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Hello, and welcome to the show. Now, we have met a lot of people | 0:00:02 | 0:00:04 | |
who've bought at auction over the years, | 0:00:04 | 0:00:06 | |
-with a lot of different reactions. -Oh, yes. | 0:00:06 | 0:00:08 | |
We've gone from pure excitement to absolute sheer terror. | 0:00:08 | 0:00:11 | |
If you're ready for the challenge, | 0:00:11 | 0:00:13 | |
why not think about buying your next home under the hammer? | 0:00:13 | 0:00:15 | |
Now, it's not true that, if you scratch your nose at auction, | 0:00:41 | 0:00:44 | |
you end up buying something. | 0:00:44 | 0:00:46 | |
No. But sometimes, at the packed auctions, | 0:00:46 | 0:00:48 | |
you do have to work to get noticed. | 0:00:48 | 0:00:50 | |
Let's see who caught the auctioneer's attention today. | 0:00:50 | 0:00:52 | |
We revisit a development in Forest Hill, London, | 0:00:54 | 0:00:57 | |
where the numbers were very big indeed. | 0:00:57 | 0:01:00 | |
Sold. £1,450,000. | 0:01:00 | 0:01:03 | |
To make the numbers work in Nelson, Lancashire, | 0:01:03 | 0:01:06 | |
it's the number of rooms that matter. | 0:01:06 | 0:01:08 | |
We've got two bedrooms, two decent-sized bedrooms, | 0:01:08 | 0:01:11 | |
but could you create three? | 0:01:11 | 0:01:13 | |
And, in Crewe, Cheshire, | 0:01:15 | 0:01:16 | |
more rooms and a HMO means even bigger numbers. | 0:01:16 | 0:01:21 | |
-£350,400. -Wow! | 0:01:21 | 0:01:24 | |
All these properties were bought at auction. | 0:01:25 | 0:01:27 | |
We'll find out who got them and how much they paid | 0:01:27 | 0:01:30 | |
-when these homes went under the hammer. -Well done. | 0:01:30 | 0:01:33 | |
Back in 2014, I was in the affluent area | 0:01:38 | 0:01:41 | |
of Forest Hill in South East London | 0:01:41 | 0:01:44 | |
to see an auction lot that was a bit special. | 0:01:44 | 0:01:47 | |
# I can see your mansion on the hill. # | 0:01:47 | 0:01:53 | |
Well, not so much a mansion on the hill, | 0:01:54 | 0:01:57 | |
but a vast plot of garages down this lane. | 0:01:57 | 0:02:00 | |
The guide price? £600,000. | 0:02:00 | 0:02:03 | |
Just have a look at this. Wow! What a plot! | 0:02:05 | 0:02:08 | |
Now, here's a bit of history for you. I know this used to be | 0:02:08 | 0:02:12 | |
the stables to an old coaching inn, back in the early 1800s, | 0:02:12 | 0:02:16 | |
when people were travelling by horse and carriage. | 0:02:16 | 0:02:19 | |
They would stay at the inn and their horses would be | 0:02:19 | 0:02:21 | |
stabled for the night right here. | 0:02:21 | 0:02:25 | |
You can see now it's been used for other things over the years, | 0:02:25 | 0:02:28 | |
from garages, to workshops to offices. | 0:02:28 | 0:02:31 | |
You can see it's rundown | 0:02:31 | 0:02:32 | |
and it's just ready to have some new life breathed into it. | 0:02:32 | 0:02:36 | |
# Breathe life into me | 0:02:37 | 0:02:40 | |
# Breathe life into me, come on | 0:02:40 | 0:02:44 | |
# I've been waiting for so long. # | 0:02:44 | 0:02:46 | |
Well, we might have a lot of history, | 0:02:46 | 0:02:49 | |
but we've also got a lot of problems. | 0:02:49 | 0:02:52 | |
Just have a look at that roof! | 0:02:52 | 0:02:53 | |
Now, the good news is that, although it's in a conservation area, | 0:02:53 | 0:02:57 | |
permission has been granted to pull this whole building down. | 0:02:57 | 0:03:01 | |
And in its place, you could build something spectacular. | 0:03:03 | 0:03:08 | |
Planning permission had been granted for seven two-bed houses, | 0:03:08 | 0:03:12 | |
but it took a bit of imagination to picture all that. | 0:03:12 | 0:03:15 | |
Four two-bed townhouses, all the way along here, with garages underneath, | 0:03:15 | 0:03:22 | |
and along here, | 0:03:22 | 0:03:25 | |
three two-storey two-bedroom houses with assigned parking spaces. | 0:03:25 | 0:03:30 | |
So it'll still pretty much be in this lovely L shape, | 0:03:30 | 0:03:34 | |
set back from the road. | 0:03:34 | 0:03:37 | |
Now, the slight negative for me is the garage that was here is | 0:03:37 | 0:03:41 | |
now just over here and access is along this driveway here. | 0:03:41 | 0:03:46 | |
Lots of cars coming up | 0:03:46 | 0:03:48 | |
and down this road didn't seem ideal for family homes. | 0:03:48 | 0:03:52 | |
Perhaps a bit of re-jigging was needed in the layout, | 0:03:52 | 0:03:55 | |
as parking is always a big selling point in London. | 0:03:55 | 0:03:58 | |
So much so, it seems some car owners | 0:03:58 | 0:04:01 | |
really don't want to give up their spaces. | 0:04:01 | 0:04:05 | |
# Who's gonna drive you home | 0:04:05 | 0:04:08 | |
# Tonight? # | 0:04:08 | 0:04:11 | |
But to have new homes to drive in to, the plot needed a buyer, | 0:04:11 | 0:04:15 | |
so let's head to auction and remind ourselves who bought it. | 0:04:15 | 0:04:19 | |
Fantastic lot, this. | 0:04:19 | 0:04:22 | |
Great, great opportunity for somebody. | 0:04:22 | 0:04:25 | |
Great development opportunity. What a great lot. | 0:04:25 | 0:04:27 | |
Who wants to give me a start on this? | 0:04:27 | 0:04:30 | |
£1 million. Thank you. | 0:04:30 | 0:04:32 | |
That's what I like. Somebody knows the value. £1 million. | 0:04:32 | 0:04:36 | |
So I've got £1 million, straight ahead. | 0:04:36 | 0:04:40 | |
Anybody else? Million ten, yeah? | 0:04:40 | 0:04:42 | |
Million ten. | 0:04:42 | 0:04:43 | |
Million 20. | 0:04:43 | 0:04:45 | |
Well, with the very first bid, the guide price is smashed | 0:04:45 | 0:04:48 | |
and the auction room is buzzing. | 0:04:48 | 0:04:50 | |
We return with the bidding at £1.4 million. | 0:04:50 | 0:04:54 | |
1.4. Four ten. | 0:04:54 | 0:04:56 | |
Four 20. | 0:04:56 | 0:04:58 | |
No? | 0:04:58 | 0:05:00 | |
Back to you, sir. Bid's £1.41 million. | 0:05:00 | 0:05:04 | |
It's against the gentleman on my left by the door. | 0:05:04 | 0:05:07 | |
You bidding? | 0:05:07 | 0:05:08 | |
You back in, yeah? Four 20. | 0:05:08 | 0:05:10 | |
Four 30. | 0:05:10 | 0:05:11 | |
Four 40. | 0:05:11 | 0:05:13 | |
Four 50. | 0:05:13 | 0:05:14 | |
Four 60. | 0:05:14 | 0:05:16 | |
Yes or no? Four 60. | 0:05:16 | 0:05:19 | |
If not, £1.45 million. For the first... | 0:05:19 | 0:05:24 | |
£1.45 million for the second... | 0:05:24 | 0:05:29 | |
£1.45 million for the third and final time... | 0:05:29 | 0:05:35 | |
Are we all done? | 0:05:35 | 0:05:37 | |
-GAVEL BANGS -Sold. £1,450,000. | 0:05:37 | 0:05:40 | |
Well bid. | 0:05:40 | 0:05:42 | |
At £1.45 million, the knockout punch came from Mark, here in the middle, | 0:05:42 | 0:05:48 | |
joined by his son Max at the back of the group. | 0:05:48 | 0:05:52 | |
Mark had been developing property for over 15 years after | 0:05:52 | 0:05:55 | |
a career as a boxer. | 0:05:55 | 0:05:58 | |
# It's all about the things you do | 0:05:58 | 0:06:00 | |
# Boy, you knock me out. # | 0:06:00 | 0:06:02 | |
Every fighter needs a manager in their corner | 0:06:02 | 0:06:05 | |
and Mark had his project manager of seven years, Johnny, | 0:06:05 | 0:06:08 | |
to rely on. | 0:06:08 | 0:06:10 | |
# Boy, you knock me out. # | 0:06:10 | 0:06:12 | |
Whose idea was this? Who's bought this? | 0:06:12 | 0:06:15 | |
Were you happy with the money you paid? | 0:06:15 | 0:06:17 | |
-Mark? -Yeah, um... | 0:06:17 | 0:06:19 | |
Well, the back-story is we just... | 0:06:19 | 0:06:21 | |
We had a site in planning in another location, | 0:06:21 | 0:06:24 | |
over in Crystal Palace, and it got refused, so we was a bit | 0:06:24 | 0:06:27 | |
sort of desperate to go and find something quickly to get work on. | 0:06:27 | 0:06:31 | |
You and Johnny were both there on auction day. | 0:06:31 | 0:06:33 | |
Guys, did you expect to win the bid? | 0:06:33 | 0:06:35 | |
Did you expect to pay what you paid, Johnny? | 0:06:35 | 0:06:38 | |
Yeah, I think Mark went there very focused, had a figure in mind. | 0:06:38 | 0:06:42 | |
I think he knew the value of the potential for development. | 0:06:42 | 0:06:47 | |
And went in there with a bar to set, really. | 0:06:47 | 0:06:51 | |
So, Mark had come out swinging at the auction, but he now | 0:06:51 | 0:06:56 | |
wanted to move the plans for the plot up to the heavyweight division. | 0:06:56 | 0:07:00 | |
It's got planning for seven two-bed houses at the moment, which... | 0:07:02 | 0:07:05 | |
There's a price on it, which is a fair price. | 0:07:05 | 0:07:09 | |
We could do very well out of it. But my gain and my speciality is | 0:07:09 | 0:07:14 | |
-gaining upon planning permission. -Yeah. | 0:07:14 | 0:07:17 | |
So, basically, because plans were given in 2006, | 0:07:17 | 0:07:20 | |
I'd like to look at how I can build upon that, | 0:07:20 | 0:07:23 | |
look at the London guide, see what's changed, look at what's been built | 0:07:23 | 0:07:26 | |
around just recently since then, so when you're thinking about it, whoa, | 0:07:26 | 0:07:30 | |
hang on, we could get another floor on here | 0:07:30 | 0:07:32 | |
and make these four beds, so, when you're looking at two beds, | 0:07:32 | 0:07:35 | |
which would probably be 600 to 650 or something and you're | 0:07:35 | 0:07:38 | |
looking at four beds, you're then talking about £1 million a house. | 0:07:38 | 0:07:41 | |
Sounds fantastic and I'm really excited to see it. | 0:07:41 | 0:07:43 | |
Johnny, how long do you think you're going to be on site for? | 0:07:43 | 0:07:46 | |
