Episode 7 Homes Under the Hammer

Hello, and welcome to the show.

Now, people buy property for all sorts of reasons -

to live in, to invest in or just to buy and then sell on.

Get it right, and many people think that investing in property is

-better than keeping your money in the bank.

-Absolutely.

Hundreds of properties are sold every month at auction,

and to help us with all the action is Mr Dion Dublin!

Hello! Great to be here, but most people know me just as a footballer.

I love my property, developed many properties, and I'm looking

forward to seeing how the country's property developers get on.

But there's a huge range of buyers and properties at an auction.

Your best chance of securing success is to go prepared.

Do your research, visit the property beforehand

and read that all-important legal pack.

And you've got to keep it cool in the auction room.

Let's take a look at the three properties on today's show.

In Birmingham, this developer drives a hard bargain with his builders.

If they get it ready before, they get bonuses.

If not, they'll be paying me!

No need for haggling in Oldham,

as it sounds like this developer's bought a property on Easy Street.

For me, something like this, it's a walk in the park, as they say!

'And I'll let you know if this house in Gravesend is a bargain.

'If I ever get inside...'

Ah! Well, access to London might be good,

but access to the property is not so good!

All of these properties have been sold at auction.

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

when they went under the hammer.

Sold to you, sir. Thank you very much. And your bidding number, sir?

MUSIC: Kashmir by Led Zeppelin

'The city of Birmingham has the largest population

'outside of London, and its six universities make it the largest

'centre of education - you guessed it - outside of London.

'However, this great second city can claim something that London cannot.

'It is the birthplace of heavy metal.

'Bands such as Black Sabbath, Judas Priest

'and half of Led Zeppelin originated from the city or nearby.

'And today, I'm in Bordesley Green,

'about two miles southeast of the city centre.'

So, the city has a strong musical heritage, for sure,

something to be very proud of.

The big question is,

will the property I'm here to see hit the right note?

Well, it's on this busy main road,

which isn't a particularly good start,

but the guide price isn't too bad, £100,000 to £125,000 for this.

It's a three-bed end-of-terrace.

Is it going to need a Whole Lotta Love?

Oh, come on, it's probably in a right state, isn't it?

Or maybe I'm just being Paranoid.

MUSIC: Paranoid by Black Sabbath

'Leaving the musical puns to one side,

'the first thing I've spotted is the state of the roof.

'It doesn't look in too good a condition,

'and I hope the rooms upstairs aren't suffering as a result.'

Oh!

Well, at least you've got an inner door there

and so a little area which will definitely stop

the noise from the road, which is good news.

So, into the property, then, you've got this little corridor.

Erm, it feels a little bit sort of claustrophobic.

I don't suppose there's a lot else you could have,

but it's not a particularly good start.

Through to...well, other things we'll discover in a minute.

But you have to see this room.

-HE LAUGHS

-It's the front living room.

It's dual-aspect, so you've got a door out to the rear garden there,

lots of light coming in through the bay window to highlight this

absolutely sensational decoration.

Could have predicted it, really.

It's the ace of spades.

# The only thing you see You know it's gonna be

# The ace of spades, The ace of spades, all right!... #

'I know, I know, I promise, no more heavy-metal gags.

'Probably.

'As individual as this decor is,

'it's still a great room with plenty of potential.'

So, through to the rear of the property, and a few signs

of some serious rot going on with the skirting boards there.

That is a bit of a worry,

especially as this looks like it's a solid floor.

Maybe there's rising damp. That's not ideal...

What's also not ideal is this is where you would expect

the kitchen to be.

But, no, you have to go further, into the darkest,

deepest reaches of the property, where you find this little add-on.

Now, this should be the utility room, but, no, it is

the only kitchen in the property. What were they thinking?

Knock this down, take this wall out.

I know it's a breast of a chimney

so there'll be lots of mess and it'll cost a bit,

but get rid of it, you need to open it all up or just make that

the kitchen and this the utility room. That is how it should be.

MUSIC: Automatic by The Pointer Sisters

'There might be more to do to this house than just changing

'the wallpaper.

'But as decisions go, moving the kitchen is, well, a no-brainer.'

# Automatic

# Automatic... #

So, a fairly tight little staircase, but what it does do is allow

a lot of space - and usable space - for the rest of the house.

So, upstairs the corridor splits two ways, that way to two bedrooms,

both a pretty decent size.

A good-size bathroom and loo upstairs, which is good news.

I mean, it needs refurbishment, but sorting out the kitchen,

sorting out that would really bring this house to life.

And then through into the rear bedroom.

Again, it's not a bad size.

Some nice views out across some fields there.

Oh. Erm, a bit of a problem with damp, though.

Hm, don't like the look of that. Need to investigate further.

Ooh, I don't like that, either, a boiler in the bedroom.

Never a good thing.

'At best, boilers can be noisy, and they're certainly not pretty,

'and you're going to have to install a carbon-monoxide alarm

'and make sure it's regularly serviced.

'Personally, I'd not want it in my bedroom.

'I'm off out the back to get another look at that roof.'

Here's a bit of a tip. Look at that roof there.

It's obvious that there's a problem, because these tiles have fallen off,

but even if they hadn't, you'd notice those grey clippy things.

They're actually put on to try

and do a temporary repair on the roof when the nails which hold

the slates in place have started to go, rust or whatever,

and the wood itself that supports the roof has also started to rot.

So if you see those kind of clippy things,

it's an indication that at some point in the future,

and probably in the fairly near future,

the whole of the roof is going to need replacing.

So that is definitely something to budget for.

'And as we're talking budgets, what better time could there be to get

'a local property expert to give this place the once-over?

