Episode 71 Homes Under the Hammer


Episode 71

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Transcript


LineFromTo

Hello, welcome to the show. Now, to be a successful property investor,

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it helps to have an eye for a bargain.

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Yeah, to be a better property investor, it's

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always good to know why it's a bargain in the first place.

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Yes, there is always a reason for those low prices.

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So if you've got a bit of property know-how, put it to good use

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and buy your next home under the hammer.

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There's no way to avoid problems as a property investor,

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but there are ways you can make things go a little more smoothly.

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Yes, always read the legal pack and any other information you can

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lay your hands on, and then give it a go.

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So what did the buyers on today's show actually go for?

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In Liverpool, there's a house with a missing ingredient.

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Most of all, these providers

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would want to see a working kitchen and a bathroom.

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And I don't think that would suffice.

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In Stoke, there's a terrace with a clean bill of health.

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No obvious signs of damp and no cracks as well. Perfect.

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And in London, there's a smell of...

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hm, not quite success, I'm afraid.

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And the first thing that really hits me is the damp!

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But you can really smell it.

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All these properties have been sold at auction.

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We'll find out who bought them and how much they paid

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when they went under the hammer.

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Under half an hour's drive from Liverpool city centre lies Huyton.

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Huyton's notable not only for its good transport links

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and shops but as the home to four mop-topped young lads whose

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band changed the entire course of popular music forever.

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# Oh, if you find the time Please come and stay a while

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# In my beautiful neighbourhood. #

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'90s indie band Space. I loved them.

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Uh, who did you think I was talking about?

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So, on the border between Huyton and Broad Green,

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not far from the beginning of the M-62 motorway, and a short

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drive into Liverpool city centre is the property I am here to see.

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70,000 quid, three-bed, semidetached. Boom.

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# Boom, shake, shake Shake the room

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# Boom, shake, shake Shake the room. #

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Well, for a guide price of 70,000,

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I sincerely hope this house doesn't shake.

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Time to check out the inside.

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OK, so what have we got?

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Smallish little entrance area here,

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but lots of light coming into this bit, which is good.

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Stairs up to your bedrooms.

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And so along the hallway I'd normally expect, what, a kitchen,

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back sitting room? Oh, no.

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This is odd.

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This is what I imagine was originally one of -

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if not the only - bathroom in the property.

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And for starters, downstairs. And secondly, it is very dark and...

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and I just...

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As layouts go, it's not ideal.

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Because, actually, the rest of it is OK.

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You come through that door there, you've got this really nice,

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open-plan sort of living/dining area.

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Sort of through kind of feel.

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So this is good. That bit is a bit odd.

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So it needs a bit of playing with. But let's continue.

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So I imagine, at one point, the house would have ended here.

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And I get a feeling this is an addition to the property

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added on at a later stage, which now creates a really good-sized kitchen.

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Well, it is the sort of kitchen which of course throws up all sorts

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of issues when it comes to getting a mortgage, cos most

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mortgage providers would want to see a working kitchen and a bathroom.

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I don't think that would suffice.

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But it is a nice-sized space.

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And you've got views out to the back garden.

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And so, as downstairs go, pretty darn good.

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And upstairs, as you'd expect, are the house's three bedrooms.

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In addition, though, is the shell of what clearly used to be a bathroom.

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Now, I don't know why it was moved,

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but if you want this house to appeal to a family market,

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then you could do a lot worse than reinstating the bathroom here.

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Well, out the back of the property,

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and you can see exactly what that kitchen is built in.

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Obviously, an extension.

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A flat-roof extension, which can be a bit of an issue.

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It is not that pretty either, is it?

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And obviously, you can see the back of the garage there.

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So if you look around on the street -

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that's always a good thing to do - see what other people have done.

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You can use that for inspiration.

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Next door, of course, amazing extension stuff going on.

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So I think there is a possibility of incorporating that a bit

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better than it currently is.

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Because I think at the moment, it could be quite problematic.

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But out the back here, a really nice thing. A good-sized garden.

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And, you know, you get this feeling of sort of leafy suburbia.

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And it is really rather pleasant.

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# I'm just a jealous guy. #

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Yes, I've got house envy.

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This house is a developer's dream as it is a blank canvas.

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If you are developing to sell or rent, just make sure the cost

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of any structural changes

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doesn't exceed the ceiling price for the area.

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Time to ask an agent from the auction house who sold it

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what he thinks of this three-bedroom

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house guided at ?£70,000.

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There is comprehensive work to be done. But I think

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with the right work done,

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this will appeal to a broad range of buyers.

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And I would expect this to sell

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relatively quickly on the open market once finished.

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Comprehensive work usually means a significant budget,

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so how much does he reckon you would need to spend to bring this

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up to spec for the local market?

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Depending on your contractors, I believe you would be

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looking at in the region of £20,000 to get this into suitable condition.

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With a guide price of 70,000 and a potential renovation budget

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of 20,000, would this make a profitable venture?

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What could it sell for?

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I believe this property could achieve

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a figure in the region of £120,000 once renovated.

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And if you were to rent the property?

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I feel this property could certainly achieve a figure

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in the region of £600 per calendar month.

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So a few issues to sort out, but intrinsically,

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you have got yourself a really nice house here in a lovely area.

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So I'm sure it was a popular lot when it went under the hammer.

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Lot 25. There it is there. Again, a good healthy level of interest

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prior to the sale. Bid me 70,000 for it. 70.

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60 to start me, 60.

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50,000 then. 50.

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50,000 for it.

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There we are. 50,000. At 50,000, lot 25. 50 is bid. Two now.

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At 50,000. Two. 54. 56. 58.

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Well, the auctioneer had to work hard to get that going.

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But whilst he did, things soon picked up.

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We rejoin the bidding at £67,000.

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67.

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500.

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68.

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500.

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69.

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69.

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Ahead of me now.

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£69,000. Are we all done? Are you out this time?

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£69,000.

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Anyone else on this? It is 500 again.

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Why not? 70.

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69.5.

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It turned out there had been a little bit of confusion

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and that bid of £69,500 was retracted.

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So this gentleman's bid of 69,000 was the successful one.

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I'm selling in front of me at 69.

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69,000.

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And that successful bidder was Andy,

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who bought this with his brother and business partner, Matt.

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They run a building company together

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and have been developing properties for a few years.

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So it is time I met up with him to find out more.

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-Andy, good to meet you.

-Good to meet you too.

-Congratulations.

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-Thanks very much.

-Tell me why you wanted to buy this house then.

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Um... I didn't particularly.

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-ANDY LAUGHS

-I didn't particularly. No...

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The morning of the auction...

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Decided we wanted to go to the auction, have a look.

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So we did some research, mostly online,

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and then literally spent the morning

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of the auction driving around about three or four possibles.

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-This was one of them.

-The morning of the auction?

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Yeah, yeah.

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Driving around three or four properties you might buy

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-the same day in that auction that day?

-Yeah.

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I'm not normally that frivolous.

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I normally plan things a little bit better than that.

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I was actually late to the auction as well

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because I decided to come have a look at this property.

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I don't know the area, but I did my research.

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It is all about research, research, research, isn't it?

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That's what it is about.

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-Yeah, but you didn't do any!

-Well...

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I did for half an hour.

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I think Andy is trying to do a touche on me.

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Research, research, research, indeed.

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It would appear, though,

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that Andy is a man who takes things in his stride.

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-So is this what you do full-time?

-I'm actually an engineer by trade.

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And after university, went to work at a big car company.

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-And then I got leukaemia.

-MARTIN GASPS

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So this was like 15 years ago. And it kind of... It was one...

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It was that catalyst, basically,

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for me to decide to do something different.

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I'm in remission now, so everything, you know, is OK.

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But sometimes you have a life-changing event

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and you decide, "OK, well, you know, maybe I shouldn't be working,

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"you know, in a big factory and go out and do my own thing."

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I don't know... I looked at property then.

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I had a couple of...bought a couple of rental houses and liked it.

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And enjoyed it.

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I liked being self-employed.

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So, yeah, it is quite a change of direction.

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Sometimes you need a kick up the backside, you know.

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Obviously, quite a severe one.

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But it makes you a better person, I think, really.

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Wow. Andy's clearly had to fight.