-How long is this project going to take? -Too long. | 0:07:46 | 0:07:49 | |
He said that without his mouth moving. | 0:07:49 | 0:07:51 | |
It's estimated at the moment around about 12 months. 11 to 12 months. | 0:07:51 | 0:07:55 | |
And, if you're not clocking in on time, have you got him on your back? | 0:07:55 | 0:07:59 | |
-Yeah. There's... Yeah. -Budget, budget, budget, budget, budget. | 0:07:59 | 0:08:04 | |
-Yeah. -Come on, then. How much is the budget? | 0:08:04 | 0:08:07 | |
The budget on this is about... It will be, depending on what we get... | 0:08:07 | 0:08:10 | |
Now, if we have the two beds built and we get rejected, | 0:08:10 | 0:08:14 | |
there's no way we're going to get even more, we've got a fallback | 0:08:14 | 0:08:17 | |
scheme to build upon, so, upon that, it'll be about 1.5 to 1.6. | 0:08:17 | 0:08:21 | |
If we get the four beds, | 0:08:21 | 0:08:23 | |
it's going to be another half a million pounds on top. | 0:08:23 | 0:08:26 | |
# One, two, three | 0:08:26 | 0:08:28 | |
# She knocked me to my knees | 0:08:28 | 0:08:30 | |
# Three, four, five | 0:08:30 | 0:08:33 | |
# I think I've got to take a dive | 0:08:33 | 0:08:35 | |
# I can't go no longer | 0:08:35 | 0:08:38 | |
# I'm giving up the ring. # | 0:08:38 | 0:08:41 | |
The big numbers of that budget left me a bit punch drunk, but they | 0:08:41 | 0:08:45 | |
were hoping to have it all done in a reasonable timescale of 12 months. | 0:08:45 | 0:08:49 | |
Mark was certainly determined to make this a successful project. | 0:08:49 | 0:08:53 | |
He might have given up the ring, but not the mentality. | 0:08:53 | 0:08:56 | |
I was a boxer at the Fitzroy Lodge when I was growing up | 0:08:58 | 0:09:02 | |
in Lambeth and I boxed there for quite a few years | 0:09:02 | 0:09:05 | |
and won the ABA London Championships. | 0:09:05 | 0:09:08 | |
So I'm anything about boxing. | 0:09:08 | 0:09:11 | |
I've always had that winning determination. | 0:09:11 | 0:09:14 | |
I get knocked down and I get up. So you have to... | 0:09:14 | 0:09:16 | |
You have to keep going and it's true. | 0:09:16 | 0:09:19 | |
No matter through recession or whatever it is, you've | 0:09:19 | 0:09:21 | |
got to keep going. Keeps you focused, good for you. | 0:09:21 | 0:09:25 | |
# I get knocked down but I get up again | 0:09:25 | 0:09:27 | |
# You're never gonna keep me down | 0:09:27 | 0:09:29 | |
# I get knocked down but I get up again | 0:09:29 | 0:09:31 | |
# You're never gonna keep me down. # | 0:09:31 | 0:09:34 | |
11 months on and it seemed nothing could keep Mark and Johnny down, | 0:09:34 | 0:09:38 | |
as they had a frame up, utilities connected | 0:09:38 | 0:09:42 | |
and work was under way in earnest. | 0:09:42 | 0:09:44 | |
Better yet, they had got the change of plans they wanted approved. | 0:09:47 | 0:09:51 | |
# I get knocked down but I get up again | 0:09:51 | 0:09:54 | |
# You're never gonna keep me down | 0:09:54 | 0:09:56 | |
# I get knocked down but I get up again | 0:09:56 | 0:09:59 | |
# You're never gonna keep me down. # | 0:09:59 | 0:10:01 | |
Well, the new plans that we got passed, | 0:10:01 | 0:10:04 | |
in comparison to the original planning consent allowed us | 0:10:04 | 0:10:09 | |
to gain an extra storey on to the whole development. | 0:10:09 | 0:10:13 | |
That extra storey meant they would now have six three-bed houses | 0:10:15 | 0:10:19 | |
and one two-bed. | 0:10:19 | 0:10:20 | |
Mark couldn't film with us due to another project commitment | 0:10:20 | 0:10:24 | |
and things had grown so large here that Johnny had brought | 0:10:24 | 0:10:26 | |
Pat on board to help him manage the site. | 0:10:26 | 0:10:29 | |
And there was a long list of things still to do. | 0:10:29 | 0:10:32 | |
Since we've last seen you, a lot has gone on. | 0:10:35 | 0:10:39 | |
Obviously, you can see the timber frame behind me now. | 0:10:39 | 0:10:44 | |
We've done obviously all of our groundwork, footings, | 0:10:44 | 0:10:47 | |
drainage, run our service ducts, getting everything prepared | 0:10:47 | 0:10:51 | |
for the timber frame to be built on top of the block and beam floor. | 0:10:51 | 0:10:55 | |
Got all of our trades lined up. | 0:10:55 | 0:10:57 | |
Roofers are in next and then all of our internal trades. | 0:10:57 | 0:11:01 | |
We've sort of maximised the development, | 0:11:01 | 0:11:04 | |
still keeping it in context with the surrounding area. | 0:11:04 | 0:11:07 | |
There's some big properties up and around this area and, yeah, | 0:11:07 | 0:11:12 | |
we feel we've got a good result. | 0:11:12 | 0:11:14 | |
They thought another six to seven months would see the project | 0:11:14 | 0:11:17 | |
complete and they were going to a full £2 million on the budget, | 0:11:17 | 0:11:21 | |
meaning a total estimated spend of £3.5 million. | 0:11:21 | 0:11:26 | |
With prices rising in the area, they were confident of a good job | 0:11:26 | 0:11:30 | |
and some profit. | 0:11:30 | 0:11:31 | |
Hopefully, when you come back in five to six months' time, | 0:11:33 | 0:11:36 | |
you should expect to see the development finished, | 0:11:36 | 0:11:39 | |
flowers in the garden, so to speak, and everything all wrapped up. | 0:11:39 | 0:11:44 | |
I'm expecting the houses to look great, really high quality, | 0:11:44 | 0:11:48 | |
to a very high standard finish, which is what we pride ourselves on. | 0:11:48 | 0:11:52 | |
Yeah, I'm expecting them to be a head turner | 0:11:52 | 0:11:55 | |
and people are going to be pleasantly surprised. | 0:11:55 | 0:11:58 | |
And that was back in April of 2015, so, when we came back, | 0:11:58 | 0:12:02 | |
were the houses a head turner, or a bit of a pain in the neck? | 0:12:02 | 0:12:06 | |
You can find out how the guys got on later in the programme. | 0:12:06 | 0:12:10 | |
Nelson in Lancashire is about four miles from Burnley. | 0:12:16 | 0:12:19 | |
Today, it's an ideal commuter town to Preston and Blackburn, | 0:12:19 | 0:12:22 | |
but historically, this former mill town was once steeped | 0:12:22 | 0:12:26 | |
in left wing politics and was nicknamed Little Moscow. | 0:12:26 | 0:12:30 | |
-# Out on my own in the suburbs of Moscow. -# | 0:12:30 | 0:12:35 | |
I've read today's auction catalogue, | 0:12:35 | 0:12:37 | |
but what property am I RUSSIAN here to see? | 0:12:37 | 0:12:40 | |
Many years ago, when important people had meetings and planned out | 0:12:41 | 0:12:45 | |
local authority housing schemes, they sometimes got it right. | 0:12:45 | 0:12:49 | |
This is an example of getting it right. | 0:12:49 | 0:12:51 | |
Houses painted in nice pretty colours and little bits of grass | 0:12:51 | 0:12:55 | |
that give it a homely feel and a nice place to be. | 0:12:55 | 0:12:59 | |
It is a two-bed mid-terrace house with a guide price of £30,000 plus. | 0:12:59 | 0:13:03 | |
Let's go see what you can get for your money. | 0:13:03 | 0:13:05 | |
OK, we're straight into a small hallway, | 0:13:10 | 0:13:13 | |
with the stairs going up to the bedrooms | 0:13:13 | 0:13:16 | |
and, in here, you've got a really decent-sized lounge. | 0:13:16 | 0:13:19 | |
Coming through into the kitchen, | 0:13:20 | 0:13:23 | |
which looks a little bit dated, | 0:13:23 | 0:13:25 | |
hasn't been touched in here for some time. | 0:13:25 | 0:13:27 | |
And you've got a little hatch as well just there. | 0:13:28 | 0:13:30 | |
That's for the lazy person that doesn't want to get up | 0:13:30 | 0:13:33 | |
to collect their tea, you can just pass it through to them. | 0:13:33 | 0:13:35 | |
But you'd do well to salvage anything in here at all. | 0:13:35 | 0:13:38 | |
Through into another bit of space. | 0:13:38 | 0:13:41 | |
And there's no plaster on the walls, just brick. | 0:13:41 | 0:13:43 | |
But what it does scream out to me is taking this wall out. | 0:13:44 | 0:13:49 | |
Now, it is a load-bearing wall, so you would need some support, | 0:13:49 | 0:13:52 | |
a supporting beam up there, but it's perfect to go from | 0:13:52 | 0:13:56 | |
kitchen to diner, a bit of a family area. | 0:13:56 | 0:13:59 | |
Instead of these two small rooms, having one big room, | 0:13:59 | 0:14:02 | |
so all the family can share a nice, big family space. | 0:14:02 | 0:14:05 | |
You know that I'm a fan of a kitchen-diner, | 0:14:08 | 0:14:10 | |
but I also know that supporting beams can be expensive. | 0:14:10 | 0:14:14 | |
However, it would really increase a sense of space | 0:14:14 | 0:14:16 | |
and give you a more flexible layout with your brand-new kitchen. | 0:14:16 | 0:14:19 | |
OK, so, upstairs seems to be a simple layout. | 0:14:25 | 0:14:29 | |
Bathroom in the middle. You've got a decent-sized bedroom here. | 0:14:29 | 0:14:33 | |
And as we go into the bathroom, | 0:14:34 | 0:14:36 | |
it's not a bad size for a family bathroom. | 0:14:36 | 0:14:39 | |
Very dated, nice green tiles. | 0:14:39 | 0:14:41 | |
Pretty much a running theme throughout the whole of the house - | 0:14:41 | 0:14:45 | |
rip it out and start again. | 0:14:45 | 0:14:46 | |
I'm pretty sure that's not a power shower. | 0:14:47 | 0:14:50 | |
So, across the landing into bedroom two... | 0:14:53 | 0:14:56 | |
..which again is a decent size. | 0:14:57 | 0:15:00 | |
I've noticed these polystyrene tiles, | 0:15:00 | 0:15:02 | |
they would have to come out definitely. | 0:15:02 | 0:15:04 | |
