Episode 77 Homes Under the Hammer

Hello and welcome to bonny Scotland.

Now, not everybody's home can be as gorgeous and grand as this one.

Yeah, but we know somewhere where you might find something with

a bit of character, and it might even be a bargain, as well.

Yes. Why don't you head down to your local property auction?

People buy property through auctions almost every day.

And here on Homes Under The Hammer, we just love to hear their stories.

Yeah. So, what are the properties that we have on offer for you today?

In Codnor, Derbyshire, this two-bedroomed bungalow

is giving me that sinking feeling.

To exaggerate, the house is like that!

While in South Norwood, London, I'm feeling underwhelmed

by this open-plan living room, er... kitchen?

It's just a couple of units. I would call it a suggestion of the kitchen.

And in Stockton on Tees,

this three-storey property has got me feeling inspired.

Down here, you've got what looks like a bit of Jackson Pollock art.

All these properties were bought at auction. We'll find out who got them

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

Well done, sir.

I'm in the Amber Valley, in Derbyshire,

and the village of Codnor,

a traditional, old industrial village

close to both Derby and Nottingham.

Well, just away from the main part of the village, but still

with easy access to local shops, is the property I'm here to see.

Now, it is just off this fairly busy road, but the good news is

it's set slightly down in this bit of a hollow.

It's a two-bedroom, semidetached bungalow.

Well, you know, it looks a bit interesting from the outside.

The guide price, though, is £35,000.

Hmm. Suspicious.

Ah-ha!

Right. Well, let me show you what's OK first.

This is the kitchen.

Nice bit of wood panelling. It's not a bad size.

Big window out onto the garden.

Little utility area at the back.

Right. That's the good bit.

From there on in, this place heads rapidly downstream.

It is in a complete state. I mean...

Things hanging off the wall...

That is not good.

OK, I was expecting things to be wrong with the walls, perhaps,

but a floor? I don't know what's gone on here.

You've got some kind of tarmac-y, bitumen-type stuff

on top of rubble, and I bet, I don't know...

I mean, what's going on there?

This house really has got problems.

Let's see if it gets

any better as I head down into the house.

And when I say DOWN into the house,

I mean down.

It's like a hill as you walk towards the rear of the property.

It seems to be sinking quite significantly,

hopefully not as we speak, into that corner over there,

so, to exaggerate, the house is like that.

I'm not exaggerating that much, though.

You have to question yourself.

It's like one of those fairground things where you go in

and there's mirrors and the floor moves.

You have to keep correcting in your head and thinking,

is something wrong with me, or is it the house?

No. In this case it's the house. It is a complete disaster.

In terms of layout, if it was flat, it would be fantastic,

because that works well at the front.

You've then got a bathroom there and two decent-sized bedrooms here.

As I said, in terms of a layout of a bungalow,

I think it works quite well.

Just not the angle, that's not good.

I mean, it's really, really not good.

# Slip sliding away

# Slip sliding away

# You know the nearer your destination

# The more you're slip sliding away... #

Well, yes, it might be hard to see from the pictures, but believe me,

this place is on the slide.

There are some serious structural issues to be addressed,

and, at the very least, I guess it will need to be underpinned.

It will certainly need a new damp-proof course put in,

new floors, or more accurately, a flat-level floor.

And then, as for the rest, it's gutting the place

and starting again,

so I fear it may be a drain on your finances.

Well, one good thing you can say about the house is that

once you come outside it actually gets quite...positive.

The land it sits on, the plot itself,

is actually pretty well-sized.

There is even scope I would say around the side there

for some kind of extension.

And then to the front of the property, a half-decent garden

with nice shrubs, a few nice trees.

You are on the side of this busy road,

which is a bit of a disadvantage, as I said,

but all in all, the plot this little bungalow is on is great.

It's just the bungalow itself, which isn't.

# Miniature disasters and minor catastrophes

# Bring me to my knees

# Well, I must be my own master

# Or a miniature disaster will be

# It will be the death of me... #

Hm, so is there much hope for this small

two-bed bungalow with big problems?

What does the auctioneer who sold it think?

This is a bit of an interesting property.

I suppose you could call it quaint. There's not a lot to it.

But it is obviously very much down at heel

and needs everything doing to it to restore it, really.

The positives are basically it's set back off the roadway.

It has potential parking,

subject to removing a bit of overgrowth outside.

Looking at it from a pessimistic point of view,

one needs to be careful what you spend

because it certainly will have a ceiling value.

Yes, that's certainly a factor.

But the bungalow was guided at £35,000,

so how far off that ceiling was the guide price?

I don't think if you renovate this without adding to it

you're going to be able to push its value much over £90,000-£100,000.

And how might it fair on the rental market?

I would say once this is renovated it would have a rental value

in the region of £400 a calendar month.

Well, even with that relatively low £35,000 guide price,

you're going to have to think very carefully

before you take this project on.

That said, the plot alone could well be worth that money.

And if it came to planning permission,

you've already got a house here,

so what I suggest you do is knock it down and start again.

The planners would look favourably on that.

So it's the project and half for whoever took it on.

Let's find out who that was when it went under the hammer.

Lot number 18.

£40,000 to start.

40. 40 is bid. Thank you.

41 somewhere? 41.

At 41. 42.