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And I'm so glad to hear he's recovered

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and enjoining a new lease on life and developing property.

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And I'm glad he still has that positive spirit,

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because he needed it again

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when he found out his bank deemed the property unmortgageable.

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Your financing fell through?

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-Yeah, it fell through.

-MARTIN GASPS

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So we had to do some work to get..to scrape some money together.

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What was the thing they didn't like,

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the fact that it hasn't got a proper kitchen or what?

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Yeah, I think that the place was pretty tired.

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And I can understand from the surveyor's point of view,

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-you couldn't have let the place the next day.

-Right.

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But a few sleepless nights then, I would've thought.

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Yeah, but it is part of the game, isn't it?

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THEY LAUGH

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Well, it is good you are so stoical about it.

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Yeah, well, you've got to have nerves of steel sometimes.

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But, you know, it's a big boy's game, isn't it? If you...

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If you're phased by it, then you shouldn't really be doing it.

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Well, you've got to love his attitude,

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but really, Andy's lack of proper research could have cost him

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a lot of money and, ultimately, the property.

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Still, a small thing like no financing - ha -

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couldn't keep him down.

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So now it is time for the hard work of getting this house back

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to its best.

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So tell me what you are going to do to sort it out.

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Basically, new kitchen, new bathroom, sort the garden out.

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Get that landscaped.

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And then a new bathroom.

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So obviously, this room downstairs, a bit of a strange one,

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-with a loo in it.

-Hm.

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-What are the plans for that?

-Um, we looked at that.

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It was the downstairs bathroom.

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And I think we decided probably the best thing to do would be to

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change that back into a living room.

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And then underneath the stairs,

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-the plan is to put a downstairs toilet in there.

-OK.

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So we don't lose the toilet, but we get another reception room.

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-And then the actual bathroom upstairs?

-Yeah.

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The bathroom upstairs, it's quite small,

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but we've worked out we can actually get a bath in there.

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If we get some nice vanity units for the toilet and the basin,

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it should work out.

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But that's why I thought we'd be better to keep, you know,

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keep the toilet downstairs.

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So, obviously, for a family house, it would work better.

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But the downstairs bathroom, it was in a real state. Pipes were...

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You know, pipework in the walls and in and out. I hate that.

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I like nice, clean, smooth lines.

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Is the idea to do it up and sell it on or to rent it out?

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Yeah, do it up and sell it on.

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We're planning to turn it around as quickly as possible.

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-Hopefully, sort of four, six weeks.

-Right.

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Probably spending about 15 on it.

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I tend to do other...

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I run the building company, I am hands-on as well,

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so that's on the tools as well.

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It is a family business, really.

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-We've got two of my sons working for me.

-Oh, great.

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-One is a painter and decorator, one is a gardener.

-Right.

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So it helps keep it in the family, really.

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And you, your skills are what?

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-I'd describe myself as a jobber, I'd say.

-OK.

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I can do a bit of everything.

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But, yeah, I put my hands to anything, really.

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-I think the only thing I won't do is plastering.

-Right.

-Or roofing.

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-Right.

-I don't like heights.

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Well, listen, congratulations. Good luck with it.

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-Really nice to meet you.

-Great, thanks very much. Cheers.

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Well, listen, you know I have got to tell Andy off, don't you?

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He did break so many rules

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and you can see the kind of problems it can create.

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He has been very chipper about the whole issue about raising finance,

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but that could have been a complete deal breaker.

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Yes, so lessons to be learned.

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However, it does seem like he has got a good place here

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and we wish him all the best sorting it out. How will he get on?

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You can find out later in the show.

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Stoke-on-Trent is made up of six different towns that came

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together as one in 1910 and gained city status in 1924.

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Now, all across these towns are plenty of amenities

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and popular visitor attractions.

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Recent investments at the local university should mean

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a bigger influx of young people looking for student accommodation

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in one of these pockets of Stoke.

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So here in Hanley, which is one of those six towns,

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is the auction lot I'm here to see.

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And it is this.

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It's a two-bed, mid-terrace house with a guide price of £32,000+.

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This house is looking very spick-and-span from the outside.

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It is well-maintained with only a few tiny bits of paint to tidy up.

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This area is currently being regenerated to encourage

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first-time buyers.

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It is really close to the centre of Hanley.

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And Hanley is the commercial hub of Stoke.

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So we are off to a very good start.

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OK, the two things I do look for when I am

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looking round a property are damp and subsidence,

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because they are the two that can cost you a few quid.

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Now, so far, I am liking what I am seeing.

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It is a decent sized front room.

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We've got central heating, double glazed windows.

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And I can see down there, you've got a new fuse box.

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Might have to put some new flooring down, but it is a nice start.

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Into the second reception room, and pretty much the same.

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Same flooring in here. No signs of damp as yet.

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More double glazing, which is great.

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Let's have a look upstairs. I hope it doesn't let me down.

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# Don't let me down

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# Gently if you have to let me down at all... #

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I've got a good feeling.

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These two reception rooms are in decent condition,

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but I think the flower power wallpaper would have to go.

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# Don't let me down. #

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So, upstairs, we have the two bedrooms -

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one on this side and one here.

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Both double bedrooms, both got double glazing as well.

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But I have noticed there's a little bit of electrical work

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that needs to be sorted. Quick fix, though, not a problem.

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The thing I am happy about is there's no signs,

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or should I say no obvious signs, of damp and no cracks as well.

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Perfect.

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# Home and dry-y-y. #

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Actually, not quite home and dry.

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Because while I am seeing two decent sized bedrooms,

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have you spotted what is not here?

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Yep, it's the bathroom.

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It is positioned off the kitchen downstairs, which is

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fairly typical for this style of house in this area.

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So far, so good. Into the kitchen. It is a decent sized space.

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It is a bit dated, so you would want to take it out

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and start again, put something new in here.

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And you've got the bathroom to the back of the property there.

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It all seems to be...OK at the moment.

0:16:510:16:55

That I don't like, here.

0:16:550:16:57

Unfortunately, there is a bit of damp just there.

0:16:570:17:00

Top of the piping.

0:17:000:17:02

We have got a bit of staining around the pipework

0:17:020:17:04

and on the ceiling and a little bit down the walls as well.

0:17:040:17:07

It doesn't seem to be too bad,

0:17:070:17:09

but that is the only problem I can see with this property.

0:17:090:17:12

The rest of it seems to tick a lot of boxes.

0:17:120:17:15

But still, get that checked out.

0:17:150:17:17

That damp could be coming through the roof in the single-storey

0:17:210:17:25

extension that houses the kitchen.

0:17:250:17:27

I'd make it a priority to get that fixed ASAP.

0:17:270:17:30

But even with that extension out the back here, there is

0:17:300:17:33

still a decent sized yard and access to back lanes.

0:17:330:17:36

And I think this is another useful area.

0:17:360:17:38

This little house certainly hasn't let me down.

0:17:380:17:41

With a guide price of £32,000, it's time to find out

0:17:450:17:48

if an agent from the auction house agrees with me.

0:17:480:17:51

First impressions of the property is that it is very typical

0:17:510:17:54

for this age of property in this area.

0:17:540:17:56

It is really mainly cosmetic improvements.

0:17:560:18:00

It's already got central heating, there's already double glazing,

0:18:000:18:03

so it is quite easy to improve this property.

0:18:030:18:06

To resell the property, I would suggest the kitchen

0:18:060:18:10

and bathroom would probably have to be replaced to maximise the value.

0:18:100:18:14

Alternatively, as a rental property, I think it is

0:18:140:18:17

really quite minimal improvements would be required.

0:18:170:18:20

Let's look at the numbers.

0:18:220:18:23

With those two options, first, if you were placed the kitchen

0:18:230:18:26

and bathroom, how much could this resell for?

0:18:260:18:29

If the property was renovated to a high standard throughout,

0:18:300:18:34

I would estimate the property would be in the region of £60,000.

0:18:340:18:37

That's not bad if you get it for the guide price of 32 grand

0:18:390:18:42

and spend 15,000 on it. That could still mean a tidy profit.

0:18:420:18:46

What about rentals?

0:18:460:18:48

I would anticipate a rental income

0:18:480:18:50

in the region of £400 per calendar month.