Huge fire hazard and here someone's tried to create some storage. | 0:15:04 | 0:15:09 | |
Again you could take that out to make this bedroom even bigger. | 0:15:09 | 0:15:13 | |
We've got two bedrooms, two decent-sized bedrooms, | 0:15:13 | 0:15:16 | |
but could you create three? | 0:15:16 | 0:15:18 | |
Hold that thought for a minute | 0:15:19 | 0:15:21 | |
and I'll show you how you might be able to do that. | 0:15:21 | 0:15:24 | |
I just wanted to come back into this bedroom, | 0:15:25 | 0:15:27 | |
cos I've been thinking, could you create two bedrooms out of this one? | 0:15:27 | 0:15:32 | |
OK, just quickly, | 0:15:32 | 0:15:34 | |
keep that door as it is, pop in a false wall just here. | 0:15:34 | 0:15:39 | |
That'd give you a small bedroom right there. | 0:15:39 | 0:15:42 | |
Put another door just here, just pop a lintel in. | 0:15:42 | 0:15:45 | |
You would have to shave a bit off the family bathroom, | 0:15:45 | 0:15:49 | |
extend the landing across just a little bit. | 0:15:49 | 0:15:52 | |
They would be small, but it's just options. | 0:15:52 | 0:15:55 | |
MUSIC: One, Two, Three by Len Barry | 0:15:57 | 0:16:00 | |
# One, two, three | 0:16:05 | 0:16:06 | |
-# It's easy -It's so easy... # | 0:16:08 | 0:16:12 | |
Or at least it's easier than you think. | 0:16:12 | 0:16:14 | |
Three is the magic number for me here, | 0:16:14 | 0:16:16 | |
because this property feels like it should be a family home, | 0:16:16 | 0:16:20 | |
with a spacious garden out back and several schools in the nearby area. | 0:16:20 | 0:16:24 | |
But like I said, just options. | 0:16:24 | 0:16:26 | |
Can a local estate agent give us any more options to consider? | 0:16:29 | 0:16:32 | |
A little bit of work needed on this property before | 0:16:35 | 0:16:37 | |
you could really move a tenant in. You've got two options, really. | 0:16:37 | 0:16:40 | |
You could go for full refurbishment, new kitchen, new bathroom, rewire, | 0:16:40 | 0:16:44 | |
upgrade the property and it'd be fit for the next ten years or so, | 0:16:44 | 0:16:47 | |
or you could do a light refurbishment | 0:16:47 | 0:16:49 | |
where it would make it fit to live in now, | 0:16:49 | 0:16:51 | |
but you'd probably need to do some further work in a few years' time. | 0:16:51 | 0:16:54 | |
So, if the new buyer or the new owner of this property wanted to do | 0:16:54 | 0:16:58 | |
a light refurbishment, we would expect them to spend around 2 to £3,000. | 0:16:58 | 0:17:03 | |
If they want to do a full refurbishment and modernise the whole property, | 0:17:03 | 0:17:06 | |
then they would probably be looking to spend about 7 or £8,000. | 0:17:06 | 0:17:10 | |
So, get it near that 30 grand guide price | 0:17:13 | 0:17:15 | |
and a full refurb might cost you 38 grand. | 0:17:15 | 0:17:18 | |
The agent thinks, regardless of the number of bedrooms, | 0:17:18 | 0:17:21 | |
it probably has a ceiling price of £45,000 for resale. | 0:17:21 | 0:17:25 | |
Perhaps renting is the right route. | 0:17:25 | 0:17:27 | |
The property was previously rented at £380 per calendar month. | 0:17:31 | 0:17:35 | |
With a light refurbishment, | 0:17:35 | 0:17:36 | |
we would expect a current rent to be around £425 per calendar month. | 0:17:36 | 0:17:41 | |
Whoever does buy this property will find that they'll get | 0:17:41 | 0:17:44 | |
a very attractive yield on the rental income. | 0:17:44 | 0:17:47 | |
By my calculations, get it near the guide price, | 0:17:48 | 0:17:51 | |
do a little refurb, that could be a 15% yield. | 0:17:51 | 0:17:54 | |
That's very interesting. | 0:17:54 | 0:17:56 | |
I've always been a fan of local authority houses. | 0:17:59 | 0:18:01 | |
They remind me of my youth back in Leicester | 0:18:01 | 0:18:04 | |
and they are normally very well built. | 0:18:04 | 0:18:06 | |
Now, this one needs a total overhaul, | 0:18:06 | 0:18:08 | |
but I think, below the surface, | 0:18:08 | 0:18:10 | |
there's a great family home to be had. | 0:18:10 | 0:18:12 | |
Let's see who's seen its potential when it went under the hammer. | 0:18:12 | 0:18:14 | |
Lot 53. Guide's 30. | 0:18:20 | 0:18:23 | |
Two-bed, mid-terraced house, right, anybody here, 30's your guide, good guide. | 0:18:23 | 0:18:28 | |
I have 25 in. | 0:18:28 | 0:18:29 | |
Need a bid. I have 25,000. 25 here. | 0:18:29 | 0:18:32 | |
I have 25. I'm bid now in ones. | 0:18:32 | 0:18:34 | |
-At 25, 26, just here. -27. -Can you? | 0:18:34 | 0:18:38 | |
£26,000. | 0:18:38 | 0:18:39 | |
27. 28. 28. | 0:18:39 | 0:18:42 | |
28 I've got. 29. | 0:18:42 | 0:18:44 | |
30. 30 I've got. | 0:18:44 | 0:18:47 | |
31. 32. 32. 33. | 0:18:47 | 0:18:50 | |
Might buy it. 34? | 0:18:53 | 0:18:55 | |
33 here. 34. 35. | 0:18:57 | 0:19:01 | |
36. Walking away. | 0:19:01 | 0:19:02 | |
With you at 35. | 0:19:02 | 0:19:05 | |
First time then at 35. Second time. | 0:19:05 | 0:19:08 | |
Third and final time, then. | 0:19:08 | 0:19:09 | |
All yours, sir, at £35,000, well done. | 0:19:09 | 0:19:13 | |
The successful bidder was Waj, buying it for 35 grand. | 0:19:16 | 0:19:20 | |
And while he was at the auction with his wife Tasleen, | 0:19:20 | 0:19:23 | |
he actually bought it with his business partner and best mate Abid. | 0:19:23 | 0:19:27 | |
They came along to their new purchase to tell me more. | 0:19:28 | 0:19:30 | |
-Waj, nice to meet you. -How are you doing, Dion? -Abid. -Dion. -Congratulations to you both. | 0:19:33 | 0:19:37 | |
BOTH: Thank you very much. | 0:19:37 | 0:19:38 | |
What made you buy this house? | 0:19:38 | 0:19:39 | |
We were born and bred in this area, so we know the area really, really well. | 0:19:39 | 0:19:43 | |
So, we thought, why not just invest in this area, benefit everybody? | 0:19:43 | 0:19:47 | |
Give us a little bit more about your relationship and your background. | 0:19:47 | 0:19:50 | |
We've known each other for well over 30 years. | 0:19:50 | 0:19:54 | |
We went to primary school together. And we've just grown up, | 0:19:54 | 0:19:57 | |
-literally, a couple of hundred yards. -Yeah, away from each other. | 0:19:57 | 0:20:01 | |
We've been in business together, | 0:20:01 | 0:20:02 | |
we're in business together now as well. | 0:20:02 | 0:20:04 | |
So, we've done quite a lot of things together, | 0:20:04 | 0:20:06 | |
hence the reason why our friendship, you know, is pretty strong | 0:20:06 | 0:20:09 | |
and we've gone into this field as well. | 0:20:09 | 0:20:11 | |
That's a long-term relationship. | 0:20:11 | 0:20:13 | |
30 years as mates, now business partners. | 0:20:13 | 0:20:15 | |
Business partners, exactly, yeah. Even though I still look 21, but... | 0:20:15 | 0:20:18 | |
-Yes. -You know? -I didn't want to mention it to you. | 0:20:18 | 0:20:20 | |
Not in front of Waj anyway. THEY LAUGH | 0:20:20 | 0:20:23 | |
Abid owns a chain of health supplement stories. | 0:20:26 | 0:20:28 | |
That must be the source of those youthful looks. | 0:20:28 | 0:20:31 | |
While Waj works on the local council | 0:20:31 | 0:20:33 | |
with some business interests on the side. | 0:20:33 | 0:20:35 | |
This is now the sixth property for the pair as they look to build their portfolio. | 0:20:35 | 0:20:39 | |
So, Abid, what have you got to do to this one in particular? | 0:20:42 | 0:20:45 | |
Let's start downstairs. What are you going to do downstairs? | 0:20:45 | 0:20:48 | |
Let's start with the kitchen. Obviously we're going to redo that again. | 0:20:48 | 0:20:51 | |
A new suite's going to go in there and in there. | 0:20:51 | 0:20:53 | |
Open it up and make it into like a kitchen-diner place. | 0:20:53 | 0:20:55 | |
The main living area, I think that just needs a bit of a revamp, | 0:20:55 | 0:20:59 | |
some paint, you know, spruce it up again. | 0:20:59 | 0:21:01 | |
I can see a bit of dampness. | 0:21:01 | 0:21:03 | |
We're just going to get that checked out and see what that's like. | 0:21:03 | 0:21:06 | |
Does that mean, if you're making a kitchen-diner, you're going to knock that wall through? | 0:21:06 | 0:21:09 | |
We're thinking put a beam across, | 0:21:09 | 0:21:13 | |
a supporting beam, and make it into a kitchen-diner. | 0:21:13 | 0:21:16 | |
-And upstairs, any plans? -Upstairs... | 0:21:16 | 0:21:19 | |
In the other bedroom, | 0:21:19 | 0:21:22 | |
we might just leave it as one or split it into two. | 0:21:22 | 0:21:27 | |
If we do split it into two, then we're going to have to use some of this bathroom space, | 0:21:27 | 0:21:31 | |
cos here is quite a spacious bathroom. | 0:21:31 | 0:21:33 | |
-Make it into a three-bed. -Yeah, make it into a three-bed. Nice family home. | 0:21:33 | 0:21:36 | |
So, Abid, tell us about the budget, what's the budget going to be to create all that? | 0:21:36 | 0:21:39 | |
-The budget? OK, well, I've really left it in Waj's hands. -THEY LAUGH | 0:21:39 | 0:21:43 | |
So, if anything goes wrong, it's his fault. | 0:21:43 | 0:21:46 | |
But I think the 8 to 10 mark? | 0:21:46 | 0:21:49 | |
8 to £10,000, we've set aside, | 0:21:49 | 0:21:52 | |
if we do split the kitchen and diner as one and split the bedrooms as two. | 0:21:52 | 0:21:57 | |
-I think the majority... Some of the work we can do ourselves. -Yeah. | 0:21:57 | 0:22:00 | |
You know, we're quite handy when it comes down to doing bits and bats, | 0:22:00 | 0:22:03 | |
so we can do some of the work ourselves and, you know, | 0:22:03 | 0:22:06 | |
