Episode 11 Homes Under the Hammer


Episode 11

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Transcript


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Hello and welcome to the show. Investing in property

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can be a good way of looking after your money

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AND grow your pension, but it's not always a sure thing.

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There are some risks.

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Definitely. If it sounds too good to be true,

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then more often than not it is.

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However, there are some bargains to be had.

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Maybe down at your local property auction.

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Now, a lot of people don't consider buying under the hammer a viable

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option, and yet it really isn't that difficult.

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Yes, but you do have to do your research.

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Let's hope today's buyers have done just that.

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I'm having some layout issues at this two-room flat in Sutton.

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It's not even vaguely working.

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It's not even vaguely in the ball park of working.

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Lucy got the wrong impression at this flat in Kent.

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Well, that is so misleading.

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Lovely new front door, nice communal areas to this!

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Could someone clean up this low guide price, mid-terrace in Middlesbrough?

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There's lots of rubbish and rubble

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that needs to be cleared out of here,

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as like the first reception room as well.

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All these properties have been sold at auction and we'll find out who

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bought them and what they paid when they went under the hammer.

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Sold to 13.

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We head now to the popular London Borough of Sutton.

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Full of appeal and charm, this area is highly sought-after,

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thanks to its travel links to the city and a plethora of shops

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and amenities on the high street.

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Well, two minutes' walk from Sutton high street is the property I'm here

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to see. It is a ground floor flat with a guide price of £180,000 plus.

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Now, there are a few alarm bells going off already,

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because it's described as having two rooms, not bedrooms.

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Obviously a layout issue.

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And there's one way to find out what's going on and that's to have a look.

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# Give me a chance to show how much I love you

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# Give me a chance to show how much I care

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# How I care... #

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This place might be worth giving a chance to because the outside has a

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bonus - off-street parking.

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And the communal stairwell looks well maintained.

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OK, let's explore.

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Bit of a narrow corridor when you come through the front door there.

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I'm straight away noticing this little area here,

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which has got a very large sort of water heating system going on.

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I wonder if there's a combination boiler can go somewhere and create a bit of space there, which is good,

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because we haven't got much. Straight away you can tell.

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There's a bedroom, I imagine,

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or at least that's what that room is, that way.

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And then this way, you've got the bathroom.

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Lovely avocado suite.

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We've also got damp.

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It's not massive. Actually, proportionally it's not a bad size,

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compared to everything else, because really that avocado suite is the least

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of your worries, because coming to this room here...

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And what is going on?

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We've got this tiny little...

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sort of bit of kitchen fitments going on in this corner.

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This then was what, the lounge?

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I don't know. Lounge/kitchen because this...

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..is the only other room.

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It's tiny. It's got two doors.

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I can see why they said it's only got two rooms.

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Two main rooms and a tiny thing there. Eurgh!

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It's not working, is it?

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It's not even vaguely working.

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It's not even vaguely in the ball park of working!

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Yeah. Hm. Not good!

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# Let's think it over

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# Let's start again... #

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The guide price of £180,000 plus suggested this is a popular area.

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But what to do to get the best out of it?

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Is it a one bed or is it a two?

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Well, I think the main bedroom is THE bedroom.

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That small room is a bit tight for your bedroom.

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If you extend it into that cupboard space it might just work.

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Could you fit the kitchen in there and have a really decent-size lounge,

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with no noisy and smelly kitchen appliances?

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Moving plumbing and drains could be expensive.

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I think my preference would be to knock through into the cupboard,

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use it as a study and get the bathroom updated.

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And then you've got a flat that works.

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You've got a one bedroomed, one study, one living area,

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nice bathroomed flat, as opposed to what it is right now,

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which is...rubbish.

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As ever, it depends on what the buyer wants the property for.

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But there are definitely options here.

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Well, the flat is described as having a communal garden.

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That's it?

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It's not going to win any awards at Chelsea, is it? Let's be honest.

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Yes, it just goes to prove how important it is that you physically

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visit a property before you head to the auction house.

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We asked a local estate agent along for his opinion on this flat guided

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at £180,000.

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This flat would need total renovation, total gutting,

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starting again from the beginning.

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New kitchen would be great.

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New bathroom and new heating system and painting and decorating with new

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flooring as well. I would keep it as a one bed and refurbish it to

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a high standard and you could possibly achieve a high price as it's in a great location.

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Possibly you could market a two-bedroom property,

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depending on the builder and what they do.

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They would need to open up the space there in the second room to make that larger,

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maybe cut into this room to create more space for the second room.

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If that's done and it's done in the right way,

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then I'm sure I can market it as a two-bedroom apartment.

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OK. So if a full refurbishment was done here,

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what numbers could we be looking at as a one-bedroom property?

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As a one-bedroom, ground-floor flat,

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this property could achieve in and around £250,000 for sale and for

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rental, it could achieve £900 per calendar month.

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And what if it was converted into a two-bed?

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This property, as a two-bedroom flat, could sell in the region of

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£300,000.

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For rental amount, could achieve £1,250 per calendar month.

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Well, it's definitely in a good location,

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but whoever bought this place definitely needs to decide

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if it's a one or two-bedroomed flat and work towards that goal.

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

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Our next one is lot 25.

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Ground-floor flat.

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I don't know, start at £180,000 here.

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180. Quite a bit of discount at that for Sutton.

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Oh, sorry. 180.

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180. 185.

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Elsewhere.

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185 with you.

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185. 190, sir.

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195. 200. 205.

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There's plenty of interest in this one.

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We rejoin at £226,000.

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226.

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Straight ahead. 228.

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230, sir.

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230? 232.

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230, with you.

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First time. Second time.

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

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Sold. 230, straight ahead.

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The successful bidder there was Fifi,

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who, after a bit of a battle, bought the property for £230,000.

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£50,000 over the guide price.

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I met up with him back at the property to find out about his plans.

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Fifi, great to meet you.

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-A pleasure to meet you, too.

-Congratulations.

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-Thank you.

-First of all, I've got to ask about your name.

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That's a fantastic name.

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I've never met a Fifi.

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Yes, it's a Ghanaian name.

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Same as Kofi. Means Friday born.

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Oh, fantastic! Wonderful!

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So, why did you want to buy this flat?

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What attracted me is the location,

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because I don't live far from here, I live in Morden,

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just less than ten minutes' drive,

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-and Sutton is a well sought-after area.

-Mm-hm.

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So it's the location that attracted me.

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OK. And is this what you do? Are you a property investor, or what?

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No. This is the first time.

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It's something that I've always wanted to do,

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so this is the first project.

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What have you been doing up to now? What's your job?

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I had my own company.

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-OK.

-Which I run it for...nearly about seven years.

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Sold it not long ago.

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-OK.

-And after the sale, I'm just looking at different things to do

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and I thought this is about it.

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So, what was it that you liked about this place?

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It's not a lot of work.

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Walls are pretty good.

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Great location, as I said.

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And it needs a total makeover.

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And then I think I'll be able to bring that into it and make it great.

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OK. And is the idea then to sell it on or rent it out?

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Depends on figures at the end of the work.

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So if you can make a lot by selling it on,

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-you'll take that?

-Then I will.

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Yeah. Good.

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So, obviously it's got a very interesting layout, hasn't it?

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You've got the tiny room behind us here and the other rooms.

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What are you going to do to the layout?

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Almost everything will stay the same,

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with the exception of the door behind you,

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which is the tiny room there.

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We might relocate that door into the old tanked, hot water area.

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-Yes.

