Episode 43 Homes Under the Hammer

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

You could be a young couple starting out,

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

-Yes.

The end result should be exactly the same.

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

-Yes.

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

How about heading down to your local property auction?

Buying wisely is the name of the game in property

if you're going to get a great return.

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

Let's find out what they bought.

In Liverpool, I like a development plan

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

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

HE LAUGHS

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

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

Is this the right house? I think it is.

HE LAUGHS

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

of clambering through the communal area to use the loo.

Just to get to the loo? Not me.

All these properties are bought at auction.

We'll find out who got them

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

Sold.

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

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

Alder Hey Children's Hospital is nearby,

so workers there might be your clientele.

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

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

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

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

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

I'm going to take a look.

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

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

More or less straight into the lounge.

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

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

see it's a little bit tired.

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

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

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

And a bit of water stainage as well,

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

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

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

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

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

Again, dated, would need changing.

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

You'd have to start again in here.

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

It's a decent space here, actually.

You could have a bit of a dining area there,

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

I think you're onto a winner.

You're going to need some skips here,

but overall the space downstairs is good.

So upstairs then, we've got three bedrooms.

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

And into what would be the master bedroom.

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

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

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

Apart from that damp downstairs, everything to me

seems very superficial.

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

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

I just wanted to come outside and see

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

You can see there's definite water damage here.

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

And I can just notice over here, it may have

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

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

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

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

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

And while you're at the front

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

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

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

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

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

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

Do check with your local council planners about the permeable

materials you should use. As we know,

flooding is a big issue these days.

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

applying for permission to get that bathroom upstairs.

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

have an extension.

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

maybe get that bathroom upstairs? But judging from what I

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

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

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

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

# There she goes

# There she goes again... #

You could put a bigger extension on the property,

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

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

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

What does the agent think?

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

'you're talking about £20,000.'

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

Is there profit potential in this popular part of Liverpool?

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

Sounds great. And rental potential?

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

would be £475 per calendar month.

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

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

Great location, well built, close to all the amenities

and the motorways.

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

there's a tidy profit to be made.

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

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

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

26. 27. 28.

29. 30. 31.

31. Gentleman's bid, yes. 32.

33.

34. 35.

36. He shakes his head.

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

Gentleman here. 36. 37.

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

A thousand. Thank you. 37.

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

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

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

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

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

41.

And a half. OK, shakes his head.

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

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

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

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

41,000. Thank you, madam.

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

the office manager for Adrian,

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

Confused yet? Let me help you place the face.

# Got to know my name... #

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

he was buying, renovating and renting

properties on behalf of his clients.

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

I met them to find out more.

-Adrian, nice to meet you.

-You, too.

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

-Congratulations.

-Thank you very much.

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

-happy with it?

-Oh, yes.

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

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

-Yes.

-Not frightened?

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

it's what I expected. So, yes.

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

-Oh!

He finds the houses...

we agree on a price and then he tells me

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

and then he manages it as well.

So I don't really have to see them.

Gary is happy to hand over his portfolio to someone else

because he works offshore carrying out seismic seabed surveys.

He's already had three properties developed by Adrian,

-but why this particular house?

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

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

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

You know, it is a good location.

-All the amenities...

-On hand, yes.

-..that you need.

-Yes.

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

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

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

all the wallpaper, everything.

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

New front and rear doors, electrics to be upgraded.

Tell us about outside, the bay window,

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

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

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

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

-Good. Upstairs.

-Upstairs, same again. Completely strip it out.

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

Upgrade the boiler, if necessary.

Are you going to change anything upstairs,

regards a bathroom or toilet?

No, the bathroom is downstairs in this property,

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

Tenants still go for the properties.

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

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

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

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

-I like the sound of it.

-Yeah, me too.

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

Might have found myself a little Merseyside crash pad.

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

but how much will it all cost?

The total refurbishment for the whole property,

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

And you get all that information...

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

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

I know exactly what it's going to do,

exactly how much it's going to cost.

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

-How long is it going to take?

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

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

Do you look for a particular yield between you?

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

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

It is very good, isn't it?

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

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

-Thank you very much.

-Gary, good luck.

-Thank you very much.

-Nice to meet you both.

-Let me know if you need any digs!

-DION CHUCKLES

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

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

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

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

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

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

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

that's Welsh for Amman Valley.

