0:00:02 > 0:00:05The property market can sometimes seem a little bit like the good old
0:00:05 > 0:00:08British weather - unpredictable and changeable.
0:00:08 > 0:00:12That is correct, but if you prepare yourself, you can reduce the stress.
0:00:12 > 0:00:14Yes, and one place that can throw up some really interesting
0:00:14 > 0:00:17options is your local property auction.
0:00:43 > 0:00:46Auction properties offer a huge variety -
0:00:46 > 0:00:49from one-bedroom flats to huge acres of land.
0:00:49 > 0:00:52Yeah, from old chapels to former public toilets.
0:00:52 > 0:00:56Yes, so we've seen all of those on the programme over the years,
0:00:56 > 0:00:58but here's what's coming up on today's show.
0:01:00 > 0:01:04Lucy has a manifesto for change at this Walthamstow, London flat,
0:01:04 > 0:01:06but on the whole, it's delectable.
0:01:06 > 0:01:08Fantastic. It certainly wins my vote.
0:01:09 > 0:01:12You'd be pretty unhappy if you didn't read the legal pack
0:01:12 > 0:01:15to this former health centre in Mansfield, Nottinghamshire.
0:01:15 > 0:01:18The seller would be entitled to some of the profits.
0:01:20 > 0:01:22And the buyer of this Derbyshire mid-terrace
0:01:22 > 0:01:25has found a neat way to help the local housing situation.
0:01:25 > 0:01:27You went to the Housing Association and said,
0:01:27 > 0:01:30"If I was to buy a house, what would you like it to be?"
0:01:30 > 0:01:31At 63...
0:01:31 > 0:01:34All these properties have been sold at auction, and we'll find out
0:01:34 > 0:01:38who bought them and what they paid when they went under the hammer.
0:01:38 > 0:01:39You've bought it.
0:01:43 > 0:01:47Lucy is in Walthamstow in the north-east of London -
0:01:47 > 0:01:49a borough that's aptly named.
0:01:50 > 0:01:53The name Walthamstow actually derives from the old English
0:01:53 > 0:01:56for "welcome place".
0:01:56 > 0:01:58Now, locals call it Stowie.
0:01:58 > 0:02:01And it's a popular place to live, with direct routes into the
0:02:01 > 0:02:05centre of London, a famous high street market and, of course,
0:02:05 > 0:02:07there's just a wealth of character properties.
0:02:07 > 0:02:09A welcome place, indeed, I'd say.
0:02:12 > 0:02:16For a property investor, the rising market is also a welcome addition,
0:02:16 > 0:02:21with sales prices here up by 12% during 2015.
0:02:21 > 0:02:24Still, it is possible to get a bargain at the auctions.
0:02:28 > 0:02:30Well, the property I'm here to see is a bit of
0:02:30 > 0:02:32a hike away from the closest tube,
0:02:32 > 0:02:36but it's about a ten-minute walk to a mainline train station
0:02:36 > 0:02:39and it's a 20-minute journey from there into Liverpool Street,
0:02:39 > 0:02:41into the city.
0:02:41 > 0:02:43So, not bad. So, here is the property.
0:02:43 > 0:02:45It's actually a two-bed,
0:02:45 > 0:02:49up on the first floor of this end-terrace house.
0:02:49 > 0:02:51It's a bit unusual-looking, I've got to say.
0:02:51 > 0:02:54It does look a little bit sort of tacked on the end
0:02:54 > 0:02:56and it's got a flat roof. Now, it went to auction
0:02:56 > 0:03:01with a guide price of ?220,000, so I'm going to take a closer look.
0:03:02 > 0:03:05On the positive side, the flat has its own entrance
0:03:05 > 0:03:09and it has 168 years left on its lease.
0:03:09 > 0:03:12But that flat roof can be a stumbling block for some mortgage
0:03:12 > 0:03:15providers, who may demand a roof inspection.
0:03:17 > 0:03:19So, at the top of the stairs there...
0:03:19 > 0:03:23nice to have your own front door into a really cosy flat.
0:03:23 > 0:03:27Now, first impressions, an extra wide hallway,
0:03:27 > 0:03:29although it might eat into the rooms,
0:03:29 > 0:03:30so I'll have to have a look at that.
0:03:30 > 0:03:35But through here, we've got the kitchen, again, which is fantastic.
0:03:35 > 0:03:38It certainly wins my vote. There's a big old table in here already,
0:03:38 > 0:03:40so you can eat in here.
0:03:40 > 0:03:42You've got some windows letting in loads of light.
0:03:42 > 0:03:45Looks like a fairly new boiler, always good to see that.
0:03:45 > 0:03:48Although, you will need to update the kitchen.
0:03:48 > 0:03:52And then, through into the lounge. I mean, look, really spacious.
0:03:52 > 0:03:54Got little picture rails up here, which are lovely.
0:03:54 > 0:03:58Bay window over here. Now, the good news is there's double glazing
0:03:58 > 0:04:02because that is quite a noisy road, so I'd be aware of that.
0:04:02 > 0:04:03Once you've decorated -
0:04:03 > 0:04:06cos you're going to need to get this hideous wallpaper off
0:04:06 > 0:04:08and that is stuck down for dear life -
0:04:08 > 0:04:10I think you've got quite a good little flat here.
0:04:13 > 0:04:16Lots of space, but the flat's decor is very tired
0:04:16 > 0:04:19and the colour scheme has to change.
0:04:19 > 0:04:22There's more greens in here then your local pitch and putt.
0:04:25 > 0:04:28Now, at the back of the property, well, this is one of the two
0:04:28 > 0:04:31bedrooms and, well, there are a few signs of damp,
0:04:31 > 0:04:33up there, down there.
0:04:33 > 0:04:36One possible cause, well, I know there's a flat roof up there,
0:04:36 > 0:04:39so you definitely should get that checked out.
0:04:39 > 0:04:41And then we have the bathroom,
0:04:41 > 0:04:43which is OK, could do with a bit of a spruce up.
0:04:43 > 0:04:45And then we've got the second bedroom through here.
0:04:45 > 0:04:47So, the flat is a good size,
0:04:47 > 0:04:50but there seems to be a lot of wasted space with a lot of
0:04:50 > 0:04:54square footage lost in this hallway, although it is fantastic.
0:04:54 > 0:04:56So maybe you could rejig the layout,
0:04:56 > 0:04:59but then you are in the realms of moving walls and doors
0:04:59 > 0:05:01and it could get expensive,
0:05:01 > 0:05:03so you've just got to weigh up your options
0:05:03 > 0:05:06and decide how quickly and cheaply you need to do this up,
0:05:06 > 0:05:09and then make your decision.
0:05:10 > 0:05:13One option you don't have is over outside space.
0:05:13 > 0:05:17The garden here belongs to the ground-floor flat.
0:05:17 > 0:05:19It's time to ask a local estate agent what
0:05:19 > 0:05:23he would do with this property, guided at 222,000.
0:05:25 > 0:05:27Key thing to add value, really,
0:05:27 > 0:05:30is down to...depending on what the owner wishes to do with it.
0:05:30 > 0:05:32If he's going to rent it out, then he needs to do things on
0:05:32 > 0:05:37a slightly different financial level to if he is looking to refurbish it
0:05:37 > 0:05:38to sell it on the open market.
0:05:38 > 0:05:42If you're looking to sell, then really reinstating the original
0:05:42 > 0:05:45features, all that sort of thing, is going to make a big difference.
0:05:45 > 0:05:48So, what could this renovated flat be worth on the sales and
0:05:48 > 0:05:51rental market?
0:05:51 > 0:05:52There's a big demand for these.
0:05:52 > 0:05:56So, easily ?1,350 per calendar month.
0:05:56 > 0:06:00Done up to a reasonable standard, this could sell for around ?375,000.
0:06:01 > 0:06:05Well, this is a spacious flat with not much wrong with it other
0:06:05 > 0:06:08than that little bit of damp. And, hopefully, it won't be too
0:06:08 > 0:06:12much work to make it spick-and-span and ready to rent or sell.
0:06:12 > 0:06:15So, who spotted the potential in this two-bed property?
0:06:15 > 0:06:18Let's head to auction and find out.
0:06:20 > 0:06:23Down the road to Walthamstow.
0:06:23 > 0:06:25Anyone bidding? ?200,000.
0:06:25 > 0:06:29Yeah, bidder down here. 200,000, I've got. 205?
0:06:29 > 0:06:30205 at the back.
0:06:30 > 0:06:36New competition. 205. 210. 215. 220. 225. 230. 235.
0:06:36 > 0:06:40240. 245. 250. 255. 260. 265.
0:06:40 > 0:06:42270. 275?
0:06:42 > 0:06:44If not, it's down here at 270,000.
0:06:44 > 0:06:47275. 280. 285? No.
0:06:47 > 0:06:50With you, sir, 280,000. 285 anywhere?
0:06:50 > 0:06:54If not, ?280,000 for the first, 280 for the second,
0:06:54 > 0:06:56280 for the third and final time.
0:06:56 > 0:06:58We all done?
0:06:58 > 0:07:00Sold, 280,000 to this gentleman in the front row there.
0:07:01 > 0:07:06A bid of 60 grand over the guide price at 280,000 secured the
0:07:06 > 0:07:09property for John, a local property developer.
0:07:10 > 0:07:13John has a portfolio of properties in the London area,
0:07:13 > 0:07:17but what did he have planned for this new purchase?
0:07:17 > 0:07:19John, so lovely to meet you. Congratulations. Nice to meet you.
0:07:19 > 0:07:21Thank you. Now, I hear you're local.
0:07:21 > 0:07:23You literally live round the corner from this purchase.
0:07:23 > 0:07:26Yes, ten minutes up the road, so it's nice and handy to get to.
0:07:26 > 0:07:29So, who saw it? Who was the one that spied this in the catalogue?
0:07:29 > 0:07:31Well, I keep my ear quite close to the ground.