-Before we're going to put central heating in.

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So, all that will be removed.

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-Right.

-That door is already created, so it's just taking,

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changing the position of the entrance.

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-Sure.

-Extend the kitchen.

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-Straight across from where it is, close to the entrance.

-Yep.

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And that will actually...

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That is about it, really.

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OK. What will that room then become?

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I've looked at the divisions in there after the hot water tank,

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so that will be extended.

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-Yeah.

-And when that is taken out,

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you'll have a decent room to be able to put a bedsit in there.

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OK. You think you'll be able to squeeze a bed into that, just about.

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Possibly a child's room or something like that.

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-Absolutely.

-OK. What kind of budget have you got?

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We're looking between...

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-£12,000 to £15,000.

-Mm-hm.

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Well, it's not a big budget,

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especially since Fifi isn't doing any of the work himself.

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He hopes that his builder will get the work done in six weeks,

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with Fifi acting as a project manager.

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So, what kind of finish are you going to go for? Are you going to for high-end or what?

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We're looking at high-end.

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We've got plans for the bathroom.

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The bathroom is going to be very high-end and modern as well.

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At the same time, the kitchen as well.

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We're looking to have open-plan, very, very small,

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but will have all the necessary white goods fitted in here.

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-Great.

-Integrated.

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And then, do you have any idea what it might be worth when you've done the work?

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I've got figures in mind.

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Go on, then?

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I've got figures in mind, because I know the property value around Sutton.

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There's one up above us, just a two-bed,

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but it's quite a decent size and that is on the market

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-at the moment for £315,000.

-Whoa!

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This hasn't got the same size,

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-so we'd be looking at roughly about £280,000, £290,000.

-Wow.

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So what kind of profit's in it for you, then, if it all goes well?

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If all goes well, then we'll be looking at roughly between £40,000 to £50,000.

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Wow, that would be great for your first project, wouldn't it?

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It would be absolutely fantastic!

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Listen, congratulations.

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-Thank you.

-Good luck and I look forward to seeing how you get on.

-Thank you.

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Well, an interesting one for Fifi's first development project.

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Tight budget to get a high-end finish and a relatively short timescale.

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How will he get on?

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You can find out later in the show.

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Lucy is in the town of Chatham, in Kent,

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famous for its dockyard situated on the River Medway.

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It served the Royal Navy for 414 years

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and during that time produced over 500 ships.

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# Did I build a ship to wreck? #

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Now, however, the ports,

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dockyards and ship building sites are being redeveloped into more

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contemporary tourist-attracting wharfs for fine dining,

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nightclubbing and shopping.

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Chatham has changed massively in recent years, owing to all the

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regeneration that's taken place here

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and those changes are most definitely for the better.

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# ..To wreck

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# To wreck...#

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Well, if you want to be right in the heart of Chatham,

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you can't get much more central than this, because all the shops and all

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the action is just around the corner there.

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Well, I'm here to see a studio flat and it went to auction with

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a guide price of £50,000 to £55,000

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and the entrance, well, it's just around here.

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The entrance is located on a private road,

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so best to check out what permits, if any, are required for parking.

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Heading inside,

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there's a rather nice foyer and a charming stairwell.

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Looking good.

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Well, that is so misleading.

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Lovely new front door, nice communal areas to this!

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Oh, it's a little bit grotty on the inside, I am not going to lie.

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I have seen better.

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So, a nice area of damp.

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It is really wet to the touch.

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Flaky, flaky, flaky.

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Wedding cake sort of effect here.

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In fact, when you look at this wall, look, it's just...

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just got to be sorted out.

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So, on first glance, this room is not very welcoming.

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I mean, I'm not even looking at the cobwebs everywhere.

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You've got a big old water tank through here.

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But, look, there's just holes everywhere.

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I mean, look at the state of that door!

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Yeah, I think it's been empty for quite some time.

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Leading through into the kitchen,

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so I'm taking it that was probably the sleeping/living area.

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Through here is the kitchen.

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Oh, my goodness me!

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Look at it!

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Yup, so we need a skip and we need to get all this stuff out and it needs to be dumped in there.

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You've got a little shower room through here with what

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looks like half the wall is missing.

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Quite a bit of work needs to be done in here.

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You've got strip lighting.

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It's just not very nice.

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So, really once you spend a little bit of money,

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I mean, it's not too big, so it's not going to take such a huge

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injection of cash, it will look amazing.

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But as it stands at the moment, it looks pretty terrible.

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# B-B-B-Bad

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# Bad to the bone... #

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Yes, it's not pretty.

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But there's nothing that stands out as a major issue.

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But are there any hidden nasties lurking in the legal pack?

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Now, if you're a regular viewer of Homes Under The Hammer you'll know

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that flats often come with a sting in their tail when it comes to the

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finer details laid out in the legal pack.

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So, I've carried my own investigations out with this studio,

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so what I can tell you?

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Well, now, the ground rent is £150 a year,

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which is a fairly standard amount, and then the service charge,

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well, that's £350 a year.

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Which, well, it sounds OK for a flat with communal areas to maintain,

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and the biggest bonus, for me, well,

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it's got to be the new 125-year lease that's on offer.

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So, all in all,

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there doesn't seem to be any hidden nasties here and that is why you

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should always read the legal pack, just in case.

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Could this studio flat, guided at between £50,000 and £55,000,

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be a small, but perfectly formed investment?

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We invited a local estate agent along to give us his opinion

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on what could be done here.

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The flat is quite a small property.

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It does need just some love and care.

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I would leave the layout as it is.

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I would suggest central heating into the property,

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a new kitchen and a new bathroom.

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With such a small flat and no obvious structural changes to be made,

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this flat could be renovated for a relatively small sum.

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But could there be a profit margin on a guide price of £50,000 to £55,000?

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This property could sell for approximately £65,000 to £70,000

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and rent for approximately £450 to £475 per calendar month.

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Yep, it does need quite a bit of work, but being such a small space,

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well, it shouldn't take too much time or money to turn this studio flat around.

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Once that's done, well, it could be a decent little investment for someone.

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Who agreed? Let's head to auction and find out.

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Lot 57. Again, studio flat.

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Main line railway station, et cetera.

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Guided at £50,000 to £55,000.

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You've got to start me at 50.

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50, can I say? 50, can I say?

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Give me 45, then.

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45 from anybody?

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45 at the back, with you.

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Thank you. 45. 47 now.

0:18:260:18:28

47, fresh place.

0:18:280:18:30

And 50, can I say?

0:18:300:18:31

50 I have. 52 for either of you?

0:18:310:18:34

52 now. Well, at £50,000, I shall sell, then.

0:18:340:18:37

For the first time at 50.

0:18:370:18:39

52. Thank you.

0:18:390:18:41

54. 54.

0:18:410:18:43

56. 56.

0:18:430:18:46

54,000 is back with you, sir. £54,000.

0:18:460:18:50

56, can I say? I shall sell then for the first time at 54.

0:18:500:18:55

56.

0:18:550:18:56

56. 58. Yes? No?

0:18:560:19:00

58. And 60 now. 60, can I say?

0:19:000:19:03

£58,000 for the first time.

0:19:050:19:08

60. £60,000.

0:19:080:19:09

Lady's bid. 62 now.

0:19:090:19:11

62. If not, lady's bid at £60,000.

0:19:110:19:15

First time. Second time.

0:19:150:19:17

You're going to miss it, sir. Third and final time.

0:19:170:19:19

Back of the room at £60,000.