keep the budget down. | 0:22:06 | 0:22:07 | |
-So, you're going to get your hands dirty, chaps? -Waj is. | 0:22:07 | 0:22:09 | |
THEY LAUGH | 0:22:09 | 0:22:11 | |
So, have you got...? Do use the same guys, the same builders, or...? | 0:22:11 | 0:22:14 | |
Yeah, we have, we've got a team of builders that we can call in, really good, handy lads. | 0:22:14 | 0:22:18 | |
They'll come in, they'll muck in and they'll get the job done. | 0:22:18 | 0:22:20 | |
8 to 10 grand...ish. How long is it going to take you two? | 0:22:20 | 0:22:24 | |
At the moment, we're doing another property as well as we speak, so... | 0:22:25 | 0:22:30 | |
-And we've spoken and said, maximum, six months. -Yeah, six months. | 0:22:30 | 0:22:35 | |
-I think ideally I'd like to do in the four-months... -Yeah. -Because... | 0:22:35 | 0:22:39 | |
There's not really much that needs to be done in here. | 0:22:39 | 0:22:42 | |
Nice to see that Waj and Abid are thinking along the same lines as me | 0:22:44 | 0:22:47 | |
when it comes to that kitchen-diner. | 0:22:47 | 0:22:49 | |
And at least they're entertaining the thought of a third bedroom. | 0:22:49 | 0:22:52 | |
-We're undecided on this one. -I think we will agree on something. | 0:22:56 | 0:23:00 | |
-You know, whatever benefits us, we'll agree on that. -Yeah. | 0:23:00 | 0:23:05 | |
-We're very good at agreeing on things. -Yeah. -It looks like it. | 0:23:05 | 0:23:09 | |
That's the reason where a good partnership and we're doing things | 0:23:09 | 0:23:11 | |
and things are moving forward for us, so I think that's good. | 0:23:11 | 0:23:15 | |
We've known each other that long, trust each other, | 0:23:15 | 0:23:17 | |
so we'll make the decisions together as well. | 0:23:17 | 0:23:19 | |
Well, you've started off on the right foot, chaps, you've got all the bases covered. | 0:23:19 | 0:23:23 | |
You seem not to get on, which is perfect for business. THEY LAUGH | 0:23:23 | 0:23:26 | |
-Yeah, that's right. -I just want to wish you two good luck. -Thank you. | 0:23:27 | 0:23:30 | |
-I hope it works out. Abid. Good luck, pal. -Thank you very much. | 0:23:30 | 0:23:33 | |
-Waj, good luck. -Cheers, thank you. -Pleasure. | 0:23:33 | 0:23:35 | |
Good mates Waj and Abid are approaching this property in the best way I can think. | 0:23:35 | 0:23:40 | |
Rip it out and start again. | 0:23:40 | 0:23:42 | |
It won't be easy, | 0:23:42 | 0:23:43 | |
but they do have that bit of experience that'll help them out. | 0:23:43 | 0:23:46 | |
I'm pretty sure they'll be fine. | 0:23:46 | 0:23:47 | |
You can find out how they get on later on in the programme. | 0:23:47 | 0:23:50 | |
Coming up... | 0:23:51 | 0:23:52 | |
In Crewe, Cheshire, this two bed needs, well, | 0:23:52 | 0:23:56 | |
very little, to be honest. | 0:23:56 | 0:23:58 | |
You know, it's all set up, isn't it? Brilliant. | 0:23:58 | 0:24:00 | |
And in Nelson, Lancashire, will this two-bed terrace help mend fences? | 0:24:03 | 0:24:08 | |
He used to bully me when I was little. | 0:24:08 | 0:24:10 | |
Earlier, we were following this story of property developer | 0:24:17 | 0:24:20 | |
Mark and his project manager Johnny, | 0:24:20 | 0:24:22 | |
seen here with Mark's son Max. | 0:24:22 | 0:24:25 | |
They paid £1.45 million for this auction lot of garages | 0:24:25 | 0:24:30 | |
and disused buildings in Forest Hill, London. | 0:24:30 | 0:24:33 | |
And they plan to expand the existing planning permission to build | 0:24:33 | 0:24:37 | |
seven family homes here. | 0:24:37 | 0:24:40 | |
When we came back 11 months on, they'd been successful | 0:24:40 | 0:24:43 | |
in getting planning permission to add another storey to the buildings. | 0:24:43 | 0:24:47 | |
And Johnny and his team had the frame up | 0:24:47 | 0:24:49 | |
and were working hard towards the end goal. | 0:24:49 | 0:24:53 | |
We promised to come back and see it when the project was finished. | 0:24:53 | 0:24:56 | |
Fast forward six months on and, well, yes, | 0:24:58 | 0:25:02 | |
work is still going on to finish six of the houses. | 0:25:02 | 0:25:06 | |
There's six three-bed properties and one two-bed house, | 0:25:06 | 0:25:10 | |
but I'm pleased to say that one is complete. | 0:25:10 | 0:25:12 | |
Sometimes, on big projects, | 0:25:12 | 0:25:14 | |
it's easy to lose sight of the little details, | 0:25:14 | 0:25:17 | |
so I want to know, have they shown the love to this house? | 0:25:17 | 0:25:21 | |
MUSIC: Feel The Love by Rudimental | 0:25:21 | 0:25:22 | |
# And all I said is true, I can feel the love, can you feel it too? | 0:25:22 | 0:25:26 | |
# I can feel it all | 0:25:26 | 0:25:29 | |
# I can feel it all... # | 0:25:29 | 0:25:31 | |
Well, this house is dressed to impress | 0:25:49 | 0:25:51 | |
and the result is certainly sleek. | 0:25:51 | 0:25:53 | |
In the basement, the kitchen is high spec. | 0:25:56 | 0:25:59 | |
And there is a handy downstairs loo with a laundry room next door. | 0:26:03 | 0:26:07 | |
On the ground floor, the sitting room is spacious and light. | 0:26:15 | 0:26:20 | |
Carry on up to the next floor in this tall house | 0:26:21 | 0:26:24 | |
and there are two good-sized bedrooms. | 0:26:24 | 0:26:26 | |
And if you've got the puff to get to the top floor, | 0:26:33 | 0:26:36 | |
there's a large master suite...with an en-suite. | 0:26:36 | 0:26:38 | |
# I can feel it all | 0:26:40 | 0:26:43 | |
# All I said is true, I can feel Can you feel it too...? # | 0:26:44 | 0:26:47 | |
Time for Mark and Johnny to tell us the story of how they | 0:26:47 | 0:26:50 | |
transformed this site from derelict buildings to desirable homes. | 0:26:50 | 0:26:55 | |
We were allowed four-bed houses, but we went back to planning, | 0:26:55 | 0:26:58 | |
even though we were granted four beds, and changed it to three. | 0:26:58 | 0:27:01 | |
Now, some people might say, "That's mad, you'll get more money," but... | 0:27:01 | 0:27:06 | |
The houses are over four storeys. | 0:27:06 | 0:27:08 | |
I prefer to give people bigger rooms, | 0:27:08 | 0:27:10 | |
more spacious accommodation and... | 0:27:10 | 0:27:12 | |
..much more for their money. | 0:27:14 | 0:27:16 | |
I think, the last time we met, | 0:27:16 | 0:27:18 | |
my timber frame structure had just gone up, so we've closed | 0:27:18 | 0:27:22 | |
the building up, weathered it, windows came in, that got us inside. | 0:27:22 | 0:27:27 | |
And then from there, we've gone through our dry lining processes, | 0:27:27 | 0:27:31 | |
first fixed plumbing, electrics, dry lining and then finishing. | 0:27:31 | 0:27:35 | |
The rest of the houses are falling well behind, | 0:27:35 | 0:27:38 | |
so it's on the schedule, so this is plot one, plot two, | 0:27:38 | 0:27:40 | |
plot three, plot four I've finished, with carpets, plot five and six, | 0:27:40 | 0:27:44 | |
carpets this week, plot seven, just some snagging | 0:27:44 | 0:27:48 | |
and carpets will be going in by the end of the week. | 0:27:48 | 0:27:50 | |
So, not much left to do before the houses are ready to sell, | 0:27:52 | 0:27:55 | |
but this project has not been without its challenges. | 0:27:55 | 0:27:58 | |
We had a couple of issues externally. | 0:28:01 | 0:28:04 | |
We did have problems with services here. | 0:28:04 | 0:28:06 | |
Remember this was an MOT station years ago, | 0:28:06 | 0:28:10 | |
so therefore there was toxic in the ground. | 0:28:10 | 0:28:13 | |
So, we came across some old arched cellars in the ground | 0:28:13 | 0:28:17 | |
which are still active and in use by neighbouring properties. | 0:28:17 | 0:28:21 | |
So, we had to deal with that. | 0:28:21 | 0:28:23 | |
So, therefore, there was an extra cost of £72,000 on top | 0:28:23 | 0:28:26 | |
of the £30,000 already paid to do the job in the first place. | 0:28:26 | 0:28:31 | |
You can never have enough rainy day money in developing. | 0:28:31 | 0:28:34 | |
Always stick it to one side. Forget about it. | 0:28:34 | 0:28:38 | |
Good advice, Mark, | 0:28:40 | 0:28:41 | |
but having to redo ground works has been a contributing factor | 0:28:41 | 0:28:44 | |
of the budget rising from 2.1 million to £2.7 million. | 0:28:44 | 0:28:50 | |
Another reason has been the high-end finish. | 0:28:50 | 0:28:53 | |
What's more important for me when developing is not just the money. | 0:28:54 | 0:28:59 | |
It's the creation. | 0:28:59 | 0:29:01 | |
It's what I can do, what I can see, cos I'm proud of what I do. | 0:29:01 | 0:29:04 | |
Mark's got a vision as to how he feels we should present ourselves, | 0:29:04 | 0:29:09 | |
which works every time. | 0:29:09 | 0:29:12 | |
He's absolutely incredible at it. | 0:29:12 | 0:29:14 | |
Yeah, I've tried to decorate the house pretty much old school | 0:29:14 | 0:29:18 | |
and then with modern furniture, | 0:29:18 | 0:29:20 | |
so it's kind of, the word is fusion that we're looking for. | 0:29:20 | 0:29:23 | |
If I've fused the old with the new, | 0:29:23 | 0:29:25 | |
where you've got your original style rads, your timber-sashed windows, | 0:29:25 | 0:29:31 | |
your oak-polished wood flooring, so I buy all reclaimed material. | 0:29:31 | 0:29:35 | |
I have everything checked to BCSA standards and I fit it all. | 0:29:35 | 0:29:40 | |
He's very good at picking an area, | 0:29:40 | 0:29:44 | |
working out what works in that area. | 0:29:44 | 0:29:46 | |
