Episode 14 Homes Under the Hammer


Episode 14

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Transcript


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Hello and welcome to the programme. Over the years, we have met literally thousands of people

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who have bought properties at auction with varying degrees of success.

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People have bought houses and flats, things for investment or to live in.

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Yes, it's not easy, but it can be exciting and rewarding

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if you get it right. Someone who knows all about that

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is the brand-new member of the team, Martel Maxwell. How are you?

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It's great to be here, guys. Thanks so much for the warm welcome.

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You're right. Property can be really rewarding -

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but having built my own house, I know you've got to be prepared for challenges, too,

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and, of course, on Homes Under The Hammer, you've seen that time and time again.

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We all know that buying property is far from straightforward but there are a few basic rules -

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make sure that you do your research, and always buy at the right price.

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Yes, paying too much in the first place can be a dangerous trap to fall into,

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especially at auction where the bidding can be fast and furious.

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Yes, let's hope the buyers on today's show didn't get carried away.

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Let's find out what they went for.

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Coming up, this two-bed property in Dover, Kent,

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gets a CUTTING remark about the garden.

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I think it's fair to say you won't be needing a sit-on mower.

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There is an unusual view from the garden

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at this three-bed semi in Camborne in Cornwall.

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What's that? Somebody's built a garden shed! Bleurgh!

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Details of this two-bed ground floor flat in Woodford Green, London,

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say it "benefits from a patio".

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I CAN see there's a little bit of outside space there...

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All of these properties have been sold at auction,

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and we'll find out who bought them

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

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Sold.

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These white cliffs on the Kent coast can only mean I'm in Dover,

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where a statue commemorates the role of the Merchant Navy seamen

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in World War II.

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Over 30,000 were killed, chiefly in the Battle of the Atlantic.

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Thankfully, it's more peaceful these days -

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tourism and the import/export business

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form the core of the town's commerce.

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Along this residential road

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is the end-of-terrace house I'm here to see.

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Now, the catalogue describes it as being "substantial"

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and in "generally good order". So far, so promising.

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It had a guide price of £115,000 to £120,000.

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I hope it lives up to my expectations.

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Into our living area.

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OK, do you know what? It IS substantial.

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It DOES look to be in good order. Good news.

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Slight smell of damp, and actually there are a few traces on the wall,

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but the smell isn't overwhelming. Hopefully not a serious problem.

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You have double glazing windows,

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you have radiators which are a bit tired-looking but the good news is

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you have central heating.

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Over to the kitchen. I'm a big fan of the flow - open living space,

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you need a new kitchen...

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The boiler looks a bit tired, but there's another two floors to go. It's a promising start.

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The kitchen could be bigger,

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but what's described in the catalogue as the diner

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is pretty spacious.

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Maybe with a change of flooring, you could have a lounge area.

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Up to the first floor.

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The bathroom is a decent size.

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Needs to come out, modern bathroom in.

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Wow, the shower is very low -

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I'm not the tallest, but definitely needs to be further up.

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Through to what the catalogue says is a reception room...

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Do you know what? It strikes me that this would be a great third bedroom

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because you have your living area downstairs.

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The only problem, of course, is

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you would be walking through someone's bedroom

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to go upstairs to the FURTHER two bedrooms.

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Possible solutions,

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you could get rid of the chimney breast,

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so you are making a bit more room on that side,

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and here, put up a partition

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with a hall corridor along here

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so that you could be walking up to...upstairs.

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But is that second flight of stairs a stairway to heavenly bedrooms?

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Well, the smallest of the two

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has slight damp issues, and the ubiquitous woodchip.

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Next door, the second of the two bedrooms

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is virtually identical to the first floor arrangement.

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There are good views from up here,

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but I'm yet to spy any outside space -

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and you know what? That makes me wonder.

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# Ooh, it makes me wonder... #

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Out of the garden... Ah.

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Well, calling it a garden is probably a bit of an overstatement.

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I wouldn't go as far as to say it's a selling point -

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I mean, you could put a bit of decking, paving, make it prettier,

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modernise it,

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but I think it's fair to say you won't be needing a sit-on mower.

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Someone not resting on his laurels either

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is the local estate agent we invited along

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to take a wee peek at the property,

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and to give us the benefit of his experience.

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It's a good-sized property. It's a good family home.

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Just needs some modernisation.

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But it would be ideal for a young family, first-time buyers.

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With a guide price of £115,000 to £120,000,

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once refurbished, what would it sell and rent for?

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Once renovated,

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this property would sell for between £155,000 and £160,000,

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and the rental between £650 and £675 per calendar month.

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Well, that garden is not exactly the biggest selling point,

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but this property DOES have loads going for it,

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not least the potential to add that third bedroom.

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And the catalogue DID live up to expectations -

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it IS substantial, it IS in good nick.

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

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Lot 87, we've got a guide of 115, 120.

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Start me where you will, 115 anywhere?

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110? 110 I have, thank you.

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£110,000 I'm bid.

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112 for anyone else?

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I've got all these people doing this, and it's really...

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112 I've got. 112.

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Were you bidding? At 112.

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It's not, sir. 115. 118.

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You are still smiling but unfortunately, sir, you are out.

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118?

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118. 120.

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No. £118,000 I have,

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gentleman on the right-hand side.

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120 do I see?