0:19:190:19:22

Sold, madam. £60,000, you've got yourself a flat.

0:19:220:19:25

And your bidder's card number?

0:19:250:19:27

The successful bid of £60,000 came from Mary, who is retired,

0:19:270:19:31

but develops property.

0:19:310:19:32

Regular viewers of the show may remember this fashionista,

0:19:340:19:38

when Lucy met her three years ago at a property in Deal.

0:19:380:19:42

Lucy caught up with Mary again to hear her plans for her newest acquisition.

0:19:420:19:46

# And then along comes Mary... #

0:19:460:19:49

Mary, congratulations.

0:19:490:19:51

Gosh, it must have been three years since I've seen you last.

0:19:510:19:53

-Yes, it was.

-Tell me, why are you here in Chatham?

0:19:530:19:57

I was looking for something not too expensive

0:19:570:20:01

and I decided on this place.

0:20:010:20:03

What did it, the difference, it's got a new 125-year lease.

0:20:030:20:08

Some of these properties, there's only about 69 years left on them,

0:20:080:20:13

so you have to pay extra for an extension.

0:20:130:20:16

So, tell me, did you get a chance to get in this property and have a good look around before you bid?

0:20:160:20:21

No, I didn't, but the trouble is, I looked at so many properties,

0:20:210:20:24

I just didn't have the time to look at them all.

0:20:240:20:27

-It's great news for you that it has got a new 125-year lease.

-Yes.

0:20:270:20:30

But you didn't look inside!

0:20:300:20:33

No. When I looked, I thought, "Oh, my God!"

0:20:330:20:35

SHE LAUGHS

0:20:350:20:37

But once you start, you say, "Well, this is going to get done."

0:20:370:20:41

Essentially, it's just one large room, a bit of a kitchen.

0:20:410:20:46

A bit of a loo. I mean, you can do it all up.

0:20:460:20:48

-It's not going to cost you the earth to do this place, is it?

-No.

-Then what are you going to do with it?

0:20:480:20:53

I'm going to let it out to start with.

0:20:530:20:56

And later on I'll probably sell it off.

0:20:560:20:59

Are you happy with what you paid now?

0:20:590:21:01

It's all right. Once it gets done up, I know I'll be able to sell it again.

0:21:010:21:05

I don't think I'll lose any money on it, that's the main thing.

0:21:050:21:08

Having completed 20 property renovations in her time,

0:21:080:21:12

Mary should know better than to buy blind,

0:21:120:21:15

but hopefully this time it will pay off.

0:21:150:21:17

What is it about property that keeps her on her toes?

0:21:170:21:20

It's exciting, you never know what you're going to get hold of next and

0:21:230:21:26

what you're going to do with it. To be honest, it's something you can get into from scratch.

0:21:260:21:30

You don't have to study for five years to do it.

0:21:300:21:33

You have to get a bit of money one way or the other, but you...

0:21:330:21:36

Anyone, you can get into it quick.

0:21:360:21:38

Is this what you've always done?

0:21:380:21:40

No, no. I was a housekeeper.

0:21:400:21:43

This interests me more.

0:21:430:21:45

Because when you're in a job, you're sort of tied down by the people.

0:21:450:21:48

Doing this you're your own boss.

0:21:480:21:50

Mary, I love your energy.

0:21:500:21:51

You are not kicking back and relaxing and retiring.

0:21:510:21:54

-You're still out and about, aren't you?

-No. I want to get out.

0:21:540:21:57

I don't want to be stuck in the house.

0:21:570:21:58

So, Mary, tell me, what's been happening since we last saw you on Homes Under The Hammer?

0:21:580:22:04

Loads of people have recognised me about...

0:22:040:22:07

Over 20 people in the street have recognised me.

0:22:070:22:10

All over the place.

0:22:100:22:11

-I can't believe it!

-So complete strangers have been coming up to you and saying,

0:22:110:22:14

-"We recognise you from Homes Under the Hammer."

-Today, a car stopped.

0:22:140:22:18

He said, "Oh, have you been on Homes Under The Hammer?"

0:22:180:22:20

I said, "Yes."

0:22:200:22:22

You see, we can take you there, Mary,

0:22:220:22:24

because I know you quite like acting, don't you?

0:22:240:22:26

-You'd quite like to be an actress, wouldn't you?

-I would.

0:22:260:22:30

SHE LAUGHS

0:22:300:22:31

If I was about five foot ten, I think I'd be...

0:22:310:22:34

I'd love to be a top model.

0:22:340:22:36

You must be one of the most glamourous landladies I think I've ever met.

0:22:360:22:40

I like dressing up.

0:22:400:22:42

# She's in fashion... #

0:22:420:22:46

It would be a shame to ruin that fantastic outfit,

0:22:460:22:49

so Mary is going to get local builders in to do the work.

0:22:490:22:53

So, Mary, talk me through the changes you're going to be doing here.

0:22:530:22:56

Let's start in this room.

0:22:560:22:59

Obviously the plastering's most important, but as it's...

0:22:590:23:03

As it's damp as well, it's going to be quite a job.

0:23:030:23:06

It's not as easy as you think. To get this really just dead-on,

0:23:060:23:11

it's quite a job.

0:23:110:23:12

And then we've got the roof.

0:23:120:23:14

Got to get a new kitchen.

0:23:140:23:16

Once you get the new kitchen,

0:23:160:23:17

you wouldn't believe it's the same place.

0:23:170:23:19

Maybe a new bathroom and maybe a new shower.

0:23:190:23:22

But it will be a big difference when it's done.

0:23:220:23:25

So, Mary, what about the central heating?

0:23:250:23:27

Are you going to be installing it?

0:23:270:23:28

I will definitely get central heating put in.

0:23:280:23:30

Everyone wants central heating nowadays.

0:23:300:23:33

And what about that old tank - is that going to go?

0:23:330:23:35

I'd like to get rid of it.

0:23:350:23:37

But I better check it out if it's allowed.

0:23:370:23:40

Maybe the whole place is just electricity.

0:23:400:23:43

We'll have to look into it first.

0:23:430:23:46

And how much are you going to spend on the work here?

0:23:460:23:48

I don't know, maybe £4,000, £5,000.

0:23:480:23:51

So, that's...

0:23:510:23:52

It's actually quite a... You look at it, it's quite a lot to be done here.

0:23:520:23:56

It's quite a mess.

0:23:560:23:58

So, what is your timescale?

0:23:580:24:00

I could probably get it sorted out in three months without actually

0:24:000:24:03

rushing it. Oh, my God, it's just too much.

0:24:030:24:06

You know, just within that timescale somewhere.

0:24:060:24:09

Well, Mary, we look forward to coming back and seeing the big

0:24:090:24:13

transformation of this very small studio flat, and it's been a real

0:24:130:24:17

pleasure to see you again.

0:24:170:24:19

-Thank you.

-Lots of love.

0:24:190:24:20

Thanks.

0:24:200:24:22

Oh, it's great to see that Mary's still got as much energy and enthusiasm as when I last saw her.

0:24:240:24:29

She seems to be taking her latest project in her stride and I just

0:24:290:24:33

hope it all works out for her.

0:24:330:24:35

You can find out how Mary gets on later in the show.

0:24:350:24:38

Still to come - there's problems afoot at this mid-terrace

0:24:410:24:44

in Middlesbrough.

0:24:440:24:45

As you can see, there's a lot of floorboards missing in here,

0:24:450:24:48

which is very dangerous.

0:24:480:24:50

And will Mary be seeing red after budget issues in Kent?