0:07:31 > 0:07:35I've got a few properties and I wanted to get in there and
0:07:35 > 0:07:37buy one more property before the stamp duty hike came in,
0:07:37 > 0:07:40only a week ago. And it would have cost me a lot more to buy
0:07:40 > 0:07:43this property now than it did when I did buy it.
0:07:43 > 0:07:46As a result of having watched Homes Under The Hammer for
0:07:46 > 0:07:48a long time, I have bought a few properties at auction and
0:07:48 > 0:07:51I've done pretty well with them. I've got some...
0:07:51 > 0:07:55I've learned a lot of ideas and I feel as if I'm quite confident now in doing this.
0:07:55 > 0:07:59So, had you wanted to purchase at auction prior to watching the show,
0:07:59 > 0:08:01or did it kind of, like, put something in your mind?
0:08:01 > 0:08:03I hadn't even considered it before watching your programme.
0:08:03 > 0:08:06So, I started watching it, I saw a few episodes and I ended up
0:08:06 > 0:08:08recording it when I was at work, so it's very sad.
0:08:08 > 0:08:11But I ended up having so many episodes
0:08:11 > 0:08:15of Homes Under The Hammer on my hard drive that I ended up having to
0:08:15 > 0:08:17start deleting them without watching them,
0:08:17 > 0:08:19which was heart-breaking for me.
0:08:21 > 0:08:25Seems like being a fan of the show is paying off for John.
0:08:25 > 0:08:28He works full time with his local authority in housing,
0:08:28 > 0:08:31so he certainly has a passion for property.
0:08:33 > 0:08:37# I'm your number one fan
0:08:37 > 0:08:40# I'm your number one fan. #
0:08:40 > 0:08:41So, having bought this now,
0:08:41 > 0:08:43are you going to be selling this on or renting it out?
0:08:43 > 0:08:46I'm going to rent it out. I'd like to add it to my portfolio.
0:08:46 > 0:08:49I think it's a decent property in quite a good location and I think
0:08:49 > 0:08:53there is still momentum for it to appreciate in value.
0:08:53 > 0:08:55So, I think over the course of the next five years,
0:08:55 > 0:08:57I'll be renting it out and seeing how things go. Fantastic.
0:08:57 > 0:09:00So, let's talk about what you're actually going to do here.
0:09:00 > 0:09:02OK, we're not going to do anything too radical,
0:09:02 > 0:09:04we're going to do a simple refurbishment.
0:09:04 > 0:09:07We're going to strip all the walls, put new carpets down throughout,
0:09:07 > 0:09:10put in a new kitchen, new bathroom and just tart it up
0:09:10 > 0:09:13and make it look really nice for the rental market.
0:09:13 > 0:09:17I'm thinking of spending no more than between 8,000 to 10,000.
0:09:17 > 0:09:20I should imagine it's probably going to go towards the upper end of the budget.
0:09:20 > 0:09:21How good are you at doing the work?
0:09:21 > 0:09:23Because maybe if you could do a lot of the work... Oh, no!
0:09:23 > 0:09:26I was going to say, you could stick to that budget.
0:09:26 > 0:09:29If you need to rely on tradesmen, that's where the money comes in.
0:09:29 > 0:09:31Yeah, I'm not very good, I've got to admit.
0:09:31 > 0:09:32I don't really like getting my hands dirty.
0:09:32 > 0:09:35And when I do, it always ends up taking three times as long
0:09:35 > 0:09:37and costing three times as much.
0:09:37 > 0:09:39So, I've learned from my mistakes, in that respect.
0:09:39 > 0:09:42And I have got a builder lined up, ready to start work tomorrow.
0:09:42 > 0:09:44I did have a look round the property myself prior to buying it
0:09:44 > 0:09:47and I did see that there was a couple of damp patches.
0:09:47 > 0:09:50And those patches have been made a little bit worse by my builder,
0:09:50 > 0:09:52who had a quick look around it before you came.
0:09:52 > 0:09:54But I think they are quite superficial.
0:09:54 > 0:09:57I've seen the walls and there doesn't seem to be any outlets
0:09:57 > 0:10:00where water is coming in and the roof might need to be looked at,
0:10:00 > 0:10:03but my builder has already said that he'll be able to do that as
0:10:03 > 0:10:05part of the refurbishment work that he's doing.
0:10:05 > 0:10:07So, hopefully, it's not going to cost too much money.
0:10:07 > 0:10:10Fingers crossed, because the minute you mention the word roof,
0:10:10 > 0:10:13I'm like... Ahh! You need to check that out as soon as possible.
0:10:13 > 0:10:15Yes, I know. But I did have a survey done on it
0:10:15 > 0:10:18and the surveyor didn't pick up on any issues with damp,
0:10:18 > 0:10:22so I hoping that's going to be OK. Now, any structural work?
0:10:22 > 0:10:24You going to be taking down any walls or moving anything?
0:10:24 > 0:10:27Or have you thought about potentially going up into the loft?
0:10:27 > 0:10:30I have thought about it, there's no loft, as such, cos it's a
0:10:30 > 0:10:33flat roof, but I would like to maybe put in a roof garden. Wow!
0:10:33 > 0:10:35A roof garden?!
0:10:35 > 0:10:38Yes, because there isn't any outdoor space that comes with this property.
0:10:38 > 0:10:41There is a garden, but it belongs to the ground-floor flat.
0:10:41 > 0:10:44Though, there is as much outdoor space as you want in
0:10:44 > 0:10:46Epping Forest nearby, so...
0:10:46 > 0:10:49I am worried that the roof garden might sort of look over the
0:10:49 > 0:10:51roundabout over there.
0:10:51 > 0:10:54It's quite noisy, it's not the prettiest, quietest area.
0:10:54 > 0:10:58Do you really think that whoever is going to rent this or want to
0:10:58 > 0:11:00buy this will want that?
0:11:00 > 0:11:02I'm very interested to hear your opinion and it's something
0:11:02 > 0:11:03that I'm going to consider.
0:11:03 > 0:11:06It's not something that I've committed myself to yet.
0:11:09 > 0:11:11A roof garden?!
0:11:11 > 0:11:14I'm pretty sure how most people would advise John on that idea.
0:11:16 > 0:11:23# Johnny, don't do it
0:11:23 > 0:11:30# Johnny, don't do it don't do it, don't do it. #
0:11:30 > 0:11:33John certainly has enough on his plate. In addition to working
0:11:33 > 0:11:36full-time and having his property portfolio,
0:11:36 > 0:11:40he has a nine-month-old daughter, Eliza, with his wife, Julia.
0:11:42 > 0:11:46How are you going to fit everything in in your life?
0:11:46 > 0:11:49I've done it for some time now and I'm used to spinning plates.
0:11:49 > 0:11:52It really is a case of, "That today, that tomorrow,
0:11:52 > 0:11:55"I've got to go to work now." Yeah, life goes bang, bang, bang for me.
0:11:55 > 0:11:58But I've got a good team of builders who are going to turn this
0:11:58 > 0:12:01place around for me. I'll obviously be here to project manage.
0:12:01 > 0:12:02How do you think Eliza feels about it all?
0:12:02 > 0:12:05She was here today, wasn't she? Well, I'm hoping to get her
0:12:05 > 0:12:08into properties from a young age. Oh, really? Yeah, so she...
0:12:08 > 0:12:10She can manage Daddy's portfolio? Yeah, well, one day, maybe.
0:12:10 > 0:12:12That's something that I'd like her to consider doing,
0:12:12 > 0:12:14but, obviously, I'm not going to push her down that road.
0:12:14 > 0:12:17But, yeah, it's going to be something that I'd like her to
0:12:17 > 0:12:20consider doing if she wants to go down that road in the future.
0:12:20 > 0:12:22Listen, I'm so excited and I can't wait to see the flat when it's done.
0:12:22 > 0:12:24Thank you. How long is it going to take you?
0:12:24 > 0:12:27I think it's probably going to take in the region of about six to eight
0:12:27 > 0:12:29weeks. OK, six to eight weeks. Fingers crossed.
0:12:29 > 0:12:31Eight to ten grand, depending. Yes.
0:12:31 > 0:12:32Good luck with that. Thank you.
0:12:32 > 0:12:36So nice to meet you. Thank you, Lucy. Good luck. Thank you.
0:12:37 > 0:12:39Now, John is no stranger to the property game.
0:12:39 > 0:12:43Over the years, he's managed to build up a good rental portfolio.
0:12:43 > 0:12:45And I think that he has done quite well here.
0:12:45 > 0:12:48He's bought a spacious flat, close to where he lives,
0:12:48 > 0:12:51which has a long lease and it doesn't need too much work.
0:12:51 > 0:12:55But will sorting the damp be more problematic and costly than
0:12:55 > 0:12:57John anticipates?
0:12:57 > 0:12:59And will his budget be blown? Hm!
0:12:59 > 0:13:02You can find out how he gets on later in the programme.
0:13:07 > 0:13:08This is Mansfield,
0:13:08 > 0:13:12a market town located around 12 miles north of Nottingham.
0:13:14 > 0:13:17The area was originally a retreat for royalty
0:13:17 > 0:13:19in the 14th and 15th centuries
0:13:19 > 0:13:22due to its location within the Sherwood Forest.
0:13:24 > 0:13:28Mansfield has been through many changes since then, and nowadays,
0:13:28 > 0:13:33it's got great road links, a train station and a large shopping centre.
0:13:35 > 0:13:38Just a ten-minute walk from the historic town centre of
0:13:38 > 0:13:40Mansfield is the auction lot I'm here to see.
0:13:40 > 0:13:44And it's fair to say it's not your average two up, two down.
0:13:44 > 0:13:45It's this -
0:13:45 > 0:13:49a former health centre, set on half an acre of land
0:13:49 > 0:13:52with a guide price of ?125,000.
0:13:52 > 0:13:53I'm going to take a look.
0:13:53 > 0:13:57The auction catalogue states it's 0.44 of an acre,
0:13:57 > 0:13:59so please forgive me for rounding up.
0:13:59 > 0:14:03That's the size of an ice hockey rink, if it helps.
