Episode 72

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0:00:02 > 0:00:04Hello, and welcome to the show. Now, we have met a lot of people

0:00:04 > 0:00:06who've bought at auction over the years,

0:00:06 > 0:00:08- with a lot of different reactions. - Oh, yes.

0:00:08 > 0:00:11We've gone from pure excitement to absolute sheer terror.

0:00:11 > 0:00:13If you're ready for the challenge,

0:00:13 > 0:00:15why not think about buying your next home under the hammer?

0:00:41 > 0:00:44Now, it's not true that, if you scratch your nose at auction,

0:00:44 > 0:00:46you end up buying something.

0:00:46 > 0:00:48No. But sometimes, at the packed auctions,

0:00:48 > 0:00:50you do have to work to get noticed.

0:00:50 > 0:00:52Let's see who caught the auctioneer's attention today.

0:00:54 > 0:00:57We revisit a development in Forest Hill, London,

0:00:57 > 0:01:00where the numbers were very big indeed.

0:01:00 > 0:01:03Sold. £1,450,000.

0:01:03 > 0:01:06To make the numbers work in Nelson, Lancashire,

0:01:06 > 0:01:08it's the number of rooms that matter.

0:01:08 > 0:01:11We've got two bedrooms, two decent-sized bedrooms,

0:01:11 > 0:01:13but could you create three?

0:01:15 > 0:01:16And, in Crewe, Cheshire,

0:01:16 > 0:01:21more rooms and a HMO means even bigger numbers.

0:01:21 > 0:01:24- £350,400.- Wow!

0:01:25 > 0:01:27All these properties were bought at auction.

0:01:27 > 0:01:30We'll find out who got them and how much they paid

0:01:30 > 0:01:33- when these homes went under the hammer.- Well done.

0:01:38 > 0:01:41Back in 2014, I was in the affluent area

0:01:41 > 0:01:44of Forest Hill in South East London

0:01:44 > 0:01:47to see an auction lot that was a bit special.

0:01:47 > 0:01:53# I can see your mansion on the hill. #

0:01:54 > 0:01:57Well, not so much a mansion on the hill,

0:01:57 > 0:02:00but a vast plot of garages down this lane.

0:02:00 > 0:02:03The guide price? £600,000.

0:02:05 > 0:02:08Just have a look at this. Wow! What a plot!

0:02:08 > 0:02:12Now, here's a bit of history for you. I know this used to be

0:02:12 > 0:02:16the stables to an old coaching inn, back in the early 1800s,

0:02:16 > 0:02:19when people were travelling by horse and carriage.

0:02:19 > 0:02:21They would stay at the inn and their horses would be

0:02:21 > 0:02:25stabled for the night right here.

0:02:25 > 0:02:28You can see now it's been used for other things over the years,

0:02:28 > 0:02:31from garages, to workshops to offices.

0:02:31 > 0:02:32You can see it's rundown

0:02:32 > 0:02:36and it's just ready to have some new life breathed into it.

0:02:37 > 0:02:40# Breathe life into me

0:02:40 > 0:02:44# Breathe life into me, come on

0:02:44 > 0:02:46# I've been waiting for so long. #

0:02:46 > 0:02:49Well, we might have a lot of history,

0:02:49 > 0:02:52but we've also got a lot of problems.

0:02:52 > 0:02:53Just have a look at that roof!

0:02:53 > 0:02:57Now, the good news is that, although it's in a conservation area,

0:02:57 > 0:03:01permission has been granted to pull this whole building down.

0:03:03 > 0:03:08And in its place, you could build something spectacular.

0:03:08 > 0:03:12Planning permission had been granted for seven two-bed houses,

0:03:12 > 0:03:15but it took a bit of imagination to picture all that.

0:03:15 > 0:03:22Four two-bed townhouses, all the way along here, with garages underneath,

0:03:22 > 0:03:25and along here,

0:03:25 > 0:03:30three two-storey two-bedroom houses with assigned parking spaces.

0:03:30 > 0:03:34So it'll still pretty much be in this lovely L shape,

0:03:34 > 0:03:37set back from the road.

0:03:37 > 0:03:41Now, the slight negative for me is the garage that was here is

0:03:41 > 0:03:46now just over here and access is along this driveway here.

0:03:46 > 0:03:48Lots of cars coming up

0:03:48 > 0:03:52and down this road didn't seem ideal for family homes.

0:03:52 > 0:03:55Perhaps a bit of re-jigging was needed in the layout,

0:03:55 > 0:03:58as parking is always a big selling point in London.

0:03:58 > 0:04:01So much so, it seems some car owners

0:04:01 > 0:04:05really don't want to give up their spaces.

0:04:05 > 0:04:08# Who's gonna drive you home

0:04:08 > 0:04:11# Tonight? #

0:04:11 > 0:04:15But to have new homes to drive in to, the plot needed a buyer,

0:04:15 > 0:04:19so let's head to auction and remind ourselves who bought it.

0:04:19 > 0:04:22Fantastic lot, this.

0:04:22 > 0:04:25Great, great opportunity for somebody.

0:04:25 > 0:04:27Great development opportunity. What a great lot.

0:04:27 > 0:04:30Who wants to give me a start on this?

0:04:30 > 0:04:32£1 million. Thank you.

0:04:32 > 0:04:36That's what I like. Somebody knows the value. £1 million.

0:04:36 > 0:04:40So I've got £1 million, straight ahead.

0:04:40 > 0:04:42Anybody else? Million ten, yeah?

0:04:42 > 0:04:43Million ten.

0:04:43 > 0:04:45Million 20.

0:04:45 > 0:04:48Well, with the very first bid, the guide price is smashed

0:04:48 > 0:04:50and the auction room is buzzing.

0:04:50 > 0:04:54We return with the bidding at £1.4 million.

0:04:54 > 0:04:561.4. Four ten.

0:04:56 > 0:04:58Four 20.

0:04:58 > 0:05:00No?

0:05:00 > 0:05:04Back to you, sir. Bid's £1.41 million.

0:05:04 > 0:05:07It's against the gentleman on my left by the door.

0:05:07 > 0:05:08You bidding?

0:05:08 > 0:05:10You back in, yeah? Four 20.

0:05:10 > 0:05:11Four 30.

0:05:11 > 0:05:13Four 40.

0:05:13 > 0:05:14Four 50.

0:05:14 > 0:05:16Four 60.

0:05:16 > 0:05:19Yes or no? Four 60.

0:05:19 > 0:05:24If not, £1.45 million. For the first...

0:05:24 > 0:05:29£1.45 million for the second...

0:05:29 > 0:05:35£1.45 million for the third and final time...

0:05:35 > 0:05:37Are we all done?

0:05:37 > 0:05:40- GAVEL BANGS - Sold. £1,450,000.

0:05:40 > 0:05:42Well bid.

0:05:42 > 0:05:48At £1.45 million, the knockout punch came from Mark, here in the middle,

0:05:48 > 0:05:52joined by his son Max at the back of the group.

0:05:52 > 0:05:55Mark had been developing property for over 15 years after

0:05:55 > 0:05:58a career as a boxer.

0:05:58 > 0:06:00# It's all about the things you do

0:06:00 > 0:06:02# Boy, you knock me out. #

0:06:02 > 0:06:05Every fighter needs a manager in their corner

0:06:05 > 0:06:08and Mark had his project manager of seven years, Johnny,

0:06:08 > 0:06:10to rely on.

0:06:10 > 0:06:12# Boy, you knock me out. #

0:06:12 > 0:06:15Whose idea was this? Who's bought this?

0:06:15 > 0:06:17Were you happy with the money you paid?

0:06:17 > 0:06:19- Mark?- Yeah, um...

0:06:19 > 0:06:21Well, the back-story is we just...

0:06:21 > 0:06:24We had a site in planning in another location,

0:06:24 > 0:06:27over in Crystal Palace, and it got refused, so we was a bit

0:06:27 > 0:06:31sort of desperate to go and find something quickly to get work on.

0:06:31 > 0:06:33You and Johnny were both there on auction day.

0:06:33 > 0:06:35Guys, did you expect to win the bid?

0:06:35 > 0:06:38Did you expect to pay what you paid, Johnny?

0:06:38 > 0:06:42Yeah, I think Mark went there very focused, had a figure in mind.

0:06:42 > 0:06:47I think he knew the value of the potential for development.

0:06:47 > 0:06:51And went in there with a bar to set, really.

0:06:51 > 0:06:56So, Mark had come out swinging at the auction, but he now

0:06:56 > 0:07:00wanted to move the plans for the plot up to the heavyweight division.

0:07:02 > 0:07:05It's got planning for seven two-bed houses at the moment, which...

0:07:05 > 0:07:09There's a price on it, which is a fair price.

0:07:09 > 0:07:14We could do very well out of it. But my gain and my speciality is

0:07:14 > 0:07:17- gaining upon planning permission. - Yeah.

0:07:17 > 0:07:20So, basically, because plans were given in 2006,

0:07:20 > 0:07:23I'd like to look at how I can build upon that,

0:07:23 > 0:07:26look at the London guide, see what's changed, look at what's been built

0:07:26 > 0:07:30around just recently since then, so when you're thinking about it, whoa,

0:07:30 > 0:07:32hang on, we could get another floor on here

0:07:32 > 0:07:35and make these four beds, so, when you're looking at two beds,

0:07:35 > 0:07:38which would probably be 600 to 650 or something and you're

0:07:38 > 0:07:41looking at four beds, you're then talking about £1 million a house.

