be worth around £40,000.

0:56:390:56:44

Once it's been refurbished,

0:56:440:56:46

I think there would be a good demand from purchasers

0:56:460:56:48

and occupiers for it.

0:56:480:56:49

I think it would command a price of £55,000-£60,000.

0:56:490:56:52

I think the second one I agree with.

0:56:520:56:53

The first one I think is a little bit low.

0:56:530:56:55

So, even that higher estimate of 60,000

0:56:550:56:58

would see a £20,000 loss for Mindy,

0:56:580:57:01

but perhaps the shop will fare better in rental values.

0:57:010:57:06

If it's going to be up for lease,

0:57:060:57:08

I would expect it to command a rent of £5,500-£6,000 per year.

0:57:080:57:11

I would estimate that, after completion of the works,

0:57:110:57:14

he should get around £5,000 per annum or £400 per calendar month.

0:57:140:57:19

The rental values for the property

0:57:190:57:21

are a true reflection of what the market appraisals are just now,

0:57:210:57:24

but as I said from the kick-off, this is a long-term investment

0:57:240:57:27

and it is to run a business, a profitable business from.

0:57:270:57:31

'Even the top possible yield of 7.5% is of no real interest to Mindy.

0:57:310:57:37

'He is looking to the future

0:57:370:57:39

'and being able to pass this down to his son.

0:57:390:57:42

'Possibly the regeneration will also help this property

0:57:420:57:46

'come good in the end. But has he been put off?'

0:57:460:57:48

It's been a learning curve, this shop.

0:57:510:57:53

I'm in the process of doing another one,

0:57:530:57:55

but I would say to anyone - do your homework.

0:57:550:57:58

Speak to the council, speak to Land and Environment

0:57:580:58:02

and make sure you know exactly what you're doing

0:58:020:58:04

before going to an auction.

0:58:040:58:06

Each buyer has their own renovation story to tell.

0:58:090:58:12

Yep, and we've got plenty more lined up for next time.

0:58:120:58:14

So make sure you join us then for more Homes Under The Hammer.

0:58:140:58:17

-Goodbye.

-Goodbye.

0:58:170:58:18

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