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For the first time, then, at 118,000...

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For the second time at 118,000,

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third and final time, at 118,000... Are you all done?

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-HAMMER COMES DOWN

-Sold at 118. Well done, sir.

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The top bidder was Bernie,

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at the auction with his builder buddy Ray.

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If you have a feeling of deja vu,

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it's because Bernie has been on the show before.

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A self-confessed petrolhead,

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we last saw him when he bought this three-storey flat conversion

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in Chatham. Ray would do the work, as Bernie balanced the budget.

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The sum total of Bernie's intended physical effort was to...?

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Buy Ray a pint occasionally. Update the spreadsheets...

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A comfortable approach to making

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a forecasted £88,000 pre-tax and expenses profit

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on his buy-to-sell project,

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and Martin asked if him he would invest it

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in more petrol power, or property.

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-HE LAUGHS

-I'm going to go with both!

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Ten months later, I'm meeting him at his latest £118,000 purchase.

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Same set of wheels - new property.

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-Bernie, pleased to meet you.

-Nice to meet you, too.

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-Congratulations.

-Thank you.

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What was it like watching yourself back?

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Yes, I think the car was more of a hit last time than I was,

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with friends and family watching it.

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And coming into this property,

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it's kind of a pleasant surprise, it's in not bad nick.

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This one is quite a simple one for us,

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it doesn't need that much work.

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There's no major structural work to do to it.

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We will take the chimney breast down, take the chimney off,

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that's probably about the most major thing we'll do.

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We'll lose a part of the room upstairs

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to make a corridor to go up to the floor above it,

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but that's just a simple internal wall.

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We will use it as a third bedroom.

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Yes, I would say this is diner/lounge area,

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and then one bedroom on the first floor, and the bathroom,

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and then up the top, two more bedrooms there, too.

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It's a three-bedroom place, one reception, is how we'll

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advertise it when we come to sell it.

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Do you prefer it like this, or do you prefer

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your work cut out for you?

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We actually like them to be as appalling as possible.

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Ex-squatters, if we can get pigeon infestation, fire damage -

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the worse, the better.

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Because there's so much value to be added?

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That's correct, yes.

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You are the spreadsheet/finance man,

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and Ray, your pal and builder, he does all the hard physical graft.

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Well, I think doing the spreadsheets is harder than the physical graft,

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personally, but we agree to disagree on that one.

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And do you and Ray have a good relationship?

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Because you'll be working together a lot.

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Yes, we've been friends for a very long time.

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A refurbishment expert like Ray and a savvy moneyman like Bernie

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makes for a well thought-out bidding strategy,

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uninfluenced by the guide price.

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The auctions tend to have the guide prices lower,

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because they want to attract people to the auction.

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So if they put silly prices on, no-one would turn up.

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We had a maximum bid of this one of 125,

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and we got it for 118, so...

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The budget, erm...

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25 to 30.

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And then we will sell it for 180, hopefully.

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Bernie has a clever way of working out his maximum bid for a property.

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He subtracts Ray's refurbishment budget, taxes,

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fees and a profit

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from his forecasted selling price, giving his top bid.

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Using this method,

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he bought two of the nine properties he was interested in at the auction,

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and happily watched the others go by to higher bidders.

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So, when can he expect a completion and return on his investment?

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Normally on one like this, we'd hope to do it in eight to ten weeks.

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This one, we're going to say ten to 12 weeks because we'll have to

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split the guys between the two properties, so

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I'm going to say three months.

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And your plan IS to sell it, not to rent it?

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Yes. With these ones where we buy

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frankly absolute rubbish at auction

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and then do them up, make them all into

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very nice, very modern, very clean,

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and then we sell them very fast.

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I don't think it's rubbish.

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No. We have had considerably worse,

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with ceilings falling down and

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we had one that didn't even have a staircase...

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We had a ladder going up to the next floor.

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And how many properties do you have on your portfolio?

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Mm...

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There's probably 25 or so long-term ones,

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which is really my pension plan.

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So these are properties you rent out?

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They're rented out, that I've had in some cases for many, many years.

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But in these ones that we're doing, the quick turnaround,

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there's probably about eight

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in various stages, so two -

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this one, and the other one we bought at auction.

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Obviously not started yet.

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We've got others with estate agents,

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and a couple that are in the middle of that process.

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The longer term ones, the ones that are rented out,

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tend to be mainly in south-east London,

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because that WAS the up-and-coming area

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and we did a lot of this type of work in south-east London,

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but then kept them, and rented them out.

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More recently we've been down

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in this area in Kent - Chatham, Maidstone,

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Dover, Ramsgate, Folkestone.

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Bernie knows his home London market well,

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but branching out to relatively unknown territory

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means his research had to be thorough,

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exploring prices and the market in all these places.

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It's all about a quick turnaround, and onto the next one.

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With dozens of properties on the go...

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-HE LAUGHS

-..is there time for anything else in your life?

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There's three aspects to my life -

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one is I run an IT recruitment agency,

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have done for 32 years now -

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my background, personally, was as a programmer...

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Erm,

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and with my wife, we have a series of children's homes, and a school.

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Keeps me out the pubs.

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SHE LAUGHS

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At this stage, do you just want to get your sleeves rolled up and...

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well, do a spreadsheet(?)

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Do you just want to crack on and, you know...