0:14:03 > 0:14:05So, that seems like a relatively low guide price
0:14:05 > 0:14:06for a property of this size.
0:14:09 > 0:14:15OK, I can immediately see why that low guide price of ?125,000
0:14:15 > 0:14:18has been put on this property.
0:14:18 > 0:14:21Someone has had a real good go at this. There's nothing here.
0:14:21 > 0:14:26The windows of all been smashed, plasterboard, non-existent.
0:14:26 > 0:14:28It's a mess. Absolute mess.
0:14:28 > 0:14:30Another reason why that guide price might be
0:14:30 > 0:14:33so low is that it's listed and sold with
0:14:33 > 0:14:36a claw back, overage clause,
0:14:36 > 0:14:39which means that the seller would be entitled to some of the
0:14:39 > 0:14:43profits from the developer later on down the line.
0:14:43 > 0:14:45That clause could bite you in the budget.
0:14:45 > 0:14:46GLASS SHATTERS
0:14:46 > 0:14:50It's another reason why you should always read the legal pack.
0:14:56 > 0:14:58This building is huge!
0:14:58 > 0:15:01Spread over two floors.
0:15:01 > 0:15:05There's a maze of examination rooms, reception areas, hallways,
0:15:05 > 0:15:08all in all, adding up to a gross internal area of
0:15:08 > 0:15:121,817 square metres.
0:15:16 > 0:15:18I may be some time.
0:15:21 > 0:15:26The former medical centre has a D1 classification, which applies to
0:15:26 > 0:15:32non-residential uses, like churches, public libraries or art galleries.
0:15:32 > 0:15:35If you wanted to convert it into something residential or
0:15:35 > 0:15:39another usage that doesn't fall within the D1 category, you would
0:15:39 > 0:15:43need a change of use permission from the local planning authority.
0:15:43 > 0:15:46So, on this type of project, my advice would definitely be
0:15:46 > 0:15:50to get expert planning advice before you bid a penny.
0:15:51 > 0:15:54I've had a good look round this place now and it is a mess.
0:15:54 > 0:15:58I don't think there's much you can recoup from that building,
0:15:58 > 0:16:01but the choice is yours. The options are huge.
0:16:01 > 0:16:04For me, I've got to total that, start again,
0:16:04 > 0:16:05put some really nice flats on.
0:16:05 > 0:16:09You've got a great location in the centre of Mansfield.
0:16:09 > 0:16:13It could be an amazing development. Car park is in place for you.
0:16:13 > 0:16:18Get it turned around, get it looking pretty, get it looking new,
0:16:18 > 0:16:19and offer me one of those flats.
0:16:20 > 0:16:22On something as massive as this,
0:16:22 > 0:16:25even a small error in your calculations could turn out
0:16:25 > 0:16:27to be very costly.
0:16:27 > 0:16:32So, to get a second opinion, we've called in a local property expert.
0:16:32 > 0:16:35Its history is, obviously, a former health centre. I think, if it was
0:16:35 > 0:16:37my plot, I would purely and simply
0:16:37 > 0:16:39just demolish it and start again.
0:16:39 > 0:16:41Have this as a blank canvas
0:16:41 > 0:16:44and then explore a wide range of avenues.
0:16:44 > 0:16:47The plot does have road access, both to the front and the rear,
0:16:47 > 0:16:50so that should help with any residential plans.
0:16:50 > 0:16:53But what scale development could we be talking here?
0:16:55 > 0:17:00My feeling is that you probably can get 20+ units on here.
0:17:00 > 0:17:02It's a sizable plot.
0:17:02 > 0:17:05It's half an acre, so there's plenty of scope here.
0:17:05 > 0:17:09What sort of budget would you need for such a development?
0:17:09 > 0:17:11Cost of development, 20 units plus,
0:17:11 > 0:17:14you are looking ?55,000 to ?60,000 per unit.
0:17:14 > 0:17:18That entails towards ?2 million worth, overall.
0:17:18 > 0:17:20Another factor is the demolition costs,
0:17:20 > 0:17:24which will be within the region of ?20,000 to ?30,000,
0:17:24 > 0:17:26but also, in addition to that,
0:17:26 > 0:17:29there may be asbestos here, so the cost will rise.
0:17:29 > 0:17:33So, the cost could be very high, but what about the potential returns?
0:17:33 > 0:17:36If someone was to build townhouses and flats,
0:17:36 > 0:17:40the townhouses would be within the region of ?120,000.
0:17:40 > 0:17:43The flats would be would be within the region of ?85,000.
0:17:43 > 0:17:44If somebody was to build here,
0:17:44 > 0:17:48the finished project would look within the region of ?3 million!
0:17:48 > 0:17:50There's options here.
0:17:50 > 0:17:53You could try and redevelop what you've got,
0:17:53 > 0:17:57but, for me, my choice would be to completely total it and put
0:17:57 > 0:18:02some more, maybe flats, houses... You know, the choice is yours.
0:18:02 > 0:18:03So much scope here.
0:18:03 > 0:18:07Let's see who has seen the potential when it went to auction.
0:18:07 > 0:18:09I'm going to start the bidding on the property at 100,000.
0:18:09 > 0:18:12Somebody bid me 105. 105.
0:18:12 > 0:18:14110. 150.' 150.
0:18:14 > 0:18:17That is blowing the property out of the water. 150, gentleman's bid.
0:18:17 > 0:18:20155. Either of you?
0:18:20 > 0:18:2655, 60. 170. 170. 75. 80? 80. 85?
0:18:26 > 0:18:29200. And five. 205, sir?
0:18:31 > 0:18:35205. 210. 215. 220.
0:18:35 > 0:18:36225. 240.
0:18:36 > 0:18:39240. 245.
0:18:39 > 0:18:41250. 55.
0:18:41 > 0:18:44No. OK. 250, gentleman's bid on my right.
0:18:44 > 0:18:47First time at 250. Second time at 250.
0:18:48 > 0:18:51Third and final time. It's your bid.
0:18:51 > 0:18:5255. 60, sir.
0:18:54 > 0:18:56Yes? 60. 65?
0:18:58 > 0:19:00260 with you.
0:19:00 > 0:19:02260, first, second, third and final time.
0:19:03 > 0:19:05Sold at 260,000.
0:19:07 > 0:19:10The successful bid came from a trio of property developers,
0:19:10 > 0:19:14Mark, Paul and Chris, just off to the right of our shot.
0:19:15 > 0:19:19They paid more than double the 125 grand guide price for this,
0:19:19 > 0:19:21their first auction purchase.
0:19:24 > 0:19:29We met up back at the former health centre to discuss their options.
0:19:31 > 0:19:33Chaps, nice to meet you. Mark, Paul, and Chris. Hi, Dion.
0:19:33 > 0:19:35How are you doing? Yeah, doing well at the moment.
0:19:35 > 0:19:38Chris, tell us how the trio got together in business.
0:19:38 > 0:19:41Well, Paul and myself, our kids went to the same school,
0:19:41 > 0:19:45so we met during parents evenings.
0:19:45 > 0:19:49And then, Mark here actually developed the barn
0:19:49 > 0:19:50that Paul lives in.
0:19:50 > 0:19:55So, I got to know Mark through Paul and we came together.
0:19:55 > 0:19:58And how's it working out at present for you?
0:19:58 > 0:20:01Well, we get on well, but we don't like him.
0:20:01 > 0:20:03LAUGHTER Before we went on camera, I could feel that.
0:20:03 > 0:20:05I don't think that's necessarily the case.
0:20:05 > 0:20:07Probably because I'm the staying force.
0:20:07 > 0:20:09Somebody's got to keep their feet on the ground.
0:20:09 > 0:20:12And that's where I'm keeping them. You've got the high-vis on.
0:20:12 > 0:20:15You're the builder. Yeah, I do the construction side of things.
0:20:15 > 0:20:17And, Paul, what's your...third?
0:20:17 > 0:20:19What do you bring to the table?
0:20:19 > 0:20:22Well, I'm the salesperson in the game,
0:20:22 > 0:20:24so a bit of the sales and a bit of the buying side.
0:20:24 > 0:20:28So, that's what I get particularly involved with,
0:20:28 > 0:20:31amongst other things. And, obviously, I specialise in winding
0:20:31 > 0:20:34Mark up as well, which always helps about finishing things quickly.
0:20:34 > 0:20:36And it's never quick enough.
0:20:36 > 0:20:39This is yours now. You've got it. You know, you outbid everybody.
0:20:39 > 0:20:41What are your plans?
0:20:41 > 0:20:44You know, there's a lot of glass to refit here. Yeah.
0:20:44 > 0:20:48Unfortunately, it entails the removal of the structure
0:20:48 > 0:20:49completely from site.
0:20:49 > 0:20:51In terms of the plan,
0:20:51 > 0:20:53we've got some initial sketch drawings made up
0:20:53 > 0:20:57through the architects. We're looking at eight houses
0:20:57 > 0:20:59and 26 apartments on-site.
0:20:59 > 0:21:01Obviously, subject to planning.
0:21:01 > 0:21:03To get this from this lovely,
0:21:03 > 0:21:06salubrious place you are in,
0:21:06 > 0:21:08what's your budget? How much is it going to cost you?
0:21:08 > 0:21:12The total budget won't exceed around 1.9 million, including
0:21:12 > 0:21:14the acquisition price.
0:21:14 > 0:21:17So, we are pretty confident to that level.
0:21:17 > 0:21:19Could you just give us a bit more detail, one of you?
0:21:19 > 0:21:22Probably you, Mark. A bit more detail in what's exactly going on
0:21:22 > 0:21:24here. You mentioned flats. What kind of flats?
0:21:24 > 0:21:27Right, well, predominately, it's separated into...
0:21:27 > 0:21:29Because we're in between two streets,
0:21:29 > 0:21:31we're going to put the terrace blocks,
0:21:31 > 0:21:34which will be in stacked rows of three, we're going to try and get
0:21:34 > 0:21:37nine, I think we'll end up probably with eight, facing the church,
0:21:37 > 0:21:41which is a nice facade there. And to the rear here,
0:21:41 > 0:21:43we're going to have two blocks of flats, which you drive in
0:21:43 > 0:21:47and then it will have rear parking and gardens for the amenity.