Spends a lot of time on the research, even on external finishes. | 0:29:46 | 0:29:50 | |
I go around everything, I look at the drawings | 0:29:50 | 0:29:52 | |
and everything is done on impulse, just there and then. | 0:29:52 | 0:29:56 | |
I can just see what I want, urban inside, urban outside. | 0:29:56 | 0:30:00 | |
This project has been very tough, | 0:30:02 | 0:30:04 | |
even for experienced developers like Mark and Johnny. | 0:30:04 | 0:30:07 | |
But has their friendship survived it? | 0:30:07 | 0:30:10 | |
Me and the Johnny are brothers. | 0:30:12 | 0:30:15 | |
Not bonded by blood brothers, | 0:30:15 | 0:30:16 | |
but we're brothers. | 0:30:16 | 0:30:18 | |
We love each other to bits | 0:30:18 | 0:30:20 | |
and we get to see each other as often as we can. | 0:30:20 | 0:30:24 | |
We work closely together. | 0:30:24 | 0:30:26 | |
We're very different in terms of our personalities, but it works. | 0:30:26 | 0:30:32 | |
We've earned that together, we trust each other, we're very loyal, | 0:30:32 | 0:30:36 | |
and no matter what mistakes he does, | 0:30:36 | 0:30:38 | |
and he does do them, he's forgiven, | 0:30:38 | 0:30:40 | |
because he stuck with me, and I can't forget that. | 0:30:40 | 0:30:44 | |
Time to get the popcorn out for the valuations | 0:30:46 | 0:30:48 | |
on these show-stopping houses. | 0:30:48 | 0:30:50 | |
What do two local estate agents think the houses could be worth, | 0:30:50 | 0:30:54 | |
and will it stack up against the boys' total spend of £4.15 million? | 0:30:54 | 0:30:59 | |
I think the three-bedroom houses here could sell | 0:31:02 | 0:31:04 | |
for anywhere between £900,000 and £1 million. | 0:31:04 | 0:31:07 | |
And the two-bedroom house probably going for a range | 0:31:07 | 0:31:10 | |
between £750,000 to £800,000. | 0:31:10 | 0:31:14 | |
Well, there's one two-bedroom house | 0:31:14 | 0:31:16 | |
which we'd expect to achieve in the region of £800,000. | 0:31:16 | 0:31:20 | |
The three-bedroom houses vary in terms of size, and we would | 0:31:20 | 0:31:24 | |
expect to achieve somewhere within the region of £1.1 to £1.2 million. | 0:31:24 | 0:31:31 | |
We have our values in mind, and what the agents have said | 0:31:31 | 0:31:33 | |
is pretty much bang on with what we thought. | 0:31:33 | 0:31:36 | |
The agents' top values give a total resale figure of £8 million, | 0:31:38 | 0:31:43 | |
meaning a potential pre-tax profit of £3.85 million. | 0:31:43 | 0:31:48 | |
A successful project for the two. | 0:31:48 | 0:31:50 | |
So what makes them such a good team? | 0:31:50 | 0:31:53 | |
Yeah, we're both grafters. | 0:31:58 | 0:31:59 | |
We both get our head down, get our teeth into something | 0:31:59 | 0:32:02 | |
and I love getting out of bed every day. | 0:32:02 | 0:32:05 | |
He's lovely. | 0:32:05 | 0:32:06 | |
He's gorgeous, isn't he, our Johnny? | 0:32:06 | 0:32:08 | |
I couldn't live a day without him. | 0:32:08 | 0:32:10 | |
Yeah, everyone loves Crewe in Cheshire, and it's long been known | 0:32:25 | 0:32:28 | |
as a town of major manufacturing, | 0:32:28 | 0:32:31 | |
from railway locomotives to cars. | 0:32:31 | 0:32:34 | |
But I want to show you another little-known part | 0:32:34 | 0:32:37 | |
of its industrial heritage. | 0:32:37 | 0:32:39 | |
Now, this may look like an ordinary brick wall | 0:32:39 | 0:32:42 | |
at the side of a building, | 0:32:42 | 0:32:43 | |
but there are some faint markings | 0:32:43 | 0:32:46 | |
which give away a really interesting bit of its historical past. | 0:32:46 | 0:32:52 | |
In the Second World War, there was a factory on the other side | 0:32:52 | 0:32:54 | |
of the wall that made ammunition. | 0:32:54 | 0:32:57 | |
And, in order to disguise the building from overhead bombers, | 0:32:57 | 0:33:01 | |
they actually painted houses | 0:33:01 | 0:33:04 | |
on this wall to make it look like it was a normal street of houses. | 0:33:04 | 0:33:08 | |
I don't know about you, but I prefer my houses in three dimensions and not painted on. | 0:33:11 | 0:33:17 | |
Time to move on to a more modern style of construction. | 0:33:17 | 0:33:20 | |
Well, coming bang up to date, | 0:33:22 | 0:33:23 | |
lots going on in Crewe in terms of regeneration and investment, | 0:33:23 | 0:33:28 | |
which potentially makes it a really interesting place to buy property. | 0:33:28 | 0:33:32 | |
Which is just as well, | 0:33:32 | 0:33:33 | |
because I'm here to look at one that was at the auction. | 0:33:33 | 0:33:36 | |
It's a two-bed mid-terrace. | 0:33:36 | 0:33:38 | |
Let's have a look. | 0:33:38 | 0:33:39 | |
Guide price on this one - £65,000. | 0:33:41 | 0:33:44 | |
Some nice features on the outside, but what's it like inside? | 0:33:44 | 0:33:48 | |
OK, so what have we got? | 0:33:49 | 0:33:51 | |
Nice, sort of, light, bright entrance hall, which is always good. | 0:33:51 | 0:33:55 | |
Nice bit of plasterwork up there. Quite ornate, which is also good. | 0:33:55 | 0:33:58 | |
Couple of obvious things, you've got central heating. | 0:33:58 | 0:34:01 | |
Again, it's all looking very positive. | 0:34:01 | 0:34:02 | |
You've got your stairs up to your bedrooms there | 0:34:02 | 0:34:05 | |
and then through into what is a very traditional layout, isn't it? | 0:34:05 | 0:34:07 | |
This front living room area here, | 0:34:07 | 0:34:09 | |
and then an archway leading through | 0:34:09 | 0:34:11 | |
to a rear, sort of, living area here. | 0:34:11 | 0:34:14 | |
It's a very, very usable space. | 0:34:14 | 0:34:16 | |
One big room, I think, is better than lots of little ones. | 0:34:16 | 0:34:19 | |
So that gets a big tick. | 0:34:19 | 0:34:21 | |
As you travel through the property, you come to the kitchen. | 0:34:21 | 0:34:24 | |
Well, it's not huge, but then the house isn't massive, | 0:34:24 | 0:34:27 | |
so I think you'd just about get away with it. | 0:34:27 | 0:34:30 | |
Boiler looks like it's very dated, | 0:34:30 | 0:34:32 | |
so maybe that's needs a good servicing or looking at for sure. | 0:34:32 | 0:34:37 | |
Units, serviceable possibly, but I think, for the cost, | 0:34:37 | 0:34:40 | |
I would look at replacing them, | 0:34:40 | 0:34:42 | |
because you'd definitely sparkle everything up. | 0:34:42 | 0:34:44 | |
And then, at the back here, you've got a loo, | 0:34:44 | 0:34:46 | |
very low ceiling height. | 0:34:46 | 0:34:48 | |
A bit of a utility area. It's all useful stuff. | 0:34:48 | 0:34:50 | |
And, as a starting point, yeah, it's looking good. | 0:34:50 | 0:34:53 | |
The layout works, and it's in pretty good nick. | 0:34:56 | 0:34:59 | |
My only thoughts beyond general modernisation would be | 0:34:59 | 0:35:03 | |
to raise the roof in the utility area. | 0:35:03 | 0:35:06 | |
That way you can get more cupboards or tall appliances in. | 0:35:06 | 0:35:10 | |
So upstairs, and good decorative order continues, | 0:35:13 | 0:35:17 | |
and again nice-sized rooms. | 0:35:17 | 0:35:18 | |
Big double bedroom at the front there. | 0:35:18 | 0:35:20 | |
Good-sized second bedroom there, | 0:35:20 | 0:35:22 | |
and then, final bonus... | 0:35:22 | 0:35:24 | |
..a brilliant family bathroom. Big enough for a shower and a bath. | 0:35:26 | 0:35:30 | |
You know, it's all set up, isn't it? Brilliant. | 0:35:30 | 0:35:33 | |
It's all good inside. | 0:35:33 | 0:35:36 | |
Very little to do beyond the superficial. | 0:35:36 | 0:35:38 | |
Outside, cosmetic issues can be cured with a bit of weedkiller. | 0:35:38 | 0:35:42 | |
With the kitchen being on the small side, | 0:35:43 | 0:35:46 | |
you could extend out back under permitted development. | 0:35:46 | 0:35:49 | |
But with the house being in good condition, perhaps a spruce up | 0:35:49 | 0:35:53 | |
and then renting it out would be the most profitable option. | 0:35:53 | 0:35:56 | |
Time to ask the thoughts of a local estate agent. | 0:35:56 | 0:35:59 | |
What does he think this property requires? | 0:35:59 | 0:36:02 | |
I don't think it needs masses of work done to the property. | 0:36:02 | 0:36:04 | |
I think definitely it needs a new kitchen. | 0:36:04 | 0:36:07 | |
I think the bathroom would need tidying up a little bit. | 0:36:07 | 0:36:09 | |
Certainly it needs refreshing up, decorating | 0:36:09 | 0:36:12 | |
and maybe some new flooring and carpets. | 0:36:12 | 0:36:14 | |
We'd be looking to spend around £5,000 to get this | 0:36:14 | 0:36:17 | |
to a rentable condition. | 0:36:17 | 0:36:19 | |
So get it near the guide price | 0:36:19 | 0:36:21 | |
and you could be looking at a total £70,000 outlay. | 0:36:21 | 0:36:24 | |
If it was in rentable standard, what could it command on the open market? | 0:36:24 | 0:36:28 | |
For rental purposes, we'd be looking | 0:36:28 | 0:36:30 | |
£485 per calendar month to £525 per calendar month. | 0:36:30 | 0:36:36 | |
And what about sales? | 0:36:36 | 0:36:39 | |
If the property was refurbished to a really nice standard, | 0:36:39 | 0:36:42 | |
we'd be looking around £90,000. | 0:36:42 | 0:36:44 | |
Well, there really is nothing to fault with this property, is there? | 0:36:50 | 0:36:54 | |
Great guide price in an area where it's definitely on the up. | 0:36:54 | 0:36:57 | |
And it's in good order. | 0:36:57 | 0:36:59 | |
Let's see who snapped it up when it went under the hammer. | 0:36:59 | 0:37:02 | |
Lot 22 has been withdrawn. | 0:37:06 | 0:37:08 | |
Lot 23. We now go to Crewe, Cheshire. | 0:37:08 | 0:37:11 | |