0:24:520:24:56

I thought maybe it'd be £4,000, £5,000, but it went over.

0:24:560:25:00

But first, let's head back to the sought-after London Borough of Sutton.

0:25:030:25:08

It was here I saw this ground-floor flat guided at £180,000 plus.

0:25:080:25:14

Inside was a tight squeeze,

0:25:140:25:17

not helped by the large water heating system occupying space in the narrow hallway.

0:25:170:25:23

The avocado bathroom suite was stuck firmly in the '70s, and the bedroom,

0:25:230:25:28

although dusty, was a decent size.

0:25:280:25:31

But it was the flat's description as a two-room property that had me concerned.

0:25:320:25:38

What is going on? We've got this tiny little...

0:25:390:25:42

..sort of bit of kitchen fitments going on in this corner. Erm...

0:25:440:25:49

This then was what, the lounge?

0:25:490:25:51

I don't know. Lounge/kitchen.

0:25:510:25:52

Because this...

0:25:520:25:54

is the only other room.

0:25:540:25:56

It's tiny. It's not working, is it?

0:25:580:26:01

It's not even vaguely working.

0:26:010:26:03

It's not even vaguely in the ball park of working!

0:26:030:26:06

£230 with you, first time.

0:26:060:26:09

Second time.

0:26:090:26:11

Third and last time, if you're all done?

0:26:110:26:14

The man to make it work was first time property developer Fifi,

0:26:140:26:18

who paid £230,000 on auction day and he had a simple plan to get the

0:26:180:26:24

dysfunctional layout working.

0:26:240:26:27

Almost everything will stay the same,

0:26:270:26:29

with the exception of the door behind you,

0:26:290:26:31

which is the tiny room there.

0:26:310:26:33

We might relocate that door into the old tanked,

0:26:330:26:39

hot water area, before we're going to put central heating in.

0:26:390:26:43

-So all that will be removed.

-Right.

0:26:430:26:46

That door is already created, so it's just taking...

0:26:460:26:49

changing the position of the entrance.

0:26:490:26:51

Fifi hoped the new layout would make enough space to turn this flat

0:26:510:26:56

from a two-room, to a two-bedroom.

0:26:560:26:59

He had a budget of £12,000 to £15,000

0:26:590:27:02

and a tight schedule of six weeks.

0:27:020:27:05

We're back just eight weeks later to see how he got on.

0:27:050:27:09

A bright new kitchen stretches along the wall,

0:27:140:27:18

where there was once a doorway.

0:27:180:27:20

It's open-plan, with a compact living-dining space.

0:27:200:27:23

The water tank has been removed and that space has been incorporated into

0:27:280:27:31

the small room, creating a second bedroom.

0:27:310:27:34

The master bedroom has had a refresh too.

0:27:380:27:41

The whole flat now benefits from new PVC double glazing and central

0:27:410:27:46

heating. That avocado suite, well, that's gone too,

0:27:460:27:50

replaced by an ultra modern, super stylish, tiled bathroom.

0:27:500:27:54

We decided to go for a modern fitting bathroom.

0:27:590:28:03

It's been amazing, the designer was fantastic.

0:28:030:28:07

She came out with great designs that I love.

0:28:070:28:10

And we were able to fit the things that we wanted in there.

0:28:100:28:15

So the bathroom looks modern.

0:28:150:28:17

The shower is amazing.

0:28:170:28:19

I wish it's even the shower at my home, but unfortunately, it's not.

0:28:190:28:23

Well, if the flat doesn't sell, you could always keep it for yourself.

0:28:240:28:27

But based on the exceptional finish here, I think that's unlikely.

0:28:270:28:32

Project manager Fifi and his builder Pajo have made it look easy.

0:28:320:28:36

But were there any struggles along the way?

0:28:360:28:38

The most difficult part was the kitchen, because we had a very

0:28:410:28:46

limited space and you need to try and squeeze almost everything you

0:28:460:28:51

can think of in that space.

0:28:510:28:54

And it was challenging.

0:28:540:28:55

We draw and then we look at the drawings and then we scrap it

0:28:550:28:59

and said, "No. This is not good enough."

0:28:590:29:02

Even last minute, we had to order a few different things, because we realised that

0:29:020:29:06

some of the cupboards, when you walk in,

0:29:060:29:09

the cupboards shouldn't be right on your face,

0:29:090:29:11

it has to be nicely tucked away.

0:29:110:29:14

So we went for slight different changes,

0:29:140:29:17

with a curved edge at the entrance, which cost us a lot more money.

0:29:170:29:22

It's little touches like those curved cupboards that make all the

0:29:220:29:26

difference to the end user.

0:29:260:29:28

And while you can't put a price on good design,

0:29:280:29:31

how much of that £12,000 to £15,000 budget did Fifi spend?

0:29:310:29:35

We've gone over budget.

0:29:360:29:37

There's no question about that.

0:29:370:29:39

We've gone over budget.

0:29:390:29:40

I thought we'd be able to deliver what we wanted within £12K to £15K,

0:29:400:29:46

but unfortunately we couldn't.

0:29:460:29:48

We went extra mad. We went over budget £5K.

0:29:480:29:52

So we ended up spending £20K on the flat.

0:29:520:29:56

The £20,000 bill costs takes Fifi's total spend

0:29:560:30:00

to £250,000. As he is unsure whether to rent or sell,

0:30:000:30:05

let's see what two local estate agents make of the changes to this ground-floor flat.

0:30:050:30:11

It's in excellent condition.

0:30:110:30:13

And it's really made some really good use of the space.

0:30:130:30:16

It's quite a spacious main bedroom as well.

0:30:160:30:18

But also, I think it's got really good usable space in the

0:30:180:30:22

kitchen/diner as well and in really good condition.

0:30:220:30:25

The flat's been completed to a high specification,

0:30:250:30:27

although it is a little bit compact.

0:30:270:30:30

However, being close to the high street, it is expected,

0:30:300:30:32

and the amenities and transportation links make up for that.

0:30:320:30:35

So, what kind of prices would someone pay to rent a high-end flat in this city location?

0:30:350:30:41

In the rental market, very popular,

0:30:410:30:43

I'd say you'd be looking in the region of sort of £1,250 to £1,350

0:30:430:30:49

per calendar month.

0:30:490:30:51

I believe this property will fetch in the region of £1,300

0:30:510:30:54

per calendar month.

0:30:540:30:56

That is a great figure.

0:30:560:30:57

That is the sort of figure that I was thinking about

0:30:570:31:02

within the region of £1,200.

0:31:020:31:03

So that's fantastic.

0:31:030:31:05

The top value of £1,300 a month could mean a potential yield of over 6%,

0:31:050:31:11

which isn't bad. But could there be good profit on the £250,000

0:31:110:31:16

investment on the resale market?

0:31:160:31:18

Sales market, I mean,

0:31:190:31:20

you're looking probably around about £300,000 to £315,000.

0:31:200:31:25

I believe this property will achieve in the region of £320,000.

0:31:250:31:29

That is amazing!

0:31:290:31:30

That is way beyond my projections.

0:31:300:31:35

I think I might probably go, put it on the market for a resale.

0:31:350:31:42

With a potential profit of £70,000, minus taxes and fees, it's no wonder.

0:31:420:31:47

So, has this experience been all he had hoped for?

0:31:470:31:52

Hearing the values, and also taking into account that this is the first main project,

0:31:520:31:59

I think I'm very excited and I can't wait to set a foot in that auction room again.