0:21:47 > 0:21:49And, Chris, do you think -
0:21:49 > 0:21:51you've obviously done your homework -
0:21:51 > 0:21:54that's the best thing to do with the money you're spending
0:21:54 > 0:21:55in this area?
0:21:56 > 0:21:58HE LAUGHS
0:21:58 > 0:22:02Personally, I'd rather go to Barbados, but, you know...
0:22:02 > 0:22:05Yeah, it's a good site, centre of town,
0:22:05 > 0:22:08new accommodation always sells well in Mansfield, so, yeah. It's good.
0:22:08 > 0:22:10It's hopefully going to be good.
0:22:10 > 0:22:14Are most of your projects in this area or are they out?
0:22:14 > 0:22:17No, no, this is the third project. We've just come slightly out of town as such.
0:22:17 > 0:22:20Just hoping Mark gets it right this time, aren't we? Absolutely.
0:22:20 > 0:22:24Absolutely, yeah. Yeah. I'll get it right. He provides the comedy.
0:22:26 > 0:22:28I'm still waiting. Anyway... LAUGHTER
0:22:28 > 0:22:33I'll get my coat. Somebody's got to be serious.
0:22:33 > 0:22:36Behind the banter, you are all serious guys and taking on
0:22:36 > 0:22:38a job of this size, which involves demolition,
0:22:38 > 0:22:41you definitely have to have a serious side.
0:22:41 > 0:22:45I think it's just the cost of waste disposal,
0:22:45 > 0:22:48the relative problems with demolition, generally.
0:22:48 > 0:22:52Size, just the quantity of moving all this structure away.
0:22:54 > 0:22:56But, actually, what is in our favour,
0:22:56 > 0:22:58it's predominantly a steel frame building.
0:22:58 > 0:23:01So, once the cladding and internal stuff is taken away,
0:23:01 > 0:23:04it shouldn't be actually that bad to move.
0:23:04 > 0:23:05So...I'll go to you, Chris.
0:23:05 > 0:23:09What's the cost of getting rid of this huge building, the demolition?
0:23:09 > 0:23:12Too much.
0:23:12 > 0:23:16We've been quoted for 60,000 to take it out and get rid of everything.
0:23:16 > 0:23:19Obviously, with it being a building of the '60s, '70s,
0:23:19 > 0:23:21there's probably asbestos in here somewhere.
0:23:21 > 0:23:25So, we've got to be careful how that's got rid of.
0:23:25 > 0:23:28This property was sold with a claw back and overage.
0:23:28 > 0:23:30Tell us a little bit more about that.
0:23:30 > 0:23:32It means that the seller has the rights to actually...
0:23:32 > 0:23:36The seller to us has rights to take a portion of the uplifting value
0:23:36 > 0:23:38once we get planning.
0:23:38 > 0:23:41And also, when we sell on in the final stages,
0:23:41 > 0:23:43they get a claw back of the profit that we make.
0:23:43 > 0:23:46And, obviously, you've put that in the budget as well?
0:23:46 > 0:23:49Yeah, and what we're trying to do is negotiate down the terms of
0:23:49 > 0:23:52those percentages that they get.
0:23:52 > 0:23:53So, we will see.
0:23:54 > 0:23:57I'm pretty sure most people would run for the hills
0:23:57 > 0:23:58looking at this property.
0:23:58 > 0:24:01Despite this being their third project,
0:24:01 > 0:24:03they don't seem phased by it at all.
0:24:03 > 0:24:06And with three of them bringing something different to the table,
0:24:06 > 0:24:08I'm sure in a year's time, when we come back,
0:24:08 > 0:24:11it's going to be looking pristine and just how they want it.
0:24:11 > 0:24:14You can find out how they get on later on in the programme.
0:24:16 > 0:24:17Coming up in Derbyshire,
0:24:17 > 0:24:21a mid-terrace that's a safety disaster.
0:24:21 > 0:24:23Some near-death experiences in the space of 20 yards.
0:24:23 > 0:24:25That's pretty good going.
0:24:27 > 0:24:30And in Mansfield, Nottinghamshire, Mark, Paul and Chris have
0:24:30 > 0:24:33major safety issues too.
0:24:33 > 0:24:35It's absolutely full of asbestos.
0:24:38 > 0:24:42Earlier on in the show, Lucy was in Walthamstow,
0:24:42 > 0:24:47north-west London to see a two-bed flat guided at ?220,000.
0:24:47 > 0:24:51While it needed a decor change, it seemed someone
0:24:51 > 0:24:53had already started stripping the wallpaper,
0:24:53 > 0:24:55and with some assistance with the damp.
0:24:56 > 0:25:00There are few signs of damp, up there, down there.
0:25:00 > 0:25:03One possible cause, well, I know there's a flat roof up there,
0:25:03 > 0:25:05so you definitely should get that checked out.
0:25:05 > 0:25:07# Number one has gone through the roof
0:25:07 > 0:25:09# Number two won't believe it's the truth. #
0:25:11 > 0:25:14And John had it checked via a survey before
0:25:14 > 0:25:18he bought the property for 280,000.
0:25:18 > 0:25:20This was in addition to his portfolio,
0:25:20 > 0:25:22and the local developer was confident the damp
0:25:22 > 0:25:24was nothing to worry about.
0:25:26 > 0:25:28I think they are quite superficial.
0:25:28 > 0:25:31I've seen the walls and there doesn't seem to be any outlets where
0:25:31 > 0:25:34water is coming in, and the roof might need to be looked at,
0:25:34 > 0:25:36but my builder's already said that he'll be able to do that
0:25:36 > 0:25:38as part of the refurbishment work that he's doing.
0:25:38 > 0:25:40So, hopefully, it's not going to cost too much money.
0:25:40 > 0:25:43Fingers crossed, because the minute you mention the word roof,
0:25:43 > 0:25:45I'm like, ahh!
0:25:45 > 0:25:48You need to check that out as soon as possible. Yes, I know.
0:25:48 > 0:25:50Fingers crossed indeed.
0:25:50 > 0:25:54Three months on, has the flat roof flattened John's dreams
0:25:54 > 0:25:59of getting this property rental ready, or has he lucked out?
0:25:59 > 0:26:01Lucky rabbit's foot at the ready.
0:26:01 > 0:26:04# I see...
0:26:04 > 0:26:06# Shadows of a doubt
0:26:06 > 0:26:10# But I'm keeping my fingers crossed. #
0:26:15 > 0:26:18Well, it certainly looks much fresher with the lovely new kitchen
0:26:18 > 0:26:23and clean decor throughout, but all is not as it seems.
0:26:27 > 0:26:31The whole flat's been refurbished, from top to bottom. So...
0:26:31 > 0:26:34It was all very simply done, all painted white,
0:26:34 > 0:26:36and the living room, the kitchen,
0:26:36 > 0:26:41had a new bathroom and both bedrooms were completely redecorated.
0:26:41 > 0:26:43New carpets, new flooring.
0:26:43 > 0:26:46Er, fortunately, it had double glazing and central heating.
0:26:46 > 0:26:48I didn't realise how bad a condition the roof was in,
0:26:48 > 0:26:51so I got somebody to have a look at it,
0:26:51 > 0:26:54and upon closer inspection of the second bedroom,
0:26:54 > 0:26:58we ended up having to take all the ceilings down in both the bedrooms
0:26:58 > 0:27:03and the kitchen and put new ceilings up, new installation and a new roof.
0:27:03 > 0:27:05The budget went through the roof.
0:27:05 > 0:27:08Over the long term, hopefully, I'll definitely get my money back.
0:27:11 > 0:27:14An unfortunate pun, all things considered, John.
0:27:14 > 0:27:17Can we assume he's pushed through the ceiling
0:27:17 > 0:27:19of his ?8,000 to ?10,000 budget, then?
0:27:19 > 0:27:22The roof in total cost about ?5,000,
0:27:22 > 0:27:26so that was quite a lot of money I hadn't expected to have to pay.
0:27:26 > 0:27:28But I had expected to spend something in the region
0:27:28 > 0:27:30of about 8,000 to 10,000,
0:27:30 > 0:27:33but what with the roof and a few other bits and pieces,
0:27:33 > 0:27:35the budget has more or less doubled,
0:27:35 > 0:27:38so we have spent something in the region of about 20 to 22,000.
0:27:38 > 0:27:41I haven't actually added up all the receipts yet, I'm a bit scared to,
0:27:41 > 0:27:44but I will be doing that over the next couple of days.
0:27:44 > 0:27:48But I expect they'll total something in the range of about 20 to 22,000.
0:27:50 > 0:27:53Well, a 12 grand overspend is not ideal,
0:27:53 > 0:27:57but better the budget goes up than the roof comes down.
0:27:57 > 0:28:00All those repairs have pushed his timescale from eight weeks
0:28:00 > 0:28:03to three months to complete, but the good news is John
0:28:03 > 0:28:07has secure tenants - and he didn't have to look very far for them.
0:28:10 > 0:28:13My plans for the property are to move the tenants
0:28:13 > 0:28:14from downstairs upstairs.
0:28:14 > 0:28:18Soon after I first bought the property, I gave them a little knock just to explain what my plans were,
0:28:18 > 0:28:21what I was going to do, how long it's going to take and all that sort of thing.
0:28:21 > 0:28:24And to apologise for any noise, cos I knew there'd be a lot of that.
0:28:24 > 0:28:27I asked if they'd like to move in, because we got on really well
0:28:27 > 0:28:30and I felt that they could be pretty good tenants.
0:28:30 > 0:28:33And, er... So, yeah, they are moving in
0:28:33 > 0:28:35as soon as you've finished filming. Yikes!
0:28:35 > 0:28:37Well, we'd better scarper sharpish, then.