42. Thank you. At 42. 43 is bid.

-44.

-There was a lot of interest in this property at the auction.

We return when the bids had reached 59,000.

59.

59,500.

500.

60,000.

At 60,000. 500.

At £60,500. Once, twice, third time.

Sold at 60,500.

So for £60,500 the successful bidders were local couple

John and Cath.

John was once an engineer on oil ships, which is lucky since

you'd need a good pair of sea legs to deal with the ups and downs

and slopes of the floor,

and I really hope they know what they've let themselves in for.

# Tell me that you'll open your eyes... #

-John, Cath, great to meet you both.

-Nice meeting you.

I hope you've walked into this project with your eyes open.

Half open, really.

-I didn't see as much as I thought it was.

-How do you mean?

A bit more what work than I thought it would.

Never counted on the floors, never counted on the damp courses,

never counted on the slope of the house.

Right. Are you a couple who like a challenge?

I do, I like a challenge.

-I do it for a hobby, it's not my job.

-A hobby?

-A hobby. Right.

-What was it? 12 months ago we bought one in Derby.

-Right.

So we done that one.

-A year later we bought this one.

-Wow!

John, tell me about your background.

I done engineering.

A long time. I worked in engineering for 18 years.

And then we started temporary foster carers,

-we've been foster carers for 28 years.

-Well done.

-28 and a half years.

-Great.

-How many children have been through your home?

-Lost count.

But not hundreds because we do long-term,

so they stay a long time with us,

so they are not coming and going all the time.

And we obviously...want to retire.

-So we have that plan in mind.

-Oh, great.

-Yeah.

-Is the idea to do it up for you?

-That's what we're going to do.

Well, despite all the downsides

and the mountain of work to be tackled,

John seems really confident that he can turn this wreck around

and get it shipshape again to make it a great home for him and Cath.

Tell me what the plan to sort it out is.

Start off and underpin it from the other side.

Underpinned from the other side.

Lots of concrete, get it underpinned,

-get the structure sorted out.

-That is the main thing.

Then the floors, what are you going to do with this?

This one is going to be dug up

to almost to where the foundations start.

And then internally, what are the plans layout-wise?

Well, this one is going to be open-plan all the way around here.

That bathroom will be changed into the far corner,

so there's no bathroom on the other side,

so the whole lot is going to be one open-plan.

As well as the open-plan kitchen/diner,

John and Cath intend on building into the attic,

installing a dormer window for a third bedroom with en suite.

How much of the work are you going to do yourself?

-89%

-Really?

-Yeah.

Most of the work will be me.

What's the timescale for sorting it?

-Up to 12 months.

-Right.

What sort of budget have you put aside?

My wife had suggested that I'm going to do it for £15,000.

-15?

-Yeah.

-If he's doing it all himself.

-And I think it's going to require a little bit more.

-No kidding.

I think it is going to be between 25 and 30,000.

I know it's going to be worth it in the end

because John is very clever, very good at what he does.

-Wow!

-It's nice encouragement, isn't it?

It's great. There's a lot of people out there

who would probably be scared by what's ahead.

-Not really, I'm not fazed at all.

-No.

-I think I can do it.

Well, listen, brilliant. I wish you all the very best.

Thank you.

Well, this really is vintage Homes Under The Hammer, isn't it?

You start off thinking John and Cath were possibly ill-advised

to buy this place, and by the end of hearing them speak

you just wish them all the best, really.

But, heck, there's a lot to do.

Find out what happens later in the show.

London's South Norwood might have been a little left behind

with all the improvements in West and Upper Norwood,

but that's changing as people are moving further along the train line

to get far more for their money.

City workers like South Norwood because of its fast train links

into Central London and nearby Croydon.

It might be relatively more affordable now,

but like most parts of the country, prices are rising and fast.

Well, this is a popular street,

although there is a school along this road

and so it can get a little bit busy.

But we at least there are speed bumps so

the cars won't be whizzing past too quickly.

And speaking of cars, well, I can see the flat I'm here to see today,

it's got off-street parking over there, which is great news.

It also has three bedrooms and a guide price of £200,000.

Great to have your own front door on a property like this.

Straight away, it feels really big, I do love these purpose-built blocks

because they're just so functional.

You've got a nice big bedroom here, another one through here,

another one through there, the bathroom.

I mean, it really does feel solid.

What a fantastic room. A great size.

Hm, this wallpaper is everywhere,

although I can see through the hall somebody started to take that off,

and it's a nightmare to get off.

So good job, some of it has already been done.

Now, this kitchen...

It's not really a kitchen, it's just a couple of units,

I would call it a suggestion of a kitchen.

And I am not really sure that it works here,

but there is a big old giveaway of what was through here...

serving hatch.

I think that kitchen probably used to live in there.

But we will have more of a chat about that later on.

But not a bad space.

You could really do a lot with this property.

So far I'm really liking what I'm seeing.

Well, yeah, apart from the mini-kitchen stuck in

the corner of the living room, that is.

I mean, there's barely enough room for a chopping board

on those worktops, even if you added a cooker in the designated space,

this kitchenette is not doing it for me.

# Oh, come with me

# To my little corner of the world... #

So would it be better to make this kitchen bigger

and keep it in this position

or move it back to its original home in the third bedroom?