'First of all, what's the location of the house like?'

The property's in a primary residential area close to

local shops, and there's a hospital very close by.

The local market here is very good for sales and lettings.

It's quite popular.

'Well, that's certainly positive news.

'But the house still needs a lot of work, not least that roof.

'How much would the total renovation work cost?'

Refurbishment costs on this would be somewhere in the region

of £15,000 to £20,000, including a new roof.

'And that means, if you got this house for the guide price of between

'100,000 and 125,000, your total spend could be

'in the region of 145,000.

'Does that leave any room for profit?'

Once the property's complete, depending upon the standard

of refurb, I would imagine achieving somewhere in the region of £160,000.

I would anticipate a rental figure of around £650 per calendar month.

'That would leave a potential profit of £15,000 or a 5% rental yield -

'not amazing numbers, but a solid profit either way.'

Well, apart from its position on the main road

and a few potential problems with the roof,

this is a really good property - nice size, nice proportions.

Yeah, a good one to go for.

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

This next lot is a three-bedroomed,

freehold end-terrace house at £100,000.

Start me, if you will,

at 100. What a buy this will be, sir, and thank you. At 100 I'm bid.

Is there 110?

There is. Thank you, sir. At 110. Do I have 115?

I do. New bid at 115. At 115 I'm bid. Is it 120 now, sir?

At 120 I'm bid, and thank you. At 120 I'm bid. Is it 125 now, sir?

Are you sure?

At £120,000, then...

First time, then.

122. Thank you, sir. At 122.

124. Thank you, sir. 124.

126, sir?

125?

125. Thank you, sir. 125. 126, is it?

Are we all done? At 125,000 for the first time.

125,000 second time.

Third and last time. Are we all done?

You've followed it all the way, sir.

And it's yours. Congratulations. Well done.

MUSIC: Johnny B Goode by Chuck Berry

'The successful bidder was Johnny, who

'together with wife Yasmin, run a property rental business.

'I met up with them back at the house to find out what they

'plan to do with this latest investment.'

# Go, go

# Go, Johnny, go, go... #

-Johnny, Yasmin, good to meet you both. Congratulations!

-Thank you.

Tell me why you wanted to buy this house.

We wanted to buy this property to sell it, erm, do it up

-and sell it, and this is our first project.

-Oh, great!

-Yeah.

Why this one for your first project?

We live not far from here, so this is close to home.

I viewed it before going to auction and I liked it,

and I think it's quite a good area, this one.

-And I've got the builders in the area, as well, so...

-Right.

So, Yasmin, is this a bit of a new family venture?

I let him do the venturing part! I just keep him in check!

So he's going to do all the work

-and you're just going to keep an eye on him.

-His little PA!

-Yeah? Really?

So what will, actually, you be doing?

Most probably the paperwork and, you know, keep the figures in line.

-Right. Well, that's pretty important.

-Yes.

So tell me, what are you going to do with it, then?

With this one, we're going to do the roof up.

And the kitchen we're going to do up, and the bathroom,

and the rest of it is plastering and all that.

Because we're going to sell it,

we don't want to spend too much money on changing anything, so...

just more or less spend the least money

-and make more money out of it.

-OK, well, that makes sense.

-What's the budget?

-The budget...

-There's no fixed budget, but I'm thinking there is about £15,000.

-OK.

So... It's not a fixed budget.

If it goes over, it goes over, so it's not a problem.

'Johnny's budget seems realistic.

'It's in line with the agent's estimate.

'However, Yasmin will have to keep a tight rein on those figures.

'The couple have had experience in buying to let,

'but this is their first venture in developing to sell on,

'and if they're determined to do that they'll have to protect that

'slim profit margin.

'They'll have major structural issues to deal with,

'but thankfully they'll be going for a more neutral decor.'

So the interior decor will be slightly

toned down from what it is at the moment?

-It will be!

-Definitely!

-Definitely from this!

We're going to get another fireplace and brighten this place up.

-Brilliant. So, what's the timescale for sorting it?

-Timescale...

The builders, they said between eight to 12 weeks,

but I'll put a challenge to them

that if they get it ready before, they get bonuses.

If not, they'll be paying me!

And you've really written that into a contract?

-Cos that would be quite good!

-No, it's a verbal contract!

Otherwise they'll be just sitting here and having sandwiches

and killing the time.

-So if they finish it early, they get a bonus.

-They get a bonus.

One of them, I said to him, "Name a price.

"What sort of bonus are you looking at?"

-He said 10%, so I said, "That's fine."

-Right!

-Off the profit.

-I'm happy with that.

-But will they reduce it by 10% if they're late?

Might be 20%!

I think you're going to do well at this game, do you know that?

I think I will!

Well, listen, congratulations and good luck with it.

-Thank you very much.

-Look forward to seeing how you get on.

-Thank you.

Hm! Well, I think Johnny and Yasmin have chosen well here.

But doing up a property to sell on is a completely different

ball game than doing up a property to rent out.

Numbers really matter.

How will they get on? Will they stick to the budget?

And will, at the end of the day,

they manage to sell this place at a profit?

You can find out later in the show.

'The growth of Oldham in Lancashire was due mainly

'to the cotton industry,

with properties built to house the mill workers

'employed in the large factories in the town.

'The mills stopped a while back,

'but some industry still remains in printing and food manufacturing.

'Indeed, 90% of cakes produced for M&S are baked in Oldham.'

And another thing about Oldham is one of England's greatest

midfield players, Mr Paul Scholes, came from here, as well.

Now, will this property be star quality, like Paul was?

We can find out.