0:28:37 > 0:28:42With his overspend, John has held off on his planned roof garden,
0:28:42 > 0:28:46but is he still pleased with his end result of the flat?
0:28:46 > 0:28:49I'm most pleased with everything, really.
0:28:49 > 0:28:52It all looks really good, it looks how I expected it to look,
0:28:52 > 0:28:53possibly a little bit better, actually.
0:28:53 > 0:28:55The standard of finish has been quite good.
0:28:55 > 0:28:57I should hope so, for the money I've spent.
0:28:57 > 0:28:59There are some things that still need doing.
0:28:59 > 0:29:01I need to sort of, like, finish a few things off,
0:29:01 > 0:29:03but it shouldn't take more than a day or two.
0:29:03 > 0:29:06By then, I think I'll be very happy with all of it.
0:29:08 > 0:29:10But will John be pleased
0:29:10 > 0:29:12with what two local estate agents have to say?
0:29:12 > 0:29:15And will he raise the roof when it comes to valuations?
0:29:17 > 0:29:21My first impression of the property is that it's been refurbed
0:29:21 > 0:29:23to the sort of standard that I usually see when people
0:29:23 > 0:29:26are looking to rent - nice and clean and white walls.
0:29:26 > 0:29:29The main selling points to the property are its location.
0:29:29 > 0:29:32It's very near to...sort of local transport links,
0:29:32 > 0:29:35so for people who work in the city, it would be ideal for them.
0:29:35 > 0:29:38And I think it's got a lot of amenities
0:29:38 > 0:29:39in this natural area, as well.
0:29:39 > 0:29:42I think the layout of the property works really well.
0:29:42 > 0:29:46The fact that it's a separate kitchen works really well
0:29:46 > 0:29:48for working professional families.
0:29:48 > 0:29:51A lot of people do want a big size. Even if they are sharers,
0:29:51 > 0:29:55they want to make sure they have same enough sized rooms,
0:29:55 > 0:29:58rather than one person having a bigger room and the other one
0:29:58 > 0:30:01doesn't have the same, or similar type of room that's the other.
0:30:03 > 0:30:08John has spent ?302,000 on buying and renovating this property.
0:30:08 > 0:30:12He has already rented it out, but did he get it for the right price?
0:30:12 > 0:30:16And will the sales value make it a good long-term investment?
0:30:18 > 0:30:21I believe this property can achieve, on the sales market,
0:30:21 > 0:30:25anything between ?350,000
0:30:25 > 0:30:29to ?400,000, and on the rental market,
0:30:29 > 0:30:31I believe this property can achieve anything between
0:30:31 > 0:30:351,275 to 1,300 per calendar month.
0:30:35 > 0:30:41For the resale market, I think you're probably looking between ?375,000 and ?400,000.
0:30:41 > 0:30:43If you went down the rental route,
0:30:43 > 0:30:46you're probably looking at about ?1,300 per calendar month.
0:30:46 > 0:30:48Yeah, those are pretty good.
0:30:48 > 0:30:51That's kind of what I was hoping for, so I'm quite pleased with that.
0:30:55 > 0:30:58It's a case of "Johnny be good" here.
0:30:58 > 0:31:02While ?1,300 per calendar month gives him a 5% yield,
0:31:02 > 0:31:08a resale value of 400,000 would give him a pre-tax profit of 98 grand.
0:31:08 > 0:31:11He plans to keep renting the property in the short term.
0:31:11 > 0:31:15Maybe one day it will fall to little Eliza to decide
0:31:15 > 0:31:19what to do with it, but has her dad enjoyed the experience?
0:31:21 > 0:31:22ELIZA CRIES
0:31:24 > 0:31:26I think in spite of all the difficulties,
0:31:26 > 0:31:27it's definitely been worthwhile.
0:31:27 > 0:31:30I've enjoyed some parts of it, there have been other parts which
0:31:30 > 0:31:33have caused me a bit of stress, but I think overall it's been
0:31:33 > 0:31:37a good experience and I will more than likely go back
0:31:37 > 0:31:39into the auction room again at some point in the future.
0:31:45 > 0:31:48Heanor in Derbyshire is a market town, and the name comes from
0:31:48 > 0:31:52the old English meaning "place at the high ridge".
0:31:52 > 0:31:54So you've probably guessed the problem
0:31:54 > 0:31:55with the property, then.
0:31:56 > 0:32:02# It's the climb... #
0:32:02 > 0:32:04You're right, Miley Cyrus.
0:32:04 > 0:32:07While we're only half a mile from the town centre,
0:32:07 > 0:32:10I hope you've brought your walking boots.
0:32:12 > 0:32:14So, will the property I'm here to see prove
0:32:14 > 0:32:17a hill to climb for the person who bought it?
0:32:17 > 0:32:19Well, I guess that depends on its condition,
0:32:19 > 0:32:21and we'll find that out in a moment.
0:32:21 > 0:32:25I am here to see this - it's a three-bedroom mid-terrace,
0:32:25 > 0:32:28guide price of 58,000 quid. Let's have a look.
0:32:34 > 0:32:37That's a nice little feature, a sort of entrance porch there,
0:32:37 > 0:32:40keeps the cold and the noise out
0:32:40 > 0:32:42and it's straight into your front room.
0:32:42 > 0:32:44You've got the bay window there, which is quite nice.
0:32:44 > 0:32:46I mean, it looks a bit tired and dated,
0:32:46 > 0:32:49but I've not seen anything I don't particularly like. Apart from that!
0:32:49 > 0:32:50Oh, my gosh!
0:32:50 > 0:32:54Right, here's my health and safety tip for today.
0:32:54 > 0:32:59Glass doors like that were all the rage in the 1960s, the 1970s.
0:32:59 > 0:33:02They are a disaster waiting to happen.
0:33:02 > 0:33:05If you've got one of those in your house, please get rid of it now,
0:33:05 > 0:33:08because it's easy to fall into it, it's not safety glass,
0:33:08 > 0:33:12you go in there, it breaks, you fall on it and, you know,
0:33:12 > 0:33:16just let your mind run riot and you won't be far wrong.
0:33:16 > 0:33:18Get rid of that straightaway.
0:33:18 > 0:33:21Through into the rear of the property, where you've got
0:33:21 > 0:33:25a classic sort of two-up, two-down terraced property layout.
0:33:25 > 0:33:27Um... MARTIN LAUGHS
0:33:27 > 0:33:28Water electrics?
0:33:28 > 0:33:31What do we think? Mm... Not ideal.
0:33:31 > 0:33:35So, here we have a leaky water pipe and lots of cables,
0:33:35 > 0:33:37which look very, very old indeed.
0:33:37 > 0:33:40Fantastic, that needs to be sorted out straightaway.
0:33:40 > 0:33:43Er, but, erm, moving swiftly on... MARTIN WHEEZES AND LAUGHS
0:33:43 > 0:33:46Two near-death experiences in the space of 20 yards,
0:33:46 > 0:33:47that's pretty good going.
0:33:47 > 0:33:50Through into the kitchen, it's a very, very standard layout.
0:33:50 > 0:33:52This is an extension at the back,
0:33:52 > 0:33:56carries on through there to a separate bathroom and a loo.
0:33:56 > 0:33:58It's going to need a bit of work,
0:33:58 > 0:34:02it's definitely going to need to some new doors and electrics. Apart from that though, I like it.
0:34:04 > 0:34:06# You're an accident...
0:34:06 > 0:34:10# Waiting to happen... #
0:34:10 > 0:34:12I'm sure I don't have to tell you this,
0:34:12 > 0:34:15but water and electricity do not mix.
0:34:15 > 0:34:19After you have addressed the immediate dangers,
0:34:19 > 0:34:22a new bathroom and kitchen would not go amiss.
0:34:22 > 0:34:24Now, judging by the hazards downstairs,
0:34:24 > 0:34:27I'd better tread lightly upstairs.
0:34:27 > 0:34:28Ooh.
0:34:29 > 0:34:33Well, that's nice. You know, so many modern houses don't have
0:34:33 > 0:34:36a nice-sized landing - and that's exactly what you've got here.
0:34:36 > 0:34:40Bedroom's off it, but it's just nice to have that little bit of space.
0:34:40 > 0:34:44It just gives...an open feel upstairs, which is really good.
0:34:44 > 0:34:48The bedrooms are a pretty decent size - three bedrooms, of course.
0:34:48 > 0:34:50This is the biggest one.
0:34:50 > 0:34:53In here, though, the first thing I noticed, the floors. Hm.
0:34:53 > 0:34:56Something here. Feel a bit...
0:34:56 > 0:34:59Well, you can sense something as you walk around,
0:34:59 > 0:35:00in terms of some level changes,
0:35:00 > 0:35:03so that immediately starts some bells ringing.
0:35:03 > 0:35:06Is there any subsidence in this property?
0:35:06 > 0:35:10We are in an area of mining, so there is a possibility.
0:35:10 > 0:35:13That can easily be resolved. You need a mining survey,
0:35:13 > 0:35:15that will tell you whether there was a mine shaft within 20 metres
0:35:15 > 0:35:18of the property that could be causing a problem.
0:35:18 > 0:35:21I don't see any cracks, it could just be settlement to the floor,
0:35:21 > 0:35:24I don't know, but it definitely needs investigating.
0:35:25 > 0:35:27Well, there is certainly plenty of space up here,
0:35:27 > 0:35:31but it is worth getting the mining report and a structural survey,
0:35:31 > 0:35:34just in case you end up having the unwanted space
0:35:34 > 0:35:38of an abandoned coal mine for a basement.
0:35:38 > 0:35:40There is a lot of space outside, too.
0:35:43 > 0:35:46It's so easy when you're looking at auction properties to get
0:35:46 > 0:35:50wrapped up in the property itself and forget some of the really
0:35:50 > 0:35:52nice little bonuses that you occasionally have.
0:35:52 > 0:35:56In this case, a really nice garden to the rear of the property.
0:35:56 > 0:35:58And as you can see, it stretches back...
0:35:58 > 0:36:01oh, I don't know, maybe 100 feet or so from the house?