My advice, ask the opinion of a local estate agent

and find out what the market around here demands.

Now I'm going to venture outside and that's good news because it means...

there is an outside! And look at the size of this garden.

That really is an incredible space.

It goes right the way up until the fence

because the garden behind is for the flat upstairs,

but it really is a great space.

You've got a little apple blossom tree in the middle,

so a lovely spacious flat, a nice garden.

Tick, tick. Thank you very much.

Gardens like this are a rare commodity in London,

and this will definitely be a draw to any prospective buyers.

# And it's getting better... #

So I think this place just keeps getting better.

But what will a local estate agent make of it?

The property is quite a good size.

It's got two good-size bedrooms,

the third room used to be kitchen,

which would be handy if it could be moved back in there because

the open-plan lounge/kitchen

wouldn't really suit a three-bedroom property.

You would make this property into a two-bedroom because

it will appeal to the general demand for the area.

At this moment in time there's a lot of city workers moving in the area,

young families with one child.

A three-bedroom would be a bit too much for them,

so you would be restricting your market.

Hm, now that's good to bear in mind, so what do the numbers tell us?

Well, as a two-bedroom flat,

the agent thinks the property could sell for £300,000

and rent for £1,200 per calendar month.

However, what if you do decide to keep this as a three-bedder,

but maybe improved it a little?

If this property was kept as a three-bedroom flat

with an improved layout, it will sell for in the region of £340,000.

And rental?

As a three-bedroom flat, this property could rent for around

the £1,500 per calendar month mark.

Well, as far as flats go,

I like this one, there's so much going for it.

You've got off-road parking as well as that lovely garden,

but there are some layout decisions to make here.

Should you leave the kitchen in lounge

or move it back to the third bedroom?

Who felt it was one to go for?

Well, let's head to the auction and find out.

South Norwood flat.

I don't know. Start at 200.

I'm not going to go below 200 on this.

200. 200 on my right.

200. 201. I'll take 201.

202. 202. 203.

204. 205.

206. 207.

Well, as I expected, interest was high on the property.

We return when bids had reached 253,000.

253.

254. 255.

256. 256, standing up. 257.

First time. 257. Back in. 258.

Yeah. 259.

Sir? 258, first time.

Second time. Third and last time.

Sold. 258, madam.

And with the successful bid of 258,000 was Tatiana.

She bought the flat with her husband Victor.

This was their first investment property,

and I was so excited to hear what they had planned for the place.

-Tatiana, congratulations.

-Thank you very much, Lucy.

Tell me about this flat. Why did you want it

and who spotted it in the auction catalogue?

I was the one who was looking through the catalogue

as soon as it came out,

so shortlisted quite a few properties to have a look at later.

Probably around 15.

Then my husband and I, we went to see the properties,

made another shortlist of about five

and eventually when I was in the auction room

I was only interested in three final ones.

I love your process - research, research, research.

That's what I like to hear. So you were really thorough with this?

Well, hopefully. You can always do more, I suppose,

but I felt like I done some good research.

Why have you decided to go into property now?

We were already thinking about that a couple of years ago.

Did a little bit of a dry run at the auction, but at that time...

it didn't quite work out for us.

We decided to wait it out for a few months.

But at that time I got pregnant

so we were focused on something else, something different.

So now we have our daughter Katie,

and also recently I was made redundant,

there was a big redundancy at our company,

so all the things combined together have led us to a decision that

now is probably the best time to start something different,

something better.

Now you've bought it, is there anything you're worried about?

Of course, it's our first project!

Worried about not to make a complete failure of it.

The concern is only natural

when tackling your first property development.

But Tatiana is following her instincts and going for it.

And it sounds like she and Victor have their heads on their shoulders,

doing plenty of research before the auction.

So what are their plans for the place?

The property was initially a two-bedroom,

and the previous owner bought it couple of months ago.

He started some renovation works.

He moved the kitchen from where it used to be into the reception,

making it an open-plan reception room

and put a couple of kitchen units here,

but what we would like to do is keep it as a three bedroom,

but remove the kitchen he put into this corner.

And take everything out and replace it with everything new.

-So this is your number one plan, kitchen in here?

-Yes.

You are going for the three bedrooms?

That's the leading plan at the moment.

So Tatiana and Victor are keeping it as a three-bedroom.

That will be a tight squeeze in here in my mind,

so I'll be interested to see how that pans out.

As for the rest of the property, all the bathrooms to be replaced,

as well as a thorough course of redecoration throughout.

So let's now talk numbers.

What sort of budget have you got for the work here?

Well, to be perfectly honest, we haven't put together a budget

in terms of we don't know exactly

how much everything is going to cost, we only have a figure in mind,

which we're hoping we're not going to exceed.

So this figure is between 12 and 15 grand.

Between 12 and 15,000. New kitchen, new bathroom, carpets,

wall coverings, plastering, because let me tell you,

by the time you've taken all this wallpaper off...

it's a bit of a bumpy ride underneath,

-so you may need to skim all the walls.

-Definitely.

Hoping that my husband is going to that, the skimming.

How long do you think it's going to take you before you're ready?

Because we're not that experienced and also we're going to do some of

the work ourselves, we are kind of thinking four, five months.

-OK.

-Because we only have weekends and the some of the evenings.