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Yes, that's exactly...

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We come in, we rip out all the things that need doing,

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probably annoy the neighbours with skips out the front

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for a week or two while we're clearing everything out,

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and then, as you say, crack on.

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Well, you've got ME excited. Can't wait to see what you do with the place.

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Congratulations again, and good luck.

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Thank you.

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Well, Bernie is a seasoned property developer

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and his latest purchase does seem pretty straightforward,

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but as he says, the name of HIS game is to sell quickly and make a profit.

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Will it all go according to plan?

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You can find out later in the show.

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Camborne in North Cornwall enjoyed boom-town status

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at the height of the tin-mining industry in the 19th century.

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It's that proud heritage

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that has left its mark here today in more ways than one.

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Well, pretty close to the centre of town is the property I'm here to see.

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Now - here's a lesson.

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What have I taught you over the years in terms of property prices?

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Well, use that knowledge to deduce something from what I'm going to tell you -

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the average price of a three-bed semidetached in this street

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is 175,000 quid.

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The one that was up for auction - that one -

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had a guide price of 75,000 to 100,000.

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Now - was this just a mistake in the auction catalogue...?

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Or is it perhaps too good to be true,

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with perhaps a problem which sets the guide price so low?

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So, on with our slightly suspicious

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property detective face, and see what we can find.

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Well, through the front door,

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nice you've got that little entrance area there and then stairs up to,

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well, whatever. Looks a bit higgledy-piggledy.

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Lots of corridors going down there, we'll explore that in a minute

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but into the front lounge. Actually quite a nice space -

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you've got the bay window there,

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some nice original features... Yeah, it looks all right.

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Well, you don't have to be Sherlock Holmes to spot that, do you?

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Behind the wallpaper here... Look at that.

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Hmm...

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Now, you might just think that is a random hole in the wall.

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Well, it's what is BEHIND that hole

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that is concerning me, because

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that looks to me like something called mundic.

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Very, very typical for this part of Cornwall.

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Basically, mundic was made from mining waste.

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It was incorporated as aggregate in concrete construction,

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either in prefabricated sections or blocks.

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In this case, the house is PRC -

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that's precast reinforced concrete -

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so it's already nonstandard construction.

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With mundic, damp can cause it to deteriorate,

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so you need a mundic report -

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which is why this hole is here.

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And as a precaution, probably not a bad idea to do that

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if you are thinking about buying houses

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in the potentially mundic area in Cornwall.

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So with a slightly heavy heart, let's continue exploring.

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Second sort of reception room here,

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with a strange kind of conservatory built off it.

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Stairs up here. Looks a bit wibbly-wobbly, but erm,

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that's not the biggest issue. I don't like this narrow corridor,

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it all starts to feel rather cramped

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as you head into the property.

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You come to this, which is laid out currently as...I don't know what.

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It's sort of...a dining room,

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or something? It's not got enough units to be properly a kitchen.

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It's got a fireplace, and then here is the actual kitchen,

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almost tacked onto the back of the property.

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Er... I think it is not helped by having this sloping roof,

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it feels dark, it feels dingy,

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it feels like it needs to be knocked down and basically replaced.

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Above the front room bay on the first floor,

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the largest of the three bedrooms

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also has the benefit of a bay window.

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The second bedroom is a generous size, with decent wardrobe space.

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Bedroom three is not much more than a box room.

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The family bathroom on the half landing

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needs a new suite and decoration,

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and it completes the upstairs rooms.

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Back downstairs for a closer look at that lean-to conservatory.

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And there's evidence here how the damp and mundic don't mix.

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The most common waste product is iron pyrites,

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often known as fool's gold -

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something the house might turn out to be,

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depending on the results of the mundic report.

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# So I'll go, before I fall to pieces... #

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Well, I've been to loads and loads of houses

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and you walk round the back and you're never quite sure

0:18:050:18:08

what you are going to find,

0:18:080:18:09

but in this case...

0:18:090:18:11

this is a complete hotchpotch disaster area,

0:18:110:18:16

I mean - look at that.

0:18:160:18:17

What is going on there? Some sort of garage-y thing

0:18:170:18:20

with a corrugated iron roof.

0:18:200:18:22

We'll forgive that bit, but look at the main part of the property.

0:18:220:18:25

This is that kitchen area here, underneath this extension

0:18:250:18:28

but what's that?!

0:18:280:18:30

Somebody has built a garden shed on the top as an extension,

0:18:300:18:33

I mean, it's completely bonkers, and just... I mean...

0:18:330:18:36

Bleurgh!

0:18:360:18:38

Eagle-eyed viewers might have spotted a clue.

0:18:380:18:41

The stained-glass window frame indicates that this shed

0:18:410:18:45

houses the bathroom.

0:18:450:18:47

You get them adorning churches and palaces -

0:18:470:18:50

so why not a wooden throne room?

0:18:500:18:52

This place is not short on issues,

0:18:550:18:57

so maybe knocking the whole thing down would be an option.

0:18:570:19:00

We asked a local estate agent along

0:19:000:19:02

to give me a breather.

0:19:020:19:04

I wouldn't demolish it -

0:19:040:19:05

I would repair what needs to be done,

0:19:050:19:07

and either rent it out or sell it on. Because you would

0:19:070:19:10

probably lose money if you tried demolishing it and then

0:19:100:19:13

building it back up,

0:19:130:19:14

just simply because of the end cost versus the end price.