60 bid. Thank you. | 0:37:12 | 0:37:14 | |
At £60,000. Going once. | 0:37:14 | 0:37:16 | |
61. | 0:37:16 | 0:37:17 | |
62. | 0:37:17 | 0:37:18 | |
63. | 0:37:18 | 0:37:19 | |
64. | 0:37:19 | 0:37:20 | |
65. | 0:37:20 | 0:37:22 | |
At £65,000, then. Are we all done? | 0:37:22 | 0:37:25 | |
Got you at 66. | 0:37:26 | 0:37:28 | |
67. | 0:37:28 | 0:37:30 | |
68. | 0:37:30 | 0:37:32 | |
Got you. | 0:37:32 | 0:37:33 | |
69. | 0:37:33 | 0:37:34 | |
70, sir? | 0:37:34 | 0:37:36 | |
No. At 69. To my left then at 69. | 0:37:36 | 0:37:38 | |
70 anywhere else now? | 0:37:38 | 0:37:40 | |
If not, I'm selling it at £69,000. | 0:37:40 | 0:37:42 | |
For the first time. | 0:37:42 | 0:37:44 | |
£69,000 for the second time. | 0:37:44 | 0:37:47 | |
Third and time at £69,000. | 0:37:47 | 0:37:50 | |
You've bought it, sir. Well done. | 0:37:50 | 0:37:52 | |
A pat on the back for Phil from his business partner Anthony. | 0:37:53 | 0:37:58 | |
They've secured the property for £69,000. | 0:37:58 | 0:38:01 | |
Their wives, both called Emma, were childhood friends, | 0:38:01 | 0:38:04 | |
and introduced the two, sparking this property development business. | 0:38:04 | 0:38:09 | |
But what do they have planned for their new acquisition? | 0:38:09 | 0:38:13 | |
Anthony, Phil, good to see you. Congratulations. | 0:38:15 | 0:38:18 | |
Tell me why you wanted to buy this place. | 0:38:18 | 0:38:20 | |
Yeah, so this place is ideally located | 0:38:20 | 0:38:22 | |
to one of the major employers of the town, | 0:38:22 | 0:38:24 | |
and we have great demand for tenants in this area. | 0:38:24 | 0:38:27 | |
So, on behalf of an investor, we're sourcing the property, | 0:38:27 | 0:38:31 | |
refurbing in the property, and letting it for them. | 0:38:31 | 0:38:34 | |
We love the proportions of this house, | 0:38:34 | 0:38:37 | |
so, although it's only a two-bed property as it stands at the moment, | 0:38:37 | 0:38:40 | |
we're going to look to turn it into a four-bed shared house. | 0:38:40 | 0:38:43 | |
Oh, great. So how are you going to get four bedrooms in here, then? | 0:38:43 | 0:38:46 | |
Yeah, I guess, in terms of rooms, we need to separate the two downstairs | 0:38:46 | 0:38:49 | |
reception rooms and create a separate entrance to the front one. | 0:38:49 | 0:38:52 | |
The kitchen doesn't need too much work, | 0:38:52 | 0:38:54 | |
other than a bit of updating and some appliances in there. | 0:38:54 | 0:38:58 | |
There's currently a downstairs toilet-cum-utility room, | 0:38:58 | 0:39:02 | |
so we're going to turn that into a wet room. | 0:39:02 | 0:39:04 | |
Quite a low height in that room at the moment. What are you going to do about that? | 0:39:04 | 0:39:07 | |
We're going to turn it into a wet room rather than | 0:39:07 | 0:39:09 | |
a traditional shower, so we don't have to incorporate | 0:39:09 | 0:39:11 | |
the shower tray, and we'll excavate the floor out slightly, | 0:39:11 | 0:39:14 | |
-so that will just give us that little bit more headroom to fit a shower room in there. -Brilliant. | 0:39:14 | 0:39:18 | |
And then upstairs, really, it's carpets and decor | 0:39:18 | 0:39:22 | |
and really just a bit of updating to the house. | 0:39:22 | 0:39:25 | |
Is it going to be corridors and partitions? | 0:39:25 | 0:39:28 | |
Yeah, we're going to put a corridor in here to split this back reception room. | 0:39:28 | 0:39:32 | |
This will become a bedroom and this will be a walk-through there | 0:39:32 | 0:39:34 | |
-for the kitchen, and the shower room at the end of the house. -Wow. | 0:39:34 | 0:39:38 | |
So what kind of planning permission is required for doing what you're suggesting? | 0:39:38 | 0:39:43 | |
So, in terms of what we're doing, because it's classed as a small HMO, | 0:39:43 | 0:39:46 | |
it doesn't need to go through full planning in that sense. | 0:39:46 | 0:39:49 | |
It needs to go through building regs | 0:39:49 | 0:39:51 | |
and we then also work closely with the housing standards | 0:39:51 | 0:39:54 | |
from the local council, in terms of making sure we're | 0:39:54 | 0:39:57 | |
meeting all their regulations from an HMO perspective. | 0:39:57 | 0:40:01 | |
So, even though it isn't a licensable HMO, | 0:40:01 | 0:40:03 | |
-you're treating it as if it is an HMO? -That's right, yeah. | 0:40:03 | 0:40:06 | |
This HMO route, then - is that something you're finding is successful? | 0:40:06 | 0:40:10 | |
Yeah, there seems to be a lot of demand in the area for this. | 0:40:10 | 0:40:14 | |
People looking to rent a room, know exactly the cost of all their bills. | 0:40:14 | 0:40:19 | |
So we fix that for them... | 0:40:19 | 0:40:20 | |
So you do an all-inclusive rate? | 0:40:20 | 0:40:22 | |
All-inclusive rate. That's right, yeah. | 0:40:22 | 0:40:24 | |
So what kind of price would you get for an average, sort of, | 0:40:24 | 0:40:27 | |
room in one of your conversions? | 0:40:27 | 0:40:29 | |
-So anywhere between £350 and £400. -Wow. -Yeah, typically. | 0:40:29 | 0:40:32 | |
If it's ensuited, then we can perhaps achieve a little bit more, | 0:40:32 | 0:40:35 | |
but, in this particular property, we're looking at close to £400, | 0:40:35 | 0:40:39 | |
because of its location to a major car manufacturer in the town. | 0:40:39 | 0:40:42 | |
I'm just trying to get my head round the economies of that. | 0:40:42 | 0:40:45 | |
Because £350-£400, surely you could get, like, a little terrace and rent that out, | 0:40:45 | 0:40:49 | |
if you were a renting person, for about the same amount? | 0:40:49 | 0:40:52 | |
So why would somebody pay such a high amount just for a room? | 0:40:52 | 0:40:55 | |
I think the challenge that people find is it's not just the rent, | 0:40:55 | 0:40:58 | |
it's once you've added all the bills and utilities and outgoings | 0:40:58 | 0:41:01 | |
on top of that, it tends to double the price | 0:41:01 | 0:41:04 | |
by the time you've paid council tax and your utilities. | 0:41:04 | 0:41:08 | |
So people like the idea of just being able to have that | 0:41:08 | 0:41:11 | |
-one outgoing a month, and know everything is covered. -Right. | 0:41:11 | 0:41:14 | |
One way that HMOs are used obviously is for either lower income or students. | 0:41:14 | 0:41:19 | |
You've taken a slightly different approach to that. | 0:41:19 | 0:41:22 | |
Yeah, I mean, we certainly do offer up HMOs to students, | 0:41:22 | 0:41:25 | |
but with this particular property, it's going to be for professionals, | 0:41:25 | 0:41:29 | |
blue-collar workers, white-collar workers in the local area. | 0:41:29 | 0:41:34 | |
I think Phil and Anthony are onto a winner with this style of HMO. | 0:41:34 | 0:41:37 | |
They don't require a licence, as HMO permits are only mandatory | 0:41:37 | 0:41:41 | |
for properties with three stories or five or more occupants. | 0:41:41 | 0:41:46 | |
And they think a budget of £6-£8,000 will be required to convert it. | 0:41:46 | 0:41:51 | |
Well, that means four rooms renting at £400 per calendar month | 0:41:51 | 0:41:57 | |
could net their investor a pretty brilliant 24% yield. | 0:41:57 | 0:42:03 | |
With numbers like that you've got to ask the question... | 0:42:03 | 0:42:06 | |
Why don't more people convert these kind of houses into lettable rooms, then? | 0:42:06 | 0:42:09 | |
What's the downside? Because there must be one, otherwise everyone would do it. | 0:42:09 | 0:42:13 | |
Yeah, there's more work required. | 0:42:13 | 0:42:14 | |
You've got separate contracts for each tenant, | 0:42:14 | 0:42:17 | |
more turnover of tenants as well, | 0:42:17 | 0:42:19 | |
there's more voids to manage, to reduce, | 0:42:19 | 0:42:23 | |
and so there's more risk and work required. | 0:42:23 | 0:42:26 | |
I think, for the average by-to-let single-let investor, it's more... | 0:42:26 | 0:42:33 | |
-There's certainly a lot more work involved. -Right. | 0:42:33 | 0:42:36 | |
-But the potential returns are surely worth it? -Absolutely. | 0:42:36 | 0:42:41 | |
I think, if you've got the right systems in place, then that | 0:42:41 | 0:42:44 | |
management doesn't need to be too much of an overhead, but certainly, | 0:42:44 | 0:42:47 | |
-that is the perception, I think, from an investor point of view. -Right. | 0:42:47 | 0:42:50 | |
Phil and Anthony plan to turn this around in six weeks, | 0:42:52 | 0:42:55 | |
and their usual team of contractors will be handling the renovation. | 0:42:55 | 0:42:59 | |
-Do you two get your hands dirty or are you...? -We used to. | 0:42:59 | 0:43:03 | |
Oh, you used to? Is that what you tell people, is it? | 0:43:03 | 0:43:05 | |
THEY LAUGH | 0:43:05 | 0:43:07 | |
We figured we'd try at least every job once, you know? | 0:43:07 | 0:43:10 | |
-At least then we know how painful it is. -Yeah, and how much they're paying for it. | 0:43:10 | 0:43:13 | |
-But now you get other people to do it? -That's right, yeah. | 0:43:13 | 0:43:15 | |
Your time is more precious to do other things. | 0:43:15 | 0:43:17 | |
Absolutely, we can do more projects with more people doing work for us. | 0:43:17 | 0:43:20 | |
Well, listen, congratulations. | 0:43:20 | 0:43:22 | |
-Good luck with it. -Thank you. -I look forward to seeing how you get on. -Thank you. | 0:43:22 | 0:43:26 | |
So Anthony and Phil following a very well thought through strategy | 0:43:26 | 0:43:31 | |