0:18:500:18:53

If this property goes for anywhere near the guide price, then

0:18:540:18:57

even including a few thousand pounds to do the work,

0:18:570:18:59

you could still make a good yield of at least 10%.

0:18:590:19:04

This seems to me like a pretty straightforward

0:19:040:19:06

two-up-two-down refurbishment.

0:19:060:19:08

You have got the issue of that damp, but I've seen a lot worse.

0:19:080:19:12

Let's see who was after a pretty simple project

0:19:120:19:14

when it went under the hammer.

0:19:140:19:16

Lot 23. So, what shall we say?

0:19:190:19:21

30 to get it going?

0:19:210:19:23

Took you. £30,000 seated.

0:19:230:19:25

At £30,000.

0:19:250:19:27

31 in the aisle.

0:19:270:19:28

32. 33.

0:19:280:19:31

34. 35.

0:19:310:19:33

No. At 35. The bid is in the aisle.

0:19:330:19:36

36, standing in the middle there. At 36.

0:19:360:19:38

37.

0:19:380:19:40

38.

0:19:400:19:42

No? 39 on the phone.

0:19:420:19:44

40?

0:19:440:19:45

40.

0:19:450:19:47

41 anywhere else?

0:19:470:19:49

If not, £40,000 once...

0:19:490:19:52

£40,000 twice....

0:19:520:19:54

Third and final time, £40,000...

0:19:540:19:58

41. 42, sir? A half?

0:19:580:20:01

41.5.

0:20:010:20:03

42, sir?

0:20:030:20:05

Yep, 42. Another half? 42.5.

0:20:050:20:09

43? No. At 42.5 then, in the middle.

0:20:090:20:12

42,500 once...

0:20:120:20:14

Twice...

0:20:140:20:15

Third and last time, 42.5...

0:20:150:20:18

You bought it, sir, well done.

0:20:180:20:20

A successful bid of 42.5 grand,

0:20:220:20:24

10,500 over the guide price, was made by Des from Birmingham.

0:20:240:20:29

Des has one other rental property which he bought ten years ago.

0:20:310:20:34

# Second time is so much better Baby

0:20:360:20:40

# Second time around... #

0:20:400:20:43

I met with Des back at the property to find out his plans.

0:20:440:20:48

-Des, nice to meet you.

-Nice to meet you, Dion.

-Congratulations, sir.

0:20:480:20:52

Thank you.

0:20:520:20:53

Tell me about the auction, were you happy with what you paid?

0:20:530:20:56

Not really, no.

0:20:560:20:58

-Oh, dear. That is not a great start.

-I know.

0:20:580:21:00

I set myself a price of £40,000.

0:21:000:21:03

I didn't want to go a penny over.

0:21:030:21:04

But when I got there on the night, I thought,

0:21:040:21:07

-"Well, just another thousand pound will do."

-Oh, no!

-Another 500...

0:21:070:21:10

When I got to 42,500, I thought, "No, that's it, I've had enough.

0:21:100:21:14

"No, no more."

0:21:140:21:15

-That was it?

-That was it, yeah.

-You got lucky.

-I got lucky, yeah.

0:21:150:21:19

That was my last and final bid.

0:21:190:21:20

Ah, the auction fever.

0:21:220:21:24

It can be so easy to spend more than what you intend.

0:21:240:21:27

Anyway, I still think this can be a winner

0:21:270:21:30

if he doesn't get carried away with the renovations.

0:21:300:21:34

So what are your plans now?

0:21:340:21:36

Basically, just to paint it.

0:21:360:21:39

Flooring...

0:21:390:21:41

A new kitchen, new bathroom.

0:21:410:21:44

And that's about it, really.

0:21:440:21:45

-But I am setting myself a very tight budget.

-OK, give us the budget then.

0:21:450:21:49

About 2,500 to 3,000.

0:21:490:21:51

-OK.

-Not much more than that.

0:21:510:21:53

And within that budget, what is going to take the bulk of the money?

0:21:530:21:56

The bulk of the money, the kitchen. It is not that big a kitchen.

0:21:560:22:00

It really needs re-tiling.

0:22:000:22:03

Especially on the floors. And units and that's it.

0:22:030:22:06

And the bathroom at the back, are you going to do the same there?

0:22:060:22:09

Yeah, I'm going to refit the bathroom. I may still keep the bath.

0:22:090:22:13

The bath looks like quite an expensive unit.

0:22:130:22:15

But the toilet and sink may have to go.

0:22:150:22:17

-But I'm going to tile it and paint it and that's it.

-Is that you?

0:22:170:22:20

-You said, "I'm going to tile it."

-Yes, yes.

-Are you really?

0:22:200:22:23

I am going to do the majority of the work myself.

0:22:230:22:26

I've got a friend who is a kitchen fitter who will refit

0:22:260:22:29

the kitchen for me.

0:22:290:22:31

And I've had another person here up

0:22:310:22:33

until last night doing the plumbing and checking out the boiler.

0:22:330:22:38

Well, he's going to need to pull in a few favours with that budget.

0:22:390:22:43

It is a little tight. So is the timescale equally tight?

0:22:430:22:47

How long are you hoping it's going to take to do that?

0:22:470:22:49

Hopefully, six to eight weeks.

0:22:490:22:51

Cos I'm going to be working on weekends.

0:22:510:22:55

So basically, it'll be fitting into my spare time.

0:22:550:22:57

You are looking to use your spare time

0:22:570:22:59

cos you've got a full-time job?

0:22:590:23:00

-I'm a lorry driver, truck driver.

-Are you really?

0:23:000:23:03

You do a lot of hours.

0:23:030:23:04

-An awful lot of hours.

-HE LAUGHS

0:23:040:23:06

-And the hours that are left in the day...

-Uh-huh.

0:23:060:23:09

-No, I won't be working during the day, no.

-Oh, OK.

0:23:090:23:12

When I finish during the day, I'm too tired to do anything else.

0:23:120:23:15

-So at the weekends - Saturdays, Sundays - you'll be here?

-Yeah.

0:23:150:23:18

-And Monday to Friday you're working.

-Working, yeah.

0:23:180:23:20

-You'll be shattered.

-Yeah. I've done harder work.

0:23:200:23:24

But after about six weeks, everything should be done and

0:23:240:23:27

I'll be able to rent it out, so I can relax and have a nice holiday.

0:23:270:23:31

# Time to go truckin', baby... #

0:23:310:23:34

So lorry-driving and developing, Des is definitely committed.

0:23:360:23:41

He's hoping he can rope in his partner, Lorraine, for help

0:23:410:23:44

on the decorating front,

0:23:440:23:45

but he's also got some friends that are quite skilful too.

0:23:450:23:49

-A friend of mine called Peter...

-Yes.

0:23:500:23:52

..he's a professional all-around maintenance man.

0:23:520:23:55

Apart from doing kitchens, he does everything else.

0:23:550:23:57

-The only thing he won't touch is electrics.

-Yeah, good.

-Yeah.

0:23:570:24:01

And I am actually a qualified electrician,

0:24:010:24:03

so I can do the electrics myself.

0:24:030:24:04

-Everything is sorted.

-There you go, yeah.

0:24:040:24:07

Also, I've got her friend called Selvin, he's a gas fitter,

0:24:070:24:11

so he does all the gas work, plumbing work and stuff like that.

0:24:110:24:15

So, yep.

0:24:150:24:16

-There's your team.

-There you go.

-Your team is your mates.

0:24:160:24:18

-Yes.

-Should be a dawdle.

0:24:180:24:19

# I'm truckin'... #

0:24:190:24:22

I say it's a dawdle, but have I jinxed it?

0:24:220:24:25

There is that one issue of the damp patch.

0:24:250:24:28

Unfortunately, I found that out the hard way.

0:24:280:24:30

I was here yesterday, it was really coming down.

0:24:300:24:33

I happened to walk into the kitchen

0:24:330:24:35

and I thought, "I can hear water dripping."

0:24:350:24:37

Looked up and saw it.

0:24:370:24:39

But hopefully, it is not a major thing.

0:24:390:24:42

I wasn't expecting any major work here.

0:24:420:24:44

Cos when I first saw it, I was quite impressed by the front door

0:24:440:24:48

and the windows and so on. I realised that quite a lot of money

0:24:480:24:51

has already been spent on the property,

0:24:510:24:53

so I am literally giving it a lick of paint, tarting it up

0:24:530:24:56

-and that's it, it's ready to be rented.