Also still have to look after our daughter,

so have to balance all of that.

What is the grand plan,

to do this place up and then obviously to sell it on at a profit?

This is one of the options. I say it's Plan A.

Plan B is to rent it out,

so we're really interested to find out what is the ceiling price

on this street and how much rental we could potentially get

-and decide based on that.

-It's been lovely meeting you today.

Good luck with this project, and I can't wait to see it.

-Well done.

-Thank you very much, Lucy.

So the first property development venture for Tatiana,

so everything's new and a little bit scary for her.

I really hope it's a straightforward debut project

and that she can make that kitchen work.

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

Coming up, in Stockton-on-Tees

Paul and Sean look out and get their top pick at auction.

-But...

-It wasn't quite as it seemed, was it, Sean?

While in South Norwood,

keeping that budget in check meant getting stuck into some DIY.

So we have learned quite a lot.

Let's head back now to Codnor in Derbyshire

where I visited this two-bedroom semidetached bungalow.

From the outside, quite a charming little house, but with

the low guide price of 35,000, I thought things might be bad.

MUSIC: O Fortuna by Carl Orff

Nope, it was much worse.

It is in a complete state.

I mean, things hanging off the wall.

Well, apart from the slightly over the top music put in by our editors,

and the obvious issues, the bungalow was sinking!

Where would you start? WHY would you start?!

Well, braving this project were John and Cath who bought this to be

their home after retiring from fostering for nearly 30 years.

They paid 60,500 for the property,

a lot more than the £35,000 guide price, so I was worried.

I hope you've walked into this project with your eyes open.

-Half open, really.

-How do you mean?

Bit more work than I thought it would.

Despite the initial shock,

John was more than ready to tackle all the structural work required.

There was to be an open-plan kitchen/living space,

the downstairs loo was to be moved,

and they would be creating a master bedroom with en suite in the attic.

It was a massive undertaking

and the only thing up for debate seemed to be the budget.

-My wife had suggested that I'm going to do it for 15,000.

-15?

-Yeah.

If he's doing it all himself.

-And I think it's going to require a little bit more.

-No kidding.

Well, who was right about that budget?

It's taken over three years for us to find out,

but let's have a look first.

This place is completely unrecognisable.

John and Cath have gutted the ground-floor of the house

and opened it up to create this generously sized kitchen/diner.

They've also moved the bathroom from one end of the house

to what was the utility room,

making a good-sized wet room on the ground floor.

The only two recognisable spaces are the two bedrooms,

which have, like the rest of the house,

been completely redone from top to bottom.

In the second bedroom, they've added patio doors,

meaning this could also be used as a dining room.

Upstairs, and the original plan was to turn the attic

into a master bedroom with en suite,

but after consultation with an architect, John and Cath decided to

maximise the space up here by adding a new roof to create two bedrooms.

One double, one single and a separate bathroom.

As well as inside, the pair have been busy in the garden too,

levelling off the previous slope towards the house

that they found had been causing flooding,

and building a retaining wall.

They've also created space for parking.

So what was a seriously dilapidated two-bedroom bungalow

is now a massive four-bedroom house.

This is some undertaking.

Let's start with the floors.

Before we thought that the damage on the floor was due to the trees

because the garden was full of big oak trees, but it wasn't.

It was due to the slacks that the previous builders had filled

the floors with.

The slack Cath is talking about is the in-fill in the foundations -

scrap materials and rotting wood that had been used in

the original construction - so all that had to be dug out.

The house then had to be underpinned to stop it sinking any further,

and then the floors could be re-laid.

But while all that sounds scary,

it turns out it wasn't the worst part for John.

The toughest challenge for me

was to set up the front garden with the wall.

It took no end of grab lorry to get rid of the soil and the dirt

and the stuff that was in there.

Obviously huge trees to be taken off and digging it out with the JCB.

-That was quite a tough job.

-It sure sounds like it.

John and Cath bought this property as a retirement project

and have done the majority of the work themselves,

albeit on a part-time basis.

They've been happy to take their time on the build, working on

the house for three months each year for the past three years,

spending the rest of their time touring France

and Spain in their motorhome.

They originally intended on living in the house once it was completed,

but now plan to sell it on

to fund their continuing travels across Europe.

The part of the house I'm most pleased with this the upstairs.

I'm amazed at what John has done

because until it was almost complete

I still couldn't visualise how it was going to be

because the roof had changed shape completely and actually gaining

two bedrooms and a bathroom, I think was brilliant.

The house is unrecognisable from the sad bungalow that was here before.

But I'm guessing both their original estimates

of what the renovation would cost will be unrecognisable too.

Was it what Cath said - 15,000?

Or John's estimate which was 25 to 30,000?

And the working total has cost us approximately £45,000.

Yikes! That is quite an overspend.

But you can see where lots of the money has gone.

So will they make enough profit for their future travels?

We asked two local estate agents along to give us their thoughts.

I think the finish is good for this property.

I like that they've got a modern feel throughout, but

they've still kept the traditional features in the property.

Personally, I like the addition of the two bedrooms upstairs

and I think it provides a wider target market for the vendors.

The selling points of this property are the fact that it's got

the shower room downstairs.

And also, the open-plan kitchen/diner, that's really

popular these days, so it means that you've got open-plan family living.