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

Well, not far from the centre of Aberdare,

with good road links to Cardiff

and access to the beautiful Brecon Beacons National Park,

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

fairly traditional, guide price £35,000.

Let's have a look.

So, what do you get for your money?

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

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

so this is a good thing to have.

Ah, now here's an interesting thing.

Looking up at the fuse box here,

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

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

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

Old style um, sort of, cartridge type fuse board

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

So, that leads me to think the electrics will definitely

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

It's a....

Is this the right house?!

I think it is! Um...

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

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

Wow. OK.

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

No, it is, really.

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

Beautiful view out the back there.

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

Let's go down.

# Something strange is going on

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

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

Perfectly serviceable.

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

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

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

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

Um... So...

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

Just noticed that. Some nasty damp going on here.

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

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

My guess is it's rising damp from there,

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

It's lovely.

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

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

but the contents could be part of the deal,

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

That damp is a minor worry and other than that,

the salt shaker needs to be refilled.

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

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

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

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

Well, judging by that bedroom, it definitely does.

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

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

a little loo. That's quite sweet.

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

Tiny third bedroom, to be fair.

But it's in reasonable condition.

Through into your final bedroom and once again,

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

You've got a house, I guess,

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

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

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

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

But as ever, do read the legal pack.

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

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

Well, at the back of the property,

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

So, what a lovely place to spend some time.

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

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

along with the damp inside,

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

guttering up there cos you can see the black

staining down the pebbledash there, so definitely check out

the rainwater goods, make sure they're OK.

But apart from that, I think

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

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

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

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

Investors will buy in the location

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

attract the first-time buyers and the families themselves.

The agent thinks the resale market is very slow,

so what about rentals then?

The rental market seems to be at probably its highest peak

since it has been for many years.

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

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

With minimal work done,

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

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

but how about those rental figures?

Without doing any work to the property,

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

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

month if any upgrading was done to the property.

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

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

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

That's good news on the one hand.

On the other hand, in terms of adding value,

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

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

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

Mid-terraced house. Accommodation over three floors.

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

Start me at 30, somebody, please?

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

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

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

27. 28. 28. 29.

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

house, with bids coming from around the room.

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

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

At 43 and a half then for the first time.

Second time. Third and last time.

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

44 and a half. 45 now.

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

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

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

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

Hailing from the Valleys, he knows the local market well

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

If anything.

-Pam, Mervyn, great to meet you both.

-Good morning.

-Congratulations.

-Thank you.

-Well, maybe.

-What do you mean "Maybe"?

-What doubt do you have about this place?

-It was too good to be true.

-What did you think when you first came in?

-Um...

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

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

it's too good to be true, really.

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

-You own everything in it as well.

-All done and dusted.

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

Even a mountain bike.

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

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

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

Tell me why you wanted to buy it.

Well, it was the right price

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

-Add to the collection, really.

-Add to what we've got.

You've done this before then, have you?

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

-Oh, well done.

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

-Yes, all in the valley.

-Yes, all in the valley.

-All in the valley.

-The first one in this actual village.

-In this village, yeah.

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

-All rented out, yeah.

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

-Yeah. And something to

-do.

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

Well, I was a bookmaker.

Small village bookmaker and had half a dozen properties,

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

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

That's a shame.

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

Oh, no.

-That's a nightmare.

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

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

-And, Pam, what was your background?

-I used to work as an estate agent.

-Oh, did you? That's useful.

-Many years ago now.

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

-Right, are you a kept woman?

-Yes, I am and loving it.

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

-Well, that works perfectly then.

-Perfect arrangement, isn't it?

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

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

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

Nudged or elbowed, you decide!

She was going, holiday, holiday!

-Holiday, holiday?

-Yeah.

-Why?

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

-Oh, is that the deal, is it?

-Yeah, yeah.

Yeah.

-That's what they pay for.

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

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

-Yes.

-Oh, great.

Well, having sold off the bookmaking business,

the couple now rely on their property portfolio

and a small wholesale electrical business for their income.

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

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

One of the things I noticed

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

That's right, yeah.

-So we'll be able to do that.

-Get that sorted, no problem.

-Yeah.

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

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

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

-That's it.

-So, what about the damp in the kitchen?

What do you think is causing that?

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

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

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

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

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

-And the kitchen's staying pink?