-Should be a doddle.

0:24:560:24:59

-Yeah, sure. Great.

-Des, good luck.

-Thank you.

-I wish you all the best.

0:24:590:25:02

-Thanks, Dion.

-A pleasure.

-Bye-bye.

0:25:020:25:05

So between Des, his friends and his partner, Lorraine,

0:25:050:25:08

they seem to have a lot of bases covered.

0:25:080:25:10

But will that damp catch them out?

0:25:100:25:12

You can find out how he gets on later on in the programme.

0:25:120:25:14

Coming up, in South East London, my imagination runs away with me.

0:25:160:25:21

You could pack planting along the back wall.

0:25:210:25:23

It just needs a bit of painting.

0:25:230:25:25

And in Stoke, truck driver Des is on a bit of a learning curve.

0:25:270:25:30

I thought painting was simple,

0:25:300:25:32

but it does take an awful lot of time to have it done properly.

0:25:320:25:35

We are back in Huyton, in the suburbs of Liverpool, to see

0:25:390:25:42

how Andy got on with that three-bedroom semi

0:25:420:25:45

with a guide price of over £70,000.

0:25:450:25:48

He bought the house with his brother, Matt,

0:25:480:25:50

who couldn't make it along to the filming.

0:25:500:25:52

# My beautiful neighbourhood. #

0:25:520:25:55

He had originally trained as an engineer,

0:25:550:25:57

but Andy changed direction completely

0:25:570:26:00

when he got seriously ill with leukaemia.

0:26:000:26:03

It was that catalyst, basically, for me

0:26:030:26:05

to decide to do something different.

0:26:050:26:06

I am in remission now, so everything is OK.

0:26:060:26:09

But sometimes you have a life-changing event and you decide,

0:26:090:26:12

"OK, well, maybe I shouldn't we working, you know,

0:26:120:26:15

"in a big factory, and go out and do my own thing."

0:26:150:26:18

Andy wasted no time setting up a building company

0:26:190:26:22

with his brother, Matt.

0:26:220:26:23

Until last year, that had been taking up all of their time.

0:26:230:26:27

They decided to buy this semi to start their business

0:26:270:26:30

in renovation development, and they picked a house with

0:26:300:26:33

plenty of problems - or do I mean opportunities?

0:26:330:26:37

This is odd. This is what I imagine was originally one of -

0:26:370:26:41

if not the only - bathroom in the property.

0:26:410:26:44

And for starters, downstairs.

0:26:440:26:45

And secondly, it is very dark and it just...

0:26:450:26:49

As layouts go, it is not ideal.

0:26:490:26:52

In fact, there wasn't much that was ideal with this sorry semi.

0:26:520:26:55

As well as the small matter of a completely missing bathroom,

0:26:550:26:59

there was a mostly missing kitchen.

0:26:590:27:02

Andy and his brother paid £69,000 for the house

0:27:020:27:06

and reckoned they could refurbish it for £15,000

0:27:060:27:09

in around four to six weeks.

0:27:090:27:12

Well, we've come back 12 weeks later to see how they got on.

0:27:120:27:16

The back garden is now green and pleasant land.

0:27:340:27:37

And inside, it just gets better and better.

0:27:400:27:42

So, in the kitchen, we had a small fire just by the back door.

0:27:460:27:50

All the walls were blackened and sooty.

0:27:500:27:52

So in the end, we stripped the whole kitchen out,

0:27:520:27:55

re-skimmed everywhere, and a new kitchen.

0:27:550:27:57

Quite pleased with the layout. It is much better than the original.

0:27:570:28:00

The old layout downstairs had something that was almost

0:28:020:28:06

a bathroom.

0:28:060:28:07

But Andy had a better use for that dank little space.

0:28:070:28:10

It was quite dark in there. And it had a frosted window in there.

0:28:120:28:15

So what we've done is we've changed that to a clear window

0:28:150:28:18

and we've also put a skylight in the garage.

0:28:180:28:20

That will just bring a bit more natural daylight into that room.

0:28:200:28:24

What they have now is a very family-friendly study.

0:28:240:28:28

And even more family friendly, right next door, under the stairs,

0:28:280:28:32

they managed to squeeze in a downstairs loo.

0:28:320:28:35

Upstairs now boasts a proper fully-fitted bathroom.

0:28:350:28:39

This was just like a cloak room, really, in the front room up there.

0:28:390:28:43

We've managed to put a bath in, so we've got a full

0:28:430:28:45

three-piece suite in there now with some nice vanity units.

0:28:450:28:49

The rest of the layout up here was pretty sound,

0:28:490:28:52

so the three bedrooms had been re-plastered where required

0:28:520:28:55

and spruced up so they're good to go.

0:28:550:28:57

And how big a job was that transformation of the back garden?

0:29:040:29:08

Outside, the garden was really overgrown.

0:29:080:29:12

It took a few days just to clear everything.

0:29:120:29:14

We rotavatored it all and then re-turfed it.

0:29:140:29:16

And it looks just much more presentable now.

0:29:160:29:19

Originally, Andy set the budget for the refurb at £15,000.

0:29:190:29:24

They thought they could turn the house around

0:29:240:29:26

in four to six weeks.

0:29:260:29:28

The budget came out at about £17,000, which is

0:29:290:29:32

probably about right.

0:29:320:29:34

We did a couple of extra jobs, things like the roof lights,

0:29:340:29:37

changing an extra couple of windows.

0:29:370:29:39

And the toilets, I think,

0:29:390:29:41

was an extra we hadn't sort of originally thought of.

0:29:410:29:45

And really, externally, it probably took a little bit more than

0:29:450:29:49

we thought in the back garden, but quite happy with the figures.

0:29:490:29:53

Adding a downstairs loo is always a good idea if you can squeeze it in.

0:29:530:29:57

And I think that skylight,

0:29:570:29:59

while it is not the most traditional resolution, it does let in light.

0:29:590:30:03

Andy and Matt bought the house for £69,000 and spent

0:30:030:30:07

£17,000 on renovating it, bringing their total spend to £86,000.

0:30:070:30:13

It's time to see what two local estate agents think of their work.

0:30:170:30:21

Two or three things that I really like

0:30:220:30:24

the thought about the room downstairs, the study room,

0:30:240:30:27

they've actually put a VELUX window

0:30:270:30:30

in the garage to have natural light coming in there.

0:30:300:30:32

That's quite thoughtful, cos otherwise, it would be dark

0:30:320:30:35

and dreary. And also the garden was like a forest.

0:30:350:30:37

You couldn't see the back of the fence.

0:30:370:30:39

And now you can see a clear garden with lovely, lush, green grass.

0:30:390:30:43

It is an ideal first-time buyer/young family home.

0:30:430:30:47

And they can grow in it. It has got place to expand the family as well.

0:30:470:30:52

So, what do the estate agents think the property would sell or rent for?

0:30:520:30:57

The property will achieve on the sales market

0:30:570:31:00

£130,000, and on the rental side,

0:31:000:31:04

£675 per calendar month.

0:31:040:31:06

In the current market, from a sales point of view,

0:31:060:31:09

the property should achieve £130,000.

0:31:090:31:12

From a rental point of view,

0:31:120:31:13

it should achieve £650 per calendar month.

0:31:130:31:17

The sales valuations would give Andy

0:31:170:31:20

and Matt a potential profit of £44,000 before taxes and fees.

0:31:200:31:25

But the big question is, will they sell it on or rent it out?

0:31:250:31:29

We originally planned to sell it,

0:31:290:31:31

but because of the increased value, we actually thought,

0:31:310:31:33

"OK, we can keep it, get a better rent than we originally thought

0:31:330:31:37

"and get some money out of it as well."

0:31:370:31:39

We've actually had our tenants come yesterday and we've agreed

0:31:390:31:42

around 675 per calendar month. Really pleased, yeah.

0:31:420:31:46

That would give Andy and Matt

0:31:490:31:51

a healthy yield of over 9% on their investment.

0:31:510:31:54

So what's next for the brothers?

0:31:540:31:56

That was the first one.

0:31:560:31:58

It was a bit nerve-racking because literally,

0:31:580:32:00

I took my coat off, sat down, and this property came up.