0:36:01 > 0:36:04It's thin, but this could be absolutely beautiful,
0:36:04 > 0:36:07and as an additional bonus, lovely views over the hills down there.
0:36:07 > 0:36:10So, yeah... Great. Really great.
0:36:13 > 0:36:15Time for some views of a different kind -
0:36:15 > 0:36:19those of an agent from the auction house who sold this property.
0:36:19 > 0:36:23What does he make of this house, guided at ?58,000?
0:36:25 > 0:36:27I've had a quick look around the property,
0:36:27 > 0:36:30and my first thoughts are it does need some upgrading and improvement.
0:36:30 > 0:36:32I think there's evidence of some damp and I would say the
0:36:32 > 0:36:35electrical installation also needs to be upgraded.
0:36:35 > 0:36:37The bathroom at the moment is currently downstairs.
0:36:37 > 0:36:39Some people don't like ground-floor bathrooms.
0:36:39 > 0:36:42It would be an opportunity maybe to bring it upstairs,
0:36:42 > 0:36:45make it a two-bedroom and bring the bathroom to the first floor.
0:36:45 > 0:36:49I think bringing the bathroom upstairs would certainly make the property more saleable.
0:36:49 > 0:36:51I don't think it would detract from the value,
0:36:51 > 0:36:53it certainly wouldn't add any, but I think it would enhance
0:36:53 > 0:36:55its prospects on the sales market.
0:36:55 > 0:36:58If I were looking to simply rent this property out, I would possibly
0:36:58 > 0:37:02leave the bathroom downstairs, as it wouldn't increase your rent at all.
0:37:03 > 0:37:05But value is what we're after,
0:37:05 > 0:37:08so let's compare sales values for a three and a two-bed.
0:37:10 > 0:37:13As a three-bedroom property, I would look to put this property,
0:37:13 > 0:37:16on the current market, for sale at ?90,000.
0:37:16 > 0:37:20If it were reduced to a two-bedroom property and bringing the bathroom upstairs,
0:37:20 > 0:37:22I would still look to market the property at ?90,000.
0:37:22 > 0:37:25However, I do think that would make it more saleable.
0:37:26 > 0:37:28And for rental?
0:37:28 > 0:37:31I would say that if the property were left as a three-bedroom
0:37:31 > 0:37:33and offered on the rental market, it would achieve
0:37:33 > 0:37:36a rent of somewhere in the region of ?600 per calendar month.
0:37:36 > 0:37:38I think if the property were reduced to a two-bedroom and offered
0:37:38 > 0:37:41to the rental market, the rent would be reduced slightly
0:37:41 > 0:37:46and it would achieve somewhere in the region of ?550 per calendar month.
0:37:47 > 0:37:49Well, a few things to sort out with the property.
0:37:49 > 0:37:52First and foremost, those health and safety issues
0:37:52 > 0:37:54of the glass in the door and the electrics
0:37:54 > 0:37:57and the water in far too close proximity.
0:37:57 > 0:37:59Definitely need a mining survey, but apart from that,
0:37:59 > 0:38:00this is a good, solid house
0:38:00 > 0:38:03that I think could do very well for somebody.
0:38:03 > 0:38:06Let's find out who that was when it went under the hammer.
0:38:09 > 0:38:1258 on the guide then, to put it into the bidding.
0:38:12 > 0:38:1558? 55 to start me?
0:38:15 > 0:38:1654?
0:38:16 > 0:38:1755.
0:38:17 > 0:38:1956.
0:38:19 > 0:38:2056, 57,
0:38:20 > 0:38:2358, 59.
0:38:23 > 0:38:25At 59, 60,000.
0:38:25 > 0:38:27At 60. 61?
0:38:28 > 0:38:3160.5, at 60.5. 61.
0:38:31 > 0:38:33500. 62.
0:38:33 > 0:38:38At 62,500 in two places, 63 on the front row.
0:38:38 > 0:38:4063.5, 64.
0:38:40 > 0:38:4464.5. 65,000.
0:38:44 > 0:38:4765.5, 66.
0:38:47 > 0:38:4966.5. 67.
0:38:49 > 0:38:51And five.
0:38:51 > 0:38:5367. Eight?
0:38:53 > 0:38:55At 67,500, your bid.
0:38:55 > 0:38:59For the first time, 68, 68,500.
0:38:59 > 0:39:0168.5.
0:39:01 > 0:39:05Once, twice, third chance.
0:39:05 > 0:39:09You've bought it, well done. 68,500, thank you.
0:39:09 > 0:39:12Very happy to get the house for 68,500 was Sarah,
0:39:12 > 0:39:14who works in IT procurement.
0:39:14 > 0:39:18She was cheered on by her mum, Anne.
0:39:19 > 0:39:21# That's Sarah... #
0:39:21 > 0:39:24Just in case you were in any doubts as to who she was.
0:39:24 > 0:39:26This is Sarah's second property.
0:39:26 > 0:39:27I met her to find out more.
0:39:30 > 0:39:34Sarah, lovely to meet you. And you. Congratulations. Thank you.
0:39:34 > 0:39:37Tell me why you wanted to buy this place.
0:39:37 > 0:39:39Well, it's in the area I wanted it to be.
0:39:39 > 0:39:41I've got a property already, which has gone to
0:39:41 > 0:39:45a housing association in Derby as four lettable rooms.
0:39:45 > 0:39:50So it's not a single-family let, it is four lettable rooms.
0:39:50 > 0:39:52So this is... I'm following the same formula,
0:39:52 > 0:39:54so I asked them, er,
0:39:54 > 0:39:56if they wanted another property, where would it be?
0:39:56 > 0:39:59They said Heanor, and this is where I started my search.
0:39:59 > 0:40:02So, you went to the housing association and said, "If I was to buy a house,
0:40:02 > 0:40:05"where would you like it to be and what would you like it to be?"
0:40:05 > 0:40:09That's right... There's no guarantee from them at that point that they would rent it from you.
0:40:09 > 0:40:12No, no, that was the original one that they've taken, so this was...
0:40:12 > 0:40:16I've got an established relationship with them and I said, "If I
0:40:16 > 0:40:19"brought you another one now, where would you like it to be?"
0:40:19 > 0:40:22Phenomenal. They didn't guarantee that they would rent it off you,
0:40:22 > 0:40:26but obviously things are stacked in your favour. Well, absolutely.
0:40:26 > 0:40:28They've already come to spec out what they want,
0:40:28 > 0:40:32more features in terms of fire safety than a standard,
0:40:32 > 0:40:35a standard let, so there's more work to do here
0:40:35 > 0:40:39than there would be in a single dwelling let.
0:40:39 > 0:40:41But it's, it's a good strategy.
0:40:41 > 0:40:43# Take care of your homework, fella
0:40:43 > 0:40:46# If you don't, somebody will
0:40:46 > 0:40:48# Oh, yeah... #
0:40:48 > 0:40:52Wow, talk about doing your homework.
0:40:52 > 0:40:56Sarah doesn't have to manage the property, and she's received
0:40:56 > 0:41:00a guaranteed rent of ?650 per calendar month.
0:41:00 > 0:41:04But she certainly needs to brush up on plenty of regulation
0:41:04 > 0:41:06to make it legal and above board.
0:41:08 > 0:41:11Actually, this afternoon, somebody will come in who's recommended
0:41:11 > 0:41:16by the local water authority to look at the, er, the leak.
0:41:16 > 0:41:18There is a leak from the main connection,
0:41:18 > 0:41:21so that will be looked at this afternoon, and then the plumber
0:41:21 > 0:41:23for the internal water coming down the wall,
0:41:23 > 0:41:26he's going to come and have a look at that this afternoon.
0:41:26 > 0:41:28And the floors?
0:41:28 > 0:41:30Er, I hadn't actually realised the floors!
0:41:30 > 0:41:31SARAH LAUGHS
0:41:31 > 0:41:33So they need to be looked at.
0:41:33 > 0:41:37There needs to be a heat detector in the kitchen, a smoke detector
0:41:37 > 0:41:41in the hall, a smoke detector in what will be a corridor here,
0:41:41 > 0:41:45and one of the first floor landing, and they all need to be interlinked.
0:41:45 > 0:41:48So that's the main piece of work making this into
0:41:48 > 0:41:50a habitable bedroom.
0:41:50 > 0:41:54The kitchen will stay pretty much as it is and then the bathroom,
0:41:54 > 0:41:56it will require a shower, but also,
0:41:56 > 0:41:58the bedroom doors need to be solid wood doors.
0:41:58 > 0:42:02They don't need to be fire doors, but they need to be solid wood,
0:42:02 > 0:42:06and also the kitchen door needs to be a fire door, as well.
0:42:06 > 0:42:10So, by approaching a council in the first instance and being
0:42:10 > 0:42:14referred on to some housing associations
0:42:14 > 0:42:18has allowed Sarah to forge herself a neat little business model.
0:42:18 > 0:42:21She has certainly found an ideal property to convert into
0:42:21 > 0:42:25a four-bed and she'll use the team of builders and tradespeople
0:42:25 > 0:42:27that worked on her previous project.
0:42:27 > 0:42:30She's hoping it will all take a timescale of three months.
0:42:30 > 0:42:32And what budget have you got?
0:42:32 > 0:42:35I'm looking around 6,000. Six? Yes.
0:42:35 > 0:42:39Including doing all those fire things and upgrading it? Yes, yes.
0:42:39 > 0:42:42I'm hopeful. We'll see, won't we?
0:42:42 > 0:42:43SARAH LAUGHS
0:42:43 > 0:42:47Well, listen, congratulations. Thank you very much. Very well done. Thank you, thank you.
0:42:47 > 0:42:50Well, it's so obvious when you hear someone like Sarah talking,
0:42:50 > 0:42:55the route that makes a lot of sense when it comes to some types
0:42:55 > 0:42:56of property development.
0:42:56 > 0:43:00Talk to the person who's going to be the end user. What do you want?
0:43:00 > 0:43:02And then do what they want. It's brilliant.