It's a two-bed mid-terrace with a guide price of £35,000 to £45,000.

'That's one of the smallest front gardens I've ever seen!

'But apart from that, the outside looks OK.'

OK, a bit of a porchway here.

But massive, high ceilings!

Nice-size room, this. Quite a nice, pretty fireplace over here.

I'm hoping that is...

HOLLOW BANGING

..real. But it's not, as you can hear. But a nice-size room.

Into the second reception room, again which is of a decent size.

You know, you'd get maybe a table and chairs in here,

even a sofa over there.

But there's really bad damp.

It's actually that bad that it's bowed the ceiling.

I'd like to find out where that comes from.

# We got to patch it up, baby Before we fall apart at the seams

# We got to patch it up, baby

# We can't let time unravel our dreams... #

'OK, damp patches on the downstairs ceiling suggest a water pipe

'might be to blame. But what else might need some TLC?'

Into the kitchen.

It is small, and it would just need a brand-new kitchen in here,

which would be fine.

That would need to be checked out, those electrics there.

That socket would need to be looked at. But have a look at this.

Staircase into the kitchen starts on the second step.

That's a little bit quirky for me.

'Quirky and possibly a bit dangerous.'

Upstairs to where the two bedrooms are.

The main bedroom at the front of the house, which is a decent size.

Here to bedroom two,

which is that little bit smaller, but you've got a big crack

underneath there which would have to get looked at as soon as possible.

And the bathroom's just here.

Now, that would explain the ceiling damp that we've seen downstairs,

because this is directly above it.

-# That's the reason why

-That's the reason why

-# The reason why

-That's the reason why... #

'Well, if indeed a leak in the bathroom is to

'blame for the damp damage downstairs,

'the same can't be true for the odd patches in the two bedrooms.

'For those, I'd check the roof and the guttering out.

'Outside at the back, there's a small yard and a garage,

'which could be used for storage.

'But the roof looks like it could

'possibly be made of asbestos cement panels,

'which is safe enough if it's not deteriorated or broken up.

'I'd get that checked out, and, if it is asbestos

'and you want to get rid of it, definitely get an expert in.

'Talking of experts, what could a local estate agent tell us

'about this house and the area it's in?'

You're very close to the local amenities in Oldham town centre.

We've got the tram link and also good bus links

and a good range of local schools,

ranging for a variety of ages from toddlers up to teenagers.

'So, location-wise it's pretty good. But what about the property itself?'

These are very traditional terraced houses. They're all very similar.

There are no immediate issues with this property that I think

require re-arrangement of any rooms.

The ceiling up here in the dining room is bowing

and will obviously require replacement.

'OK, so once that work was carried out, how did this property,

'that was guided at £35,000 to £45,000 at auction,

'stack up as a financial investment?'

Once refurbished,

I would expect to achieve in the region of £58,000 to £60,000,

or for let, I would expect to achieve

between £350 per calendar month and £375 per calendar month.

This property did seem quite straightforward,

but there's more to this house than first meets the eye.

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

Right, lot number nine, £35,000 to £45,000.

Mid-terraced house, situated popular residential area, Clarksfield.

Lounge, dining room, kitchen, two bedrooms and bathroom.

At £40,000 am I bid?

35, then? At 35. Is that a bid, sir?

35 here. At £35,000.

At £35,000. Are we done?

36. 37.

37. New bidder. 38.

Where are we? 38 I'm bid. 39 at the back, someone? See a paddle?

39 here. 40.

Can you?

40 I'm bid. 41. 42. New bidder. 42.

43. 44. Can you?

44 I'm bid. 45. 46 I'm bid. 7.

48.

48. 49.

50.

No? Here at 49.

At £49,000, then. With you, sir, on the pillar. Against you two.

At £49,000.

First time, then. At £49,000. Second time. All done?

All out, selling away.

Well done, sir. Can I have your paddle number, please?

'And so the successful bid of £49,000 for the two-bed mid-terrace

'house in Oldham was made by Tariq.

'Tariq and his brother Saeed are local property developers,

'and they've bought this house on behalf of a client.'

-Tariq, nice to meet you. Congratulations.

-Thank you.

Tell me about the auction experience.

Yeah, well, I've been to auction quite a few times,

so I'm used to the experience now.

But this time, I think it was more nerve-racking.

I was doing it on behalf of an investor,

so I was making sure I kept in their limits,

and we got the right price for the property, hopefully.

-Were you on your own?

-I was actually with the investor.

Keep an eye on us, make sure we don't go over their limit!

LAUGHS So they trust you?

-You've got people that trust you to buy their properties for them?

-Yeah.

Well, we've done it, we've bought lots ourselves and invested

and bought and sold for the last so many years.

But what we've started doing is helping investors actually

purchase property.

They give us their budget, we go through, we do the due diligence for

them and we tell them the figures, what to buy within, and obviously

look at their investment pot and what they've got to spend

and then try and take it from there.

Why did they want this particular house?

-They've got family, they've got a house on the street already.

-Ah!

But what it is with a lot of investors,

first-time investors or even

investors that are a bit more experienced,

they tend to want property within their geographical location.

-Yeah.

-Easy to manage, easy to keep an eye on and so forth.

'Tariq started renovating properties around eight years ago,

'and he reckons he's bought and sold over 100 properties.

'He generally buys around 20 houses a year, 15 or so of which he will

'do up and sell on, and a few he will hang on to, to rent out.

'But his role at this house is as a property consultant,

'where he will advise and oversee both the purchase

'and the refurbishment of the property on behalf of an investor.'

What is the budget to try and turn this property around?