-Kitchen's staying pink.

-Show your feminine side, is it?

-Yes.

-Show the feminine side off.

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

And how long do you think it'll take?

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

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

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

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

-It's ideal.

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

-starting together...

-Oh, yeah.

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

They can manage with all the furniture for a while.

-They can manage with whatever's here.

-Yeah, superb start.

-So, what's next on the agenda?

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

-Yes.

-That's the next thing on the agenda.

-Where are you going to go?

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

-They go away in threes.

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

And I stay home.

And do the work.

-You don't go on the holidays?

-No.

-What?!

-No.

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

-Yeah.

And I spend it.

-And the family goes and enjoys the holidays.

-Yeah.

-You seem very happy about this.

-Yeah, that's fine.

-I'm happy with that.

-Wonderful arrangement.

-Yeah.

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

-Congratulations.

-Thank you.

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

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

-We'll let you know!

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

Well, Pam and Mervyn really recognise that they have been

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

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

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

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

later in the show?

Oh, just come back later and see anyway!

Coming up in Glasgow, small shop,

big budget, for a beauty parlour.

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

-£25,000 to £30,000.

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

-Four to five.

And Cwmaman, big house, tiny budget,

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

I do the work, she spends the money.

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

where I met businessman Adrian and his client Gary.

Adrian is a professional developer, buying,

renting and renovating properties for his clients.

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

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

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

An impressive finish here.

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

Adrian can take us through the changes.

Let's start with the exterior.

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

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

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

renewed some guttering, downspouts.

The main work - a new front door,

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

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

It's not only the front garden

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

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

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

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

all the soil.

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

a tremendous amount of undergrowth and rubbish.

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

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

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

which is really low-maintenance.

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

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

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

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

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

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

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

So what about the rest of downstairs?

On the downstairs, we've decorated throughout.

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

and bathroom, lovely wall tiling,

it just gives it a nice uplift to the house,

it's really modern.

And what about that bay window?

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

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

bay window roof, which needed replacing,

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

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

Upstairs, the decor being spruced up has really lifted

the appeal of the bedrooms.

Adrian also saved a little in the budget.

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

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

We have put a new boiler in.

When we purchased the property, even though it did

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

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

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

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

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

because it was very close to the rear window,

and it was placed in the middle of the bedroom.

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

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

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

wherever you put your boiler.

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

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

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

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

-That's pretty impressive.

-Thank you.

It is though, isn't it?

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

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

So, very pleased. I could live here.

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

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

But will two local estate agents like it?

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

I think the property has been transformed.

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

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

I could live here myself!

It is a really, really nice place.

They've made it a really good home.

I think the property's excellent,

I think the owner's done a brilliant job,

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

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

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

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

But will buying under the hammer translate to profit?

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

has been £59,000.

So what could it attract on the sales market?

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

on the open market,

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

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

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

because of the nice finish,

that it's coming up as a higher valuation.

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

a 51 grand pre-tax profit,

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

What does the agent think?

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

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

Yes, I would agree with those valuations.

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

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

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

which is an excellent result, so, very happy.

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

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

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

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

The area is mainly made up of tenements

and Victorian villas and terraces.

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

extended and refurbished, rather than knocked down

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

I do love these tenement buildings.

The red and blonde sandstone construction means

they are very impressive and substantial

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

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

is the property I'm here to see today.

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

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

typical tenement block.

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

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

On a busy street like this,

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

I'm going in.

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

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

commercial space could be used for.

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

milling around outside, traffic,

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

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

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

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

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

But here's something interesting.

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

And, of course, the buildings insurance.

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

so that is something you need to take into consideration.

The factor is the management company that sorts out repairs

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

so definitely worth checking

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

Once you've got rid of everything, well,

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

You couldn't use that for anything other than

storage at the moment.

# When I'm down here I could be anywhere

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

# In the basement... #

Now, looking around this little shop,

I've noticed there is no toilet.

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

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

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

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

stepping over your nearest and dearest

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

Not me.

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

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

Food for thought, eh?

I asked a local property expert what he thought about this

interesting retail space and what its future might be.

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

The local streets have become popular

from a retailing perspective.

So there's good demand within the area.

Businesses such as small cafes, groceries, newsagents which,

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

because of the residential market.