0:07:41 > 0:07:43Sounds fantastic and I'm really excited to see it.

0:07:43 > 0:07:46Johnny, how long do you think you're going to be on site for?

0:07:46 > 0:07:49- How long is this project going to take?- Too long.

0:07:49 > 0:07:51He said that without his mouth moving.

0:07:51 > 0:07:55It's estimated at the moment around about 12 months. 11 to 12 months.

0:07:55 > 0:07:59And, if you're not clocking in on time, have you got him on your back?

0:07:59 > 0:08:04- Yeah. There's... Yeah.- Budget, budget, budget, budget, budget.

0:08:04 > 0:08:07- Yeah.- Come on, then. How much is the budget?

0:08:07 > 0:08:10The budget on this is about... It will be, depending on what we get...

0:08:10 > 0:08:14Now, if we have the two beds built and we get rejected,

0:08:14 > 0:08:17there's no way we're going to get even more, we've got a fallback

0:08:17 > 0:08:21scheme to build upon, so, upon that, it'll be about 1.5 to 1.6.

0:08:21 > 0:08:23If we get the four beds,

0:08:23 > 0:08:26it's going to be another half a million pounds on top.

0:08:26 > 0:08:28# One, two, three

0:08:28 > 0:08:30# She knocked me to my knees

0:08:30 > 0:08:33# Three, four, five

0:08:33 > 0:08:35# I think I've got to take a dive

0:08:35 > 0:08:38# I can't go no longer

0:08:38 > 0:08:41# I'm giving up the ring. #

0:08:41 > 0:08:45The big numbers of that budget left me a bit punch drunk, but they

0:08:45 > 0:08:49were hoping to have it all done in a reasonable timescale of 12 months.

0:08:49 > 0:08:53Mark was certainly determined to make this a successful project.

0:08:53 > 0:08:56He might have given up the ring, but not the mentality.

0:08:58 > 0:09:02I was a boxer at the Fitzroy Lodge when I was growing up

0:09:02 > 0:09:05in Lambeth and I boxed there for quite a few years

0:09:05 > 0:09:08and won the ABA London Championships.

0:09:08 > 0:09:11So I'm anything about boxing.

0:09:11 > 0:09:14I've always had that winning determination.

0:09:14 > 0:09:16I get knocked down and I get up. So you have to...

0:09:16 > 0:09:19You have to keep going and it's true.

0:09:19 > 0:09:21No matter through recession or whatever it is, you've

0:09:21 > 0:09:25got to keep going. Keeps you focused, good for you.

0:09:25 > 0:09:27# I get knocked down but I get up again

0:09:27 > 0:09:29# You're never gonna keep me down

0:09:29 > 0:09:31# I get knocked down but I get up again

0:09:31 > 0:09:34# You're never gonna keep me down. #

0:09:34 > 0:09:3811 months on and it seemed nothing could keep Mark and Johnny down,

0:09:38 > 0:09:42as they had a frame up, utilities connected

0:09:42 > 0:09:44and work was under way in earnest.

0:09:47 > 0:09:51Better yet, they had got the change of plans they wanted approved.

0:09:51 > 0:09:54# I get knocked down but I get up again

0:09:54 > 0:09:56# You're never gonna keep me down

0:09:56 > 0:09:59# I get knocked down but I get up again

0:09:59 > 0:10:01# You're never gonna keep me down. #

0:10:01 > 0:10:04Well, the new plans that we got passed,

0:10:04 > 0:10:09in comparison to the original planning consent allowed us

0:10:09 > 0:10:13to gain an extra storey on to the whole development.

0:10:15 > 0:10:19That extra storey meant they would now have six three-bed houses

0:10:19 > 0:10:20and one two-bed.

0:10:20 > 0:10:24Mark couldn't film with us due to another project commitment

0:10:24 > 0:10:26and things had grown so large here that Johnny had brought

0:10:26 > 0:10:29Pat on board to help him manage the site.

0:10:29 > 0:10:32And there was a long list of things still to do.

0:10:35 > 0:10:39Since we've last seen you, a lot has gone on.

0:10:39 > 0:10:44Obviously, you can see the timber frame behind me now.

0:10:44 > 0:10:47We've done obviously all of our groundwork, footings,

0:10:47 > 0:10:51drainage, run our service ducts, getting everything prepared

0:10:51 > 0:10:55for the timber frame to be built on top of the block and beam floor.

0:10:55 > 0:10:57Got all of our trades lined up.

0:10:57 > 0:11:01Roofers are in next and then all of our internal trades.

0:11:01 > 0:11:04We've sort of maximised the development,

0:11:04 > 0:11:07still keeping it in context with the surrounding area.

0:11:07 > 0:11:12There's some big properties up and around this area and, yeah,

0:11:12 > 0:11:14we feel we've got a good result.

0:11:14 > 0:11:17They thought another six to seven months would see the project

0:11:17 > 0:11:21complete and they were going to a full £2 million on the budget,

0:11:21 > 0:11:26meaning a total estimated spend of £3.5 million.

0:11:26 > 0:11:30With prices rising in the area, they were confident of a good job

0:11:30 > 0:11:31and some profit.

0:11:33 > 0:11:36Hopefully, when you come back in five to six months' time,

0:11:36 > 0:11:39you should expect to see the development finished,

0:11:39 > 0:11:44flowers in the garden, so to speak, and everything all wrapped up.

0:11:44 > 0:11:48I'm expecting the houses to look great, really high quality,

0:11:48 > 0:11:52to a very high standard finish, which is what we pride ourselves on.

0:11:52 > 0:11:55Yeah, I'm expecting them to be a head turner

0:11:55 > 0:11:58and people are going to be pleasantly surprised.

0:11:58 > 0:12:02And that was back in April of 2015, so, when we came back,

0:12:02 > 0:12:06were the houses a head turner, or a bit of a pain in the neck?

0:12:06 > 0:12:10You can find out how the guys got on later in the programme.

0:12:16 > 0:12:19Nelson in Lancashire is about four miles from Burnley.

0:12:19 > 0:12:22Today, it's an ideal commuter town to Preston and Blackburn,

0:12:22 > 0:12:26but historically, this former mill town was once steeped

0:12:26 > 0:12:30in left wing politics and was nicknamed Little Moscow.

0:12:30 > 0:12:35- # Out on my own in the suburbs of Moscow.- #

0:12:35 > 0:12:37I've read today's auction catalogue,

0:12:37 > 0:12:40but what property am I RUSSIAN here to see?

0:12:41 > 0:12:45Many years ago, when important people had meetings and planned out

0:12:45 > 0:12:49local authority housing schemes, they sometimes got it right.

0:12:49 > 0:12:51This is an example of getting it right.

0:12:51 > 0:12:55Houses painted in nice pretty colours and little bits of grass

0:12:55 > 0:12:59that give it a homely feel and a nice place to be.

0:12:59 > 0:13:03It is a two-bed mid-terrace house with a guide price of £30,000 plus.

0:13:03 > 0:13:05Let's go see what you can get for your money.

0:13:10 > 0:13:13OK, we're straight into a small hallway,

0:13:13 > 0:13:16with the stairs going up to the bedrooms

0:13:16 > 0:13:19and, in here, you've got a really decent-sized lounge.

0:13:20 > 0:13:23Coming through into the kitchen,

0:13:23 > 0:13:25which looks a little bit dated,

0:13:25 > 0:13:27hasn't been touched in here for some time.

0:13:28 > 0:13:30And you've got a little hatch as well just there.

0:13:30 > 0:13:33That's for the lazy person that doesn't want to get up

0:13:33 > 0:13:35to collect their tea, you can just pass it through to them.

0:13:35 > 0:13:38But you'd do well to salvage anything in here at all.

0:13:38 > 0:13:41Through into another bit of space.

0:13:41 > 0:13:43And there's no plaster on the walls, just brick.

0:13:44 > 0:13:49But what it does scream out to me is taking this wall out.

0:13:49 > 0:13:52Now, it is a load-bearing wall, so you would need some support,

0:13:52 > 0:13:56a supporting beam up there, but it's perfect to go from

0:13:56 > 0:13:59kitchen to diner, a bit of a family area.

0:13:59 > 0:14:02Instead of these two small rooms, having one big room,

0:14:02 > 0:14:05so all the family can share a nice, big family space.

0:14:08 > 0:14:10You know that I'm a fan of a kitchen-diner,

0:14:10 > 0:14:14but I also know that supporting beams can be expensive.

0:14:14 > 0:14:16However, it would really increase a sense of space

0:14:16 > 0:14:19and give you a more flexible layout with your brand-new kitchen.

0:14:25 > 0:14:29OK, so, upstairs seems to be a simple layout.

0:14:29 > 0:14:33Bathroom in the middle. You've got a decent-sized bedroom here.

0:14:34 > 0:14:36And as we go into the bathroom,

0:14:36 > 0:14:39it's not a bad size for a family bathroom.

0:14:39 > 0:14:41Very dated, nice green tiles.

0:14:41 > 0:14:45Pretty much a running theme throughout the whole of the house -

0:14:45 > 0:14:46rip it out and start again.

0:14:47 > 0:14:50I'm pretty sure that's not a power shower.

0:14:53 > 0:14:56So, across the landing into bedroom two...