So a positive response from the agents.

But this project needs to make a profit.

John and Cath bought the property for £60,500

and have spent 45,000 renovating it.

Bringing their total spend to 105,500.

So what could it sell for?

I would value this property on the sales market for £140,000-£150,000.

I think on the sales market at the moment the vendor should be

looking to market the property at £145,000.

-Wow! That's a lot more than we thought.

-No, it was not!

Well, it is for me.

I always thought it would be that kind of price anyway.

You did, yeah. You kept saying that, yeah.

Well, despite that overspend

it looks like the motorhome will be on the road again,

with a potential profit of nearly £45,000 in the kitty.

But what if they decide to rent the house?

On the rental market we'd look to achieve £550 per calendar month.

I would advise the owners of this property to advertise

the property at £575 per calendar month.

£575 per calendar month would give John and Cath a yield of 6.5%.

So could they be tempted to rent it out?

That's a good rental value, but we don't have to rent.

No. Not going to be for rent.

So, eager to sell.

I wonder what's next for John and Cath.

Going to countries that we haven't been yet.

I would love to do Route 66.

That's in the plan for next year, but we need the money.

Stockton-on-Tees in County Durham

often picks up awards for Britain in Bloom competitions,

so will the auction lot I'm here to see today be blooming brilliant?

# Let's watch the flowers grow... #

Not far from the centre of Stockton is Oxbridge, and the property

I'm here to see which is a mixture of commercial and residential use.

Ground-floor - commercial, and over two floors you've got five bedsits.

It is at a guide price of £65,000-£80,000.

The kerb appeal isn't great. The rendering needs some work.

Let's hope it improves inside.

OK, what have we got? A lot of space in here.

Sectioned off into cubicles.

There's three areas here that have been sectioned off,

but a lot of floor space.

Personally, I'd get rid of all this, I'd start again.

Let's see what else there is.

Just like developing residential property,

with commercial it's key to make the space appeal

to as wide a range of potential clients as possible,

and opening up this former tattoo parlour would do just that.

OK, out the back we have got... a cupboard in there.

Toilet and sink just there, but it's dark and dingy.

You've got pipe work for services there.

There's electrics as well and your extractor just there.

Maybe it was a kitchen, Who knows? But down here you've got

what looks like a bit of Jackson Pollock art.

Now, I'm really thinking about taking this up

and trying to make a few quid. Just joking.

What you could do with this? Down here you can have a blank canvas,

you could do whatever you want with this.

It could potentially be a great commercial unit.

Get your plans right, you could be on to a winner.

Well, it turned out that floor wasn't real Jackson Pollock.

Who'd have thought it?

But on the bright side, having back room like that with amenities

in store just makes this premises more appealing.

But the real jewel in the crown here is that this house has

five bedsits on two floors,

which of course means that this comes under

the houses of multiple occupancy legislation.

Now, at the moment it doesn't have a licence,

so if you wanted to keep these five rooms, you'd need to apply.

And that costs around £1,000.

According to the catalogue, some of the rooms are tenanted,

so let's have a look.

OK, into the first bedsit.

That, I'm not sure what that is.

It looks like there may have been a shower there at some stage,

but I can't see any drainage at all, so not a great start.

This is small for a bedsit. Is it going to get any better?

Let's have a look.

The other two bedsits on this floor are in similar poor condition,

as is the bedsits' only kitchen.

And not only that, but so far, I've only seen one toilet.

I've also yet to see any sign of tenants.

Now, on one hand that could be good as it means you can set your own

rental charge, but it will mean you filling the bedsits before you

start to make any income.

# Gone, gone, gone

# Really gone!

# Gone, gone, gone. #

Two further bedrooms up here in similar conditions to the ones

on the first floor. There is a shower room but no toilet.

That means one toilet for five bedsits.

Whoever gets this property

would have two consider putting more toilets in.

# In the midnight hour she cried, "More, more, more!"

# More, more, more! #

One toilet and one shower does satisfy the minimum

requirements for five people sharing.

As an HMO landlord, you are only obliged to provide

two toilets for between six and ten people.

However, one loo between five people is hardly likely

to make for the happiest tenants in the world.

I think it would be a good idea to spend a little extra

and make this place more appealing to tenants, and that's doable

if you get it for anywhere near the guide price of £60,000-£80,000.

Let's get the opinion of an agent from the auction house who sold it.

I think the commercial unit downstairs is in quite a nice

prominent visual position.

It's in a good area,

so you've got quite a lot of customers that'll see it.

I think the rest of the property is a good size.

It needs a little bit of TLC to bring it up to a good spec, though.

Agreed!

What does he think needs done and, more importantly,

how much does he think it will cost to do it all?

With the ground floor unit, I'd want to basically do away

with the booths, put it as a blank canvas.

With the bedsits, I'd see

if we can accommodate any more facilities into it.

I would estimate that a ballpark figure to bring the downstairs

commercial unit and the upstairs apartments up to a rental standard

would be around £20,000-£25,000.

That's a sizeable investment,

but the agent thinks that the business premises

on the ground floor could rent for around £7,000 a year,

and each refurbished bedsit could bring in £270 per calendar month.

Based on the rental incomes that I've estimated,

I would expect the total income to be around £23,000 per annum.