0:31:590:32:05

Teesside in the north-east of England is made up of a series of towns,

0:32:070:32:12

including Middlesbrough and Stockton-on-Tees.

0:32:120:32:15

They are separated by the River Tees and connected by the Newport Bridge.

0:32:150:32:19

The bridge was the first vertical lift bridge to be built in the UK

0:32:190:32:23

and was lifted over 1,000 times a week in its peak.

0:32:230:32:27

These days, it remains permanently lowered,

0:32:270:32:29

providing an important road connection between Stockton and Middlesbrough.

0:32:290:32:34

# Here I am Stuck in the middle with you... #

0:32:340:32:37

So, I'm in Middlesbrough,

0:32:380:32:39

just a ten-minute walk away from the town centre and an even shorter walk

0:32:390:32:43

to Teesside University, which is just down the road.

0:32:430:32:46

I'm here to see a two-bedroom, mid-terrace property

0:32:460:32:49

with surprisingly low guide price of £14,000.

0:32:490:32:53

Now, is that going to prove to be a good deal or a good deal of work?

0:32:530:32:58

Let's find out!

0:32:580:33:00

Right.

0:33:030:33:05

OK, that's not a great front door,

0:33:050:33:06

but what I do like is if you put a brand-new door on there,

0:33:060:33:09

you've got a second door here as well, which is good for security,

0:33:090:33:12

keeps the heat in, keeps the cold out and then you come straight into

0:33:120:33:15

a hallway here.

0:33:150:33:17

First reception room just here, it's a good-sized room.

0:33:170:33:20

Nice high ceiling.

0:33:200:33:22

Big bay window, but I have seen a little bit of damp just above that

0:33:220:33:25

bay window there. Doesn't look too bad and it's not alarming me at the moment.

0:33:250:33:30

Down the hallway and you've got your stairs up to your bedrooms into

0:33:300:33:34

the second reception room.

0:33:340:33:36

It's a decent size again.

0:33:360:33:38

There's lots of rubbish and rubble

0:33:380:33:40

that needs to be cleared out of here,

0:33:400:33:42

as like the first reception room as well.

0:33:420:33:44

Central heating here, which is good.

0:33:440:33:46

This doesn't look in great condition.

0:33:460:33:47

As you can see, that's falling off the wall altogether.

0:33:490:33:51

So, if you're looking to rent this out,

0:33:510:33:53

put some brand-new radiators up and get a nice new boiler.

0:33:530:33:57

Just keep it nice and safe.

0:33:570:33:58

Kitchen's just here.

0:33:580:34:00

It's a galley kitchen, nice and long.

0:34:000:34:02

Not in great condition though, so that would have to come out.

0:34:020:34:05

Same goes for the bathroom, which is right at the end of the property.

0:34:050:34:09

Saying that, apart from the radiators, all the rubble and the rubbish...

0:34:090:34:14

there's potential here, definitely.

0:34:140:34:16

# Pick up the pieces and we'll throw them away

0:34:160:34:21

# Throw them away and replace them... #

0:34:210:34:26

Step one - clear everything out.

0:34:260:34:29

Bear in mind, this job can sometimes be a health hazard,

0:34:290:34:32

so you could get a specialist company in to do it.

0:34:320:34:35

I'd certainly recommend some safety measures, though,

0:34:370:34:40

like protective gloves.

0:34:400:34:41

But so far, I'm not seeing any reason for that low guide price.

0:34:420:34:46

Maybe upstairs might shed some light on it.

0:34:460:34:48

Right, there's two good-sized bedrooms up here.

0:34:530:34:56

The one at the front more or less mirrors this one.

0:34:560:34:59

So there's lots of space.

0:34:590:35:01

As you can see, there's a lot of floorboards missing in here,

0:35:010:35:04

which is very dangerous.

0:35:040:35:06

I would suggest get the basics done, get it nice and safe.

0:35:060:35:09

Get those floorboards back in and you'd have two good-sized bedrooms,

0:35:090:35:13

either to rent out or to flip it and sell it, and see what kind of profit

0:35:130:35:17

you could make. On the other hand, I'm thinking,

0:35:170:35:20

you've got the university, which isn't too far away.

0:35:200:35:22

Is there an argument that this could fit the student market?

0:35:220:35:27

That's three markets, three choices I've given to you.

0:35:270:35:30

I love options, I really do!

0:35:300:35:32

# I can't choose

0:35:320:35:33

# It's too hard when your mind's a big

0:35:330:35:36

# Bruise Dida dida, should be this guy... #

0:35:360:35:39

Two things are not an option. First,

0:35:390:35:42

resolving the damp both upstairs and downstairs, and secondly,

0:35:420:35:46

clearing all this stuff out.

0:35:460:35:48

Let's see what a local estate agent would chose to do with this two up,

0:35:480:35:52

two down guided at £14,000.

0:35:520:35:55

This is a great property.

0:35:550:35:57

Yes, it does need scheme modernisation,

0:35:570:36:00

the windows need addressing,

0:36:000:36:02

the kitchen needs an overhaul, as does the bathroom and then after that,

0:36:020:36:06

really just a general tidy through.

0:36:060:36:07

I think you could probably spend sort of £6,000 to £8,000 on this property.

0:36:070:36:11

That's more good news for potential investors.

0:36:110:36:14

So what's the best option in terms of the area?

0:36:140:36:18

It's very much a student let area.

0:36:180:36:20

You know, these houses will be converted into three,

0:36:200:36:23

possibly four bedrooms, depending on the size of the property.

0:36:230:36:27

But, yeah, there's definitely a very strong student rental market in this area.

0:36:270:36:31

We would turn the front room into a bedroom and then, the room which

0:36:310:36:35

we're stood in now into, obviously, a bedroom and across the corridor

0:36:350:36:40

another bedroom.

0:36:400:36:41

That's one option and the agent thinks as a student let it could bring in

0:36:420:36:46

at least £55 per room, per week.

0:36:460:36:50

With three rooms, that's £660 per month in total.

0:36:500:36:55

He also thinks it could be a lot more depending on the finish.

0:36:550:36:59

But what could it rent for if it was kept as a two-bed house?

0:36:590:37:02

If we were looking to rent this as a two-bedroomed house

0:37:050:37:07

it would achieve £350 per calendar month.

0:37:070:37:09

As a final option, what would it sell for if you got it for anywhere

0:37:090:37:12

near the guide price of £14,000 and spent £8,000 on it,

0:37:120:37:16

as the agent suggested,

0:37:160:37:18

investing a total, somewhere around £22,000?

0:37:180:37:22

The property could be placed on the open market at £45,000.

0:37:230:37:27

This is one not for the faint-hearted.

0:37:280:37:30

There's a bit of work that needs to be done in there -

0:37:300:37:32

new bathroom, new kitchen, not to mention all the windows as well.

0:37:320:37:36

On the positive side,

0:37:360:37:37

it's in a good location and don't forget that low guide price of £14,000.

0:37:370:37:42

I'm sure that's got to create some interest.

0:37:420:37:44

Let's go to the auction house and find out who the last person was standing.

0:37:440:37:48

This is a two-bedroomed, mid-terraced property.

0:37:490:37:53

Start me if you will. Five again.

0:37:530:37:55

Five again. Do I have ten?

0:37:550:37:56

Ten. Thank you, sir. Ten.

0:37:560:37:58

15? Say it again.

0:37:580:38:00

11. If we must.

0:38:000:38:01

12, sir.