0:14:57 > 0:15:00..which again is a decent size.

0:15:00 > 0:15:02I've noticed these polystyrene tiles,

0:15:02 > 0:15:04they would have to come out definitely.

0:15:04 > 0:15:09Huge fire hazard and here someone's tried to create some storage.

0:15:09 > 0:15:13Again you could take that out to make this bedroom even bigger.

0:15:13 > 0:15:16We've got two bedrooms, two decent-sized bedrooms,

0:15:16 > 0:15:18but could you create three?

0:15:19 > 0:15:21Hold that thought for a minute

0:15:21 > 0:15:24and I'll show you how you might be able to do that.

0:15:25 > 0:15:27I just wanted to come back into this bedroom,

0:15:27 > 0:15:32cos I've been thinking, could you create two bedrooms out of this one?

0:15:32 > 0:15:34OK, just quickly,

0:15:34 > 0:15:39keep that door as it is, pop in a false wall just here.

0:15:39 > 0:15:42That'd give you a small bedroom right there.

0:15:42 > 0:15:45Put another door just here, just pop a lintel in.

0:15:45 > 0:15:49You would have to shave a bit off the family bathroom,

0:15:49 > 0:15:52extend the landing across just a little bit.

0:15:52 > 0:15:55They would be small, but it's just options.

0:15:57 > 0:16:00MUSIC: One, Two, Three by Len Barry

0:16:05 > 0:16:06# One, two, three

0:16:08 > 0:16:12- # It's easy - It's so easy... #

0:16:12 > 0:16:14Or at least it's easier than you think.

0:16:14 > 0:16:16Three is the magic number for me here,

0:16:16 > 0:16:20because this property feels like it should be a family home,

0:16:20 > 0:16:24with a spacious garden out back and several schools in the nearby area.

0:16:24 > 0:16:26But like I said, just options.

0:16:29 > 0:16:32Can a local estate agent give us any more options to consider?

0:16:35 > 0:16:37A little bit of work needed on this property before

0:16:37 > 0:16:40you could really move a tenant in. You've got two options, really.

0:16:40 > 0:16:44You could go for full refurbishment, new kitchen, new bathroom, rewire,

0:16:44 > 0:16:47upgrade the property and it'd be fit for the next ten years or so,

0:16:47 > 0:16:49or you could do a light refurbishment

0:16:49 > 0:16:51where it would make it fit to live in now,

0:16:51 > 0:16:54but you'd probably need to do some further work in a few years' time.

0:16:54 > 0:16:58So, if the new buyer or the new owner of this property wanted to do

0:16:58 > 0:17:03a light refurbishment, we would expect them to spend around 2 to £3,000.

0:17:03 > 0:17:06If they want to do a full refurbishment and modernise the whole property,

0:17:06 > 0:17:10then they would probably be looking to spend about 7 or £8,000.

0:17:13 > 0:17:15So, get it near that 30 grand guide price

0:17:15 > 0:17:18and a full refurb might cost you 38 grand.

0:17:18 > 0:17:21The agent thinks, regardless of the number of bedrooms,

0:17:21 > 0:17:25it probably has a ceiling price of £45,000 for resale.

0:17:25 > 0:17:27Perhaps renting is the right route.

0:17:31 > 0:17:35The property was previously rented at £380 per calendar month.

0:17:35 > 0:17:36With a light refurbishment,

0:17:36 > 0:17:41we would expect a current rent to be around £425 per calendar month.

0:17:41 > 0:17:44Whoever does buy this property will find that they'll get

0:17:44 > 0:17:47a very attractive yield on the rental income.

0:17:48 > 0:17:51By my calculations, get it near the guide price,

0:17:51 > 0:17:54do a little refurb, that could be a 15% yield.

0:17:54 > 0:17:56That's very interesting.

0:17:59 > 0:18:01I've always been a fan of local authority houses.

0:18:01 > 0:18:04They remind me of my youth back in Leicester

0:18:04 > 0:18:06and they are normally very well built.

0:18:06 > 0:18:08Now, this one needs a total overhaul,

0:18:08 > 0:18:10but I think, below the surface,

0:18:10 > 0:18:12there's a great family home to be had.

0:18:12 > 0:18:14Let's see who's seen its potential when it went under the hammer.

0:18:20 > 0:18:23Lot 53. Guide's 30.

0:18:23 > 0:18:28Two-bed, mid-terraced house, right, anybody here, 30's your guide, good guide.

0:18:28 > 0:18:29I have 25 in.

0:18:29 > 0:18:32Need a bid. I have 25,000. 25 here.

0:18:32 > 0:18:34I have 25. I'm bid now in ones.

0:18:34 > 0:18:38- At 25, 26, just here.- 27.- Can you?

0:18:38 > 0:18:39£26,000.

0:18:39 > 0:18:4227. 28. 28.

0:18:42 > 0:18:4428 I've got. 29.

0:18:44 > 0:18:4730. 30 I've got.

0:18:47 > 0:18:5031. 32. 32. 33.

0:18:53 > 0:18:55Might buy it. 34?

0:18:57 > 0:19:0133 here. 34. 35.

0:19:01 > 0:19:0236. Walking away.

0:19:02 > 0:19:05With you at 35.

0:19:05 > 0:19:08First time then at 35. Second time.

0:19:08 > 0:19:09Third and final time, then.

0:19:09 > 0:19:13All yours, sir, at £35,000, well done.

0:19:16 > 0:19:20The successful bidder was Waj, buying it for 35 grand.

0:19:20 > 0:19:23And while he was at the auction with his wife Tasleen,

0:19:23 > 0:19:27he actually bought it with his business partner and best mate Abid.

0:19:28 > 0:19:30They came along to their new purchase to tell me more.

0:19:33 > 0:19:37- Waj, nice to meet you. - How are you doing, Dion?- Abid.- Dion. - Congratulations to you both.

0:19:37 > 0:19:38BOTH: Thank you very much.

0:19:38 > 0:19:39What made you buy this house?

0:19:39 > 0:19:43We were born and bred in this area, so we know the area really, really well.

0:19:43 > 0:19:47So, we thought, why not just invest in this area, benefit everybody?

0:19:47 > 0:19:50Give us a little bit more about your relationship and your background.

0:19:50 > 0:19:54We've known each other for well over 30 years.

0:19:54 > 0:19:57We went to primary school together. And we've just grown up,

0:19:57 > 0:20:01- literally, a couple of hundred yards.- Yeah, away from each other.

0:20:01 > 0:20:02We've been in business together,

0:20:02 > 0:20:04we're in business together now as well.

0:20:04 > 0:20:06So, we've done quite a lot of things together,

0:20:06 > 0:20:09hence the reason why our friendship, you know, is pretty strong

0:20:09 > 0:20:11and we've gone into this field as well.

0:20:11 > 0:20:13That's a long-term relationship.

0:20:13 > 0:20:1530 years as mates, now business partners.

0:20:15 > 0:20:18Business partners, exactly, yeah. Even though I still look 21, but...

0:20:18 > 0:20:20- Yes.- You know? - I didn't want to mention it to you.

0:20:20 > 0:20:23Not in front of Waj anyway. THEY LAUGH

0:20:26 > 0:20:28Abid owns a chain of health supplement stories.

0:20:28 > 0:20:31That must be the source of those youthful looks.

0:20:31 > 0:20:33While Waj works on the local council

0:20:33 > 0:20:35with some business interests on the side.

0:20:35 > 0:20:39This is now the sixth property for the pair as they look to build their portfolio.

0:20:42 > 0:20:45So, Abid, what have you got to do to this one in particular?

0:20:45 > 0:20:48Let's start downstairs. What are you going to do downstairs?

0:20:48 > 0:20:51Let's start with the kitchen. Obviously we're going to redo that again.

0:20:51 > 0:20:53A new suite's going to go in there and in there.

0:20:53 > 0:20:55Open it up and make it into like a kitchen-diner place.

0:20:55 > 0:20:59The main living area, I think that just needs a bit of a revamp,

0:20:59 > 0:21:01some paint, you know, spruce it up again.

0:21:01 > 0:21:03I can see a bit of dampness.

0:21:03 > 0:21:06We're just going to get that checked out and see what that's like.

0:21:06 > 0:21:09Does that mean, if you're making a kitchen-diner, you're going to knock that wall through?

0:21:09 > 0:21:13We're thinking put a beam across,

0:21:13 > 0:21:16a supporting beam, and make it into a kitchen-diner.

0:21:16 > 0:21:19- And upstairs, any plans?- Upstairs...

0:21:19 > 0:21:22In the other bedroom,

0:21:22 > 0:21:27we might just leave it as one or split it into two.

0:21:27 > 0:21:31If we do split it into two, then we're going to have to use some of this bathroom space,

0:21:31 > 0:21:33cos here is quite a spacious bathroom.

0:21:33 > 0:21:36- Make it into a three-bed.- Yeah, make it into a three-bed. Nice family home.

0:21:36 > 0:21:39So, Abid, tell us about the budget, what's the budget going to be to create all that?

0:21:39 > 0:21:43- The budget? OK, well, I've really left it in Waj's hands. - THEY LAUGH

0:21:43 > 0:21:46So, if anything goes wrong, it's his fault.

0:21:46 > 0:21:49But I think the 8 to 10 mark?