This is an interesting lot. You've got the commercial downstairs

and the residential upstairs.

Now, on the auction listings, it did say sold as tenanted.

I can't see any sign of that from what I've seen.

Anyway, with the combined rental from the commercial

and those five bedsits upstairs, you could be on to a winner.

Let's see who agreed when it went to auction.

Lot number 32, then, in your catalogue.

Mixed-use commercial and residential property

situated in the proper popular location of Stockton on Tees.

Start me off, someone. At 75, am I bid? 70, then.

Start me off 70 here.

At 70, I'm bid now. At £70,000.

And 71. 71 at the back. 72.

73. 74. 75.

76. 77. 78.

79. 80. You're out.

Here is 79, back left.

At £79,000, are we all done? Here at 80.

At £80,000 with you, sir, against you and against you.

First time at 80. Second time...

Third and final time, if you're all done...

Selling away...

Well done, sir.

The successful bid of £80,000, at the top of the guide price

was made by friends Paul and Sean.

They met through their children, who attend the same school.

Paul already had a sizeable portfolio

when he began his business partnership with Sean.

Together, they now have seven properties they rent out.

-Paul, Sean, nice to meet you.

-Nice to meet you, Dion.

-Nice to meet you, pal.

-Dion.

-Congratulations.

-Thank you.

Tell us about that auction. How was it?

We got the property we were looking at,

but it wasn't quite as it seemed, was it, Sean?

We thought the property was coming fully let.

But when we arrived on Saturday, two days after getting the keys,

we found it was completely empty.

It said on the listings that it was fully tenanted,

earning X amount per month, and we thought, fantastic yield.

It's sorted. We'll work around that.

And it wasn't quite that way, was it?

No, but I mean, it's probably a blessing in disguise, actually.

-Blank canvas.

-We've got a blank canvas and we can work from there.

We can get the builders in and they're not inhibited by residents.

# Where do you go, my lovely? #

While it's a shame the tenants have left,

it does mean that Paul and Sean can get this place sorted

just that little quicker.

Generally, a lot of it's decorative work, believe it or not.

Once we've cleaned the place out,

-we're still talking about putting gas central heating in.

-New kitchen.

-New kitchen, extra WC...

-There's only one toilet between five rooms,

which is a bit much.

And it's on the first floor,

so we intend to bring another one on to the second floor.

There's a shower room there but there's no toilet. So we found...

There's a cupboard next to it, so if we can get the drainage to it,

we can get a toilet in there.

I'm glad Paul and Sean are tackling this.

They plan to create a second shower room by taking some

space from the kitchen.

They'll then add a toilet to the top floor shower room

so they have two toilets, both with showers.

Much more appropriate for a five-bedsit property.

But what about the shop?

I mean, basically, what we think is,

-if we make the whole front look nice, it'll attract people.

-Yeah.

Don't charge the earth for it,

give people sensible rent and they'll come.

Well, I can't argue with that.

But let's not forget this is a big building,

so even just doing a cosmetic tidy up will be a big undertaking.

So who'll be doing the work?

Have you got a team of people that, you know, are going to help you?

-Are you going to do some of the work yourself?

-We've got a main guy,

who does all our maintenance, called Roly.

-Roly!

-Yeah, and he has a team.

-There is a painter, Phil the Brush...

-Phil the Brush!

-Yeah, yeah.

-Chris the plumber...

-Chris the plumber. Barney.

-Barney the plumber.

-Bassy the Backup.

-Bassy the Backup?!

Just in case Bill the Brush doesn't turn up.

Roly, Phil the Brush, Bassy the Backup...

I think I stepped into a Guy Ritchie movie.

Well, let's hope this property will be changing lock, stock and...

Well, you know what I mean.

Anyway, having a gang like this sounds ideal.

Although Paul and Sean rent seven properties together already,

this is only the second development project they've taken on together.

And Diamond Dion would love to know how much dosh

they have for the boys to do the job.

-10-15 grand.

-What's the timescale for the work?

-Three months?

I reckon probably just over,

but we'll tell the builders three months.

LAUGHTER

Why not? So three months from what it is now to your finished product?

We'll be starting work next week.

Chaps, you've got a great balance and a great property,

-as well.

-Thank you!

-I hope it works out for you. Sean, good luck.

-Thanks, Dion.

-Good luck to you.

-Thanks, Dion.

-Good luck.

-Cheers, mate.

Paul and Sean initially disappointed,

as they thought they were buying a tenanted property.

That's not the case.

But with the help of the famous Roly and his team, will they

get this property turned around in the three-month scale and tenanted?

You can find out later on in the programme.

Well, when it comes to taking on a property projects,

it can take a lot of energy, patience and, most importantly,

-the ability to bounce back when things go wrong.

-Yes.

We've seen how one of our buyers got on, what about the others?

Yes, stick around and you will find out.

Back now to the London Borough of Croydon

and the increasingly popular South Norwood.

When I visited this three-bed purpose-built flat,

it had some great things - off-street parking

and a much-coveted garden space at the back, which was generous.

And the inside seemed spacious too.

Except when you got to the open-plan living-kitchen-room.

Well, I say kitchen... Er...

So this kitchen is not really a kitchen,

it's just a couple of units. I would call it a suggestion of a kitchen.