0:32:000:32:03

So a bid within 30 seconds of sitting down.

0:32:030:32:05

Within 60 seconds of sitting down, I'd actually bought the property.

0:32:050:32:08

But, yeah, I think it was an interesting

0:32:080:32:10

and enjoyable process, so I probably will buy at auction again.

0:32:100:32:13

This is Charlton in South East London.

0:32:200:32:22

If you've not heard of it before, it is located east of Greenwich

0:32:220:32:26

and west of Woolwich.

0:32:260:32:28

It's an area that hasn't really been touched by the redevelopment in

0:32:280:32:31

and around the Greenwich Docklands,

0:32:310:32:33

so it still retains a London village kind of feel with

0:32:330:32:36

a number of traditional businesses all along the high street.

0:32:360:32:40

Although, there are major changes on the horizon with

0:32:410:32:44

the opening of the Crossrail at nearby Woolwich Arsenal,

0:32:440:32:47

which has caused a huge uplift in prices here.

0:32:470:32:50

Now, I hope you can hear me,

0:32:520:32:54

because there's no getting away from it. This is a really busy road!

0:32:540:32:57

Cars and bikes hurdling past with a dual carriageway

0:32:570:33:01

in both directions.

0:33:010:33:03

Now, that is issue number one.

0:33:030:33:05

But issue number two - parking around here, well, it's not

0:33:050:33:07

easy because there are single yellow lines all the way along here.

0:33:070:33:11

But I'll tell you what, the guide price for this two-bedroom flat

0:33:110:33:14

is £100,000+,

0:33:140:33:17

which sounds very reasonable for London.

0:33:170:33:19

# London calling to the far away towns... #

0:33:190:33:24

Yeah, it is relatively rare to find properties for that

0:33:240:33:27

figure in London these days.

0:33:270:33:29

But it could be factors like the busy location,

0:33:290:33:32

the building looks a little tired and there are some commercial

0:33:320:33:35

properties which just might affect mortgageability.

0:33:350:33:38

So time to head to the lower ground.

0:33:380:33:41

So far, well, the communal hallway is less than impressive -

0:33:410:33:44

dark, dingy, cracks on the wall...

0:33:440:33:47

And is that damp I smell?

0:33:470:33:49

So, once you're down all those stairs, you are in the flat...

0:33:520:33:55

-SHE INHALES DEEPLY

-And the first thing that really

0:33:550:33:58

hits me, and I know it is a basement flat and it is so notoriously famous

0:33:580:34:01

for it, is the damp! But you can really smell it.

0:34:010:34:04

It is very pungent indeed, which is a bit of a worry.

0:34:040:34:07

But the kitchen here, fantastic space. It really is.

0:34:070:34:10

And it looks like a kitchen that you could perhaps keep.

0:34:100:34:14

End of the corridor...

0:34:140:34:15

And, on a positive note, it feels really, really spacious.

0:34:150:34:19

You've got a separate loo here.

0:34:190:34:20

You've got a lounge and a bedroom and a bathroom.

0:34:200:34:24

A nice long corridor, so it feels very open.

0:34:240:34:26

Through into bedroom number two, if you like.

0:34:260:34:29

It is easily a double. You know, it doesn't look too bad.

0:34:290:34:33

It's not crying out for decoration, although it wouldn't hurt.

0:34:330:34:37

Something that is concerning me is what I can see out the window.

0:34:370:34:41

I do think you've got a bit of outside space.

0:34:410:34:43

It looks a bit worrying. I'm going to investigate.

0:34:430:34:47

Oh, no, it is a shame that we don't have smell-o-television

0:34:470:34:50

for this flat, because that damp...

0:34:500:34:53

"Ugh, yuck!" is all I can say.

0:34:530:34:55

# Lord, I smell trouble up ahead of me... #

0:34:550:34:58

That can be a costly job to sort out.

0:35:010:35:03

But the expenses aren't all about the inside of the flat, I'm afraid.

0:35:030:35:07

Now, I love a bit of outside space thrown into the deal.

0:35:100:35:13

Always good to have somewhere to come outside and get some fresh air.

0:35:130:35:16

And this is a big space...

0:35:160:35:18

But just look at it.

0:35:180:35:20

Whoever takes this on needs to get a skip.

0:35:210:35:24

Now, I don't know where they are going to put the skip,

0:35:240:35:26

but look at all this!

0:35:260:35:28

A big clean-up needs to take place.

0:35:280:35:30

But it could look absolutely fantastic.

0:35:300:35:34

You could have planting along the back wall.

0:35:340:35:36

It just needs a bit of painting.

0:35:360:35:38

You might even be able to get independent access through

0:35:380:35:41

this door here into the basement flat.

0:35:410:35:43

It could be brilliant!

0:35:430:35:45

At the moment, it's just none of those.

0:35:450:35:48

Absolutely.

0:35:500:35:51

Now, this is a shared back yard,

0:35:510:35:52

but with a little bit of imagination,

0:35:520:35:54

it could transform this property.

0:35:540:35:56

# Just my imagination

0:35:560:36:00

# Running away with me... #

0:36:000:36:05

The flat also comes with a small courtyard at the front

0:36:050:36:08

of the property.

0:36:080:36:09

Yes, it is a bit dark and feels hemmed-in,

0:36:110:36:14

but still, any outside space is London is a bonus.

0:36:140:36:17

And at least this is private.

0:36:170:36:19

A few pot plants could make all the difference.

0:36:190:36:22

But back to the issue of communal areas

0:36:220:36:24

and my biggest concern with this flat.

0:36:240:36:27

Now, I know I always tell you to read the legal pack, as you should,

0:36:270:36:32

but it might not always contain all the information you need.

0:36:320:36:36

And one glaring omission in this instance is

0:36:360:36:39

the cost of the service charge and the possibility of future

0:36:390:36:43

building works taking place in this block.

0:36:430:36:46

I would make it my business to find out two important details.

0:36:460:36:49

First, what are the annual communal charges for the upkeep

0:36:490:36:53

of the building?

0:36:530:36:54

And secondly, given the condition of the building,

0:36:540:36:56

are any works planned and could there be a big bill to follow?

0:36:560:37:00

The good news is, the lease is not a problem.

0:37:000:37:03

There is 88 years left to run on it.

0:37:030:37:05

We invited a local agent along to find out his opinion

0:37:050:37:09

on the property.

0:37:090:37:10

The flat itself is actually well proportioned.

0:37:110:37:13

It is quite a good size - two double bedrooms,

0:37:130:37:15

decent sized living room, good-sized kitchen.

0:37:150:37:18

It is a bit damp at the moment. It has got a lot of damp smell

0:37:180:37:21

in all the rooms. But overall, it has got a good proportion to it.

0:37:210:37:25

I think the fact that you don't have any

0:37:250:37:26

information about the service charge is a big worry

0:37:260:37:29

because the building itself does need a lot of attention.

0:37:290:37:32

So, as I suspected,

0:37:320:37:34

major concerns about that elusive service charge.

0:37:340:37:37

So what about the resale value of this property?

0:37:370:37:41

Once renovated, I think this flat can sell for £220,000.

0:37:410:37:44

And on the rental market?

0:37:440:37:47

This flat, once renovated, could rent for £1,100 per calendar month.

0:37:470:37:51

Yes, the flat is in a busy location and you can't escape

0:37:530:37:56

the smell of damp inside, but it is a really good-sized flat.

0:37:560:38:01

I just hope whoever bought it had their investigation

0:38:010:38:04

skills at the ready to find out about the service charge

0:38:040:38:07

and the future building works here.

0:38:070:38:10

Let's find out if we have a Sherlock Holmes -

0:38:100:38:12

under the hammer - in the making when we went to auction.

0:38:120:38:16

Lot 99 is offered with vacant possession.

0:38:190:38:22

Who wants to get me started on this?

0:38:220:38:24

130 anywhere?

0:38:240:38:26

130 I've got.

0:38:260:38:28

131 anywhere?

0:38:280:38:29

131. 132?

0:38:290:38:33

132. 133.

0:38:330:38:34

134. 135.

0:38:340:38:37

136. 137.

0:38:370:38:39

Well, so much for that 100 grand guide price

0:38:400:38:43

because we rejoin the bidding at 147,000.