0:19:140:19:18

Demolition can be really costly,

0:19:180:19:21

and this is a semi, so it could prove complicated.

0:19:210:19:24

The good news is that after testing,

0:19:240:19:26

some 80% of houses with mundic are deemed OK,

0:19:260:19:29

but the fact that this house is nonstandard construction

0:19:290:19:32

likely means a cash buyer.

0:19:320:19:35

In terms of the local market, the lettings side is extremely buoyant,

0:19:370:19:41

and there's a shortage of supply versus demand

0:19:410:19:44

so we've got quite a lot of people looking to rent.

0:19:440:19:47

In terms of sales,

0:19:470:19:48

there's a lot of investors and first-time buyers

0:19:480:19:50

so we're always very busy.

0:19:500:19:52

I suppose if good rental yields can be achieved,

0:19:520:19:55

this gets all the more appealing.

0:19:550:19:57

But if you tried the resale market, what might you achieve?

0:19:570:20:00

If this property was to go on the market in a saleable condition,

0:20:000:20:05

I would imagine it would be worth around £130,000 to £140,000.

0:20:050:20:10

Well, that's probably because of local demand.

0:20:100:20:13

If you got it for the lower end of that 75,000 to 100,000 guide price,

0:20:130:20:17

you'll be quids in.

0:20:170:20:19

Well, clearly this is a house with its fair share of issues.

0:20:210:20:26

However, if you know those issues then it's just a case of working out

0:20:260:20:28

how much it's going to cost to actually

0:20:280:20:31

sort out the problems - if indeed they are

0:20:310:20:34

surmountable.

0:20:340:20:35

-HE EXHALES

-Work that out, and then decide if it's still worth doing.

0:20:350:20:39

Anyway, let's see who took on the challenge when it went under the hammer.

0:20:390:20:43

To the next available lot,

0:20:430:20:46

which is lot 126.

0:20:460:20:47

£75,000, may I say.

0:20:470:20:49

Straightaway at 75. Thank you. 76, then.

0:20:490:20:53

76. Sorry, madam, didn't see you, 76.

0:20:530:20:55

77,000.

0:20:550:20:57

77. 78.

0:20:570:20:59

79, 80.

0:20:590:21:01

80,000. 81,000, sir, are you coming back?

0:21:010:21:03

Or are you going to be a gentleman and let the lady have it?

0:21:030:21:06

For the first time at £80,000...

0:21:060:21:09

Second...

0:21:090:21:10

Third and final time, all finished...?

0:21:100:21:13

Yours, madam. Well done.

0:21:130:21:15

The top bid of £80,000

0:21:150:21:17

was placed by Sue, who was bidding on behalf of son Mark.

0:21:170:21:21

I had a chat with Mark,

0:21:210:21:23

who is a domestic energy assessor, back at his new purchase.

0:21:230:21:27

-Mark, good to meet you.

-Nice to meet you.

-Congratulations.

0:21:280:21:31

Tell me why you wanted to buy this house.

0:21:310:21:34

Basically it was the right price, in a good location in Cornwall.

0:21:340:21:37

-Right.

-I'm looking for a base for me in Cornwall,

0:21:370:21:40

but also to rent out the other rooms on a sort of room-by-room basis.

0:21:400:21:43

Right. Do you know the area quite well?

0:21:430:21:46

Erm, I've been volunteering with a local disaster relief charity...

0:21:460:21:50

-Oh, wow.

-..for some years now, and we basically go as volunteers

0:21:500:21:53

following natural or man-made disasters,

0:21:530:21:57

to help the people affected by the disaster

0:21:570:22:00

by supplying tents and other equipment

0:22:000:22:02

-such as blankets and things like that.

-Oh, wow.

0:22:020:22:05

So what sort of places have you been to?

0:22:050:22:07

The most recent deployment was to Fiji.

0:22:070:22:09

Prior to that last year I went to Nepal,

0:22:090:22:13

following the flooding and landslides rather than the earthquake.

0:22:130:22:16

Right. You must see some awful stuff.

0:22:160:22:18

Erm, it's a lot of destruction,

0:22:180:22:20

but the great part of it is to see how people...

0:22:200:22:24

how resilient people are following the destruction and

0:22:240:22:27

how they rebuild their lives.

0:22:270:22:29

With our assistance, but also largely from their own work.

0:22:290:22:32

Given Mark's experiences,

0:22:330:22:35

suddenly a house with potential structural problems seems like small beer.

0:22:350:22:40

It's basically made of mundic, which is essentially mining waste,

0:22:410:22:45

and that means it's essentially un-mortgageable.

0:22:450:22:48

There's also issues as you go around, you've probably seen,

0:22:480:22:51

with damp penetration, largely due

0:22:510:22:53

to the roof being the original roof,

0:22:530:22:56

and also nonexistent gutters.

0:22:560:22:59

-Right. Never good.

-Yeah. Not great,

0:22:590:23:01

so I'm going to do what I can myself such as ripping out

0:23:010:23:04

a lot of the insides of the house,

0:23:040:23:06

and then I'm going to get trades to do the majority of the complicated work.

0:23:060:23:10

Now, what about the back? Because it's a bit strange, isn't it?