0:21:49 > 0:21:528 to £10,000, we've set aside,

0:21:52 > 0:21:57if we do split the kitchen and diner as one and split the bedrooms as two.

0:21:57 > 0:22:00- I think the majority... Some of the work we can do ourselves.- Yeah.

0:22:00 > 0:22:03You know, we're quite handy when it comes down to doing bits and bats,

0:22:03 > 0:22:06so we can do some of the work ourselves and, you know,

0:22:06 > 0:22:07keep the budget down.

0:22:07 > 0:22:09- So, you're going to get your hands dirty, chaps?- Waj is.

0:22:09 > 0:22:11THEY LAUGH

0:22:11 > 0:22:14So, have you got...? Do use the same guys, the same builders, or...?

0:22:14 > 0:22:18Yeah, we have, we've got a team of builders that we can call in, really good, handy lads.

0:22:18 > 0:22:20They'll come in, they'll muck in and they'll get the job done.

0:22:20 > 0:22:248 to 10 grand...ish. How long is it going to take you two?

0:22:25 > 0:22:30At the moment, we're doing another property as well as we speak, so...

0:22:30 > 0:22:35- And we've spoken and said, maximum, six months.- Yeah, six months.

0:22:35 > 0:22:39- I think ideally I'd like to do in the four-months...- Yeah.- Because...

0:22:39 > 0:22:42There's not really much that needs to be done in here.

0:22:44 > 0:22:47Nice to see that Waj and Abid are thinking along the same lines as me

0:22:47 > 0:22:49when it comes to that kitchen-diner.

0:22:49 > 0:22:52And at least they're entertaining the thought of a third bedroom.

0:22:56 > 0:23:00- We're undecided on this one. - I think we will agree on something.

0:23:00 > 0:23:05- You know, whatever benefits us, we'll agree on that.- Yeah.

0:23:05 > 0:23:09- We're very good at agreeing on things.- Yeah.- It looks like it.

0:23:09 > 0:23:11That's the reason where a good partnership and we're doing things

0:23:11 > 0:23:15and things are moving forward for us, so I think that's good.

0:23:15 > 0:23:17We've known each other that long, trust each other,

0:23:17 > 0:23:19so we'll make the decisions together as well.

0:23:19 > 0:23:23Well, you've started off on the right foot, chaps, you've got all the bases covered.

0:23:23 > 0:23:26You seem not to get on, which is perfect for business. THEY LAUGH

0:23:27 > 0:23:30- Yeah, that's right.- I just want to wish you two good luck.- Thank you.

0:23:30 > 0:23:33- I hope it works out. Abid. Good luck, pal.- Thank you very much.

0:23:33 > 0:23:35- Waj, good luck.- Cheers, thank you. - Pleasure.

0:23:35 > 0:23:40Good mates Waj and Abid are approaching this property in the best way I can think.

0:23:40 > 0:23:42Rip it out and start again.

0:23:42 > 0:23:43It won't be easy,

0:23:43 > 0:23:46but they do have that bit of experience that'll help them out.

0:23:46 > 0:23:47I'm pretty sure they'll be fine.

0:23:47 > 0:23:50You can find out how they get on later on in the programme.

0:23:51 > 0:23:52Coming up...

0:23:52 > 0:23:56In Crewe, Cheshire, this two bed needs, well,

0:23:56 > 0:23:58very little, to be honest.

0:23:58 > 0:24:00You know, it's all set up, isn't it? Brilliant.

0:24:03 > 0:24:08And in Nelson, Lancashire, will this two-bed terrace help mend fences?

0:24:08 > 0:24:10He used to bully me when I was little.

0:24:17 > 0:24:20Earlier, we were following this story of property developer

0:24:20 > 0:24:22Mark and his project manager Johnny,

0:24:22 > 0:24:25seen here with Mark's son Max.

0:24:25 > 0:24:30They paid £1.45 million for this auction lot of garages

0:24:30 > 0:24:33and disused buildings in Forest Hill, London.

0:24:33 > 0:24:37And they plan to expand the existing planning permission to build

0:24:37 > 0:24:40seven family homes here.

0:24:40 > 0:24:43When we came back 11 months on, they'd been successful

0:24:43 > 0:24:47in getting planning permission to add another storey to the buildings.

0:24:47 > 0:24:49And Johnny and his team had the frame up

0:24:49 > 0:24:53and were working hard towards the end goal.

0:24:53 > 0:24:56We promised to come back and see it when the project was finished.

0:24:58 > 0:25:02Fast forward six months on and, well, yes,

0:25:02 > 0:25:06work is still going on to finish six of the houses.

0:25:06 > 0:25:10There's six three-bed properties and one two-bed house,

0:25:10 > 0:25:12but I'm pleased to say that one is complete.

0:25:12 > 0:25:14Sometimes, on big projects,

0:25:14 > 0:25:17it's easy to lose sight of the little details,

0:25:17 > 0:25:21so I want to know, have they shown the love to this house?

0:25:21 > 0:25:22MUSIC: Feel The Love by Rudimental

0:25:22 > 0:25:26# And all I said is true, I can feel the love, can you feel it too?

0:25:26 > 0:25:29# I can feel it all

0:25:29 > 0:25:31# I can feel it all... #

0:25:49 > 0:25:51Well, this house is dressed to impress

0:25:51 > 0:25:53and the result is certainly sleek.

0:25:56 > 0:25:59In the basement, the kitchen is high spec.

0:26:03 > 0:26:07And there is a handy downstairs loo with a laundry room next door.

0:26:15 > 0:26:20On the ground floor, the sitting room is spacious and light.

0:26:21 > 0:26:24Carry on up to the next floor in this tall house

0:26:24 > 0:26:26and there are two good-sized bedrooms.

0:26:33 > 0:26:36And if you've got the puff to get to the top floor,

0:26:36 > 0:26:38there's a large master suite...with an en-suite.

0:26:40 > 0:26:43# I can feel it all

0:26:44 > 0:26:47# All I said is true, I can feel Can you feel it too...? #

0:26:47 > 0:26:50Time for Mark and Johnny to tell us the story of how they

0:26:50 > 0:26:55transformed this site from derelict buildings to desirable homes.

0:26:55 > 0:26:58We were allowed four-bed houses, but we went back to planning,

0:26:58 > 0:27:01even though we were granted four beds, and changed it to three.

0:27:01 > 0:27:06Now, some people might say, "That's mad, you'll get more money," but...

0:27:06 > 0:27:08The houses are over four storeys.

0:27:08 > 0:27:10I prefer to give people bigger rooms,

0:27:10 > 0:27:12more spacious accommodation and...

0:27:14 > 0:27:16..much more for their money.

0:27:16 > 0:27:18I think, the last time we met,

0:27:18 > 0:27:22my timber frame structure had just gone up, so we've closed

0:27:22 > 0:27:27the building up, weathered it, windows came in, that got us inside.

0:27:27 > 0:27:31And then from there, we've gone through our dry lining processes,

0:27:31 > 0:27:35first fixed plumbing, electrics, dry lining and then finishing.

0:27:35 > 0:27:38The rest of the houses are falling well behind,

0:27:38 > 0:27:40so it's on the schedule, so this is plot one, plot two,

0:27:40 > 0:27:44plot three, plot four I've finished, with carpets, plot five and six,

0:27:44 > 0:27:48carpets this week, plot seven, just some snagging

0:27:48 > 0:27:50and carpets will be going in by the end of the week.

0:27:52 > 0:27:55So, not much left to do before the houses are ready to sell,

0:27:55 > 0:27:58but this project has not been without its challenges.

0:28:01 > 0:28:04We had a couple of issues externally.

0:28:04 > 0:28:06We did have problems with services here.

0:28:06 > 0:28:10Remember this was an MOT station years ago,

0:28:10 > 0:28:13so therefore there was toxic in the ground.

0:28:13 > 0:28:17So, we came across some old arched cellars in the ground

0:28:17 > 0:28:21which are still active and in use by neighbouring properties.

0:28:21 > 0:28:23So, we had to deal with that.

0:28:23 > 0:28:26So, therefore, there was an extra cost of £72,000 on top

0:28:26 > 0:28:31of the £30,000 already paid to do the job in the first place.

0:28:31 > 0:28:34You can never have enough rainy day money in developing.

0:28:34 > 0:28:38Always stick it to one side. Forget about it.

0:28:40 > 0:28:41Good advice, Mark,

0:28:41 > 0:28:44but having to redo ground works has been a contributing factor

0:28:44 > 0:28:50of the budget rising from 2.1 million to £2.7 million.

0:28:50 > 0:28:53Another reason has been the high-end finish.

0:28:54 > 0:28:59What's more important for me when developing is not just the money.

0:28:59 > 0:29:01It's the creation.

0:29:01 > 0:29:04It's what I can do, what I can see, cos I'm proud of what I do.

0:29:04 > 0:29:09Mark's got a vision as to how he feels we should present ourselves,

0:29:09 > 0:29:12which works every time.

0:29:12 > 0:29:14He's absolutely incredible at it.

0:29:14 > 0:29:18Yeah, I've tried to decorate the house pretty much old school

0:29:18 > 0:29:20and then with modern furniture,

0:29:20 > 0:29:23so it's kind of, the word is fusion that we're looking for.

0:29:23 > 0:29:25If I've fused the old with the new,

0:29:25 > 0:29:31where you've got your original style rads, your timber-sashed windows,

0:29:31 > 0:29:35your oak-polished wood flooring, so I buy all reclaimed material.