So a good area and with potential customers aplenty,

what could be done

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

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

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

You could potentially raise the existing floor or you could drop

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

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

that would still have lots of space.

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

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

But if done as a straight renovation,

what could this property sell for?

I would expect, if placed on the open market,

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

The agent said valuing the property

as two usable floors would depend on the final square footage

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

What about rental potential?

I would expect this property to achieve

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

In this up and coming area,

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

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

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

when it went to auction.

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

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

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

25. 15,000, then.

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

17? 18. 19.

20.

With both rival bidders hidden from our view,

we return to the action at £48,000.

Looking for 48.

48. 48, I have.

48 going once, twice...

third and final time. Sorry.

Before I got the hammer down.

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

49. 50.

50 I have. 51? No.

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

Gentleman stood at the back. Thank you very much.

Wow. For 30 grand over the guide price,

this shop went to businessman Mindy.

He already runs a store across the road from this lot

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

Mindy, congratulations on your purchase.

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

What was the guide price, remind me.

-The guide was 17 to 22.

-So did you get caught up?

-Can you admit to me...

-I did.

-You got so excited?

-I did.

I did get caught up because the bidding...

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

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

-A Mindy check.

-Hold on a moment!

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

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

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

would have been so much wiser.

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

Remember, set a budget and stick to it.

Moving on...

Well, you have bought it.

What are you going to do with it here?

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

-Mm-hm.

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

that we are standing on right now,

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

-OK.

So raise this floor so it...

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

-OK.

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

with four to five sunbeds.

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

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

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

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

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

-That's it.

-Beauty, sunbeds.

-Leisure industry.

-Fantastic.

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

-No.

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

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

the more eager I am to give it a blast.

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

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

-and eyebrows and hairdressing?

-It is my gut instinct, Lucy.

It's a no-brainer.

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

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

I want to do it to a really good standard,

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

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

-a dental hygienist place.

-OK.

-And just keep basic core colours in here.

-OK.

That's a really good idea.

I mean, the only thing that worries me

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

let alone starting to raise up floors,

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

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

business venture?

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

they're very expensive bits of kit.

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

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

-And you're looking at buying...

-Four to five.

Four to five of those machines?

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

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

-Really?!

-Yes.

Mindy sounds very determined,

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

he's got to get change of use

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

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

Subject to planning and public entertainment licence,

which are in the control of the council,

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

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

-Wow.

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

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

Everybody's just raring to go,

but we need the green light from the council.

Can you see any problems there?

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

It's just one of those ones.

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

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

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

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

but I have to just go with it.

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

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

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

-Thank you, Lucy.

-Lovely to meet you.

-It's been a pleasure.

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

that he is on to a winner

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

But he paid £50,000 on auction day

and how's he going to get on with

that small issue of raising this whole floor?

I'm excited to find out what happens.

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

Renovating a property often ends up costing you more money

-and taking longer than you think.

-Yep.

Well, we know how one of our buyers got on

-but how did the other two fare?

-Let's find out.

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

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

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

Is this the right house?

I think it is!

Sorry, I'm just slightly bemused by the fact

it looks like somebody's living here.

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

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

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

'And Mervyn decided the perfectly presented property

'would be perfect for his portfolio

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

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

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

-Oh, is that the deal, is it?

-Yeah, yeah.

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

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

'but did they encounter major problems?

'Did they decide to do a massive overhaul instead?

'Answer - no.'

# The way I've got it figured out

# I ain't missed a thing

# And I can't find a reason to change

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

'OK, it's time to play

'the Homes Under The Hammer spot the difference game.

'Any changes here?

'Any in here?

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

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

'So, what did Pam and Mervyn actually do

'to get it ready for rental?'

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

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

and the young lady that moved in,

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

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

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

and there was a bit of painting,

there was a bit of condensation on the walls

and it was done and dusted.

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

'but the only major problem was that damp.

'So, how did they get that fixed?'

Well, I had a painter in and he felt

because it's a three-storey property

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

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

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

we'll have to have a further investigation

and see what it needs from there.

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

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

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

Well, my work was literally a day

and the electrician, when he came in,

they were sort of half a day to a day,

sort of two days and it was done and dusted.

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

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

by a fortnight, they were in.

'The definition of a quick turnaround!

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

'than this renovation did.

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

'selling the mountain bike on the internet,

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

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

-Not with me.