0:23:100:23:14

Long and thin and...you know, whatever.

0:23:140:23:16

Yeah. So the back two parts of the building

0:23:160:23:19

are basically the garage and the shed,

0:23:190:23:21

and it looks like a tree has come down in the past

0:23:210:23:24

and caused quite a lot of damage to the garage,

0:23:240:23:27

so that will have to come down and potentially be replaced.

0:23:270:23:30

The kitchen and the sort of dining room area,

0:23:300:23:34

I'm looking to clear that through,

0:23:340:23:37

and remove the chimney breast to hopefully

0:23:370:23:39

-create a reasonable living space there.

-Right.

0:23:390:23:43

Mark has a lot to organise -

0:23:430:23:44

new central heating, wiring, double glazed windows -

0:23:440:23:48

but he's also planning to take advantage of one of Cornwall's

0:23:480:23:51

natural free resources. The plentiful rain.

0:23:510:23:54

So we will harvest the rainwater to use in flushing the toilets

0:23:550:23:58

and also for the washing machine.

0:23:580:23:59

How do you do that? How do you harvest it?

0:23:590:24:02

Erm, so, basically, when I put the gutters on

0:24:020:24:04

we're going to try and connect them all up,

0:24:040:24:06

put a pipe in the ground into a nice, big tank under the garden,

0:24:060:24:09

and then there will be a pump in there to pump the water

0:24:090:24:12

around a separate sort of system in the house.

0:24:120:24:14

Oh, great. Brilliant.

0:24:140:24:16

Erm... And, so what is the budget for all your planning?

0:24:160:24:20

I'm looking at roughly £25,000 to £35,000 at the moment.

0:24:200:24:24

There's not too much flex in that,

0:24:240:24:26

so I'm hoping to certainly come in under 35.

0:24:260:24:29

And what's the timescale?

0:24:290:24:31

Erm, I'm looking hopefully at two to three months.

0:24:310:24:33

It being the summer, and in Cornwall,

0:24:330:24:36

I'm looking to get some good friends to come and help me,

0:24:360:24:38

and then we can go to the beach and surf during our time off.

0:24:380:24:41

Oh, great, yeah! That's a good incentive, actually.

0:24:410:24:44

-Are you a surfer?

-Erm, I'm a BAD surfer...

0:24:440:24:47

-MARTIN LAUGHS

-..but still learning, put it that way.

0:24:470:24:50

Well, congratulations, good luck.

0:24:500:24:51

-Thank you.

-Look forward to seeing how you get on.

0:24:510:24:54

Well, I'm delighted that Mark is fully aware of the issues

0:24:550:24:58

that this property has. And you know what?

0:24:580:25:01

You could say that those issues actually enabled him to buy it,

0:25:010:25:05

because if there weren't any issues, the price would've been a lot higher,

0:25:050:25:09

so for him, it's perfect.

0:25:090:25:11

Will he be able to sort it out for 25,000 to 35,000?

0:25:110:25:15

Mmm. Not so sure, but we'll find later in the show.

0:25:150:25:19

Still to come,

0:25:190:25:21

detective work at my Woodford Green two-bed flat

0:25:210:25:24

makes me think a smoker lived here.

0:25:240:25:27

I'm thinking...there was something on the wall just here.

0:25:270:25:30

And energy assessor Mark saves more than energy...

0:25:320:25:35

That means an estimated saving of about £2,000 a year in running costs.

0:25:360:25:40

MUSIC: Albatross by Fleetwood Mac

0:25:430:25:45

Back now to a place popular with cross-Channel swimmers.

0:25:450:25:49

Is that one of them starting out from Dover(?)

0:25:490:25:51

There was no bathing for me when I went there earlier in the show

0:25:520:25:56

to look around this three-storey two-bedroom property,

0:25:560:25:59

bought by the familiar face of Bernie for £118,000,

0:25:590:26:03

with the intention of refurbishing by his builder mate Ray.

0:26:030:26:07

You're the spreadsheet/finance man and Ray, your pal and builder,

0:26:100:26:14

he does all the hard, physical graft...

0:26:140:26:16

Well, I think doing the spreadsheets is harder than the physical graft,

0:26:160:26:19

personally, but we agree to disagree on that one.

0:26:190:26:22

We're back three and a half months later,

0:26:240:26:26

to see the results of Bernie's graft on his spreadsheets

0:26:260:26:29

and Ray's graft with his tool kit.

0:26:290:26:32

I know which one I'd prefer.

0:26:330:26:35

# I'm waking up to ash and dust

0:26:350:26:39

# I wipe my brow and I sweat my rust

0:26:390:26:43

# I'm breathing in the chemicals... #

0:26:430:26:46

Yeah, paint stripper does that to me.

0:26:460:26:49

Well, downstairs everything is new -

0:26:510:26:53

plaster, plumbing, glazing and so on...

0:26:530:26:55

Even the staircase to the first floor.

0:26:550:26:59

Although, I would definitely recommend a banister.

0:26:590:27:01

And is that...

0:27:050:27:07

Yes. It's a corridor to the top floor.

0:27:070:27:10

# Welcome to the new age, to the new age

0:27:100:27:13

# Welcome to the new age, to the new age... #

0:27:130:27:17

Yes, it has compromised the square footage of the room a little,

0:27:170:27:21

but the chimney breast has gone here as well as downstairs.