0:29:35 > 0:29:40I have everything checked to BCSA standards and I fit it all.

0:29:40 > 0:29:44He's very good at picking an area,

0:29:44 > 0:29:46working out what works in that area.

0:29:46 > 0:29:50Spends a lot of time on the research, even on external finishes.

0:29:50 > 0:29:52I go around everything, I look at the drawings

0:29:52 > 0:29:56and everything is done on impulse, just there and then.

0:29:56 > 0:30:00I can just see what I want, urban inside, urban outside.

0:30:02 > 0:30:04This project has been very tough,

0:30:04 > 0:30:07even for experienced developers like Mark and Johnny.

0:30:07 > 0:30:10But has their friendship survived it?

0:30:12 > 0:30:15Me and the Johnny are brothers.

0:30:15 > 0:30:16Not bonded by blood brothers,

0:30:16 > 0:30:18but we're brothers.

0:30:18 > 0:30:20We love each other to bits

0:30:20 > 0:30:24and we get to see each other as often as we can.

0:30:24 > 0:30:26We work closely together.

0:30:26 > 0:30:32We're very different in terms of our personalities, but it works.

0:30:32 > 0:30:36We've earned that together, we trust each other, we're very loyal,

0:30:36 > 0:30:38and no matter what mistakes he does,

0:30:38 > 0:30:40and he does do them, he's forgiven,

0:30:40 > 0:30:44because he stuck with me, and I can't forget that.

0:30:46 > 0:30:48Time to get the popcorn out for the valuations

0:30:48 > 0:30:50on these show-stopping houses.

0:30:50 > 0:30:54What do two local estate agents think the houses could be worth,

0:30:54 > 0:30:59and will it stack up against the boys' total spend of £4.15 million?

0:31:02 > 0:31:04I think the three-bedroom houses here could sell

0:31:04 > 0:31:07for anywhere between £900,000 and £1 million.

0:31:07 > 0:31:10And the two-bedroom house probably going for a range

0:31:10 > 0:31:14between £750,000 to £800,000.

0:31:14 > 0:31:16Well, there's one two-bedroom house

0:31:16 > 0:31:20which we'd expect to achieve in the region of £800,000.

0:31:20 > 0:31:24The three-bedroom houses vary in terms of size, and we would

0:31:24 > 0:31:31expect to achieve somewhere within the region of £1.1 to £1.2 million.

0:31:31 > 0:31:33We have our values in mind, and what the agents have said

0:31:33 > 0:31:36is pretty much bang on with what we thought.

0:31:38 > 0:31:43The agents' top values give a total resale figure of £8 million,

0:31:43 > 0:31:48meaning a potential pre-tax profit of £3.85 million.

0:31:48 > 0:31:50A successful project for the two.

0:31:50 > 0:31:53So what makes them such a good team?

0:31:58 > 0:31:59Yeah, we're both grafters.

0:31:59 > 0:32:02We both get our head down, get our teeth into something

0:32:02 > 0:32:05and I love getting out of bed every day.

0:32:05 > 0:32:06He's lovely.

0:32:06 > 0:32:08He's gorgeous, isn't he, our Johnny?

0:32:08 > 0:32:10I couldn't live a day without him.

0:32:25 > 0:32:28Yeah, everyone loves Crewe in Cheshire, and it's long been known

0:32:28 > 0:32:31as a town of major manufacturing,

0:32:31 > 0:32:34from railway locomotives to cars.

0:32:34 > 0:32:37But I want to show you another little-known part

0:32:37 > 0:32:39of its industrial heritage.

0:32:39 > 0:32:42Now, this may look like an ordinary brick wall

0:32:42 > 0:32:43at the side of a building,

0:32:43 > 0:32:46but there are some faint markings

0:32:46 > 0:32:52which give away a really interesting bit of its historical past.

0:32:52 > 0:32:54In the Second World War, there was a factory on the other side

0:32:54 > 0:32:57of the wall that made ammunition.

0:32:57 > 0:33:01And, in order to disguise the building from overhead bombers,

0:33:01 > 0:33:04they actually painted houses

0:33:04 > 0:33:08on this wall to make it look like it was a normal street of houses.

0:33:11 > 0:33:17I don't know about you, but I prefer my houses in three dimensions and not painted on.

0:33:17 > 0:33:20Time to move on to a more modern style of construction.

0:33:22 > 0:33:23Well, coming bang up to date,

0:33:23 > 0:33:28lots going on in Crewe in terms of regeneration and investment,

0:33:28 > 0:33:32which potentially makes it a really interesting place to buy property.

0:33:32 > 0:33:33Which is just as well,

0:33:33 > 0:33:36because I'm here to look at one that was at the auction.

0:33:36 > 0:33:38It's a two-bed mid-terrace.

0:33:38 > 0:33:39Let's have a look.

0:33:41 > 0:33:44Guide price on this one - £65,000.

0:33:44 > 0:33:48Some nice features on the outside, but what's it like inside?

0:33:49 > 0:33:51OK, so what have we got?

0:33:51 > 0:33:55Nice, sort of, light, bright entrance hall, which is always good.

0:33:55 > 0:33:58Nice bit of plasterwork up there. Quite ornate, which is also good.

0:33:58 > 0:34:01Couple of obvious things, you've got central heating.

0:34:01 > 0:34:02Again, it's all looking very positive.

0:34:02 > 0:34:05You've got your stairs up to your bedrooms there

0:34:05 > 0:34:07and then through into what is a very traditional layout, isn't it?

0:34:07 > 0:34:09This front living room area here,

0:34:09 > 0:34:11and then an archway leading through

0:34:11 > 0:34:14to a rear, sort of, living area here.

0:34:14 > 0:34:16It's a very, very usable space.

0:34:16 > 0:34:19One big room, I think, is better than lots of little ones.

0:34:19 > 0:34:21So that gets a big tick.

0:34:21 > 0:34:24As you travel through the property, you come to the kitchen.

0:34:24 > 0:34:27Well, it's not huge, but then the house isn't massive,

0:34:27 > 0:34:30so I think you'd just about get away with it.

0:34:30 > 0:34:32Boiler looks like it's very dated,

0:34:32 > 0:34:37so maybe that's needs a good servicing or looking at for sure.

0:34:37 > 0:34:40Units, serviceable possibly, but I think, for the cost,

0:34:40 > 0:34:42I would look at replacing them,

0:34:42 > 0:34:44because you'd definitely sparkle everything up.

0:34:44 > 0:34:46And then, at the back here, you've got a loo,

0:34:46 > 0:34:48very low ceiling height.

0:34:48 > 0:34:50A bit of a utility area. It's all useful stuff.

0:34:50 > 0:34:53And, as a starting point, yeah, it's looking good.

0:34:56 > 0:34:59The layout works, and it's in pretty good nick.

0:34:59 > 0:35:03My only thoughts beyond general modernisation would be

0:35:03 > 0:35:06to raise the roof in the utility area.

0:35:06 > 0:35:10That way you can get more cupboards or tall appliances in.

0:35:13 > 0:35:17So upstairs, and good decorative order continues,

0:35:17 > 0:35:18and again nice-sized rooms.

0:35:18 > 0:35:20Big double bedroom at the front there.

0:35:20 > 0:35:22Good-sized second bedroom there,

0:35:22 > 0:35:24and then, final bonus...

0:35:26 > 0:35:30..a brilliant family bathroom. Big enough for a shower and a bath.

0:35:30 > 0:35:33You know, it's all set up, isn't it? Brilliant.

0:35:33 > 0:35:36It's all good inside.

0:35:36 > 0:35:38Very little to do beyond the superficial.

0:35:38 > 0:35:42Outside, cosmetic issues can be cured with a bit of weedkiller.

0:35:43 > 0:35:46With the kitchen being on the small side,

0:35:46 > 0:35:49you could extend out back under permitted development.

0:35:49 > 0:35:53But with the house being in good condition, perhaps a spruce up

0:35:53 > 0:35:56and then renting it out would be the most profitable option.

0:35:56 > 0:35:59Time to ask the thoughts of a local estate agent.

0:35:59 > 0:36:02What does he think this property requires?

0:36:02 > 0:36:04I don't think it needs masses of work done to the property.

0:36:04 > 0:36:07I think definitely it needs a new kitchen.

0:36:07 > 0:36:09I think the bathroom would need tidying up a little bit.

0:36:09 > 0:36:12Certainly it needs refreshing up, decorating

0:36:12 > 0:36:14and maybe some new flooring and carpets.

0:36:14 > 0:36:17We'd be looking to spend around £5,000 to get this

0:36:17 > 0:36:19to a rentable condition.

0:36:19 > 0:36:21So get it near the guide price

0:36:21 > 0:36:24and you could be looking at a total £70,000 outlay.

0:36:24 > 0:36:28If it was in rentable standard, what could it command on the open market?

0:36:28 > 0:36:30For rental purposes, we'd be looking

0:36:30 > 0:36:36£485 per calendar month to £525 per calendar month.

0:36:36 > 0:36:39And what about sales?

0:36:39 > 0:36:42If the property was refurbished to a really nice standard,

0:36:42 > 0:36:44we'd be looking around £90,000.

0:36:50 > 0:36:54Well, there really is nothing to fault with this property, is there?

0:36:54 > 0:36:57Great guide price in an area where it's definitely on the up.