-Oh, no!

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

I do the work, she spends the money.

Well, if it works for you, Mervyn!

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

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

What do two local estate agents

think are the selling points of this place?

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

it's got plenty of living space.

The bathroom is on the bottom floor.

However, there is an upstairs cloakroom,

which is an advantage for a three-storey property.

I think the kitchen and bathroom could do with updating,

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

I would say that this would really stand out

because of the access to the rear garden.

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

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

'The agents thought the property

'could rent for around £450 per calendar month,

'giving them a 12% yield,

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

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

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

In the current condition, I would expect this property

to go on the market for about £60,000

and achieve very close to that.

If the work in the kitchen and bathroom were done,

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

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

If the property was sold in its current condition,

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

If the work was to be done to the property

to upgrade the kitchen and the bathroom,

we would be looking to sell the property

between £65,000 and £75,000.

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

That's lovely, thank you very much!

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

'but they are happy to stick with renting

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

'if all the properties were this easy?'

It's not often when you go to auction,

you find something that's ready to go.

Normally, there is at least, you know,

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

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

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

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

There were positives,

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

but issues like factors' fees,

the only toilet being in the communal close

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

but they didn't stop the enthusiasm of Mindy.

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

So, did you get caught up?

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

-I did.

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

-A Mindy check, hold on a moment!

-Yeah, just what was I doing here?

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

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

'Mindy planned to raise the floor to utilise the basement

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

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

with four to five sunbeds.

Up here, as we're moving the floor,

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

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

an eye studio, nail studio and maybe a hairdresser chair

and just rent the chairs out.

'Mindy was sparing no expense

'with the total quarter of a million investment planned.

'It was all predicated on getting the appropriate licence

'from the council, planning permission

'and all that ambitious work going to plan.

'Over one year on,

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

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

# Taking care of business

# It's all right

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

'Mindy has come along with his son to tell us

'what happened over the last year.'

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

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

but we had to apply for specific licences from the council

and, while applying for these licences,

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

a regeneration policy, which has effectively not let us

get an application for the licence for a sunbeds shop

and that scuppered all plans.

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

and our appeal has been refused, also.

'Mindy's plans were rejected

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

'more bakers and greengrocers, rather than beauty salons.

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

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

'So, what is plan B, Mindy?'

Plan B - because of other multiples and supermarkets

that are successful in the discount range,

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

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

so that's the plan.

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

'so that will be simpler, as is his decision

'not to get into that ambitious building work

'with moving floors up and down.

'But he has made a number of changes.'

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

The staircase is becoming centralised.

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

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

The shop's narrow so we centralise the staircase,

then we can use both sides of the walls

for shelving and hanging products.

'Downstairs will be used for storage

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

'to the front of the building.'

Brand-new aluminium shop fronts, electric roller shutters

and we've still got lots more to do.

'During the renovation,

'Mindy discovered the shop was previously a butchers

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

'He also discovered these beautiful original tiles

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

'With the renovation having taken 15 months so far,

'how much has he spent?'

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

the best of stuff.

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

'Mindy clearly wants to work to a high standard,

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

'Has he enjoyed it?'

So far, there's been highs and lows,

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

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

and I've great confidence in what we do

and I'm a professional in the retail industry.

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

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

'what he thinks of the work.'

There's been a reasonably significant amount of work

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

and, having been down in the basement,

there's a lot of the rubbish been taken away

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

It's my first time inside the building.

The work that has been done,

they have stripped out the previous fittings,

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

'Both agents were agreed that the property would need

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

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

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

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

Once it's been refurbished,

I think there would be a good demand from purchasers

and occupiers for it.

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

I think the second one I agree with.

The first one I think is a little bit low.

So, even that higher estimate of 60,000

would see a £20,000 loss for Mindy,

but perhaps the shop will fare better in rental values.

If it's going to be up for lease,

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

I would estimate that, after completion of the works,

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

The rental values for the property

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

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

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

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

'He is looking to the future

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

'Possibly the regeneration will also help this property

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

It's been a learning curve, this shop.

I'm in the process of doing another one,

but I would say to anyone - do your homework.

Speak to the council, speak to Land and Environment

and make sure you know exactly what you're doing

before going to an auction.

Each buyer has their own renovation story to tell.

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

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

-Goodbye.

-Goodbye.