And I'm not really sure that it works here,

but there's a big old giveaway

of what was through here - serving hatch!

I think that kitchen probably needs to live in there.

But really, this wasn't my ideal kitchen,

and I thought reconfiguration was needed.

But would the new owner agree or be driven by maximising profits?

# Money talks

# Dirty cash, I want you dirty cash, I need you

# Whoa. #

Someone willing to face this question head-on is Tatiana,

who made the final bid of £258,000.

She and her husband Victor bought the flat as their first

property venture, so I was keen to find out what her plans

were for that teeny-weeny kitchen.

So, what we want to do is keep it as a three-bedroom.

-So this is your number one plan, kitchen in here?

-Yes.

You are going for the three bedrooms?

That's the leading plan at the moment.

So, with a budget of 12,000-15,000,

and setting themselves a timescale of four to five months,

would Tatiana and Victor make this three-bedroom property a success?

We returned six months later to have a peek.

What a transformation!

The tired and dated decor has been replaced with fresh,

bright walls and new neutral-coloured flooring.

It now looks sleek and contemporary.

The tiny kitchen has gone too, and is now a larger space

with additional units and integrated modern appliances.

The bright purple splashback adds a pop of colour

and complements the designer decor in this room.

The bathroom has also been refitted as well as restructured,

to offer as much space as possible.

Like the living-room-kitchen,

it's been finished to an impeccable standard with contemporary fittings.

The three bedrooms have been overhauled too.

The old wallpaper has gone, the walls skimmed,

windows replaced and new carpets fitted,

breathing new life into these once tired-looking rooms.

Tatiana and Victor have also installed a new gas central

heating system with a new boiler,

to bring this property firmly into the 21st century.

We wanted to go with a contemporary feel for the property,

because it's not a period property. It was a purpose-built in the '60s.

So we wanted to make sure that it looks very modern

and all of the fixtures and fittings are contemporary,

nice, shiny. So we hope that we have managed to achieve that.

Well, I would say so. The place is looking incredible!

So who's been responsible for all the work that's gone on here?

Well, the whole project has been managed by my husband, Victor

and myself.

So we sourced all of the materials,

so all the design decisions have been made by ourselves

and we did quite a lot of work ourselves as well.

So all the professional work, where professional work was required -

such as electrics and gas central heating system, bathrooms,

plumbing etc - they have been done by professionals.

And the other works have been done by ourselves.

So we have learned quite a lot.

As I expected, Tatiana and Victor have been very meticulous

managing this renovation and, well, it's definitely paid off.

They've also managed to keep to their original

timescale of five months.

But how did their budget fare of £15,000?

We eventually spent 14,500, which is under 15,000,

so we're really happy with that.

With all the work that's gone on here,

they've done brilliantly to stay under their budget,

which takes their total spend on this property to £272,500.

So, will these first-timers have turned a profit?

We invited along two local estate agents to find out.

Let's start with the one that saw the flat the last time.

Having a look around the flat, I think

it's been done to a really good standard. Luxury finish throughout.

Good finish to the bathroom. I love the splashback in the kitchen.

The fact that this property has been kept as a three-bedroom flat

with the open-plan lounge

and kitchen, to my surprise it actually works quite well.

All the rooms are of a good size.

The open-plan lounge and kitchen aspect

works really well in this flat.

Having looked around the flat, I must say, absolutely fantastic.

This is how flats should be finished. The colours are fantastic.

I know it looks all white, but there's little hints

on the woodwork of a slight off-grey colour. It's beautiful.

It's really subtle, really nice.

The bathroom is beautifully done, well thought through.

But also how the lounge and kitchen was done.

They've done the kitchen nice and compact in the corner

so it doesn't dominate the open-plan lounge-kitchen.

Mm! All very positive indeed, but let's get those valuations,

starting with the rental.

This flat could achieve around £1,600 per calendar month.

I believe the flat will rent for around £1,500 a month.

I think they're very good. They're very good for the area

and I think they reflect the true value of the property.

So if we were to go down this road, that would be fine for us, as well.

Using that top valuation of £1,600,

that would bring in a yield of 7%.

However, the plan was to sell, so let's hear what the agents think

this £272,500 investment is worth now.

This flat could achieve around £330,000.

I believe the flat would sell for around £325,000.

Well, not bad at all.

As it turns out, Tatiana and Victor have the flat on the market,

and only after a week they've managed to achieve even more,

accepting an offer of £350,000,

making them an incredible £77,500 profit before taxes and fees.

So do they plan to head back to the auction rooms any time soon?

I don't think we're going to go to the next auction right now,

because we want to take some time to rest

and have time together as a family over Christmas etc.

But next year, we're thinking next year is a good time for us

to start thinking about it again.

Back now to the market town of Stockton on Tees,

where I visited this three-storey property

with a mix of commercial and residential space.

And it had a guide price of £65,000-£80,000.

From the street, it was obvious the exterior was going to need

some attention, but inside, the shop was generously sized,

although, in my opinion, would need those booths ripped out

and generally freshened up to appeal to any potential tenant.

# Something better change! #

Up on the first floor, and to be honest

things were looking pretty grim.

Three very tired-looking bedsits,

a sad kitchen and a tiny toilet.

And then there was the top floor.

Two further bedrooms up here in similar condition

to the ones on the first floor.