0:36:57 > 0:36:59And it's in good order.

0:36:59 > 0:37:02Let's see who snapped it up when it went under the hammer.

0:37:06 > 0:37:08Lot 22 has been withdrawn.

0:37:08 > 0:37:11Lot 23. We now go to Crewe, Cheshire.

0:37:12 > 0:37:1460 bid. Thank you.

0:37:14 > 0:37:16At £60,000. Going once.

0:37:16 > 0:37:1761.

0:37:17 > 0:37:1862.

0:37:18 > 0:37:1963.

0:37:19 > 0:37:2064.

0:37:20 > 0:37:2265.

0:37:22 > 0:37:25At £65,000, then. Are we all done?

0:37:26 > 0:37:28Got you at 66.

0:37:28 > 0:37:3067.

0:37:30 > 0:37:3268.

0:37:32 > 0:37:33Got you.

0:37:33 > 0:37:3469.

0:37:34 > 0:37:3670, sir?

0:37:36 > 0:37:38No. At 69. To my left then at 69.

0:37:38 > 0:37:4070 anywhere else now?

0:37:40 > 0:37:42If not, I'm selling it at £69,000.

0:37:42 > 0:37:44For the first time.

0:37:44 > 0:37:47£69,000 for the second time.

0:37:47 > 0:37:50Third and time at £69,000.

0:37:50 > 0:37:52You've bought it, sir. Well done.

0:37:53 > 0:37:58A pat on the back for Phil from his business partner Anthony.

0:37:58 > 0:38:01They've secured the property for £69,000.

0:38:01 > 0:38:04Their wives, both called Emma, were childhood friends,

0:38:04 > 0:38:09and introduced the two, sparking this property development business.

0:38:09 > 0:38:13But what do they have planned for their new acquisition?

0:38:15 > 0:38:18Anthony, Phil, good to see you. Congratulations.

0:38:18 > 0:38:20Tell me why you wanted to buy this place.

0:38:20 > 0:38:22Yeah, so this place is ideally located

0:38:22 > 0:38:24to one of the major employers of the town,

0:38:24 > 0:38:27and we have great demand for tenants in this area.

0:38:27 > 0:38:31So, on behalf of an investor, we're sourcing the property,

0:38:31 > 0:38:34refurbing in the property, and letting it for them.

0:38:34 > 0:38:37We love the proportions of this house,

0:38:37 > 0:38:40so, although it's only a two-bed property as it stands at the moment,

0:38:40 > 0:38:43we're going to look to turn it into a four-bed shared house.

0:38:43 > 0:38:46Oh, great. So how are you going to get four bedrooms in here, then?

0:38:46 > 0:38:49Yeah, I guess, in terms of rooms, we need to separate the two downstairs

0:38:49 > 0:38:52reception rooms and create a separate entrance to the front one.

0:38:52 > 0:38:54The kitchen doesn't need too much work,

0:38:54 > 0:38:58other than a bit of updating and some appliances in there.

0:38:58 > 0:39:02There's currently a downstairs toilet-cum-utility room,

0:39:02 > 0:39:04so we're going to turn that into a wet room.

0:39:04 > 0:39:07Quite a low height in that room at the moment. What are you going to do about that?

0:39:07 > 0:39:09We're going to turn it into a wet room rather than

0:39:09 > 0:39:11a traditional shower, so we don't have to incorporate

0:39:11 > 0:39:14the shower tray, and we'll excavate the floor out slightly,

0:39:14 > 0:39:18- so that will just give us that little bit more headroom to fit a shower room in there.- Brilliant.

0:39:18 > 0:39:22And then upstairs, really, it's carpets and decor

0:39:22 > 0:39:25and really just a bit of updating to the house.

0:39:25 > 0:39:28Is it going to be corridors and partitions?

0:39:28 > 0:39:32Yeah, we're going to put a corridor in here to split this back reception room.

0:39:32 > 0:39:34This will become a bedroom and this will be a walk-through there

0:39:34 > 0:39:38- for the kitchen, and the shower room at the end of the house.- Wow.

0:39:38 > 0:39:43So what kind of planning permission is required for doing what you're suggesting?

0:39:43 > 0:39:46So, in terms of what we're doing, because it's classed as a small HMO,

0:39:46 > 0:39:49it doesn't need to go through full planning in that sense.

0:39:49 > 0:39:51It needs to go through building regs

0:39:51 > 0:39:54and we then also work closely with the housing standards

0:39:54 > 0:39:57from the local council, in terms of making sure we're

0:39:57 > 0:40:01meeting all their regulations from an HMO perspective.

0:40:01 > 0:40:03So, even though it isn't a licensable HMO,

0:40:03 > 0:40:06- you're treating it as if it is an HMO?- That's right, yeah.

0:40:06 > 0:40:10This HMO route, then - is that something you're finding is successful?

0:40:10 > 0:40:14Yeah, there seems to be a lot of demand in the area for this.

0:40:14 > 0:40:19People looking to rent a room, know exactly the cost of all their bills.

0:40:19 > 0:40:20So we fix that for them...

0:40:20 > 0:40:22So you do an all-inclusive rate?

0:40:22 > 0:40:24All-inclusive rate. That's right, yeah.

0:40:24 > 0:40:27So what kind of price would you get for an average, sort of,

0:40:27 > 0:40:29room in one of your conversions?

0:40:29 > 0:40:32- So anywhere between £350 and £400. - Wow.- Yeah, typically.

0:40:32 > 0:40:35If it's ensuited, then we can perhaps achieve a little bit more,

0:40:35 > 0:40:39but, in this particular property, we're looking at close to £400,

0:40:39 > 0:40:42because of its location to a major car manufacturer in the town.

0:40:42 > 0:40:45I'm just trying to get my head round the economies of that.

0:40:45 > 0:40:49Because £350-£400, surely you could get, like, a little terrace and rent that out,

0:40:49 > 0:40:52if you were a renting person, for about the same amount?

0:40:52 > 0:40:55So why would somebody pay such a high amount just for a room?

0:40:55 > 0:40:58I think the challenge that people find is it's not just the rent,

0:40:58 > 0:41:01it's once you've added all the bills and utilities and outgoings

0:41:01 > 0:41:04on top of that, it tends to double the price

0:41:04 > 0:41:08by the time you've paid council tax and your utilities.

0:41:08 > 0:41:11So people like the idea of just being able to have that

0:41:11 > 0:41:14- one outgoing a month, and know everything is covered.- Right.

0:41:14 > 0:41:19One way that HMOs are used obviously is for either lower income or students.

0:41:19 > 0:41:22You've taken a slightly different approach to that.

0:41:22 > 0:41:25Yeah, I mean, we certainly do offer up HMOs to students,

0:41:25 > 0:41:29but with this particular property, it's going to be for professionals,

0:41:29 > 0:41:34blue-collar workers, white-collar workers in the local area.

0:41:34 > 0:41:37I think Phil and Anthony are onto a winner with this style of HMO.

0:41:37 > 0:41:41They don't require a licence, as HMO permits are only mandatory

0:41:41 > 0:41:46for properties with three stories or five or more occupants.

0:41:46 > 0:41:51And they think a budget of £6-£8,000 will be required to convert it.

0:41:51 > 0:41:57Well, that means four rooms renting at £400 per calendar month

0:41:57 > 0:42:03could net their investor a pretty brilliant 24% yield.

0:42:03 > 0:42:06With numbers like that you've got to ask the question...

0:42:06 > 0:42:09Why don't more people convert these kind of houses into lettable rooms, then?

0:42:09 > 0:42:13What's the downside? Because there must be one, otherwise everyone would do it.

0:42:13 > 0:42:14Yeah, there's more work required.

0:42:14 > 0:42:17You've got separate contracts for each tenant,

0:42:17 > 0:42:19more turnover of tenants as well,

0:42:19 > 0:42:23there's more voids to manage, to reduce,

0:42:23 > 0:42:26and so there's more risk and work required.

0:42:26 > 0:42:33I think, for the average by-to-let single-let investor, it's more...

0:42:33 > 0:42:36- There's certainly a lot more work involved.- Right.

0:42:36 > 0:42:41- But the potential returns are surely worth it?- Absolutely.

0:42:41 > 0:42:44I think, if you've got the right systems in place, then that

0:42:44 > 0:42:47management doesn't need to be too much of an overhead, but certainly,

0:42:47 > 0:42:50- that is the perception, I think, from an investor point of view. - Right.

0:42:52 > 0:42:55Phil and Anthony plan to turn this around in six weeks,

0:42:55 > 0:42:59and their usual team of contractors will be handling the renovation.

0:42:59 > 0:43:03- Do you two get your hands dirty or are you...?- We used to.

0:43:03 > 0:43:05Oh, you used to? Is that what you tell people, is it?

0:43:05 > 0:43:07THEY LAUGH

0:43:07 > 0:43:10We figured we'd try at least every job once, you know?

0:43:10 > 0:43:13- At least then we know how painful it is.- Yeah, and how much they're paying for it.

0:43:13 > 0:43:15- But now you get other people to do it?- That's right, yeah.

0:43:15 > 0:43:17Your time is more precious to do other things.

0:43:17 > 0:43:20Absolutely, we can do more projects with more people doing work for us.

0:43:20 > 0:43:22Well, listen, congratulations.