0:27:210:27:25

I thought that would help.

0:27:250:27:27

The old bathroom redefined the phrase,

0:27:270:27:30

"Just going for a short shower, dear."

0:27:300:27:32

Ray's come up with an inspired fix for that -

0:27:320:27:35

change ends, and mount the shower on the wall.

0:27:350:27:37

Genius!

0:27:370:27:39

Once showered,

0:27:400:27:42

it's a much more private climb to the top floor,

0:27:420:27:45

where the largest of the two bedrooms up here

0:27:450:27:47

is little-changed - just freshened up.

0:27:470:27:50

# Welcome to the new age, to the new age

0:27:500:27:54

# Welcome to the new age, to the new age... #

0:27:540:27:57

The smallest bedroom is free at last of woodchip, and damp,

0:27:570:28:01

and I think apart from the interior looking like

0:28:010:28:04

there's been an explosion in a magnolia factory,

0:28:040:28:07

well, it's all good.

0:28:070:28:08

But what's money man Bernie's account of things?

0:28:080:28:11

We had a couple of minor issues with the roof

0:28:130:28:15

when the chimney came out,

0:28:150:28:18

so we had to get some scaffolding and get the roof fixed.

0:28:180:28:21

Other than that, it's white and magnolia and new carpets everywhere.

0:28:210:28:26

Was it worth sacrificing the space

0:28:260:28:28

from the first-floor living area as was, to create a third bedroom?

0:28:280:28:32

Generally speaking,

0:28:330:28:36

the more you can get for the estate agents

0:28:360:28:38

on their three beds instead of two,

0:28:380:28:40

two receptions instead of one, whatever

0:28:400:28:43

the more you can get on there, the better it reflects on the price.

0:28:430:28:46

And actually, creating an extra room

0:28:460:28:49

when you're doing so much work to the property anyway

0:28:490:28:51

is surprisingly cheap to do.

0:28:510:28:54

One area they've not been able to expand, of course,

0:28:560:28:58

is the teeny-weeny garden.

0:28:580:29:00

We were stuck with the size of the garden as it is,

0:29:000:29:03

so what we've done is we've cleaned it up, we've made it all nice.

0:29:030:29:07

It was filthy before, so

0:29:070:29:09

it'll make a nice little kind of barbecue area,

0:29:090:29:12

possibly a storage area for bikes or something like that now.

0:29:120:29:15

The timescale was planned to be ten to 12 weeks.

0:29:160:29:19

Ray and his team completed the work in just EIGHT weeks,

0:29:190:29:21

despite those issues dismantling the chimney.

0:29:210:29:24

But - how did Bernie's spreadsheets fare?

0:29:240:29:27

We budgeted a top end of about £30,000.

0:29:280:29:33

We actually come out at a total spend of £34,000,

0:29:330:29:37

but that does include non-building things

0:29:370:29:40

like auction fees, solicitors' fees, stamp duty, et cetera.

0:29:400:29:43

So I'm quite pleased that it's broadly on budget.

0:29:430:29:47

Taking Bernie's £34,000 spend

0:29:480:29:50

for once including all taxes and expenses,

0:29:500:29:53

and adding it to his £118,000 purchase price

0:29:530:29:57

gives a total of £152,000.

0:29:570:30:00

So - will Bernie be as successful with THIS project

0:30:000:30:04

as he has been in the past?

0:30:040:30:06

Will his formula for working at a top bid price

0:30:060:30:08

serve him well this time?

0:30:080:30:09

We've invited two local estate agents along to find out.

0:30:110:30:15

First up, the chap who saw it before work commenced.

0:30:150:30:18

They've done a very nice job on it,

0:30:190:30:20

it's bright and airy. I like the carpets,

0:30:200:30:23

the colours are very nice.

0:30:230:30:24

Nice contemporary fitted kitchen

0:30:240:30:27

and nice bathroom suite,

0:30:270:30:28

so it is a very nice property now.

0:30:280:30:30

The finishes are neat and tidy, and clean, the carpets are nice.

0:30:300:30:34

The finishes in the kitchen are tidy,

0:30:340:30:37

everything is there as it should be.

0:30:370:30:39

Quality of finishes perhaps at the lower end,

0:30:390:30:43

but still nicely presentable.

0:30:430:30:45

Although he has plenty of rental properties in his portfolio,

0:30:450:30:48

Bernie came into this with a view to selling on after refurbishment.

0:30:480:30:52

So, what is it worth now?

0:30:520:30:55

I would put this on the market at £160,000

0:30:550:30:58

and expect to achieve

0:30:580:30:59

in the region of £150,000, perhaps a little more.

0:30:590:31:02

If we were to put this property on the market,

0:31:020:31:05

I think it would re-sale at between £155,000 and £165,000.

0:31:050:31:10

Taking the top figure, that gives Bernie a clear profit of £13,000.

0:31:100:31:16

Perhaps a LITTLE disappointing,

0:31:160:31:18

but it's still an 8.5% increase on his investment

0:31:180:31:21

in just three months - and he's not fazed.

0:31:210:31:25

We've had three estate agents round to value it,

0:31:250:31:27

we have it on the market funnily enough with

0:31:270:31:31

the highest one.

0:31:310:31:32

So it's on the market at £180,000.