-The budget's not massive. Maybe 3,000, 4,000.

-Yeah.

£3,000 or £4,000. And try and see if we can do it within that.

So things like the carpets will have to go,

some of the wallpaper looks a bit dingy.

-DION LAUGHS

-But at the same time,

if it can get painted and it's not ripped, there's not too much damp,

we can salvage that, as well.

In, I think, the second reception, the ceiling needs looking at.

There's a few areas of damp and the odd bits here

and there that we would maybe need professionals to come in.

I'm going to give you two more - there's a crack,

and the wiring, the electrics.

On a property like this, especially if it's being tenanted,

I would advise anybody purchasing

to get a check on the wiring by a professional person.

-I have seen the crack. It's upstairs under one of the wardrobes...

-Yes.

..in the smaller bedroom. I don't think it's anything serious.

These are old terraced properties

and I've helped people finance properties in the area.

There's been historical movement in this area on a lot

of the streets, and the houses are quite safe now.

But sometimes it's just wall ties. So it's not a massive cost.

It could add a bit to the budget.

We're hoping it's nothing serious, but if it is and it needs

rectifying, they'll have to find the budget and just get that work done.

'Well, one thing I wanted to pick up on was that potentially

'problematic roof at the back. What has Tariq planned for that?'

Same again, get a professional in, get that checked.

And I think there's sometimes people in the council that can come

and check for you, just to clarify if it is or not.

But if that is asbestos,

then it was going to be used as a storage or a garage, but it'll

have to be closed off until they can get that fixed,

which would be as soon as possible, hopefully,

to make it safe for any person living in the property.

-Safety first, always.

-Definitely, especially if you've got a tenant.

Even if you're living in the property, you'd want it to be safe.

So, yeah, definitely.

'Tariq has local tradesmen he uses to refurbish his properties

'and will recommend them to his investors,

'who also plan to help out with some of the labouring and paintwork.

'And it's hoped that they'll be ready for the rental market

'in four to six weeks.'

-I wish you all the best.

-Thank you very much.

-Good luck, Tariq.

-Thanks.

'How will Tariq get on with turning this property around on such

'a tight budget and timescale? Find out later on in the programme.'

'Coming up, have these four friends in Kent made

'a profitable decision at the pub?'

We're in a pub-quiz team together, and we just thought one night,

"We'll buy somewhere and see if we can do it up."

'And we get some words of advice from our developer in Oldham.'

You've got to buy at the right price.

It's all about what you pay for the property.

'Back now to Birmingham, and do you remember this three-bed end-terrace?

'No?

'How about now?'

# I remember you... #

'Ah, yes.

'Guided at £100,000 to £125,000,

'the house with the striking decor was difficult to forget.

'Not only that, the kitchen had been crammed into a space only fit to

'be a utility room and there were damp patches that made me

'worry about the state of the roof.'

Here's a bit of a tip. Look at that roof there.

You notice those grey clippy things?

They're actually put on to try and do a temporary repair on the roof.

So if you see those kind of clippy things,

it's an indication that at some point in the future

the whole of the roof is going to need replacing.

# Cos the roof's got a hole in it

# And everything's been ruined by the rain... #

'It was bought at auction by Johnny for £125,000.

'He and his wife Yasmin run a property rental company

'and had spotted the roof problem straight away.

'He'd set a timescale of eight to 12 weeks

'but had a cunning plan to get the builders to stick to schedule.'

-So if they finish it early, they get a bonus.

-They get a bonus.

I said to him, "Name a price." He said 10%, so I said, "That's fine."

Right! But will they reduce it by 10% if they're late?

Might be 20%!

I think you're going to do well at this game, do you know that?

I think I will!

'Though Johnny had a lot of property experience,

'this was the first he'd bought specifically to sell.

'Would he and Yasmin be able to stick to their £15,000 budget

'and bring in a profit?

'Four months later, and we've returned.

'And what a difference.

'Gone is the dark, overbearing wallpaper,

'replaced with neutrals to create a bright and welcoming space.

'The wall between what should have been the kitchen and what WAS

'the kitchen has been removed, making - hey, presto - a kitchen!

'It's now a lovely, spacious kitchen/diner.

'Upstairs, Johnny and Yasmin have completely retiled

'and refitted the bathroom, and it looks stunning.

'But all of this great work would be for nothing

'if they hadn't got that roof fixed.'

The roof itself wasn't a problem, but it was just getting

the right quotes to have the roof done.

Once we got the right quote, it was done in a few days.

There was a bit of damp in the house,

but once we'd done the roof it sorted the damp issues out.

The roofer originally put the red tiles on there.

We didn't want the red tiles, so we told him to remove the tiles

-and put them...

-I don't think he was too pleased with that!

-# That's the way

-Uh-huh

# Uh-huh, I like it

-# Uh-huh

-Uh-huh... #

'That's the voice of experience talking.

'Skilled tradesmen are invaluable, but anyone can make a mistake,

'and when that happens it's crucial you speak up and get what you want.

'With the roof fixed, the whole house was replastered and repainted.

'And what a difference!

'Johnny and Yasmin mainly used tradesmen,

'so has Johnny been hands-on during the redevelopment?'

I was here most of the time, just checking out the works

and everything and making sure everything was done to my plan.

'And what was Yasmin's role?'

She was the finance minister, really!

Yeah, keeping him under control

and not letting him get carried away with the finances.

But we did choose the stuff together, colours and everything.

'And did the finance minister manage to keep the spending under control?'

The money we wanted to spend was £15,000, £16,000, but my finance...

We weren't limited to the budget.