in terms of their property investment, | 0:43:31 | 0:43:34 | |
and, potentially, it could pay big dividends. | 0:43:34 | 0:43:38 | |
You can find out how they got on sorting this property out later in the show. | 0:43:38 | 0:43:42 | |
So that's one property owner who's ready to move on. | 0:43:45 | 0:43:48 | |
Yes, but what about the other two? | 0:43:48 | 0:43:50 | |
Can they see the light at the end of the tunnel? | 0:43:50 | 0:43:52 | |
Let's find out. | 0:43:52 | 0:43:54 | |
Early in the show, I was in Nelson, Lancashire, | 0:43:59 | 0:44:01 | |
to see a two-bedroom ex-local authority house, | 0:44:01 | 0:44:04 | |
guided at £30,000 plus. | 0:44:04 | 0:44:06 | |
And I thought it had the potential to become a lovely family home | 0:44:06 | 0:44:10 | |
by dividing this bedroom to make it a three-bed, | 0:44:10 | 0:44:12 | |
and undividing... Is that a word? | 0:44:12 | 0:44:15 | |
..the kitchen and dining room. | 0:44:15 | 0:44:17 | |
What it does scream out to me is taking this wall out. | 0:44:19 | 0:44:23 | |
Now, it is a load-bearing wall, so you would need some support - | 0:44:23 | 0:44:26 | |
a supporting beam up there - | 0:44:26 | 0:44:28 | |
but it's perfect to go from kitchen to diner, | 0:44:28 | 0:44:31 | |
a bit of the family area. | 0:44:31 | 0:44:33 | |
Instead of these two small rooms, having one big room, | 0:44:33 | 0:44:36 | |
so all the family can share a nice, big family space. | 0:44:36 | 0:44:39 | |
Waj, here on the right, and his business partner, Abid, | 0:44:42 | 0:44:45 | |
agreed with me. | 0:44:45 | 0:44:47 | |
They planned to make a kitchen-diner, | 0:44:47 | 0:44:49 | |
and were considering a third bedroom | 0:44:49 | 0:44:51 | |
at their new £35,000 purchase. | 0:44:51 | 0:44:54 | |
Walls would be coming down, | 0:44:54 | 0:44:55 | |
but there was one bond that wouldn't break. | 0:44:55 | 0:44:58 | |
We've known each other for well over 30 years. | 0:45:00 | 0:45:02 | |
We went to primary school together. | 0:45:02 | 0:45:04 | |
That's a long-term relationship. | 0:45:04 | 0:45:06 | |
30 years as mates, now business partners. | 0:45:06 | 0:45:08 | |
Business partners, exactly, yeah. | 0:45:08 | 0:45:10 | |
-Even though I still look 21, but you know. -Yes. | 0:45:10 | 0:45:12 | |
I didn't want to mention it, not in front of Waj anyway! | 0:45:12 | 0:45:16 | |
There you have it. The fountain of youth is apparently in Lancashire. | 0:45:21 | 0:45:25 | |
I'm moving. | 0:45:25 | 0:45:26 | |
But six months on, have the boys rolled back the years on this property? | 0:45:26 | 0:45:30 | |
And have those walls in the bedroom been built | 0:45:30 | 0:45:33 | |
and those in the kitchen been knocked down? | 0:45:33 | 0:45:35 | |
The lads have knocked down the walls for the kitchen-diner, | 0:46:06 | 0:46:09 | |
but opted to keep it as a two-bed upstairs. | 0:46:09 | 0:46:12 | |
That involved a bit too much work, | 0:46:13 | 0:46:15 | |
and the timescale that we had, I thought, you know what? | 0:46:15 | 0:46:18 | |
It's best if we just renovate the house the best as we can, | 0:46:18 | 0:46:22 | |
really, and just get on with it. | 0:46:22 | 0:46:24 | |
Yeah, because we had a tenant waiting as well | 0:46:24 | 0:46:27 | |
and they were happy with two bedrooms. | 0:46:27 | 0:46:29 | |
The time implications and the cost implications we had to think about, | 0:46:29 | 0:46:32 | |
so it was just financially viable just to stick with two. | 0:46:32 | 0:46:35 | |
It's good to hear they've met their tenants needs, | 0:46:38 | 0:46:41 | |
but the kitchen-diner is the real star selling point in this property. | 0:46:41 | 0:46:46 | |
When we bought this house originally, there was two rooms, | 0:46:46 | 0:46:48 | |
the kitchen on the side, | 0:46:48 | 0:46:50 | |
and there was a room here with a wall where I'm stood, with a doorway. | 0:46:50 | 0:46:55 | |
What we've done is take this wall down, | 0:46:55 | 0:46:58 | |
and because it was a supporting wall, | 0:46:58 | 0:47:01 | |
what we've done is put a high-spec kitchen in, which the tenant loves. | 0:47:01 | 0:47:07 | |
I loved the job, because it was brilliant. | 0:47:07 | 0:47:09 | |
I had to manage the builders, | 0:47:09 | 0:47:11 | |
make sure they done it to my specifications. | 0:47:11 | 0:47:15 | |
We've added spotlights as well. | 0:47:15 | 0:47:17 | |
It just makes the room spacious and a family-friendly room. | 0:47:17 | 0:47:21 | |
Elsewhere, they've sorted the damp in the living room | 0:47:24 | 0:47:27 | |
and decorated, while upstairs, there's a brand-new bathroom | 0:47:27 | 0:47:31 | |
and no more green tiles, thankfully! | 0:47:31 | 0:47:33 | |
The bedrooms have also had tiles stripped out | 0:47:35 | 0:47:38 | |
of the dangerous polystyrene variety. | 0:47:38 | 0:47:40 | |
In the back garden, the lads haven't quite finished, | 0:47:42 | 0:47:45 | |
but it's ready to be landscaped. | 0:47:45 | 0:47:47 | |
With a high standard throughout, that list of work came at a cost. | 0:47:48 | 0:47:53 | |
Originally, we were thinking of spending 87,000, | 0:47:53 | 0:47:56 | |
but we went slightly over, £12,000, which we've spent so far. | 0:47:56 | 0:48:00 | |
Going to add a bit more to that with the gardens, probably £1,000 more. | 0:48:00 | 0:48:06 | |
They've had another property to develop at the same time, | 0:48:06 | 0:48:08 | |
but they've managed to pull this off | 0:48:08 | 0:48:10 | |
bang on their timescale of six months, | 0:48:10 | 0:48:12 | |
with Waj coordinating most of the work. | 0:48:12 | 0:48:15 | |
So, still mates, guys? | 0:48:15 | 0:48:17 | |
Nothing can come between our friendship, no matter what it is. | 0:48:19 | 0:48:22 | |
We're brothers. We're actually more than brothers. | 0:48:22 | 0:48:25 | |
We've been through ups and downs through our lives, you know, from | 0:48:25 | 0:48:27 | |
family to business, this, that, the other, and we're still here today. | 0:48:27 | 0:48:31 | |
And I think that's a blessing from God. | 0:48:31 | 0:48:33 | |
He used to bully me when I was little. | 0:48:33 | 0:48:35 | |
I think that's the sound of a can of worms being opened. | 0:48:37 | 0:48:40 | |
We'll just let Abid and Waj settle their childhood differences | 0:48:40 | 0:48:43 | |
like grown-ups while we ask two local estate agents | 0:48:43 | 0:48:46 | |
what they think of the property, | 0:48:46 | 0:48:48 | |
starting with the agent who saw it before the renovation. | 0:48:48 | 0:48:51 | |
Obviously, as we can see, it's a very nice conversion. | 0:48:53 | 0:48:56 | |
It's been fully modernised, fit for a family. | 0:48:56 | 0:48:59 | |
Very nice layout downstairs. | 0:48:59 | 0:49:00 | |
Maximum use of the space available, perfect for modern living standards, | 0:49:00 | 0:49:04 | |
modern family, open-plan kitchen, breakfast area, brilliant. | 0:49:04 | 0:49:09 | |
Well, the first impressions of the property are good. | 0:49:09 | 0:49:11 | |
It gives you a natural feeling | 0:49:11 | 0:49:13 | |
when you come inside and it's a good family home. | 0:49:13 | 0:49:17 | |
The layout is really good. | 0:49:17 | 0:49:18 | |
As you walk in, you know that it's got a good kitchen size, | 0:49:18 | 0:49:21 | |
it's got a little dining area around the corner of the kitchen, | 0:49:21 | 0:49:24 | |
which gives it a very big selling point. | 0:49:24 | 0:49:27 | |
When all is said and done, | 0:49:29 | 0:49:30 | |
Abid and Waj have spent a total of 48 grand. | 0:49:30 | 0:49:35 | |
They're currently renting at just over £525 per calendar month, | 0:49:35 | 0:49:40 | |
giving them just over a 13% yield. | 0:49:40 | 0:49:43 | |
But could they make more by selling the property? | 0:49:43 | 0:49:46 | |
I would value this property at £65,000. | 0:49:48 | 0:49:51 | |
Sale valuation on this property would be between 60 and £75,000. | 0:49:51 | 0:49:56 | |
That's absolutely, that's actually pretty awesome. | 0:49:56 | 0:49:59 | |
Really pleased with that, actually, yeah. | 0:49:59 | 0:50:01 | |
That top valuation of £75,000 would give them | 0:50:04 | 0:50:07 | |
a pre-tax profit of 27 grand, but they're planning to hold on | 0:50:07 | 0:50:11 | |
to the property for the time being and seeing if the market rises. | 0:50:11 | 0:50:15 | |
Abid was away for most of the project, | 0:50:15 | 0:50:17 | |
leaving it in the capable hands of Waj. | 0:50:17 | 0:50:20 | |
So does he think his bezzie mate | 0:50:20 | 0:50:22 | |
and business partner has done a good job? | 0:50:22 | 0:50:24 | |
It was a job well done. | 0:50:28 | 0:50:30 | |
Waj handled most of it, basically getting the builders in, | 0:50:30 | 0:50:33 | |
getting everything sorted. | 0:50:33 | 0:50:34 | |
I was busy doing other work, | 0:50:34 | 0:50:37 | |
but it was a job well done and he's done it. | 0:50:37 | 0:50:39 | |
-Really proud of him. -Can I have a pat on the back? | 0:50:39 | 0:50:42 | |
THUD! | 0:50:42 | 0:50:43 | |
There you go, mate. | 0:50:43 | 0:50:45 | |
Earlier on in the show, I was in Crewe in Cheshire | 0:50:50 | 0:50:54 | |
to see a two-bed, mid-terrace guided at £65,000. | 0:50:54 | 0:50:58 | |
And while the decor needed updating, | 0:50:59 | 0:51:01 | |
the layout downstairs was spacious, with one big reception room. | 0:51:01 | 0:51:06 | |
There were ideal facilities with a reasonable kitchen, | 0:51:07 | 0:51:10 | |
downstairs toilet, | 0:51:10 | 0:51:12 | |