0:38:430:38:47

147.

0:38:470:38:49

148.

0:38:490:38:50

150, knows the value. 151.

0:38:500:38:52

It is with you, sir, the bid is £150,000.

0:38:540:38:56

It is against the gentleman here, on my left. 150 for the first.

0:38:560:39:00

150 for the second.

0:39:000:39:02

150 for the third and final time. Are we all done?

0:39:020:39:05

Sold, 150. Well bought.

0:39:070:39:08

And with the successful bid of £150,000 was Sat.

0:39:120:39:17

Sat is no stranger to the auction house,

0:39:170:39:19

having become a property developer in 2010.

0:39:190:39:23

He always buys at auction for himself as well as investors.

0:39:230:39:26

So I met him back at the flat to hear what

0:39:260:39:28

he had planned for the place.

0:39:280:39:30

# Oh, now tell me, where can you party, child, all night long?

0:39:300:39:35

# In the basement

0:39:350:39:37

# Down in the basement... #

0:39:370:39:38

-Sat, congratulations.

-Thank you very much.

-Well done.

0:39:380:39:41

-You got the property you wanted at auction.

-Mm-hm.

0:39:410:39:44

-You are not an auction virgin, are you?

-No. I've done it since 2010.

0:39:440:39:49

I finished university in 2009.

0:39:490:39:51

It wasn't the best time to graduate in terms of the economy,

0:39:510:39:56

so, yeah, my father was in property, my grandfather was in it.

0:39:560:39:59

I bought my first one, my grandfather helped me

0:39:590:40:01

out a little bit, and went from there, really.

0:40:010:40:04

Well, it sounds like Sat knows what he is doing here.

0:40:040:40:07

He currently has ten properties in his portfolio

0:40:070:40:09

and often works with investors on properties for resale.

0:40:090:40:13

Now, I wonder why he chose this one.

0:40:130:40:15

This area is quite familiar to me.

0:40:150:40:17

I wasn't born too far away, in Blackheath.

0:40:170:40:21

-And my grandma used to work in the Post Office in Charlton.

-Did she?

0:40:210:40:24

Yeah, she did. Yeah.

0:40:240:40:25

So quite familiar with the area and, you know,

0:40:250:40:28

I grew up around here, so it means a lot to me.

0:40:280:40:31

And it has changed a lot as well.

0:40:310:40:33

So, yeah, it's been a bit of a surprise

0:40:330:40:35

how it's turned out, really.

0:40:350:40:37

How lovely for Sat to be investing in an area with such fond memories

0:40:380:40:41

for him. And I'm sure it has changed a lot

0:40:410:40:44

since his grandmother worked in the Post Office.

0:40:440:40:46

But I am betting this is not a purchase based

0:40:460:40:49

on sentiment for the good ole days.

0:40:490:40:52

# Glory days, glory days. #

0:40:520:40:57

So, how much research did you do?

0:40:570:40:59

I did the usual amount - looked through the legal pack.

0:40:590:41:02

I did view it, just about.

0:41:020:41:04

The gentleman was just leaving the property,

0:41:040:41:07

he was showing it round, and he said, "You have 30 seconds."

0:41:070:41:10

So I literally was in and out of here in 30 seconds.

0:41:100:41:13

-Was he just locking up?

-Yeah, he was just locking up.

0:41:130:41:15

My car was on the yellow line, I was like, "Uh..."

0:41:150:41:17

But quickly ran out, got it done. So I did see it, just about.

0:41:170:41:20

As you entered the property for the first time,

0:41:200:41:22

did you get that...smell?

0:41:220:41:24

It the damp smell that hits you as soon as you walk through the door.

0:41:240:41:28

-Yeah, sure.

-Now, it is a basement flat.

0:41:280:41:30

It has always been a big problem,

0:41:300:41:31

always will be a problem with property.

0:41:310:41:33

Are you worried about it?

0:41:330:41:35

I'm not too worried about it.

0:41:350:41:37

I mean, sometimes it is hard to

0:41:370:41:38

distinguish between condensation and damp, but I'll get

0:41:380:41:41

a specialist in to, you know, have a look and give their opinion on it.

0:41:410:41:45

But, yeah, like you said, it seems to be a current trend with

0:41:450:41:47

basement flats, so that will be my priority.

0:41:470:41:50

Mm, very wise.

0:41:510:41:53

Getting that damp fixed would be my number one priority as well.

0:41:530:41:57

Now, I know in the legal pack, there wasn't any information

0:41:590:42:02

on the service charge and any future building works taking place.

0:42:020:42:06

Are you concerned about that? And what do you know?

0:42:060:42:09

The heart is secretly racing on that one.

0:42:090:42:12

I think when we hear back from the freeholder, I think

0:42:120:42:15

my heart will definitely be

0:42:150:42:18

beating out of my chest because I've been hit with it before.

0:42:180:42:21

-So I am very concerned about it.

-What happened in the past?

0:42:210:42:24

In the past, I got a nice big bill

0:42:240:42:27

for £25,000

0:42:270:42:29

on a flat.

0:42:290:42:31

-So, yeah, it wasn't...

-So you haven't learned by your mistakes!

0:42:310:42:35

No, I haven't, but I have factored it in, in the price,

0:42:350:42:38

so I said, "That's the worst I've ever dealt with,

0:42:380:42:41

"so hopefully it won't go past that figure."

0:42:410:42:43

Anything less than £25,000 is a bonus for Sat.

0:42:430:42:47

That's good to know.

0:42:470:42:49

So let's find out what renovations he's got planned for the place.

0:42:490:42:53

It doesn't need anything too dramatic done,

0:42:530:42:56

but I think I would still give it a repaint,

0:42:560:42:58

put new carpets in and just making it look prim and proper, really.

0:42:580:43:03

As well as the renovations inside, Sat plans to tidy up

0:43:030:43:08

the front courtyard and the communal gardens at the back,

0:43:080:43:11

and all within six to eight weeks.

0:43:110:43:13

So, let's talk budget.

0:43:130:43:15

I think my budget is probably going to be about £8,000.

0:43:150:43:18

That is relatively low.

0:43:180:43:20

Yeah, it is relatively low,

0:43:200:43:21

but I think the amount of work that is needed, I'm pretty comfortable

0:43:210:43:25

in my past experience that it can be achieved in that price.

0:43:250:43:28

Well, I'm really excited to see the outcome.

0:43:280:43:30

-Well done, Sat, congratulations.

-Likewise. Thank you.

-Thank you.

0:43:300:43:34

On face value, this seems like a straightforward

0:43:340:43:36

project for experienced developer Sat,

0:43:360:43:38

but even he admits he is a bit worried about the lack

0:43:380:43:41

of information with the service charge and the building works.

0:43:410:43:44

I just hope he gets to the bottom of those extra costs

0:43:440:43:48

and they don't prove too expensive for him.

0:43:480:43:50

Join me later in the programme and you can find out how he gets on.

0:43:500:43:54

So, we've seen how our first buyer got on,

0:43:560:43:58

-but what about the others?

-Did everything go to plan?

0:43:580:44:01

Let's find out.

0:44:010:44:02

We are back in Stoke-on-Trent in the area of Hanley to see what

0:44:050:44:09

happened to that two-bed mid-terrace which was guided at £32,000.

0:44:090:44:14

The house was in pretty good condition.

0:44:150:44:17

And the more I saw, the more I liked it.

0:44:170:44:19

No signs of damp as yet.

0:44:200:44:22

More double glazing, which is great.

0:44:220:44:24

Let's have a look upstairs. I hope it doesn't let me down.

0:44:240:44:27

The two bedrooms were in need of redecoration

0:44:310:44:34

and a little bit of re-wiring.

0:44:340:44:36

But it was downstairs in the kitchen where I started to have my worries.

0:44:360:44:39

That I don't like, here.

0:44:400:44:42

Unfortunately, there is a bit of damp just there.

0:44:420:44:46

Top of the piping, you have got a bit of staining around

0:44:460:44:49

the pipework and on the ceiling and a little bit down the walls as well.

0:44:490:44:53

It doesn't seem to be too bad.

0:44:530:44:54

That is the only problem I can see with this property.

0:44:540:44:57

Putting a patch of damp to one side, I thought

0:44:570:45:00

this would be a simple job for someone.