But we wanted to make a good job,

especially as it's our first project,

so we weren't really looking at our pockets,

we were looking at the stuff we wanted to buy for the property.

-A better-quality product.

-Yeah.

'Hm, OK, well, that is admirable,

'but this meant they ended up spending 20 grand

'on the renovation, and they're determined to sell rather than rent.

'Does that mean that all-important profit margin has disappeared?

'The couple also ended up taking longer than they'd planned.'

One other setback was that we took the radiators off and we had

the whole house plastered, and that took time drying.

Had we had the heating on, it would have dried quicker,

so it took a really long time drying the plaster.

'Yeah, yeah, absolutely, I can completely understand.

'And, erm, nothing to all to do with the fact that Johnny decided'

'to go on holiday, then...?'

Whoo!

It's the first holiday that he's been by himself.

And he was sending me pictures of him just enjoying himself.

Just making her jealous, really!

'Well, they spent a little more money

'and it's taken a little more time,

but there's no denying the house looks great.

'We've asked along two local estate agents to see

'if they're equally impressed.'

I think the work that these people have done is

to a very high standard.

I'm very surprised. It looks really good.

They've worked it well.

There's a lot of do-up-and-sells going on around here,

a lot of people trying to flip properties about.

The quality here is actually pretty good.

So, I think people will be impressed with the kitchen,

they'll be impressed with the bathroom.

I don't think he could have done too much more

within the boundaries that he's got.

'Along with the £20,000 they spent on development,

'Johnny and Yasmin spent £125,000 at auction.

'Can they make a profit on their first buy-to-sell

'with their £145,000 investment?'

The resale valuation would be somewhere between

£155,000 and £165,000.

So, my valuation for this property, top end,

£155,000.

Rental figure, somewhere in the region of

£675 to £700 per calendar month.

If this property was to be offered for rent,

I would assume you would be looking at about

£675 per calendar month.

-I think a little bit more.

-I'd think we would sell it

a bit more than what the valuation has come out.

The valuation is what people are prepared to pay at the moment.

This is quite a good location, so obviously people

are willing to pay a bit more than what the valuation is of properties.

'That top sales figure of £165,000 would give Johnny

'and Yasmin a profit of 20 grand.

'But Johnny's absolutely right,

'a house is worth what somebody's prepared to pay for it.

'So, now that they've finished their first buy-to-sell property,

'do they plan on doing more?'

Yes, definitely. The experience was really good.

We took our time and we didn't let ourselves get stressed about it.

Yeah, we never get stressed out.

Yeah. At our pace!

'Gravesend was once a flourishing destination

'and was one of England's first resort towns,

'thriving from the early tourist trade of the 19th century.

'The steamboats brought business from London.

'But it's not all about the water.

'Both road and rail links make Gravesend an attractive

'prospect for London commuters and keeps it as a bustling town.'

I am only a five-minute walk from all the local amenities,

including the train station,

and with a high-speed rail service here from Gravesend,

that means you are less than half an hour to St Pancras International.

You certainly can't deny that this two-bed end-of-terrace with

a guide price of 115,000 to 125,000 is well-connected.

Ah. Well, access to London might be good,

but access to the property is not so good!

SHE LAUGHS

Maybe I can try and get in downstairs.

'Having two doors is handy, as is a basement,

'but entering by the basement door doesn't really do it for me.'

"Dusty", "dirty", "damp" -

just a few words that spring to mind in the first room I walk in.

Yeah, a bit of a disappointment, actually. Not a great space.

And it's clear to see a lot of work will be done.

Now, you expect basements to be dingy and dark,

but this really is something else,

a kitchen which harks back to many moons ago,

so all of this need to be completely updated.

It's filthy, as well! And up here, what have we got?

A little half-landing and a loo out the back.

I'm going to investigate further.

# I can only disappoint you

# Cos I always let you down... #

'Not the best first impression,

'and already the layout is a little confusing.

'The kitchen is down in the basement with an exit out to the rear garden,

'while up on the ground floor,

'there's a really good-sized lounge and a big bathroom,

'which, despite its size, is inexplicably missing a loo!

'It definitely doesn't feel like it's in the right place.

'And going up to the first floor, there's two bedrooms,

'one at the front and one at the back.

'There's no doubt that this layout doesn't suit modern family living,

'but there's definitely the scope here to either create

'a better family house or split the property into two flats,

'especially as it already has a kitchen downstairs,

'two back doors and two front doors!

'However, there are a couple of issues that are still nagging me.'

Now, I can see some nice little garden at the front there,

but most of the neighbours, I see, have opted to turn theirs

into off-road parking, which isn't a terrible idea,

as there isn't any on the street here.

You've got double yellow lines.

However, there's a bit of an issue across the nation's front gardens.

Local authorities feel the loss of natural drainage could

contribute to local flooding.

So it's worth checking out what the options are,

because with no on-street parking, we could be staring

at the major downside to this property right in that bush.

'So you'll need to check if creating parking here will be allowed.

'And then... Well, have a look at this.'

Now, just because there is a building site next door,

it doesn't mean you should run for the hills.

A quick search and you would discover that this old council

building right here is being turned into some new, shiny flats,

and it's in keeping with what's happening in the broader

picture around Gravesend, where just last year local councillors

agreed the first stages of a £120 million regeneration for the town,

which is so exciting.

For an investor, a building site is a sign of regeneration

and a helping hand in turning a profit.

'So, what do you think?

'I'm pretty convinced that this dingy property has

'lots of possibilities and potential.

'What does a local estate agent think of this three-storey

'end-terrace that's guided at £115,000 to £125,000?'

There's many options with this particular property.