0:43:22 > 0:43:26- Good luck with it.- Thank you. - I look forward to seeing how you get on.- Thank you.

0:43:26 > 0:43:31So Anthony and Phil following a very well thought through strategy

0:43:31 > 0:43:34in terms of their property investment,

0:43:34 > 0:43:38and, potentially, it could pay big dividends.

0:43:38 > 0:43:42You can find out how they got on sorting this property out later in the show.

0:43:45 > 0:43:48So that's one property owner who's ready to move on.

0:43:48 > 0:43:50Yes, but what about the other two?

0:43:50 > 0:43:52Can they see the light at the end of the tunnel?

0:43:52 > 0:43:54Let's find out.

0:43:59 > 0:44:01Early in the show, I was in Nelson, Lancashire,

0:44:01 > 0:44:04to see a two-bedroom ex-local authority house,

0:44:04 > 0:44:06guided at £30,000 plus.

0:44:06 > 0:44:10And I thought it had the potential to become a lovely family home

0:44:10 > 0:44:12by dividing this bedroom to make it a three-bed,

0:44:12 > 0:44:15and undividing... Is that a word?

0:44:15 > 0:44:17..the kitchen and dining room.

0:44:19 > 0:44:23What it does scream out to me is taking this wall out.

0:44:23 > 0:44:26Now, it is a load-bearing wall, so you would need some support -

0:44:26 > 0:44:28a supporting beam up there -

0:44:28 > 0:44:31but it's perfect to go from kitchen to diner,

0:44:31 > 0:44:33a bit of the family area.

0:44:33 > 0:44:36Instead of these two small rooms, having one big room,

0:44:36 > 0:44:39so all the family can share a nice, big family space.

0:44:42 > 0:44:45Waj, here on the right, and his business partner, Abid,

0:44:45 > 0:44:47agreed with me.

0:44:47 > 0:44:49They planned to make a kitchen-diner,

0:44:49 > 0:44:51and were considering a third bedroom

0:44:51 > 0:44:54at their new £35,000 purchase.

0:44:54 > 0:44:55Walls would be coming down,

0:44:55 > 0:44:58but there was one bond that wouldn't break.

0:45:00 > 0:45:02We've known each other for well over 30 years.

0:45:02 > 0:45:04We went to primary school together.

0:45:04 > 0:45:06That's a long-term relationship.

0:45:06 > 0:45:0830 years as mates, now business partners.

0:45:08 > 0:45:10Business partners, exactly, yeah.

0:45:10 > 0:45:12- Even though I still look 21, but you know.- Yes.

0:45:12 > 0:45:16I didn't want to mention it, not in front of Waj anyway!

0:45:21 > 0:45:25There you have it. The fountain of youth is apparently in Lancashire.

0:45:25 > 0:45:26I'm moving.

0:45:26 > 0:45:30But six months on, have the boys rolled back the years on this property?

0:45:30 > 0:45:33And have those walls in the bedroom been built

0:45:33 > 0:45:35and those in the kitchen been knocked down?

0:46:06 > 0:46:09The lads have knocked down the walls for the kitchen-diner,

0:46:09 > 0:46:12but opted to keep it as a two-bed upstairs.

0:46:13 > 0:46:15That involved a bit too much work,

0:46:15 > 0:46:18and the timescale that we had, I thought, you know what?

0:46:18 > 0:46:22It's best if we just renovate the house the best as we can,

0:46:22 > 0:46:24really, and just get on with it.

0:46:24 > 0:46:27Yeah, because we had a tenant waiting as well

0:46:27 > 0:46:29and they were happy with two bedrooms.

0:46:29 > 0:46:32The time implications and the cost implications we had to think about,

0:46:32 > 0:46:35so it was just financially viable just to stick with two.

0:46:38 > 0:46:41It's good to hear they've met their tenants needs,

0:46:41 > 0:46:46but the kitchen-diner is the real star selling point in this property.

0:46:46 > 0:46:48When we bought this house originally, there was two rooms,

0:46:48 > 0:46:50the kitchen on the side,

0:46:50 > 0:46:55and there was a room here with a wall where I'm stood, with a doorway.

0:46:55 > 0:46:58What we've done is take this wall down,

0:46:58 > 0:47:01and because it was a supporting wall,

0:47:01 > 0:47:07what we've done is put a high-spec kitchen in, which the tenant loves.

0:47:07 > 0:47:09I loved the job, because it was brilliant.

0:47:09 > 0:47:11I had to manage the builders,

0:47:11 > 0:47:15make sure they done it to my specifications.

0:47:15 > 0:47:17We've added spotlights as well.

0:47:17 > 0:47:21It just makes the room spacious and a family-friendly room.

0:47:24 > 0:47:27Elsewhere, they've sorted the damp in the living room

0:47:27 > 0:47:31and decorated, while upstairs, there's a brand-new bathroom

0:47:31 > 0:47:33and no more green tiles, thankfully!

0:47:35 > 0:47:38The bedrooms have also had tiles stripped out

0:47:38 > 0:47:40of the dangerous polystyrene variety.

0:47:42 > 0:47:45In the back garden, the lads haven't quite finished,

0:47:45 > 0:47:47but it's ready to be landscaped.

0:47:48 > 0:47:53With a high standard throughout, that list of work came at a cost.

0:47:53 > 0:47:56Originally, we were thinking of spending 87,000,

0:47:56 > 0:48:00but we went slightly over, £12,000, which we've spent so far.

0:48:00 > 0:48:06Going to add a bit more to that with the gardens, probably £1,000 more.

0:48:06 > 0:48:08They've had another property to develop at the same time,

0:48:08 > 0:48:10but they've managed to pull this off

0:48:10 > 0:48:12bang on their timescale of six months,

0:48:12 > 0:48:15with Waj coordinating most of the work.

0:48:15 > 0:48:17So, still mates, guys?

0:48:19 > 0:48:22Nothing can come between our friendship, no matter what it is.

0:48:22 > 0:48:25We're brothers. We're actually more than brothers.

0:48:25 > 0:48:27We've been through ups and downs through our lives, you know, from

0:48:27 > 0:48:31family to business, this, that, the other, and we're still here today.

0:48:31 > 0:48:33And I think that's a blessing from God.

0:48:33 > 0:48:35He used to bully me when I was little.

0:48:37 > 0:48:40I think that's the sound of a can of worms being opened.

0:48:40 > 0:48:43We'll just let Abid and Waj settle their childhood differences

0:48:43 > 0:48:46like grown-ups while we ask two local estate agents

0:48:46 > 0:48:48what they think of the property,

0:48:48 > 0:48:51starting with the agent who saw it before the renovation.

0:48:53 > 0:48:56Obviously, as we can see, it's a very nice conversion.

0:48:56 > 0:48:59It's been fully modernised, fit for a family.

0:48:59 > 0:49:00Very nice layout downstairs.

0:49:00 > 0:49:04Maximum use of the space available, perfect for modern living standards,

0:49:04 > 0:49:09modern family, open-plan kitchen, breakfast area, brilliant.

0:49:09 > 0:49:11Well, the first impressions of the property are good.

0:49:11 > 0:49:13It gives you a natural feeling

0:49:13 > 0:49:17when you come inside and it's a good family home.

0:49:17 > 0:49:18The layout is really good.

0:49:18 > 0:49:21As you walk in, you know that it's got a good kitchen size,

0:49:21 > 0:49:24it's got a little dining area around the corner of the kitchen,

0:49:24 > 0:49:27which gives it a very big selling point.

0:49:29 > 0:49:30When all is said and done,

0:49:30 > 0:49:35Abid and Waj have spent a total of 48 grand.

0:49:35 > 0:49:40They're currently renting at just over £525 per calendar month,

0:49:40 > 0:49:43giving them just over a 13% yield.

0:49:43 > 0:49:46But could they make more by selling the property?

0:49:48 > 0:49:51I would value this property at £65,000.

0:49:51 > 0:49:56Sale valuation on this property would be between 60 and £75,000.

0:49:56 > 0:49:59That's absolutely, that's actually pretty awesome.

0:49:59 > 0:50:01Really pleased with that, actually, yeah.

0:50:04 > 0:50:07That top valuation of £75,000 would give them

0:50:07 > 0:50:11a pre-tax profit of 27 grand, but they're planning to hold on

0:50:11 > 0:50:15to the property for the time being and seeing if the market rises.

0:50:15 > 0:50:17Abid was away for most of the project,

0:50:17 > 0:50:20leaving it in the capable hands of Waj.

0:50:20 > 0:50:22So does he think his bezzie mate

0:50:22 > 0:50:24and business partner has done a good job?

0:50:28 > 0:50:30It was a job well done.

0:50:30 > 0:50:33Waj handled most of it, basically getting the builders in,

0:50:33 > 0:50:34getting everything sorted.

0:50:34 > 0:50:37I was busy doing other work,

0:50:37 > 0:50:39but it was a job well done and he's done it.

0:50:39 > 0:50:42- Really proud of him. - Can I have a pat on the back?

0:50:42 > 0:50:43THUD!

0:50:43 > 0:50:45There you go, mate.

0:50:50 > 0:50:54Earlier on in the show, I was in Crewe in Cheshire

0:50:54 > 0:50:58to see a two-bed, mid-terrace guided at £65,000.

0:50:59 > 0:51:01And while the decor needed updating,

0:51:01 > 0:51:06the layout downstairs was spacious, with one big reception room.