0:45:000:45:02

And that someone was Des, a full-time lorry driver

0:45:020:45:05

and second-time-around developer.

0:45:050:45:07

And when Des told me his work schedule, I was gobsmacked.

0:45:070:45:10

-So at the weekends - Saturday, Sunday - you'll be here?

-Yeah.

0:45:120:45:15

-And Monday to Friday, you're working.

-Working, yeah.

0:45:150:45:17

-You'll be shattered.

-Yeah. I've done harder work.

0:45:170:45:20

OK, so Des was clearly not afraid of grafting.

0:45:200:45:24

But remember, this house cost him

0:45:240:45:26

more than he wanted to spend in the first place.

0:45:260:45:29

He paid £42,500 for this house and had a modest budget

0:45:290:45:33

of £2,500 to £3,000 for the renovations.

0:45:330:45:36

He thought he could turn this house around in six to eight weeks.

0:45:360:45:40

We've come back ten weeks later to see

0:45:400:45:42

if the part-time developer has a full-time hit on his hands.

0:45:420:45:46

# It ain't what you do It's the way that you do it

0:45:460:45:49

# It ain't what you do It's the way that you do it

0:45:490:45:52

# It ain't what you do It's the way that you do it

0:45:520:45:54

# That's what gets results. #

0:45:540:45:56

Des has transformed this dark front room,

0:46:000:46:03

making it bright and welcoming.

0:46:030:46:05

The old vinyl floor tiles are a thing of the past

0:46:050:46:08

and have been replaced throughout the ground floor with

0:46:080:46:10

contemporary wooden flooring that is hard-wearing and practical.

0:46:100:46:14

He has smoothed, skimmed and painted his way throughout

0:46:140:46:17

the whole of the house, just like he said he would.

0:46:170:46:19

Once I'd painted, it didn't come out 100%.

0:46:200:46:23

So, up till last night, I had to repaint it again.

0:46:230:46:26

But it's...it's drying out slowly.

0:46:260:46:29

So it's getting there.

0:46:290:46:31

I like his attention to detail here.

0:46:310:46:33

He is not willing to accept a sloppy job, especially if it is his own.

0:46:330:46:37

Also, on the ground floor,

0:46:370:46:39

there was that kitchen with that worrying damp patch.

0:46:390:46:42

I had a slight leak in the roof in the kitchen,

0:46:420:46:45

which was above the boiler.

0:46:450:46:46

There was a problem with some loose tiles on the extension.

0:46:460:46:50

I had to get a roofer to do that. And that was it, quite simple.

0:46:500:46:53

# It ain't what you do It's the way that you do it

0:46:530:46:56

# And that's what gets results. #

0:46:560:46:59

It's simple if you get the right people to do the work,

0:46:590:47:02

but with a small budget of just 2.5 to three grand,

0:47:020:47:05

Des had to keep the cost down,

0:47:050:47:06

only replacing what was absolutely necessary.

0:47:060:47:09

After giving the old kitchen a good clean, I decided, no,

0:47:110:47:13

it needed replacing, so rip it all out.

0:47:130:47:16

Then I decided to start on the floor.

0:47:160:47:18

The floor was a bit of a major problem cos it had vinyl tiles.

0:47:180:47:22

The vinyl tiles needed taking up with a pneumatic drill.

0:47:220:47:25

That is how hard down they were.

0:47:250:47:26

# Swing my hammer strong at night... #

0:47:260:47:31

The bathroom was a little bit easier.

0:47:340:47:36

The units inside it were quite good. It needed just a good clean.

0:47:360:47:41

I replaced the taps. I fitted a shower as well.

0:47:410:47:44

And new tiling and that was it.

0:47:440:47:46

# I'm just a hard workin' driver man. #

0:47:460:47:50

I'm really impressed how Des has reused what

0:47:510:47:53

he could to keep the costs down but keep the quality up.

0:47:530:47:56

He's been working hard, but has he been working smart?

0:47:560:48:00

Well, the biggest challenge, I think, is I should have

0:48:000:48:03

subcontracted out most of the work, considering the painting.

0:48:030:48:07

I thought painting was simple,

0:48:070:48:08

but it does take an awful lot of time to have it done properly.

0:48:080:48:12

So that is what I should have subcontracted out.

0:48:120:48:14

Well, there is always something to learn on every development, Des.

0:48:140:48:18

# Second time. #

0:48:180:48:19

And this is only your second property refurbishment.

0:48:190:48:22

Upstairs, the two bedrooms have been given a fresh look

0:48:220:48:26

with new carpets and plain walls.

0:48:260:48:28

Des spent a little longer than his original eight weeks,

0:48:280:48:31

taking ten in total.

0:48:310:48:33

So how did his three grand budget work out?

0:48:330:48:36

I ended up spending 3,200 in total.

0:48:360:48:40

The main reason for going slightly over budget was getting

0:48:400:48:43

the roof repaired and the boiler repaired,

0:48:430:48:45

but these were jobs which I just had to do.

0:48:450:48:47

Des bought the house for 42.5 grand and spent 3,200

0:48:500:48:54

on refurbishment, bringing his total investment to £45,700.

0:48:540:48:59

It's time to find out what two local property agents

0:49:020:49:04

think of the house.

0:49:040:49:06

This is my first time inside the property

0:49:060:49:08

I am particularly impressed with the level of finish, especially

0:49:080:49:11

in the kitchen and the bathroom.

0:49:110:49:13

The main selling points for this property is that it is close

0:49:130:49:17

to the city centre and, of course, the road links that that provides.

0:49:170:49:21

There is not anything different to the property, it is

0:49:210:49:24

just a basic refurbishment, which is all that is needed around the area.

0:49:240:49:28

The area is on the up as well,

0:49:280:49:30

so hopefully it'll get better over time.

0:49:300:49:32

So, what do the agents think the property could sell or rent for?

0:49:320:49:36

If this property was going to the market for sale,

0:49:380:49:40

I'd expected to achieve around £50,000.

0:49:400:49:43

And if it was going to go onto the rental market,

0:49:430:49:45

I would expect it to achieve around £375 per calendar month.

0:49:450:49:49

For the sale market, I think

0:49:490:49:51

this property will achieve a figure in the region of £55,000.

0:49:510:49:54

For the rental market, a figure around £395 per calendar month.

0:49:540:49:59

Although Des was planning on renting the house out,

0:50:010:50:04

those sales figures would give him a profit of in between just

0:50:040:50:07

under £5,000 and £10,000 before taxes and expenses.

0:50:070:50:11

But closer to his heart are those rental yields,

0:50:110:50:14

which would give Des a very healthy return of between 9% and 10%.

0:50:140:50:18

The rental figures I've had quoted have been very similar,

0:50:210:50:24

by two different agents,

0:50:240:50:25

and I'm happier with the second figure rather than the first,

0:50:250:50:29

obviously.

0:50:290:50:30

This is Des' second development,

0:50:320:50:34

the last one being ten years ago. So what is next?

0:50:340:50:37

At the moment, I'm not too sure.

0:50:370:50:39

I'm going to lease this one out first of all.

0:50:390:50:42

And then from there, I'll calculate some figures

0:50:420:50:45

and consider doing this again.

0:50:450:50:46

But at the moment, I would like a little bit of a holiday.

0:50:460:50:49

# London boy! #

0:50:520:50:54

Well, it is time to go back to Charlton, in London,

0:50:580:51:01

and a basement flat I saw there guided at what seemed like,

0:51:010:51:05

in London terms, a really reasonable 100,000.

0:51:050:51:08

It, however, had a few extras it could well do without.

0:51:090:51:12

First thing that really hits me, and I know it is a basement flat

0:51:140:51:17

and it is so notoriously famous for it, is the damp!

0:51:170:51:20

But you can really smell it.

0:51:200:51:22

It is very pungent indeed, which is a bit of a worry.

0:51:220:51:25

# Lord, I smell trouble up ahead of me. #

0:51:250:51:28

But there were upsides to the less-than-fragrant basement.

0:51:280:51:32

It was a really spacious flat.

0:51:320:51:34

There was a super kitchen, which really needed very little work,

0:51:340:51:37

and a decent bathroom with a shower and a bath in there,

0:51:370:51:40

plus a separate loo.