0:31:320:31:36

We will leave it a few weeks,

0:31:360:31:38

and if there's no suitable offers,

0:31:380:31:42

then I will take a buy-to-let mortgage and erm...

0:31:420:31:45

rent it out to offset the costs of the mortgage.

0:31:450:31:47

But I'll have my investment money back

0:31:470:31:49

by getting an 80% mortgage on

0:31:490:31:52

the new value, now that it's all finished.

0:31:520:31:55

Bernie would rent for a year

0:31:550:31:57

and then look to sell on, depending on his tenant,

0:31:570:32:00

but this strategy does depend on property prices going UP -

0:32:000:32:05

so, what is in the future for our laid-back Bernie?

0:32:050:32:08

More properties, for certain, more auctions,

0:32:080:32:11

more investments...

0:32:110:32:14

Hopefully, more profits. More of the same.

0:32:140:32:16

We already have

0:32:160:32:18

several more in progress at the moment.

0:32:180:32:22

No thoughts of cashing in on that pension portfolio, then(?)

0:32:220:32:26

-HE LAUGHS

-Too young and too good-looking to be retiring.

0:32:260:32:29

No intentions on retirement -

0:32:290:32:31

I like my skiing, I like my holidays,

0:32:310:32:33

and I need to be making the money to pay for all of that.

0:32:330:32:35

# Gonna get myself, I'm gonna get myself

0:32:410:32:44

# I'm gonna get myself connected... #

0:32:440:32:46

I'm here in Woodford Green,

0:32:460:32:47

and Woodford Tube

0:32:470:32:49

is a short walk in that direction,

0:32:490:32:51

which can get you into the centre of London in about half an hour,

0:32:510:32:55

so this is a very good location.

0:32:550:32:57

The property I'm here to see is in this building.

0:32:570:33:00

It's a ground-floor flat,

0:33:000:33:03

it's got two bedrooms and a guide price of 240 grand.

0:33:030:33:06

HE EXHALES Let's go and see what you get for your money.

0:33:080:33:11

Well, for a start,

0:33:110:33:13

it's situated in pleasant communal grounds and it comes with a

0:33:130:33:17

service charge of £900 per year.

0:33:170:33:20

There's also a decent 107 years left on the lease,

0:33:200:33:24

plus it's on the ground floor, no stairs!

0:33:240:33:26

My dodgy knees are happy.

0:33:260:33:28

Right.

0:33:280:33:30

It's not my colour. So what have we got?

0:33:300:33:32

We've got a bit of storage in there and in here,

0:33:320:33:36

we've got a bit more storage in there.

0:33:360:33:40

Now as I come along to this part of the hallway,

0:33:400:33:43

it's starting to feel like a flat that I stayed in when I was playing

0:33:430:33:48

for Norwich City. The layout's very similar and I really did like that

0:33:480:33:53

flat at the time, I'm getting the same feeling with this place, too.

0:33:530:33:56

You've got a big bedroom here to my right, a nice big window, as well,

0:33:560:34:01

central heating and I can also see

0:34:010:34:04

there's a sort of wall heater, as well.

0:34:040:34:07

One of them must have replaced the other at some stage and across the

0:34:070:34:11

hallway, you've got another bedroom here, bedroom two.

0:34:110:34:13

A little bit smaller, it is a double bedroom.

0:34:130:34:16

You've got fitted wardrobes there, sort of '70s, '80s feel,

0:34:160:34:20

I'd want to get all that out, clean it up,

0:34:200:34:22

tidy at all up a little bit.

0:34:220:34:24

It just looks a bit dated and tired.

0:34:240:34:26

And across the hallway, the green theme continues,

0:34:270:34:30

follow me into here and we've got the bathroom.

0:34:300:34:33

You've got the bath and you've got the sink, but there isn't any toilet.

0:34:330:34:38

Right. Rip it out, put a new bathroom in here,

0:34:380:34:42

smarten it up a little bit while I search for the toilet.

0:34:420:34:47

Space is definitely my first thought.

0:34:470:34:50

There's a decent amount of it here. Plenty of it is green.

0:34:500:34:53

I would prefer the bathroom and toilet together

0:34:530:34:56

but I've got to find it first.

0:34:560:34:58

# We'll find it

0:34:580:35:01

# We'll find it... #

0:35:020:35:05

OK, still no sign of the toilet.

0:35:060:35:08

This is the lounge and a good-sized lounge it is, as well.

0:35:080:35:12

It's dated like the rest of the flat.

0:35:120:35:15

You've got an old gas fire

0:35:150:35:17

just there. It has got central heating,

0:35:170:35:20

nice, big window letting loads of light in, which is good.

0:35:200:35:23

Not so good, you've got some exposed piping just there,

0:35:230:35:27

I would suggest you get that boxed off or if you can get it behind the

0:35:270:35:31

wall, even better. It feels like this place hasn't been touched since

0:35:310:35:36

this building was assembled back in the 1970s.

0:35:360:35:39

The decor is '70s, everything about it is '70s.

0:35:390:35:44

Now, you don't have to believe me,

0:35:440:35:47

but I'm thinking there was something on the wall just here and that was

0:35:470:35:51

the original wallpaper colour, but it is a good-sized lounge.

0:35:510:35:56

The search continues for the toilet, so across the hallway and there

0:35:560:36:02

we have the elusive toilet.