0:51:07 > 0:51:10There were ideal facilities with a reasonable kitchen,

0:51:10 > 0:51:12downstairs toilet,

0:51:12 > 0:51:15and a generous-sized upstairs bathroom.

0:51:16 > 0:51:21This house was situated near one of the town's largest employers.

0:51:21 > 0:51:24You know, it's all set up, isn't it? Brilliant.

0:51:24 > 0:51:28'And it added up enough for property developers Phil,

0:51:28 > 0:51:32'here on the right, and Anthony to pay £69,000 at auction,

0:51:32 > 0:51:36'but they plan to add something else - extra bedrooms.'

0:51:38 > 0:51:41On behalf of an investor, we are sourcing the property,

0:51:41 > 0:51:44refurbing the property and letting it for them.

0:51:44 > 0:51:46We love the proportions of this house,

0:51:46 > 0:51:49so, although it's only a two-bed property as it stands at the moment,

0:51:49 > 0:51:54we're going to look to turn it into a four-bed, shared house.

0:51:54 > 0:51:57# House of four doors... #

0:51:59 > 0:52:03And this house of four doors - or four bedrooms, rather -

0:52:03 > 0:52:06didn't need an HMO licence, as it was only two storeys

0:52:06 > 0:52:10with less than five occupants, a formula that was producing

0:52:10 > 0:52:13plentiful profits for Phil and Anthony's investors.

0:52:15 > 0:52:18- £350 and £400.- Wow!- Yeah, typically.

0:52:18 > 0:52:19If it's en suited,

0:52:19 > 0:52:22then we can perhaps achieve a little bit more,

0:52:22 > 0:52:25but in this particular property, we're looking at close to £400,

0:52:25 > 0:52:29because of its location to a major car manufacturer in the town.

0:52:31 > 0:52:34It's now two months on and I'm eager to see

0:52:34 > 0:52:37if the duo have turned this two-bedder into a four.

0:52:41 > 0:52:45# Four to the floor, I was sure

0:52:45 > 0:52:48# Never seeing clear

0:52:50 > 0:52:54# I could have it all... #

0:52:54 > 0:52:57Oh, yes, they've got it all, with four on two floors here.

0:52:59 > 0:53:03The standard of finish is above your usual HMO as they were

0:53:03 > 0:53:05targeting professionals.

0:53:05 > 0:53:08It took them one week over their six-week timescale,

0:53:08 > 0:53:11but again, there were a few difficulties along the way.

0:53:11 > 0:53:15So we started with ripping out the necessary parts of the property.

0:53:15 > 0:53:18We discovered that the kitchen carcasses

0:53:18 > 0:53:21weren't suitable, so we took those out the property.

0:53:21 > 0:53:23We were originally just hoping to keep the kitchen carcasses

0:53:23 > 0:53:26and put a new worktop on, but as we took out the old worktop,

0:53:26 > 0:53:29we found a damp issue behind one corner,

0:53:29 > 0:53:32so it made sense, really, to remove the carcasses.

0:53:32 > 0:53:36We treated the damp before we put a brand-new kitchen in.

0:53:36 > 0:53:38With the kitchen replaced, they could crack on

0:53:38 > 0:53:40with making this HMO-ready.

0:53:42 > 0:53:44We then went through to the wet room,

0:53:44 > 0:53:46what is the wet room now, didn't we?

0:53:46 > 0:53:47- Yeah.- And excavated.

0:53:47 > 0:53:51Excavated there, put up the various stud walling downstairs

0:53:51 > 0:53:55to partition off the separate rooms, plastered that out,

0:53:55 > 0:53:58full decoration throughout, then, new carpets upstairs,

0:53:58 > 0:54:00laminate flooring downstairs

0:54:00 > 0:54:03and then the wet room was the final piece of the jigsaw,

0:54:03 > 0:54:05really, in terms of finishing of the tiling

0:54:05 > 0:54:08- and getting all the appliances hooked up in there.- Yeah.

0:54:08 > 0:54:12And while this didn't need to be a licensed HMO, Phil and Anthony

0:54:12 > 0:54:16have put in all the safety features a permit would require.

0:54:16 > 0:54:20But has that unexpected kitchen change caused some alarm

0:54:20 > 0:54:23with the budget?

0:54:23 > 0:54:25Our original budget, we were hoping to spend around £8,000.

0:54:25 > 0:54:28We've spent just slightly over that,

0:54:28 > 0:54:31because we had a few extra works that we included.

0:54:31 > 0:54:32We've replaced a few windows,

0:54:32 > 0:54:36so, all in all, the building works will be just under 10,000.

0:54:37 > 0:54:40A little over is OK with that unexpected kitchen change,

0:54:40 > 0:54:42but is their investor happy?

0:54:44 > 0:54:46Yeah, they're really pleased with it. We've got tenants in,

0:54:46 > 0:54:50so they're starting to receive rental income on the property.

0:54:50 > 0:54:52And what kind of income are they getting

0:54:52 > 0:54:55and did they get the professional tenants they wanted?

0:54:56 > 0:54:58So we managed to get the professional tenants

0:54:58 > 0:55:00that we were looking for,

0:55:00 > 0:55:03being close to the major manufacturer in the town.

0:55:03 > 0:55:08We've managed to achieve £390 per month, per room, in this property.

0:55:08 > 0:55:13There's been good demand and we'll certainly have people

0:55:13 > 0:55:16moving in straightaway, so we're looking forward to that, yeah.

0:55:18 > 0:55:22And having spent £79,000 buying and renovating on behalf

0:55:22 > 0:55:27of their investor, that £390 per calendar month, per room, figure

0:55:27 > 0:55:29gives you a total yield of what?

0:55:29 > 0:55:31Dum-de-dum...

0:55:31 > 0:55:35If you said 23%, top of the class for maths.

0:55:35 > 0:55:39But time to ask a school of local estate agents swimming this way

0:55:39 > 0:55:44if this was the right decision, to convert to an HMO.

0:55:44 > 0:55:48Let's start with the agent who saw it before the renovation.

0:55:48 > 0:55:50I think what they've done with the property is very good.

0:55:50 > 0:55:52I wouldn't have, er...

0:55:52 > 0:55:55You know, to maximise income, I think they've done the right thing,

0:55:55 > 0:55:57so I would have probably done the same thing.

0:55:57 > 0:56:00They've pretty much done all they can do to get the amount of bedrooms

0:56:00 > 0:56:02they have out of the property,

0:56:02 > 0:56:05and they are quite spacious and they do work really well.

0:56:05 > 0:56:07My first impression of the property is, it flows really nicely.

0:56:07 > 0:56:09All the rooms have their own individual space,

0:56:09 > 0:56:12nice kitchen area, nice wet room for people to use.

0:56:12 > 0:56:14It's finished to a really high standard, you can see that,

0:56:14 > 0:56:17particularly in the kitchen and the bathroom.

0:56:18 > 0:56:21While this is a long-term investment as an HMO rental,

0:56:21 > 0:56:24what could it fetch on the sales market?

0:56:26 > 0:56:30As an HMO, you're probably looking at around £85 to £90,000

0:56:30 > 0:56:31for the property.

0:56:31 > 0:56:33If it was converted back to a family home,

0:56:33 > 0:56:36you'd probably be looking at around £95,000 for the property.

0:56:36 > 0:56:37As an HMO property,

0:56:37 > 0:56:42it's going to be in the region of £115,000 to £120,000.

0:56:42 > 0:56:43The reason for this,

0:56:43 > 0:56:47it is bringing in quite a considerable income per year,

0:56:47 > 0:56:50so it is, I guess, in a way, a business investment for somebody,

0:56:50 > 0:56:53so because of that, they do tend to fetch more money.

0:56:53 > 0:56:55If it was converted back into a family home,

0:56:55 > 0:57:00you'd be around about the 100 to £105,000.

0:57:00 > 0:57:03Those top figures mean, as a family home,

0:57:03 > 0:57:07they could net a pre-tax profit of 26,000,

0:57:07 > 0:57:10or a profit of 41,000, if sold as an HMO,

0:57:10 > 0:57:13before the usual taxes and expenses.

0:57:16 > 0:57:18Yeah, I mean, that's the sort of valuation that we would expect

0:57:18 > 0:57:20as a regular property.

0:57:20 > 0:57:23Obviously, if you factor in the commercial elements of the HMO,

0:57:23 > 0:57:26then we'd look to probably achieve something higher than that,

0:57:26 > 0:57:29but we're going to hold the property anyway for the investor

0:57:29 > 0:57:33and let it, but it's good for them to know that there's plenty

0:57:33 > 0:57:35of equity in the property now.

0:57:35 > 0:57:38Yeah, they're starting from a profitable position from day one.

0:57:38 > 0:57:43A long-term investment, because 23% yields don't come along very often.

0:57:43 > 0:57:46Will this be a trick the guys repeat in the future?

0:57:48 > 0:57:52- Absolutely, yes, yeah. - More of the same, more of the same.

0:57:52 > 0:57:55- Yeah, we'll keep repeating the model, I think.- Yeah.

0:57:57 > 0:58:01So those were our stories from the auction houses of the UK today.

0:58:01 > 0:58:03But there are many more out there.

0:58:03 > 0:58:06So make sure you join us next time for more Homes Under The Hammer.

0:58:06 > 0:58:07- We'll see you then.- Goodbye.- Bye.