0:43:02 > 0:43:03How will she get on sorting it out?
0:43:03 > 0:43:08Will it turn out to be that amazing cash cow that she hopes?
0:43:08 > 0:43:11You can find out later in the show.
0:43:14 > 0:43:17Well, we still have to see how two properties
0:43:17 > 0:43:19are going to turn out, so don't go anywhere.
0:43:19 > 0:43:22Yes, will our remaining renovators be quids in?
0:43:22 > 0:43:26Or will they wish they hadn't even started bidding? Let's find out.
0:43:28 > 0:43:30Time for the ?250,000 question
0:43:30 > 0:43:33from the lot I saw earlier in Mansfield.
0:43:33 > 0:43:38What would you do with 260 grand? A Mediterranean villa?
0:43:38 > 0:43:42A small yacht? Or the biggest party for you and your mates?
0:43:42 > 0:43:45Sold at 260,000.
0:43:45 > 0:43:48Well, Mark, Paul and Chris, who is just out of shot here,
0:43:48 > 0:43:52bought a former health centre that was not easy on the eye.
0:43:53 > 0:43:57# Doctor, my eye
0:43:57 > 0:44:00# Tell me what is wrong
0:44:00 > 0:44:04# Just say if it's too late for me. #
0:44:04 > 0:44:07Worse was what you couldn't see -
0:44:07 > 0:44:09the almost half an acre site
0:44:09 > 0:44:13was listed and also had a claw-back clause that allowed
0:44:13 > 0:44:17the seller to receive some of the profits from future sales.
0:44:17 > 0:44:20But the trio could see real potential here.
0:44:20 > 0:44:23In terms of the plan, we've got some initial sketch drawings made up
0:44:23 > 0:44:25through the architects.
0:44:25 > 0:44:30We're looking at, erm, eight houses and 26 apartments on site.
0:44:30 > 0:44:33Obviously, subject to planning. To get this from this lovely... Mm.
0:44:33 > 0:44:38..salubrious place we're in... Mm. What's your budget?
0:44:38 > 0:44:39How much is it going to cost you?
0:44:39 > 0:44:42The total budget won't exceed around 1.9 million,
0:44:42 > 0:44:44including the acquisition price.
0:44:46 > 0:44:50Demolish and rebuild was the plan, so, 16 months later,
0:44:50 > 0:44:55do we have eight houses and 26 flats?
0:44:55 > 0:44:59# I ain't felt nothing like this, like this
0:44:59 > 0:45:02# I ain't felt nothing like this, like this... #
0:45:02 > 0:45:05Well, not entirely what I was expecting,
0:45:05 > 0:45:07but I must say, I really...
0:45:07 > 0:45:09# Like this, like this! #
0:45:09 > 0:45:13From one side of the site, there are eight three-bed homes,
0:45:13 > 0:45:15almost complete, apart from decoration.
0:45:17 > 0:45:21Built across two storeys, their layouts are identical,
0:45:21 > 0:45:22with kitchen, downstairs loo
0:45:22 > 0:45:26and a large lounge with patio doors leading out to the garden.
0:45:28 > 0:45:32The three bedrooms are also spacious and the bathrooms are finished
0:45:32 > 0:45:34to a very high standard.
0:45:34 > 0:45:37Around the side of the site are seven townhouses,
0:45:37 > 0:45:41also with three bedrooms but built over three storeys.
0:45:43 > 0:45:46With the exterior, the boys have followed their yellow brick code,
0:45:46 > 0:45:48so to speak.
0:45:48 > 0:45:51A lovely brick finish that meets the listed status of the area.
0:45:53 > 0:45:56These townhouses should be finished in around two months,
0:45:56 > 0:45:58meaning that despite the change of plan,
0:45:58 > 0:46:00this site is running to schedule.
0:46:00 > 0:46:04So, why did the trio change their plans?
0:46:04 > 0:46:07With Chris on holiday, Mark and Paul can tell us.
0:46:07 > 0:46:12On reflection, on more research with the local agents,
0:46:12 > 0:46:15it became apparent there was a need for new houses.
0:46:15 > 0:46:18Looking deeper into that, it was the three-bedroom new properties
0:46:18 > 0:46:21that were high on the list of agents, etc.
0:46:21 > 0:46:25So, that swayed us into building three-bedroom houses.
0:46:25 > 0:46:26We had the space.
0:46:26 > 0:46:29The problem was we had actually gone in for planning permission
0:46:29 > 0:46:33for 22 apartments when we decided against that particular plan.
0:46:33 > 0:46:36So, we then had to go back in for planning permission to supersede
0:46:36 > 0:46:39the 22 apartments for the seven houses at the back,
0:46:39 > 0:46:40which is phase two.
0:46:40 > 0:46:43The process normally takes sort of three months in total
0:46:43 > 0:46:46but it took four and a half, five months in total
0:46:46 > 0:46:47from the beginning to the end.
0:46:47 > 0:46:50So, it was more difficult than we anticipated, but eventually,
0:46:50 > 0:46:52we got there.
0:46:57 > 0:47:00Demolition was always going to be difficult.
0:47:00 > 0:47:04So, on the demolition, we employed an excellent contractor,
0:47:04 > 0:47:06who was first class.
0:47:06 > 0:47:09It was a very challenging project.
0:47:09 > 0:47:13It was a '60s CLASP building, which by nature of the animal
0:47:13 > 0:47:15is absolutely full of asbestos.
0:47:15 > 0:47:18So, specialists were brought in to remediate the site.
0:47:18 > 0:47:20Once you've got the asbestos out of the way,
0:47:20 > 0:47:24then dismantling the structure is relatively straightforward.
0:47:24 > 0:47:28The biggest challenge is separating the debris inside the building.
0:47:28 > 0:47:31Once you've done that process, crushing the hard-core
0:47:31 > 0:47:35and the rest of the procedures is relatively straightforward.
0:47:35 > 0:47:39The demolition issues, delays with planning and the change in the build
0:47:39 > 0:47:41could spell disaster for the budget.
0:47:41 > 0:47:45They hope to bring the whole thing in at 1.9 million,
0:47:45 > 0:47:49including the purchase price, so how have they done so far?
0:47:49 > 0:47:53Clearly, we've now gone into two phases of eight and seven houses.
0:47:53 > 0:47:56We're looking... We've got a very good handle and we're on budget.
0:47:56 > 0:47:59We're looking at about 1.35 million.
0:47:59 > 0:48:01We're heading quite tightly towards that figure.
0:48:01 > 0:48:05Clearly, we're not finished yet, but we believe that 1.35 million
0:48:05 > 0:48:06will be the spend budget.
0:48:08 > 0:48:09Despite all the difficulties,
0:48:09 > 0:48:13the boys have kept to the time and kept a sensible budget.
0:48:13 > 0:48:16But will they impress two local estate agents?
0:48:16 > 0:48:18Let's start with the agent who remembers it
0:48:18 > 0:48:21when it was just a disused health centre.
0:48:21 > 0:48:24I'm very impressed with the transformation so far.
0:48:24 > 0:48:28It's beyond what I conceived initially,
0:48:28 > 0:48:32so currently as I stand now, we've got a fantastic site.
0:48:32 > 0:48:37I think the design is what modern-day living requires.
0:48:37 > 0:48:39Obviously, in a central location,
0:48:39 > 0:48:42they've made the most of the space that they've got
0:48:42 > 0:48:45and it gives somebody everything they actually need
0:48:45 > 0:48:47in a three-bed townhouse.
0:48:47 > 0:48:49So, time for the valuations.
0:48:49 > 0:48:54Phase one, the eight two-storey houses, and phase two,
0:48:54 > 0:48:58the seven yet-to-be-completed three-storey townhouses.
0:48:58 > 0:49:00What could they each sell for?
0:49:00 > 0:49:02If this property was put on the open market,
0:49:02 > 0:49:06I think it could achieve around ?135,000.
0:49:06 > 0:49:07I haven't seen phase two,
0:49:07 > 0:49:10I haven't been in them or studied the plans,
0:49:10 > 0:49:12but because they're bigger,
0:49:12 > 0:49:15I think they could achieve in excess of ?150,000.
0:49:15 > 0:49:19With regards to the two-storey three-bedroom townhouses,
0:49:19 > 0:49:22my view is you'd be pitching this on the open market
0:49:22 > 0:49:25within the region of ?130-140,000.
0:49:25 > 0:49:28With regards to the three-storey townhouse,
0:49:28 > 0:49:30my view would be you'd command a figure
0:49:30 > 0:49:34within the region of ?150-160,000.
0:49:34 > 0:49:36Very positive.
0:49:36 > 0:49:40the phase one figures were in line with where we expected them to be.
0:49:40 > 0:49:45Phase two, slightly higher than we thought, so that would be good.
0:49:45 > 0:49:48But, overall, really positive.
0:49:48 > 0:49:50Yeah, definitely. Good project.
0:49:50 > 0:49:52A good project indeed.
0:49:52 > 0:49:55The highest values of the properties could mean
0:49:55 > 0:50:00a potential sales income of ?2.24 million.
0:50:00 > 0:50:04Once the 1.35 million spend has been deducted,
0:50:04 > 0:50:09that leaves a potential pre-tax profit of ?890,000.
0:50:09 > 0:50:12And the trio have negotiated that claw-back clause with the
0:50:12 > 0:50:15original seller that both sides are very happy with.
0:50:15 > 0:50:20Paul, Mark and Chris have created 15 homes from a dilapidated site,
0:50:20 > 0:50:23all on schedule and on budget.
0:50:23 > 0:50:25And they've had a good time while doing it.
0:50:25 > 0:50:28Absolutely, we've got other projects in line,
0:50:28 > 0:50:29quite good ones in front.
0:50:29 > 0:50:31So, yeah, it's good.
0:50:31 > 0:50:33It's not just about building,
0:50:33 > 0:50:35there's quite a bit of skylarking, isn't there?
0:50:35 > 0:50:37Well... We have fun doing it. Absolutely.