and a generous-sized upstairs bathroom. | 0:51:12 | 0:51:15 | |
This house was situated near one of the town's largest employers. | 0:51:16 | 0:51:21 | |
You know, it's all set up, isn't it? Brilliant. | 0:51:21 | 0:51:24 | |
'And it added up enough for property developers Phil, | 0:51:24 | 0:51:28 | |
'here on the right, and Anthony to pay £69,000 at auction, | 0:51:28 | 0:51:32 | |
'but they plan to add something else - extra bedrooms.' | 0:51:32 | 0:51:36 | |
On behalf of an investor, we are sourcing the property, | 0:51:38 | 0:51:41 | |
refurbing the property and letting it for them. | 0:51:41 | 0:51:44 | |
We love the proportions of this house, | 0:51:44 | 0:51:46 | |
so, although it's only a two-bed property as it stands at the moment, | 0:51:46 | 0:51:49 | |
we're going to look to turn it into a four-bed, shared house. | 0:51:49 | 0:51:54 | |
# House of four doors... # | 0:51:54 | 0:51:57 | |
And this house of four doors - or four bedrooms, rather - | 0:51:59 | 0:52:03 | |
didn't need an HMO licence, as it was only two storeys | 0:52:03 | 0:52:06 | |
with less than five occupants, a formula that was producing | 0:52:06 | 0:52:10 | |
plentiful profits for Phil and Anthony's investors. | 0:52:10 | 0:52:13 | |
-£350 and £400. -Wow! -Yeah, typically. | 0:52:15 | 0:52:18 | |
If it's en suited, | 0:52:18 | 0:52:19 | |
then we can perhaps achieve a little bit more, | 0:52:19 | 0:52:22 | |
but in this particular property, we're looking at close to £400, | 0:52:22 | 0:52:25 | |
because of its location to a major car manufacturer in the town. | 0:52:25 | 0:52:29 | |
It's now two months on and I'm eager to see | 0:52:31 | 0:52:34 | |
if the duo have turned this two-bedder into a four. | 0:52:34 | 0:52:37 | |
# Four to the floor, I was sure | 0:52:41 | 0:52:45 | |
# Never seeing clear | 0:52:45 | 0:52:48 | |
# I could have it all... # | 0:52:50 | 0:52:54 | |
Oh, yes, they've got it all, with four on two floors here. | 0:52:54 | 0:52:57 | |
The standard of finish is above your usual HMO as they were | 0:52:59 | 0:53:03 | |
targeting professionals. | 0:53:03 | 0:53:05 | |
It took them one week over their six-week timescale, | 0:53:05 | 0:53:08 | |
but again, there were a few difficulties along the way. | 0:53:08 | 0:53:11 | |
So we started with ripping out the necessary parts of the property. | 0:53:11 | 0:53:15 | |
We discovered that the kitchen carcasses | 0:53:15 | 0:53:18 | |
weren't suitable, so we took those out the property. | 0:53:18 | 0:53:21 | |
We were originally just hoping to keep the kitchen carcasses | 0:53:21 | 0:53:23 | |
and put a new worktop on, but as we took out the old worktop, | 0:53:23 | 0:53:26 | |
we found a damp issue behind one corner, | 0:53:26 | 0:53:29 | |
so it made sense, really, to remove the carcasses. | 0:53:29 | 0:53:32 | |
We treated the damp before we put a brand-new kitchen in. | 0:53:32 | 0:53:36 | |
With the kitchen replaced, they could crack on | 0:53:36 | 0:53:38 | |
with making this HMO-ready. | 0:53:38 | 0:53:40 | |
We then went through to the wet room, | 0:53:42 | 0:53:44 | |
what is the wet room now, didn't we? | 0:53:44 | 0:53:46 | |
-Yeah. -And excavated. | 0:53:46 | 0:53:47 | |
Excavated there, put up the various stud walling downstairs | 0:53:47 | 0:53:51 | |
to partition off the separate rooms, plastered that out, | 0:53:51 | 0:53:55 | |
full decoration throughout, then, new carpets upstairs, | 0:53:55 | 0:53:58 | |
laminate flooring downstairs | 0:53:58 | 0:54:00 | |
and then the wet room was the final piece of the jigsaw, | 0:54:00 | 0:54:03 | |
really, in terms of finishing of the tiling | 0:54:03 | 0:54:05 | |
-and getting all the appliances hooked up in there. -Yeah. | 0:54:05 | 0:54:08 | |
And while this didn't need to be a licensed HMO, Phil and Anthony | 0:54:08 | 0:54:12 | |
have put in all the safety features a permit would require. | 0:54:12 | 0:54:16 | |
But has that unexpected kitchen change caused some alarm | 0:54:16 | 0:54:20 | |
with the budget? | 0:54:20 | 0:54:23 | |
Our original budget, we were hoping to spend around £8,000. | 0:54:23 | 0:54:25 | |
We've spent just slightly over that, | 0:54:25 | 0:54:28 | |
because we had a few extra works that we included. | 0:54:28 | 0:54:31 | |
We've replaced a few windows, | 0:54:31 | 0:54:32 | |
so, all in all, the building works will be just under 10,000. | 0:54:32 | 0:54:36 | |
A little over is OK with that unexpected kitchen change, | 0:54:37 | 0:54:40 | |
but is their investor happy? | 0:54:40 | 0:54:42 | |
Yeah, they're really pleased with it. We've got tenants in, | 0:54:44 | 0:54:46 | |
so they're starting to receive rental income on the property. | 0:54:46 | 0:54:50 | |
And what kind of income are they getting | 0:54:50 | 0:54:52 | |
and did they get the professional tenants they wanted? | 0:54:52 | 0:54:55 | |
So we managed to get the professional tenants | 0:54:56 | 0:54:58 | |
that we were looking for, | 0:54:58 | 0:55:00 | |
being close to the major manufacturer in the town. | 0:55:00 | 0:55:03 | |
We've managed to achieve £390 per month, per room, in this property. | 0:55:03 | 0:55:08 | |
There's been good demand and we'll certainly have people | 0:55:08 | 0:55:13 | |
moving in straightaway, so we're looking forward to that, yeah. | 0:55:13 | 0:55:16 | |
And having spent £79,000 buying and renovating on behalf | 0:55:18 | 0:55:22 | |
of their investor, that £390 per calendar month, per room, figure | 0:55:22 | 0:55:27 | |
gives you a total yield of what? | 0:55:27 | 0:55:29 | |
Dum-de-dum... | 0:55:29 | 0:55:31 | |
If you said 23%, top of the class for maths. | 0:55:31 | 0:55:35 | |
But time to ask a school of local estate agents swimming this way | 0:55:35 | 0:55:39 | |
if this was the right decision, to convert to an HMO. | 0:55:39 | 0:55:44 | |
Let's start with the agent who saw it before the renovation. | 0:55:44 | 0:55:48 | |
I think what they've done with the property is very good. | 0:55:48 | 0:55:50 | |
I wouldn't have, er... | 0:55:50 | 0:55:52 | |
You know, to maximise income, I think they've done the right thing, | 0:55:52 | 0:55:55 | |
so I would have probably done the same thing. | 0:55:55 | 0:55:57 | |
They've pretty much done all they can do to get the amount of bedrooms | 0:55:57 | 0:56:00 | |
they have out of the property, | 0:56:00 | 0:56:02 | |
and they are quite spacious and they do work really well. | 0:56:02 | 0:56:05 | |
My first impression of the property is, it flows really nicely. | 0:56:05 | 0:56:07 | |
All the rooms have their own individual space, | 0:56:07 | 0:56:09 | |
nice kitchen area, nice wet room for people to use. | 0:56:09 | 0:56:12 | |
It's finished to a really high standard, you can see that, | 0:56:12 | 0:56:14 | |
particularly in the kitchen and the bathroom. | 0:56:14 | 0:56:17 | |
While this is a long-term investment as an HMO rental, | 0:56:18 | 0:56:21 | |
what could it fetch on the sales market? | 0:56:21 | 0:56:24 | |
As an HMO, you're probably looking at around £85 to £90,000 | 0:56:26 | 0:56:30 | |
for the property. | 0:56:30 | 0:56:31 | |
If it was converted back to a family home, | 0:56:31 | 0:56:33 | |
you'd probably be looking at around £95,000 for the property. | 0:56:33 | 0:56:36 | |
As an HMO property, | 0:56:36 | 0:56:37 | |
it's going to be in the region of £115,000 to £120,000. | 0:56:37 | 0:56:42 | |
The reason for this, | 0:56:42 | 0:56:43 | |
it is bringing in quite a considerable income per year, | 0:56:43 | 0:56:47 | |
so it is, I guess, in a way, a business investment for somebody, | 0:56:47 | 0:56:50 | |
so because of that, they do tend to fetch more money. | 0:56:50 | 0:56:53 | |
If it was converted back into a family home, | 0:56:53 | 0:56:55 | |
you'd be around about the 100 to £105,000. | 0:56:55 | 0:57:00 | |
Those top figures mean, as a family home, | 0:57:00 | 0:57:03 | |
they could net a pre-tax profit of 26,000, | 0:57:03 | 0:57:07 | |
or a profit of 41,000, if sold as an HMO, | 0:57:07 | 0:57:10 | |
before the usual taxes and expenses. | 0:57:10 | 0:57:13 | |
Yeah, I mean, that's the sort of valuation that we would expect | 0:57:16 | 0:57:18 | |
as a regular property. | 0:57:18 | 0:57:20 | |
Obviously, if you factor in the commercial elements of the HMO, | 0:57:20 | 0:57:23 | |
then we'd look to probably achieve something higher than that, | 0:57:23 | 0:57:26 | |
but we're going to hold the property anyway for the investor | 0:57:26 | 0:57:29 | |
and let it, but it's good for them to know that there's plenty | 0:57:29 | 0:57:33 | |
of equity in the property now. | 0:57:33 | 0:57:35 | |
Yeah, they're starting from a profitable position from day one. | 0:57:35 | 0:57:38 | |
A long-term investment, because 23% yields don't come along very often. | 0:57:38 | 0:57:43 | |
Will this be a trick the guys repeat in the future? | 0:57:43 | 0:57:46 | |
-Absolutely, yes, yeah. -More of the same, more of the same. | 0:57:48 | 0:57:52 | |
-Yeah, we'll keep repeating the model, I think. -Yeah. | 0:57:52 | 0:57:55 | |
So those were our stories from the auction houses of the UK today. | 0:57:57 | 0:58:01 | |
But there are many more out there. | 0:58:01 | 0:58:03 | |
So make sure you join us next time for more Homes Under The Hammer. | 0:58:03 | 0:58:06 | |
-We'll see you then. -Goodbye. -Bye. | 0:58:06 | 0:58:07 |