One would be just to redecorate it, refurbish it and keep it as

one unit for either sales or rentals,

depending on the owner's plans.

The other possibility is to actually convert it into two properties,

whereby you could end up with a ground-floor one-bedroom

or studio apartment,

then above you would have a two-bedroom split-level maisonette.

'If split into two properties,

'the combined rental could be in the region of

'£1,100 to £1,200 per calendar month

'or £750 to £800 per calendar month if kept as a three-bed house.

'What about the resale value?'

With this particular property,

if it's refurbished to a very high standard

and we build in the wow factor, there is a possibility that

somebody may be prepared to pay £195,000, subject to contract.

If the property was converted, again, to a very high standard,

I would expect that the ground-floor unit would reach

approximately 85,000 to 90,000

and the two-bedroom first- and second-floor maisonettes

would probably make around

150,000, 160,000, subject to contract.

So there's plenty of work to be done to drag this property

out of the seventies and get it right back up to date.

But the local market is on the up and demand is outstripping

supply, so the timing might be just right to grab this property.

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

Let's get cracking. Can I now invite your bids for lot one?

Do I see 115 anywhere?

110, then?

110. I'm on the way. 115 now, can I say?

115. 120, sir?

120. 125?

125. 130. 135.

'This was a busy auction house, with competitive bidders,

'and the price soon rose.

'We rejoin the bidding at £160,000.'

160. 160. 161 now.

161 I have. 162?

162. 163? Are you coming back in, sir?

163, yes. 163. With you at £163,000.

Are we all done? I shall sell, then, for the first time.

For the second time.

Are you quite sure? Third and final time at 163,000.

-Quite sure? All done?

-HAMMER BANGS

Sold to you, sir. Thank you very much.

'And that successful bid of £163,000 came from Shane.

'But he doesn't come alone,

'bidding on behalf of a team who, after 40 years of friendship,

'have decided to take their first step

'in property development together.'

Good morning, chaps!

ALL: Morning!

How lovely! What a fine sight, to have four of you to chat to today!

'Shane, Hugh, Jay and Martin

'pooled their resources for this venture together.'

We're still chums, and we see each other every week.

We're in a pub-quiz team together,

and we just thought one night at the pub quiz, "Well, we're all getting

"old, we've come up to retirement now, what are we going to do?"

And, stupidly - and that was after a few drinks - we thought,

"Ooh, it'd be a good idea. We'll buy somewhere, see if we can do it up."

-So, did you all visit the property prior to the auction?

-ALL: Yeah.

-At least once.

-Yeah.

We had a bit of trouble,

though, because when we came to the auction, the guy that was showing us

about from the auction company took us round and said,

"Oh, I can't shut this back door. Somebody's opened the back door."

Of course, it had been shut for a long time.

He said, "Can you give us a hand?"

So I went round the back, and he said, "Right, I'll pull it."

I went to push it

and put my arm through the glass and smashed the glass in the back.

So you had to buy it! "I've broken the glass - put the price up!"

So, what happens now?

Hugh, talk me through what the next stage is going to be for you guys.

Right. Our builder friend has looked at the place,

and we've talked through a few proposals.

We basically have Plan A and Plan B.

-Plan A is to turn the basement into a one-bedroom flat...

-Mm-hm.

..and the rest of the building to be turned into a two-bedroom flat.

But that's subject to planning permission and building regs.

What is your Plan B?

Plan B is to leave it as one unit and just renovate it.

'Both plans are good,

'but the decider should always be the figures.

'So I'm guessing they've done some sums.'

We've got some indicative prices with regards to doing the two jobs.

If it's a single entity, it'll be about 20,000.

But if it was to be split into two, which we probably want to be doing,

it's about £40,000, we think, that will be the costs to produce that.

-OK.

-And that's very much on the basis that the four of us will be

involved as much as we can in terms of the sort of

-labouring elements of the work.

-Really?

-I was going to move on to that!

-You three!

And you're just going to be telling them what to do.

-Absolutely. That's the plan!

-He will be making the coffee.

'So they're going to get their sleeves rolled up.

'Unfortunately, though, there isn't a plumber or electrician among them.

'Shane worked for the police, Hugh was an accountant,

'Martin a solicitor, while Jay worked in public health.'

What skills, what can you each individually bring to the table?

Well, there's a lovely bit of ironwork just outside,

nice sort of wrought-iron railings

which I quite fancy sort of tarting up.

OK. That's got your name on it.

We're taking down the chimney breasts throughout the building.

And he's doing a bit of painting, which sounds right.

That doesn't surprise us at all, to be perfectly honest!

So, what are you going to bring to the table?

I think, like these two here, I've basically had me own house

for 30-odd years, got some DIY skills at home.

This is a great opportunity to hone those skills and

develop other skills.

And the builder we've been talking to will hopefully give us

an opportunity to use the tools a bit more,

perhaps a bit of plastering, perhaps a bit of brickwork,

I don't quite know, whatever comes along.

So when we finish this you've got that sense of achievement

and actually you're in a better position to commence

the new project as and when we've settled this

and we've got the money left to buy another property.

-So you really want to be hands-on here.

-Absolutely, yes.

-Fantastic.

So, what's the timescale, the realistic timescale,

you've set yourselves?

-Nine months?

-Realistically?

I would love it if you all said different things at the same time!

-Oops!

-We did discuss this yesterday, didn't we?

-Yeah. Yeah.

-So, come on, timescale. All say it together. Go.

-ALL:

-Nine months.

Six to nine months.

You really are looking forward to this, aren't you?

I am so pleased for all of you. I've never met such a lovely group,

and I really do hope it all works out.