There is a shower room, but no toilet.

That means one toilet for five bedsits.

Whoever gets this property

would have to consider putting more toilets in.

# I said something better change! #

The property was purchased for 80 grand by friends

and business partners, Paul and Sean.

But things didn't quite pan out as they expected.

It said on the listings that it was fully tenanted,

earning X amount per month. And we thought, fantastic yield, you know.

But when we arrived on Saturday, two days after getting the keys,

we found it was completely empty.

Still, every cloud and all that.

The tenants moving out meant they could get started.

With project manager Roly and his madly named team,

they planned to open up the first floor toilet to accommodate

a shower, install a new kitchen,

add a much-needed loo in the top floor bathroom

as well as fitting gas central heating

and a good deal of decoration throughout.

And all for a budget of between £10,000 and £50,000.

And a timescale of around three months.

So will Paul and Sean be quids in in their second property

development together?

We returned over nine months later to have a look.

On the first floor,

the three bedrooms have been completely overhauled.

The new carpets, fresh paintwork and gas central heating

now make these rooms excellent bedsit accommodation.

Along the hallway, the bathroom has been opened up,

stealing space from the kitchen to fit a much-needed shower.

It's a small space, but perfectly formed.

Next door, the kitchen has been refitted with new units

and appliances, making it a modern,

functional communal space for the five bedsits.

On the top floor, the two bedrooms have been redone to the same

excellent standard as downstairs.

They've also revamped the bathroom up here to include a toilet,

something that was oddly missing from this room before.

Paul and Sean have actually let out two bedsits already

and expect more tenants soon.

So the residential side of the property is looking good.

But what about the commercial?

Yes, the pair have let this out too.

It's been taken over by new tenants

and turned into a takeaway restaurant.

It all looks so easy,

but I'm guessing there's been a fair amount of work taking place here

since we last saw the pair.

Well, every room, as you can see, has been stripped back to basics.

It's been plastered where needed, electrics have been made good,

new lighting - LED low-energy lighting -

blinds, decent carpets, as you can see.

I mean, before, it was horrible, wasn't it?

-Yeah, it was terrible.

-You know, now it's like a five-star hotel now!

LAUGHTER

Steady on! Not quite.

I can't see the swimming pool or Jacuzzi anywhere.

There's no doubt, though, that Roly

and his team have turned in a nice job.

They've been responsible for all the renovation work here.

They also completed within the three and a half month timescale.

Paul and Sean decided to leave the property vacant for over

three months while a government grant for external cladding

was being processed.

This proved to be a lengthier process than first imagined

and is still ongoing, with work unlikely to begin

for another four to five months.

So they've started renting out the rooms with a warning to tenants

that the exterior building works are on the horizon.

What about that budget of 10-15 grand?

I think we've gone...

about 17,500 in total.

But that's due to the fact that we've left it empty for three

or four months, so we've had bills to pay. That's including everything.

-It's including solicitors. So about 17,500.

-17,500, yeah.

I don't think we've done a bad job for that.

That brings their total spend on the property to £97,500.

So let's find out what two local property experts make of it.

Will the lads' second property renovation together

prove to be a fruitful one?

My first impressions of the property,

having had a look around previously, is they've done a very smart job.

I think the finish is quite impressive.

I think it's quite sensible for them to put a bit more into it,

because then tenants will stay longer.

My first impression of the property is that it's very neat and tidy.

Looking at the layout, the second bathroom is a big advantage,

especially if there are five people in the property.

So they agree that the place is looking good,

but can Paul and Sean make a profit on their £97,500 investment?

Let's start at the bottom

and get the rental figures for the commercial space.

I would be expecting it to rent for approximately £500 per month.

The commercial unit rent, I think would be

around £500 per calendar month.

Paul and Sean have let out the space already

and for a figure of £450 per calendar month,

rising to £550 over the course of a five-year lease.

So those valuations are pretty much in line with that,

but what about the rental on the bedsits?

I think the bedsits on their own would be expected

to achieve around £70-£75 per week.

The rental price of the bedsits

would be around £65-£75 per week per room.

I think that's good.

We're trying to concentrate on the correct type of tenant

-rather than the rental values.

-Mm-hm.

-And...

-I think people will be happy living here.

-Yeah.

That's good to hear.

At £75 per week,

on the basis that all the rooms are occupied throughout the year,

and including the rental income from the commercial property,

that would be a whopping yield of between 23% and 26%.

So they can definitely afford to be picky.

Now, let's get those sales valuations to see

if these guys would be interested in selling.

I would expect investors to be interested in buying it

between £130,000 and £140,000.

If the property was to be sold,

we would expect something around £130,000-£140,000.

-It's reasonable.

-It's in the right ballpark.

Got no intention of selling it, so... Yeah.

So, not even a potential pre-tax profit of nearly 43 grand

is tempting them to sell.

They intend to stick to renting the rooms.

But since filming with us they decided to make

one of the first floor bedsits a room with a lounge.

So they'll actually make less income with four bedsits,

but they're more interested in getting good tenants.

Well, we might not have renovated any castles today,

but it's just amazing what people take on.

Yes, and if you don't fancy tackling a project yourself,

there's an easier way to enjoy property developing.

Yeah, just join us here next time on Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Goodbye.