0:38:010:38:03

The £1,000 increases had the bidders interested,

0:38:030:38:06

so we rejoin the auction looking for £27,000.

0:38:060:38:10

27 in the room?

0:38:100:38:12

27 with Ian.

0:38:120:38:13

27 and a half in the room.

0:38:130:38:15

27 and a half in the room. Is it 28 anywhere?

0:38:150:38:18

28. 28. 28 and a half, sir.

0:38:180:38:22

28 on the phone and being sold...

0:38:220:38:25

With Ron, then. Sir, do you want 28 and a half?

0:38:250:38:27

You do? 28 and a half.

0:38:270:38:29

29.

0:38:290:38:30

Being sold, then. Gone, gone. Gone is gone, I think so.

0:38:310:38:35

It's with you. 28 and a half.

0:38:350:38:37

Are we all done? One, two, three.

0:38:370:38:40

That's yours. Well done, sir.

0:38:400:38:41

Good contest.

0:38:410:38:42

# You might find it cheap

0:38:420:38:44

# But you're never gonna find it free... #

0:38:440:38:47

The successful bid of £28,500 came from property developer Mohammed.

0:38:470:38:53

He lives and works in London, and is a builder by trade.

0:38:530:38:56

I caught up with him to find out what his plans were for his new acquisition.

0:38:560:39:01

-Mohammed, nice to meet you, sir.

-Nice meeting you.

-Congratulations.

0:39:010:39:04

-Thank you.

-What made you buy this property?

0:39:040:39:07

The price was low, so...

0:39:070:39:10

that's the reason I just came and

0:39:100:39:12

plus, it's closest to town centre and the big uni around here.

0:39:120:39:17

So that is the only reason I just went for it.

0:39:170:39:19

So were you looking for a property this size in an area, like, near a university?

0:39:190:39:25

Yes, I was looking for quite a few months.

0:39:250:39:27

-Were you happy with what you paid?

-Yes, definitely.

0:39:270:39:30

-I'm happy.

-Because you're a London lad, aren't you?

0:39:300:39:32

Yes, I live in London.

0:39:320:39:34

And, yeah, I saw it through the internet and I found this place really cheap.

0:39:340:39:39

Good-sized bedrooms and a good-sized property.

0:39:390:39:42

So what are the differences then, Mohammed?

0:39:420:39:44

You've got a house of this size up here, up north -

0:39:440:39:47

what would it cost you down south?

0:39:470:39:48

Yeah, I mean, the price which I paid up here,

0:39:480:39:51

you can't even pay the deposit out there.

0:39:510:39:55

So it's about ten, 15 times more higher than this.

0:39:550:40:00

-Are you moving up north?

-No, I'm not. I'm not, I'm sticking in London!

0:40:000:40:03

-Sticking in London.

-I'm sticking in London.

0:40:030:40:05

But I'm buying properties up north.

0:40:050:40:07

OK. So now you've got this property, it's now yours.

0:40:070:40:11

What are your plans for it?

0:40:110:40:12

Probably I'm going to do HMO for students

0:40:120:40:15

and I'm going to rent it out.

0:40:150:40:17

I'm trying to capture the student market basically.

0:40:170:40:20

OK. So how many bedrooms can we expect when it's all finished?

0:40:200:40:24

It's going to be a four-bedroom,

0:40:240:40:26

-because it's two bedroom upstairs already.

-Yeah.

0:40:260:40:28

So it's two reception rooms on the ground floor. One there, one here.

0:40:280:40:33

So I'm converting that one as bedrooms as well.

0:40:330:40:35

So it's going to be good, three king-size bedrooms,

0:40:350:40:39

and one is going to be a double bedroom.

0:40:390:40:41

So in order to change this into an HMO, do you know what is required?

0:40:410:40:44

Yes. You need to have heat alarms, smoke alarms, all over the rooms.

0:40:440:40:49

Plus, you need to have fire doors.

0:40:490:40:52

It is all about fire and health and safety checks.

0:40:520:40:54

You have to put in some signs and this kind of stuff.

0:40:540:40:59

And what about financially for you?

0:40:590:41:01

What are you looking to get back from this property financially?

0:41:010:41:04

I had a word with a couple of estate agents as well.

0:41:040:41:08

And the advice which I have is £125 or £110

0:41:080:41:14

to £125 margin per week.

0:41:140:41:17

-OK.

-So, for example, if there's four rooms up here,

0:41:170:41:20

I'm getting about £450 per week.

0:41:200:41:24

-So times four...

-Yes.

0:41:240:41:27

It's decent, isn't it?

0:41:270:41:28

It is a really decent return.

0:41:280:41:30

The yield is about 18% yield,

0:41:300:41:33

which is not bad either.

0:41:330:41:35

That is an amazing return.

0:41:360:41:38

But to get to those mental figures,

0:41:380:41:40

Mohammed is pushing the boat out in terms of quality.

0:41:400:41:43

He'll need to watch his budget and have a very tight team.

0:41:430:41:46

I have six, seven people.

0:41:490:41:51

-Wow!

-They work underneath me, so I'm going to bring them down here.

0:41:510:41:55

So they're going to have their holidays while they're working here

0:41:550:41:58

as well! It is going to be away from London where it's a hectic life

0:41:580:42:01

down there, so it's going to be away from London.

0:42:010:42:04

Plus, after the work, it's going to be all party going on here.

0:42:040:42:08

-That's the plan.

-So tell me how that works, then?

0:42:080:42:11

You've got a team of six to seven builders.

0:42:110:42:13

Will they be up at the weekends or for the week?

0:42:130:42:15

Where are they going to stay?

0:42:150:42:17

We're going to rent a house down here.

0:42:170:42:19

We're going to go after one or two weeks, after two weeks,

0:42:190:42:23

spend the weekend back in London, come back fresh on Monday again.

0:42:230:42:27

-Ready to go again.

-Then start again.

0:42:270:42:29

So when your team get in here, when they get into this house,

0:42:290:42:31

what's the first thing they're going to do?

0:42:310:42:33

First thing, need to get rid of this wallpaper, all over.

0:42:330:42:38

Taking these carpets out, kitchen, everything going into the skip.

0:42:380:42:42

So then we start doing all the plastering and new flooring,

0:42:420:42:46

and new tiles in the kitchen and the boxroom.

0:42:460:42:49

So basically renovating everything.

0:42:490:42:51

What's your budget going to be to turn this place around?

0:42:510:42:53

The budget is going to be about 10,000.

0:42:530:42:56

How long is the work going to take?

0:42:560:42:58

About three weeks, max.

0:42:580:43:00

Really? Turn it all around?

0:43:000:43:02

-Like I said...

-HMO?

-Everything.

0:43:020:43:04

-So you're ready to go?

-Yeah.

0:43:040:43:06

-And happy?

-Very happy.

0:43:060:43:08

-Good man. Listen, good luck.

-Thank you very much.

0:43:080:43:10

-Can't wait to see how you get on.

-Definitely. Thank you.

-Pleasure.

0:43:100:43:13

So Mohammed has got his heart set on making this an HMO for students,

0:43:130:43:17

which I think is a very good idea.

0:43:170:43:20

The university is just down the road

0:43:200:43:22

and if he touches those impressive yields, it'll be money well spent.

0:43:220:43:26

But will he pass his test with flying colours

0:43:260:43:29

or will he be university challenged?

0:43:290:43:31

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

0:43:310:43:34

It's been a while since we visited our remaining two properties.

0:43:370:43:42

Have they got all the work done or did they make a mess of it?