-It's been smashing meeting you today. Thank you.

-ALL: Thank you.

With four people in charge, all with their own ideas, I am wondering

how long it will be before we start wheeling out

the cooks and broth metaphors.

Or do many hands make light work?

It's clear to me that these boys are set to have some fun, which is

great, but it'll be no laughing matter

if the council rejects their profitable Plan A.

Join me later in the programme and you can see what the outcome is.

We've seen how one property turned out, but what about the other two?

Yeah. Do we think it's gone well?

Well, you can never tell. Let's take a look.

'So, back to Oldham now and this two-bed terraced house

'with a guide price of £35,000 to £45,000.

'Its high ceilings gave it a real feeling of space,

'but there were obvious problems right away,

'a damp ceiling indicating a plumbing problem from above.'

Upstairs to where the two bedrooms are.

You've got a big crack underneath there,

which would have to get looked at as soon as possible.

# Crack me up!... #

'Now, a crack like that could mean very little,

'or it could mean an expensive structural problem.

'Not only that, but there were electrics to check

'and a complete overhaul of the decoration.

'None of this seemed to faze successful bidder Tariq,

'who bought the house on behalf of an investor for £49,000.'

Doesn't seem to frighten you. You've done it many times.

No, I've got a lot of experience in doing this.

I've been doing it for the last seven years.

For me, something like this, it's a walk in the park, as they say.

# That's why I'm easy

# Ah, ah-ah-ah

# I'm easy like Sunday morning... #

'Yes, Tariq is an experienced developer

'and was advising his client on how to make the most of this investment.

'The client had a budget of £3,000 to £4,000 to spend

'and a timescale of four to six weeks.'

MUSIC: Roxette by Dr Feelgood

'Four months later, and we return to see what the owners did

'to their first investment property.'

Well, basically, on this property it's just been spruced up.

The property has been painted, new carpets,

all the rubbish has been taken out of the property

and it's just been a small refurb job, really.

'Tariq advised his client on how to deal with some of

'the trickier issues, such as

'that big crack in the wall that did concern me.'

Yeah, this is the wall where the crack was originally.

We've had a structural engineer in to rectify the crack.

They've put wall ties in and skimmed over, so now that's ready to go,

and hopefully it'll last for a good few years.

MUSIC: Call Me by Spagna

'Tariq has given his client advice on the project management,

'while the client and his family did

'the work as well as being involved in

'getting the crack sorted, the plumbing and that wiring fixed.

'As Tariq said when I first met him, it's always a case of safety first.

'It's much more important than any fancy renovation.

'As a landlord, you have a legal obligation

'to make sure the house is free from hazards,

'so when it comes to gas and electrics

'and anything like that, call in the experts.'

# Call me

-# Call me

-Baby, baby

# Do, do, do it

# Baby, please!... #

'So, what does Tariq think of the final job now the owner's got

'the property ready to rent?'

Well, I've been doing this for some years now,

and I've got quite a lot of experience in this,

but in areas such as the bathroom

I would have gone for a new bathroom suite.

I think the kitchen was salvageable, but there are elements

that you can spruce up just to give that property a different style.

But I think they'll learn. It's their first property.

I think we've all been through this learning curve.

So, with the money that they were working with, I think

it's quite a good job.

'The new owner spent about £2,000 on the property, and it's taken him

'three months, because they've been doing it in their spare time.

'That can be a bit of a false economy,

'as obviously you're losing rent in that time.

'And although the property will probably be pitched

'OK for the rental market in this area, I can't help agreeing

'with Tariq that some things could have been made a bit better.

'After all, if you have a well-maintained property

'and a happy tenant who will want to stay for the long term,

'that will save you money in the end, with no void periods.

'Still, all part of the learning curve for new developers.

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

The property is a good size,

particularly suitable for the first-time buyer or perhaps

the buy-to-let investor, and the size

of the property will be a real positive.

This is my first time inside the property.

I think the works have been carried out to a fairly basic level.

But it's certainly now in a lettable standard.

'Reassuring news, because renting out the property is

'exactly what the new owner intends to do.

'So, having bought the property for £49,000 at auction

'and spent only £2,000 doing it up, let's hear those valuations.'

I think the rent for this property in its current

condition would be in the region of

£400 to £425 per calendar month.

I would expect a rental income

of around £400 per calendar month.

If this property was put on the market

in the current conditions, I'd expect to achieve

a figure around £65,000.

I would expect the property to achieve

between £65,000 and £70,000.

'With a total spend of £51,000,

'those higher values would give the owners a yield of 10% or

'a sale profit of £19,000, minus the usual taxes and expenses.

'But as a property developer himself,

'what does Tariq think of those crucial rental valuations?'

I think for this property, it'd be realistic.

We have had properties that we've managed for the investors

in the area, and we are achieving up to 450, as well.

But for the level of work that the current owner has done on this

property, I think between 400 and 425 is a realistic price.

'Tariq's got his client a potentially profitable investment,

'so as a seasoned developer,

'what advice would he give to any property beginners?'

The best advice, I would say,

is you've got to buy at the right price.

It's all about what you pay for the property. Obviously, do your maths.

If it's a lot of structural work or a lot of builders' work

inside the property, you've got to take

that into consideration, take builders with you.

But it's all about what you pay for the property at the start.

'Time to return to Gravesend in Kent,

'where I looked at this two-bed end-of-terrace.

'At least, well, I tried to.'

Ah. Well, access to London might be good,

but access to the property is not so good!

# I've been locked out

# And I know we're through

# But I can't begin to face up to the truth... #

'Handily, there was an entrance to the basement,

'and although this was guided at just £115,000 to £125,000

'and had some good-sized rooms, I wasn't very impressed.