0:50:41 > 0:50:44MARTIN: Back now to the hilltop market town of Heanor in Derbyshire
0:50:44 > 0:50:48and the three-bed property that I saw earlier which had an unwanted
0:50:48 > 0:50:52indoor water feature, alongside some other issues.
0:50:53 > 0:50:57Water and electrics, what do we think?
0:50:57 > 0:50:58Not ideal.
0:50:59 > 0:51:03# Danger! Danger! #
0:51:03 > 0:51:07But Sarah, who bought the property for 68,500,
0:51:07 > 0:51:09had a brilliant idea for this place.
0:51:13 > 0:51:15I've got a property already
0:51:15 > 0:51:17which has gone to a housing association in Derby
0:51:17 > 0:51:19as four lettable rooms.
0:51:19 > 0:51:24So, it's not a single-family let, it is four lettable rooms.
0:51:24 > 0:51:28So, I'm following the same formula and I said, "If I brought you
0:51:28 > 0:51:30"another one now, where would you like it to be?"
0:51:30 > 0:51:32And the answer was Heanor.
0:51:32 > 0:51:35Three months on, does Sarah have four rooms
0:51:35 > 0:51:37for the housing association?
0:51:38 > 0:51:40# One, two, gimme 1-2-3-4! #
0:51:42 > 0:51:45The answer is oh, yes, she does.
0:51:45 > 0:51:48Turning the front living room into a bedroom maximises the
0:51:48 > 0:51:50lettable space in the house.
0:51:50 > 0:51:54The other bedrooms have been repainted and re-carpeted.
0:51:54 > 0:51:58While the kitchen is much the same, the bathroom does have a new shower.
0:51:58 > 0:52:01Due to the size of the property and the number of occupants,
0:52:01 > 0:52:05it's not subject to mandatory House of Multiple Occupancy rules,
0:52:05 > 0:52:09but Sarah has had to comply with the housing association's spec.
0:52:09 > 0:52:11For the housing association,
0:52:11 > 0:52:13the sort of things I've had to bear in mind
0:52:13 > 0:52:16are the interlinking heat detector in the kitchen
0:52:16 > 0:52:19and the smoke detectors throughout the halls.
0:52:19 > 0:52:23As you can see in the kitchen, there's a fire blanket.
0:52:23 > 0:52:25They also wanted white goods in there.
0:52:25 > 0:52:30So, another thing I had to think about was the thumb turns
0:52:30 > 0:52:32on the external doors.
0:52:32 > 0:52:34So, these are necessary in the event of a fire.
0:52:34 > 0:52:38You can get out of the property without the need for keys.
0:52:38 > 0:52:41So, that's a necessary for a house of this type.
0:52:43 > 0:52:47And she's found a novel solution to the damp issue.
0:52:47 > 0:52:50The damp situation probably caused me the greatest stress
0:52:50 > 0:52:52throughout the whole project.
0:52:52 > 0:52:56So, as you saw last time, it was very moist on the dining room wall.
0:52:56 > 0:53:00The plumber has taken away the pipes and the issue has gone.
0:53:00 > 0:53:04It's just that for months and months, water has been coming down
0:53:04 > 0:53:09that wall and when the builders put in their new frame
0:53:09 > 0:53:10for the fire door in the kitchen,
0:53:10 > 0:53:13they said that the wall was sopping wet.
0:53:13 > 0:53:18So, my dad offered to tile it for me, so it does look a little strange
0:53:18 > 0:53:21having towels on the dining room wall. But we're just concerned
0:53:21 > 0:53:26over the long-term that it will be a constant needing to paint the wall.
0:53:26 > 0:53:30Sarah had the electrics removed by a qualified electrician
0:53:30 > 0:53:33and a dehumidifier and all sorts of paint
0:53:33 > 0:53:36and stain removers were tried, so hopefully the tiles
0:53:36 > 0:53:39will be a resolution to the damp.
0:53:39 > 0:53:43Similarly, Sarah has ensured safety by placing a plastic safety film
0:53:43 > 0:53:45over the glass doors,
0:53:45 > 0:53:47which is considerably cheaper than replacing them.
0:53:51 > 0:53:53Out back, the garden has been cleared up and is now
0:53:53 > 0:53:55low-maintenance for tenants.
0:53:55 > 0:53:59Unsurprisingly, Sarah, a procurement manager by day,
0:53:59 > 0:54:02has brought this in on her six-grand budget
0:54:02 > 0:54:05and her three-month timescale.
0:54:05 > 0:54:08She's had plenty of tradespeople to help out, and her family too.
0:54:10 > 0:54:14The garden is something I'm particularly proud of.
0:54:14 > 0:54:18I worked hard on that along with my partner and my parents.
0:54:18 > 0:54:20You don't do this on your own.
0:54:20 > 0:54:22My partner has been a great support.
0:54:22 > 0:54:25He's been giving technical advice
0:54:25 > 0:54:26and I've been borrowing all his tools.
0:54:26 > 0:54:30Mum's been stripping wallpaper and helping me to keep going at times
0:54:30 > 0:54:32when I wanted to give up.
0:54:32 > 0:54:36Dad's been wonderful and it's fantastic that I remember
0:54:36 > 0:54:40as a kid, as a five-year-old, following him around in the garage
0:54:40 > 0:54:43and handing him a different type of screwdriver he asked for.
0:54:43 > 0:54:47So, on this project, it's been wonderful to work with him on that
0:54:47 > 0:54:50and it really brought that memory home.
0:54:52 > 0:54:54The housing association now have four lettable rooms
0:54:54 > 0:54:56for the local community.
0:54:56 > 0:54:58But what will two local estate agents think?
0:54:58 > 0:55:01Let's start with the agent who saw it first time.
0:55:03 > 0:55:06Coming back to the property, my thoughts are that the makeover
0:55:06 > 0:55:08that's been done is OK.
0:55:08 > 0:55:10It could have been better, and I think it's actually
0:55:10 > 0:55:12aimed at the market that the property is intended for.
0:55:12 > 0:55:15I would say the downsides of the property, now it's complete,
0:55:15 > 0:55:18are if it were ever to be used again as a family home,
0:55:18 > 0:55:21the living accommodation is relatively small.
0:55:21 > 0:55:26It really has been engineered now to provide maximum letting capacity.
0:55:26 > 0:55:28Looking at the property for the first time,
0:55:28 > 0:55:31it appears the owner has spent a very limited budget
0:55:31 > 0:55:35carrying out essential works, in their mind, to complete the project.
0:55:35 > 0:55:37On the positive side,
0:55:37 > 0:55:40the work the owner has done has made it a clean, fresh property.
0:55:40 > 0:55:43The double-glazing, the central heating, the decor
0:55:43 > 0:55:45just means someone can move in and make the most of it.
0:55:45 > 0:55:49Sarah's budget was six grand and that's what she spent on the work.
0:55:49 > 0:55:53Add that to her ?68,500 purchase price,
0:55:53 > 0:55:56brings her total to ?74,500.
0:55:56 > 0:56:01The local housing association are paying her ?7,800 a year
0:56:01 > 0:56:05for the four rooms, which gives her just over a 10% yield.
0:56:05 > 0:56:09Letting to the housing association gives her guaranteed income
0:56:09 > 0:56:13and covers her for the periods when the rooms could be vacant.
0:56:13 > 0:56:16But has she chosen the most profitable route?
0:56:16 > 0:56:19If she were to let this as individual rooms, it would be
0:56:19 > 0:56:21round about ?60 per week per room,
0:56:21 > 0:56:25which grosses up to nearly ?1,000 a month.
0:56:25 > 0:56:28However, there would be far higher costs involved,
0:56:28 > 0:56:31they would need to include all the utility bills, council tax.
0:56:31 > 0:56:34There's going to be a higher unoccupancy rate
0:56:34 > 0:56:36and far higher management rates,
0:56:36 > 0:56:40so it would probably net down to more like ?600-700 a calendar month.
0:56:40 > 0:56:43In the current rental market, in its current condition,
0:56:43 > 0:56:47I would anticipate lets as a four-room HMO, this property
0:56:47 > 0:56:50would generate somewhere in the region of ?600-650
0:56:50 > 0:56:51per calendar month.
0:56:51 > 0:56:54I think that's what I would expect.
0:56:54 > 0:56:57The 650 is being managed by someone else
0:56:57 > 0:57:03and the 1,000, it would be on a per room, per week basis.
0:57:03 > 0:57:06But I then would be responsible for the bills,
0:57:06 > 0:57:08which I'm not, in this instance.
0:57:08 > 0:57:13So, yes, they are fair, accurate evaluations.
0:57:13 > 0:57:17So, that ?1,000 a month on the open market might seem attractive
0:57:17 > 0:57:20at first with a higher yield, but when you take off the costs
0:57:20 > 0:57:23mentioned by the agent and having to manage the property
0:57:23 > 0:57:26and keep occupation levels at full,
0:57:26 > 0:57:28Sarah has made a deal she's happy with.
0:57:28 > 0:57:30So, what's next?
0:57:30 > 0:57:32I've already spoken to the housing association
0:57:32 > 0:57:34of where they'd like to go next.
0:57:34 > 0:57:38There's certainly another one in me, and from a personal perspective,
0:57:38 > 0:57:41I would like to buy a property to live in.
0:57:41 > 0:57:43That would be the dream,
0:57:43 > 0:57:47to get something like this but on a bigger scale to actually live in.
0:57:47 > 0:57:49So, watch this space!
0:57:52 > 0:57:55Well, we hope you've enjoyed today's stories and perhaps learnt
0:57:55 > 0:57:56some lessons along the way.
0:57:56 > 0:57:59Yes, and hopefully, we've given you a bit of inspiration
0:57:59 > 0:58:01to get involved in property developing yourself.
0:58:01 > 0:58:03Or...perhaps we've put you off for good.
0:58:03 > 0:58:06Join us next time for more Homes Under The Hammer.
0:58:06 > 0:58:07Goodbye. Goodbye.
0:58:36 > 0:58:37MUSIC: Beyond The Sea