0:43:420:43:45

Has it all been plain sailing or rough waters?

0:43:450:43:48

Let's go back and find out.

0:43:480:43:50

Back now to the town of Chatham in Kent,

0:43:520:43:54

where Lucy saw a small studio flat at the end of a private road guided

0:43:540:43:59

at between 50,000 and 55,000.

0:43:590:44:01

There was a rather nice communal foyer,

0:44:040:44:06

but inside the flat was a different story.

0:44:060:44:09

It appeared to have been empty for some time.

0:44:100:44:13

There were some problematic areas of damp

0:44:140:44:16

and it was covered in textured wall coating.

0:44:160:44:19

Yes, it was small.

0:44:210:44:22

But for a studio flat it was to be expected.

0:44:220:44:26

At least it had a separate kitchen.

0:44:260:44:28

Oh, my goodness me! Look at it!

0:44:290:44:32

Yep, so we need a skip and we need to get all this stuff out

0:44:320:44:35

and it needs to be dumped in there.

0:44:350:44:37

But good things often come in small packages,

0:44:380:44:40

which was the case when part-time property developer and local celebrity

0:44:400:44:45

Mary bought the flat at auction for 60,000.

0:44:450:44:48

So, Mary, tell me, what's been happening since we last saw you on

0:44:500:44:54

Homes Under The Hammer?

0:44:540:44:56

Loads of people have recognised me.

0:44:560:44:58

Over 20 people on the street have recognised me, all over the place.

0:44:580:45:03

-I can't believe it.

-So complete strangers have been coming up to you

0:45:030:45:06

and saying, "We recognise you from Homes Under The Hammer"?

0:45:060:45:08

Today, a car stopped and said, "Oh, have you been on Homes Under The Hammer?"

0:45:080:45:12

I said, "Yes."

0:45:120:45:14

With more than 20 renovations under her belt,

0:45:140:45:17

Mary was certain she could get this studio flat into pristine condition

0:45:170:45:22

for £4,000 to £5,000 in a matter of three months.

0:45:220:45:25

So when we returned seven months later,

0:45:260:45:29

was the flat ready for its close-up?

0:45:290:45:31

The flat is looking much fresher and brighter.

0:45:380:45:41

That icing, cakey wall coating has gone

0:45:410:45:44

and has been re-plastered with a lovely smooth finish.

0:45:440:45:47

The unsightly water tank has been tidied away in a smart new cupboard.

0:45:500:45:55

And that large damp patch has been treated and looks good as new.

0:45:550:45:59

The kitchen has been ripped out and replaced with much more functional

0:46:100:46:13

fittings in neutral creams and greys, with a space or two for a tipple.

0:46:130:46:18

That grotty bathroom has also been given a new lease of life with a new

0:46:240:46:28

suite and is now sparkling.

0:46:280:46:30

It's quite a transformation!

0:46:300:46:31

The wall was in a terrible state.

0:46:350:46:38

There was damp all over this bit here.

0:46:380:46:42

The kitchen was a complete wreck.

0:46:440:46:46

The bathroom was a complete wreck.

0:46:460:46:50

Just about everything was a complete wreck!

0:46:500:46:52

SHE LAUGHS

0:46:520:46:54

This is no comparison now.

0:46:540:46:56

I just can't believe it's the same place.

0:46:560:46:59

The builders have done a smashing job, but I must say,

0:46:590:47:02

I'm a little disappointed.

0:47:020:47:03

It's not as colourful as Mary.

0:47:030:47:05

This is always the safest shade to have.

0:47:070:47:10

Nobody in their right mind would have red!

0:47:100:47:13

SHE LAUGHS

0:47:130:47:14

Some people like it,

0:47:140:47:15

but not if you're...other people coming to look at it though.

0:47:150:47:19

The neutral colour palette seems to have done the trick,

0:47:210:47:24

as Mary has already secured a tenant.

0:47:240:47:27

So everything has worked out nicely,

0:47:270:47:29

but it did take longer than her three-month timescale.

0:47:290:47:32

Well, there was hold-ups along the way,

0:47:350:47:38

because unfortunately with builders,

0:47:380:47:42

they start a job and then they go off to something else,

0:47:420:47:47

and then they have to come back again.

0:47:470:47:49

So unfortunately, they don't do it all straight away.

0:47:490:47:53

The job probably could have been done in maybe a couple of weeks,

0:47:530:47:57

really going straight out,

0:47:570:47:58

but with these hold-ups, it took longer than that.

0:47:580:48:02

So the project overran,

0:48:020:48:05

but how did Mary fare with the £4,000 to £5,000 budget?

0:48:050:48:10

Oh, well, originally I thought maybe be about 4,000 and 5,000,

0:48:100:48:14

but it went over.

0:48:140:48:16

But this often happens.

0:48:160:48:18

Unless you can do it yourself.

0:48:180:48:20

Mary ended up spending 12 grand on the build,

0:48:210:48:24

which takes her total investment to 72,000.

0:48:240:48:28

But will that overspend be worth it?

0:48:280:48:30

What will two local estate agents

0:48:300:48:32

make of the changes to the studio flat?

0:48:320:48:34

I think my initial thoughts is they've done a very nice job to it.

0:48:360:48:40

It's very cosy, very nice and warm with the heating.

0:48:400:48:43

I think its disadvantage is the access to it. For some people,

0:48:430:48:46

they're not going to quite like going up the back there.

0:48:460:48:49

Although the size is on the small side,

0:48:490:48:52

I do feel that it does have everything that you would need.

0:48:520:48:55

It has been freshly painted. You can see that it's got new carpets.

0:48:550:48:59

The kitchen is fantastic

0:48:590:49:01

and so is the shower room there.

0:49:010:49:03

So to have a brand-new apartment in this area is quite sought-after.

0:49:030:49:07

I think the selling point of this property is where it's located.

0:49:070:49:10

It is very close to the town

0:49:100:49:12

and if you don't drive, parking is quite difficult around here,

0:49:120:49:16

then it's ideal to be able to walk to work or to a station.

0:49:160:49:20

The agents are right.

0:49:200:49:22

There's a strong demand

0:49:220:49:23

and Mary is already letting the flat out for £500 per calendar month,

0:49:230:49:28

which is within the range the agents recommended.

0:49:280:49:31

This gives her a healthy yield of over 8%.

0:49:310:49:34

Mary does want to sell the flat at some point,

0:49:340:49:37

but what would her £72,000 investment make now?

0:49:370:49:41

I would suggest placing it on the market in a guide price of £75,000 to £80,000.

0:49:460:49:51

I think if I was putting this on the market now,

0:49:510:49:54

I would be looking at offering it out at say offers in the region of

0:49:540:49:58

£80,000.

0:49:580:49:59

It's not the best I've had,

0:49:590:50:02

but as I said, as I've gone through quite a number of properties,

0:50:020:50:07

to me it's just another property, you know, you get through.

0:50:070:50:11

It's still a potential profit of £8,000 minus taxes and fees.

0:50:110:50:17

But for Mary it's onwards and upwards.

0:50:170:50:20

Does she have any advice for any budding property developers out there?

0:50:200:50:24

There's quite a number of things.

0:50:270:50:29

You can make a lot of mistakes along the way.

0:50:290:50:32

It's not exactly a doddle.

0:50:320:50:35

But you've got to be prepared to risk it, basically.

0:50:350:50:39

You know, if you're too scared to risk it, you'll never do it.