'It was a bit, well, all over the place.

'It had a kitchen in the basement, a WC in the lobby

'and a bathroom with no toilet at all.

'What this place needed was a squad of strapping men to sort it out.'

MUSIC: The Boys Are Back In Town by Thin Lizzy

'Enter Shane, Hugh, Jay and Martin, four friends who had thought long

'and hard before parting with the £163,000 for the property at action.

'Hadn't they?'

We're in a pub-quiz team together, and we just thought one night,

stupidly - and that was after a few drinks -

we thought, "We'll buy somewhere and see if we can do it up."

'Hm... Oh, dear.

'They hope to split the property into two,

'a basement flat and a main two-bed house.

'But failing that, they would develop the property as is.

'With a budget of up to £40,000 and a timescale of six to nine months,

'they got stuck in.

'Almost 12 months later, and it's time to see what our fired-up

'foursome have managed to do.'

MUSIC: She Sells Sanctuary by The Cult

'Well, it's obvious it's not finished yet,

'but the eagle-eyed amongst you will have spotted two kitchens,

'so, yes, this will become two properties.

'There's a one-bed studio flat in the basement,

'and to create the two-bed maisonette on the upper floors

'they've ripped out

'most of the walls to create an open-plan kitchen/living area

'and reconfigured upstairs to fit in the bathroom

'alongside the two bedrooms.

'That's no small job.

'A strategy was needed, as Jay can explain.'

Yeah, we particularly enjoyed all the planning meetings in the pubs,

and so far, so good, all going well.

I think these things inevitably take longer than you imagine,

especially for the first time some of us have been involved

in the process, and then the added dimension was around this

being part of a conservation area.

So where we wanted to change, for example, the front door

and things like that, we had to get additional planning approval.

'OK, chaps, so, it's all very well having meetings to thrash out

'the plans in the pub,

'but you are quite a bit behind that nine-month time schedule.

'Have you been having pub meetings a little bit too often?'

We've hardly ever been there.

But on the occasions we do go, we don't always agree,

but we don't fall out about things.

We have differences of opinion and we come to a shared conclusion.

So it's fine.

'Hardly ever been at the pub, Hugh? I'm not sure I believe you.

'Is that true, Jay?'

Pretty much, but it's about time one of the others bought a round.

# Tell me lies, tell me sweet little lies

-# Tell me lies

-Tell me, tell me lies... #

'OK, boys, porky pies aside,

'given that renovations can be fraught with fall-outs,

'Martin seems to think they've kept their four-way friendship.'

Well, I think we've got on very well together, actually.

We've each got our particular strengths and weaknesses,

and those have fitted together very well.

Well, Hugh's an accountant,

so he's done the majority of the accountancy for us.

Martin is a solicitor,

he has obviously done lots of the legal work,

obviously in consultation with us.

I come from an administrative background

and sort of project management.

And Jay is very good at making coffee.

'Shane, I'm sure that is going to cost you a drink or two!

'It's not just each other they had to get along with.

'When you're doing building work,

'you have to get on with your neighbours, as well.

'And that can be easier said than done,

'especially when the neighbours' builders accidentally drove

'a truck through their back-garden wall. Hm...'

But actually, at the end of the day, it's worked out very well for us.

We've agreed that they will topsoil a strip of land about two metres

beyond our previous boundary, so at the end of the day

we've gained something like 36, 40 square metres of land.

'Some free extra back garden is not a bad bonus.

'Throughout the project,

'the fantastic foursome have been getting

'stuck in alongside their builders, but soon the builders will

'wrap up, just leaving the final painting and decorating to be done.

They budgeted £40,000 for the development

'but are now estimating a final cost of 55 on top of the 163 grand

'they paid at auction,

'as there was more structural work needed than they expected.

'And almost inevitably, planning did take longer.

'But has it all been worth it?

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

I think there's always a demand for quality properties,

and at the moment I believe there is a shortage of properties,

so if you've got something and if it is of a good quality, I think

it will go very quickly.

I think the owners have done a really good job here.

They've converted it into two units, both of which will sell

quite readily or be able to be rented out fairly quickly.

'Their projected final cost is £218,000,

'but now they have two properties in a high-demand area.

'If they get the finish to a suitably high standard,

'the top rental valuation the estate agents said they could hope for

'was up to £600 per calendar month for the basement flat

'and £800 per calendar month for the upper-floor maisonette.

'But it's sales that they're really interested in.

'Let's start now with the basement.'

It should make somewhere in the region

of £95,000.

That should achieve a price in the region

of £90,000.

And the upper flat should sell for somewhere in the region

of £175,000.

That property should achieve a price in the region

of £160,000.

Clearly, both give us a reasonable profit.

The upper one is obviously better than the lower one,

but, yeah, very happy with it, yeah.

And this is always defined by who can sell it quicker, and that

dictates what you're prepared to accept

so we can move on to the next, really.

'With the upper sales estimate totalling 270,000, Shane, Jay, Hugh

'and Martin stand to make a potential profit of £52,000,

'minus the usual taxes and expenses.

'Well, I think you can call that a success.

'So, is it "time" to call a meeting to plan the next development, boys?'

We do of course have an unwritten rule that every

board meeting for the company has to be in a different pub.

JAY: That's the real reason most of us are involved in the project,

as you've probably guessed!

That's where we're going at the moment.

Well, that's it for today's show. We'll be back with more action

-from the auction for you next time.

-And more property adventures.

We'll see you for more Homes Under The Hammer.

-Goodbye.

-Goodbye.