0:51:400:51:42

There was not one but two decent sized, bright bedrooms.

0:51:420:51:46

The living room is at the front of the house,

0:51:460:51:49

with not much of a view, but again, plenty of light.

0:51:490:51:52

And things got even better around the back. Well, sort of.

0:51:520:51:56

This is a big space.

0:51:560:51:58

But just look at it.

0:51:580:51:59

Whoever takes this on needs to get a skip.

0:52:000:52:03

Now, I don't know where they're going to put the skip,

0:52:030:52:06

but look at all this!

0:52:060:52:07

A big clean-up needs to take place.

0:52:070:52:10

But it could look absolutely fantastic.

0:52:100:52:13

The flat was bought by Sat,

0:52:140:52:16

a local lad who comes from a property developing family.

0:52:160:52:19

He thought he sniffed out a bargain here.

0:52:190:52:21

And with over ten properties under his belt, that eau de damp

0:52:210:52:24

that permeated the flat, well, it held no fears for him.

0:52:240:52:28

I'm not too worried about it.

0:52:300:52:32

I mean, sometimes it is hard to distinguish

0:52:320:52:34

between condensation and damp.

0:52:340:52:35

But I'll get a specialist in to, you know, have a look

0:52:350:52:38

and give their opinion on it.

0:52:380:52:39

But, yeah, like you said, it seems to be a current trend with

0:52:390:52:42

basement flats, so that will be my priority.

0:52:420:52:45

The legal pack didn't state whether there was a service charge or

0:52:450:52:49

if there was any future building work planned on the property,

0:52:490:52:52

so this had Sat feeling a little bit nervous.

0:52:520:52:55

The heart is secretly racing on that one because I've been hit

0:52:550:52:58

with it before, so I am very concerned about it.

0:52:580:53:01

In the past, I got a nice big bill for £25,000

0:53:010:53:06

on a flat. So, yeah.

0:53:060:53:08

So you haven't learned by your mistakes!

0:53:080:53:11

No, I haven't, but I have factored it in, in the price.

0:53:110:53:15

Oh, well, that's all right, then. Maybe!

0:53:150:53:17

Sat bought the flat for 150,000 and had a budget of £8,000

0:53:170:53:22

and six to eight weeks.

0:53:220:53:24

Now, we have come back 11 weeks later to find out how he got on.

0:53:240:53:29

# I'm a wonderful thing, baby

0:53:340:53:37

# Wonderful

0:53:400:53:42

# I'm a wonderful thing, baby... #

0:53:440:53:47

Well, you've just got to take my word for it,

0:53:470:53:49

this flat now smells as good as it looks.

0:53:490:53:51

Sat has neither scrimped nor scraped to turn this smelly, old

0:53:510:53:55

basement into a clean, fresh haven.

0:53:550:53:57

He's done all the work that was essential and then he has had

0:53:570:54:00

a whole lot of fun with making the kitchen and bathroom just wonderful.

0:54:000:54:05

# Wonderful! #

0:54:050:54:07

Of course, the finish on the property.

0:54:070:54:10

We decided to go for a quite high spec finish.

0:54:100:54:12

Especially with the area, up-and-coming with the Crossrail.

0:54:120:54:15

I think we are trying to get a little bit ahead of the times

0:54:150:54:18

by just modernising it, because we feel that the area is going to be

0:54:180:54:22

quite cosmopolitan at a later stage.

0:54:220:54:25

Some of the tricks of the trade there from Sat.

0:54:250:54:28

He has prepared the flat for the new opportunities that better

0:54:280:54:31

transport will bring.

0:54:310:54:32

But I want to know

0:54:340:54:35

if it was the sweet smell of success with the smelly, old damp problem.

0:54:350:54:39

There had to be something that dampened my mood, pardon the pun.

0:54:400:54:44

The damp was a bit of an issue, so I did get someone to check it out.

0:54:440:54:47

They said it wasn't that bad.

0:54:470:54:49

And then once I did the whole property in the flat, I did notice

0:54:490:54:52

a few areas, so I thought, "Hang on, let me call a specialist in."

0:54:520:54:55

They then said there is damp, so I had to redo it again afterwards.

0:54:550:54:59

So I think that is a lesson learned.

0:54:590:55:01

And that lesson is that rising damp needs a specialist to fix it.

0:55:020:55:06

But Sat was a lot more fortunate with the service charges and

0:55:060:55:10

possible future building works which had caused him sleepless nights.

0:55:100:55:14

There was no future building works planned

0:55:140:55:16

and the service charges are a very reasonable 500 quid a year,

0:55:160:55:21

a saving in the short term.

0:55:210:55:22

But there is no doubt that money spent on renovating

0:55:220:55:25

the building would in turn increase the value of the flat.

0:55:250:55:28

So has the flat come up smelling of roses for Sat?

0:55:280:55:32

I'm really happy with it.

0:55:320:55:33

From start to finish, before and after, there is a really,

0:55:330:55:36

really big difference.

0:55:360:55:38

And considering the building, I think this really,

0:55:380:55:41

really stands out as a really, really good modern flat.

0:55:410:55:44

So I'm really happy we've put a bit of CPR on it

0:55:440:55:47

and brought it back to life.

0:55:470:55:48

# I can feel the love Can you feel it too?

0:55:480:55:51

# I can feel it, ah-ah... #

0:55:510:55:54

Outside, Sat wasn't able to do much about the whole building,

0:55:540:55:57

but he made the view from the living room so much better.

0:55:570:56:00

He got his team to clear out the shed, rear yard,

0:56:000:56:03

so it no longer looked like a rubbish tip.

0:56:030:56:06

Sat bought the flat for 150,000 and spent £8,800 on

0:56:060:56:11

the renovations, bringing his total spend to just under 159,000.

0:56:110:56:17

It's time to find out

0:56:170:56:19

if our two property experts think Sat has a nose for a bargain.

0:56:190:56:23

I think the property has been done

0:56:230:56:25

nicely to a nice, modern standard.

0:56:250:56:27

It's light, it's bright.

0:56:270:56:29

And despite the fact that it is a basement,

0:56:290:56:32

it feels airy.

0:56:320:56:33

Everything is done, so it is just a walk-into property.

0:56:330:56:36

The property itself has good rooms, good-sized, spacious rooms,

0:56:360:56:39

a nice kitchen, nice bathroom and a separate toilet,

0:56:390:56:42

so it has got a lot of selling points to the property.

0:56:420:56:46

So, what sales and rental values

0:56:460:56:47

do the agents think the property could achieve?

0:56:470:56:51

On the resale market,

0:56:520:56:55

we would sell this property at £270,000.

0:56:550:56:59

And on the rental market,

0:56:590:57:01

we would rent it at £1,250 per calendar month.

0:57:010:57:06

I think this property is worth £270,000 on the resale market

0:57:060:57:10

and £1,200 per calendar month on the rental market.

0:57:100:57:13

Wow! Based on these figures,

0:57:130:57:15

that means Sat could make a potential profit of just

0:57:150:57:19

over £111,000 before taxes and expenses if he sold the flat

0:57:190:57:24

and around a 9% yield if he rented it out.

0:57:240:57:28

Well, with them figures,

0:57:280:57:30

I think I will be very happy to sell at the moment.

0:57:300:57:34

And that was our intention from the beginning.

0:57:340:57:37

The rental idea was only just as a precaution

0:57:370:57:41

if we couldn't sell the flat.

0:57:410:57:43

With this South London property a resounding success,

0:57:430:57:46

is Sat tempted to head off to pastures new?

0:57:460:57:49

I really enjoy South East London. It is...

0:57:490:57:53

Like I said, it is an up-and-coming area

0:57:530:57:55

and I was born not too far away from here,

0:57:550:57:59

so my roots are here and, yeah,

0:57:590:58:00

it has always been a lucky area for me. So, yeah, if a deal

0:58:000:58:04

comes in this area, I'll be more than happy to take it on board.

0:58:040:58:07

We'll be back next time with more auction properties

0:58:100:58:13

and the stories behind them.

0:58:130:58:14

Yeah, we'll see you then for more Homes Under The Hammer.

0:58:140:58:16

-Goodbye.

-Goodbye.

-Goodbye.

0:58:160:58:18

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