0:50:390:50:42

It seems like only ten minutes since I was in Middlesbrough

0:50:460:50:49

looking around this two-bed mid-terrace.

0:50:490:50:51

It had plenty of floor space,

0:50:540:50:56

except it didn't have any floorboards in place.

0:50:560:50:59

Where there was floor, it was covered in lots of damaged items.

0:51:000:51:04

This probably contributed to its low guide price of 14 grand plus.

0:51:040:51:08

Central heating here, which is good.

0:51:100:51:12

This doesn't look in great condition.

0:51:120:51:14

As you can see, that's falling off the wall altogether.

0:51:150:51:17

The kitchen is just here.

0:51:170:51:19

It's a galley kitchen, nice and long. Not in great condition though,

0:51:190:51:22

so that would have to come out.

0:51:220:51:24

Same goes for the bathroom, which is right at the end of the property.

0:51:240:51:28

Apart from the radiators, all the rubble and the rubbish...

0:51:280:51:32

there's potential here, definitely.

0:51:320:51:34

The man who saw that potential at auction was London-based

0:51:340:51:37

property developer Mohammed.

0:51:370:51:39

He paid £28,500 for the property, just over double the guide price.

0:51:400:51:44

-Were you happy with what you paid?

-Yes, definitely.

0:51:470:51:50

-I'm happy.

-What would it cost you down south?

0:51:500:51:52

Yeah. I mean, the price which I paid up here,

0:51:520:51:55

you can't even pay the deposit.

0:51:550:51:57

It's about ten, 15 times more higher than this.

0:51:570:52:03

Being close to the university, his plan was to convert it into a HMO,

0:52:030:52:07

a house of multiple occupancy.

0:52:070:52:09

So, for example, if there's four rooms up here,

0:52:100:52:13

I'm getting about £450 per week.

0:52:130:52:15

The yield is about 18%,

0:52:150:52:19

which is not bad either.

0:52:190:52:20

Not bad if the work can be done economically.

0:52:200:52:23

Mohammed had a plan to use his trusted tradesmen from London who'd

0:52:250:52:29

worked on his portfolio of rental properties before.

0:52:290:52:31

I have six, seven people, so I'm going to bring them down here,

0:52:320:52:37

so they're going to have their holidays while they're working here as well.

0:52:370:52:41

It's going to be away from London where it's a hectic life down there,

0:52:410:52:44

so it's going to be away from London, plus, after the work,

0:52:440:52:47

it's going to be all partying going on.

0:52:470:52:49

So, was it all play and no work when it came to attacking his ambitious

0:52:520:52:56

three-week timescale?

0:52:560:52:58

Well, we're back, 27 weeks and one day later.

0:52:580:53:01

The rubbish has been cleared and in the first reception room,

0:53:050:53:09

in the first bedroom of what is now a two-bed downstairs flat.

0:53:090:53:14

Looks like the long-distance working has worked out.

0:53:140:53:16

What used to be the rear reception room is now the second bedroom of

0:53:300:53:34

the downstairs flat.

0:53:340:53:35

The new radiators I was hoping for are there and a number of safety

0:53:370:53:40

features have been installed, along with fitted wardrobes.

0:53:400:53:44

It couldn't have been much of a holiday for Mohammed's team of builders.

0:53:450:53:49

The rest of the downstairs tour starts with the hall.

0:53:570:54:01

Very nice.

0:54:020:54:03

In the new gallery kitchen, there's a new boiler, toaster and kettle,

0:54:050:54:10

and all the mod cons.

0:54:100:54:12

The wreck of a bathroom has new fittings and tiles.

0:54:160:54:21

Heated towel rail, neutral tones will make bath times a little more appealing.

0:54:210:54:26

So, to the upstairs where the old back bedroom is now a studio flat.

0:54:300:54:35

It's amazing these days what you can fit into a small space.

0:54:390:54:43

But I don't fancy my chances in that small shower tray.

0:54:450:54:49

There's another studio flat where the front bedroom was.

0:54:500:54:53

But was it all worth a 24 week and one day overrun?

0:54:590:55:03

What does Mohammed have to say about that?

0:55:030:55:07

It took me a little while to find the good builders to come into the property and

0:55:070:55:12

just sort out everything for me,

0:55:120:55:14

rather than me coming around and sort it out.

0:55:140:55:16

Hang on a minute, you told me you were going to use your London-based

0:55:160:55:20

-team.

-Bringing them here,

0:55:200:55:22

it was costing me a little bit more, so I was thinking, rather than bring them here,

0:55:220:55:26

just give a contractor a job to finish it off for me.

0:55:260:55:30

The local builders took care of...

0:55:300:55:32

well, building. They also did acoustic tests,

0:55:320:55:36

electrics and gas certification.

0:55:360:55:38

They even sorted planning permission,

0:55:380:55:40

which also didn't go to Mohammed's plan for a HMO.

0:55:400:55:44

I told my builders to find out what exactly can we do

0:55:440:55:47

and ending up having three flats into the property, which is all good.

0:55:470:55:53

He believes he'll make a much better return with the property as three

0:55:530:55:58

flats, but how long did it really take?

0:55:580:56:01

Everything from start to finish, they'd done in four weeks,

0:56:010:56:05

as you can see, so I will 100% prefer them.

0:56:050:56:09

His local builders have really pulled it out of the bag,

0:56:090:56:12

allowing Mohammed to concentrate on projects closer to home.

0:56:120:56:16

I just came a couple of times, especially to come here to make the payments basically.

0:56:160:56:23

Let's find out from two local estate agents if Mohammed's payments were

0:56:230:56:27

wisely invested.

0:56:270:56:29

First, the agent who visited before work commenced.

0:56:290:56:32

First impressions, I think the owner's done a fabulous job.

0:56:320:56:35

They've used all the space available.

0:56:350:56:37

Really well done with a great finish.

0:56:370:56:40

So, the market that this property will be primarily aimed at

0:56:400:56:43

would be the student market.

0:56:430:56:46

It would be really popular with students in the area.

0:56:460:56:48

In fact, one of the agents told us the council were converting another

0:56:480:56:53

terraced house for student lets at the end of the street.

0:56:530:56:56

Good news for the local market.

0:56:560:56:59

The university is expanding, so that's good for the area as well,

0:56:590:57:03

so we are seeing more activity in the market at the moment.

0:57:030:57:06

The agents predicted an average total rental income per calendar month of £1,340.

0:57:060:57:14

Mohammed spent £28,500 at auction and budgeted a £10,000 spend for

0:57:140:57:19

refurbishment. He says this increased to £30,000 because of the extra work

0:57:190:57:24

required for the unforeseen conversion to flats.

0:57:240:57:28

His business model is to rent and you can see why, because the potential yield is 28%.

0:57:280:57:35

Of course, he could have empty rooms during the summer period, but

0:57:350:57:39

nonetheless, nearly a 30% yield is very impressive.

0:57:390:57:43

30% yield you cannot get from anywhere in London, definitely, first of all,

0:57:440:57:49

but it's a very good return and I'm happy with that.

0:57:490:57:53

And so he should be.

0:57:530:57:55

And I'm glad to see, for a change,

0:57:550:57:57

a great return on capital from outside the capital.

0:57:570:58:00

Well, that's it for today's show,

0:58:050:58:08

but there's always something new to learn in the world of property,

0:58:080:58:10

so make sure you join us next time.

0:58:100:58:12

Yes, please do, right here on Homes Under The Hammer.

0:58:120:58:15

-See you.

-Goodbye.

0:58:150:58:16

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