0:36:020:36:05

Well, that doesn't work, does it?

0:36:050:36:07

Nowhere to wash your hands and I can't see how you will squeeze a

0:36:070:36:10

sink in. I think this toilet belongs with the bath in the bathroom -

0:36:100:36:13

soil pipes and freeholders permitting.

0:36:130:36:17

And...last

0:36:170:36:20

but no means least, we have the kitchen and it is a good-sized

0:36:200:36:23

kitchen, as well.

0:36:230:36:26

This room more or less sums up the whole of this flat.

0:36:260:36:30

If you look around, you can see the doors to the cupboards,

0:36:300:36:33

the cupboards themselves, the work surfaces,

0:36:330:36:36

everything hasn't been touched for some time.

0:36:360:36:39

Take it all out, brighten it up with nice,

0:36:390:36:42

white units and I think this kitchen would look a lot better and the

0:36:420:36:47

space would be used a lot better, as well.

0:36:470:36:50

I can see there's a little bit of outside space there at the

0:36:500:36:53

back door and some communal space, as well.

0:36:530:36:56

But I've got to say, I do like the potential this flat has.

0:36:560:36:59

Now this flat is in a bit of a time warp.

0:36:590:37:01

There were many good things about the '70s...

0:37:010:37:05

# Bright eyes

0:37:050:37:07

# Burning in like fire... #

0:37:070:37:08

# If I don't see a ribbon round the old oak tree... #

0:37:080:37:12

Well, perhaps not those.

0:37:120:37:14

MUSIC: The Hustle by Van McCoy

0:37:140:37:16

Ah, better!

0:37:160:37:18

But not even the walls think that most of the paper is worth hanging on to

0:37:180:37:21

and those ceiling tiles, given their age,

0:37:210:37:24

are likely to be a hazard in a fire.

0:37:240:37:26

Let's be honest, they're not that pretty. '70s decor aside,

0:37:260:37:32

what does a local estate agent make of the two-bedroomed flat?

0:37:320:37:35

Is it likely to be a hustle or a hassle?

0:37:350:37:37

Feel the funk.

0:37:370:37:40

The main selling point for this kind of property is A,

0:37:400:37:45

it's close to the Central Line station, it's a good size.

0:37:450:37:49

Ground floors are always in demand and there's

0:37:490:37:52

so many facilities locally.

0:37:520:37:55

You don't need a car.

0:37:550:37:57

But as good as this flat potentially is, does a 240 grand

0:37:570:38:01

guide price afford any possibility of profit?

0:38:010:38:04

Once this flat has been well refurbished,

0:38:060:38:09

I believe it would achieve in the region of £350,000-360,000.

0:38:090:38:15

And rental returns?

0:38:160:38:18

Once this flat is renovated, I believe it would be possible

0:38:200:38:24

to achieve in the region of £1,400-1,500

0:38:240:38:27

-per calendar month.

-It's a good size, it's got a good layout and

0:38:270:38:32

it's in a very good location. Who agreed?

0:38:320:38:36

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

0:38:360:38:39

Lot 45B is a two-bed, ground-floor flat.

0:38:390:38:42

I'm not going to go below 250 on this.

0:38:420:38:45

Well done, 250 sitting down.

0:38:450:38:48

255. 255. 260. 265, sir.

0:38:480:38:55

270. 275.

0:38:550:38:59

280. 285. 290. 290.

0:38:590:39:05

295. 300. 305. 310. 305.

0:39:050:39:11

310 elsewhere. 310?

0:39:120:39:15

If not, 307, sir?

0:39:150:39:17

Another go?

0:39:170:39:19

Yes, 307.

0:39:190:39:21

First time, second time,

0:39:210:39:24

third and last time if you're all done...

0:39:240:39:27

Sold for 307.

0:39:270:39:29

Well done.

0:39:290:39:30

So, for £67,000 over

0:39:300:39:32

the guide price, and for 307 grand,

0:39:320:39:35

the Woodford Green two-bed, ground-floor flat

0:39:350:39:38

was bought by Raqqah and Jan.

0:39:380:39:41

This was to be their first development project.

0:39:420:39:45

I met them back at the flat to find out their plans.

0:39:450:39:48

Raqqah, nice to meet you.

0:39:480:39:50

-Yeah, nice to meet you, too.

-Nice to meet you, Jan.

-Hello, nice to meet you.

0:39:500:39:53

Congratulations, both of you. Are you happy with what you got?

0:39:530:39:56

I think so, yeah.

0:39:560:39:58

-Yeah?

-Yeah.

-So who found the property, then?

0:39:580:40:00

I've seen it on the website together with about five other properties.

0:40:000:40:04

-OK.

-That was actually the one that we liked the most.

0:40:040:40:07

I mean, to be honest,

0:40:070:40:09

Jan did all of the research and then I was the one who said, "OK,

0:40:090:40:12

"looking at the pluses and minuses..."

0:40:120:40:14

He put a spreadsheet together.

0:40:140:40:16

So you're the organiser? How does this relationship work?

0:40:160:40:18

-Tell me.

-I deal with the finances,

0:40:180:40:21

the legal side of things and he is the one who looks at the property,

0:40:210:40:26

assesses what we need done to the property.

0:40:260:40:29

What do you do, then, when you're not buying property?

0:40:290:40:32

I'm a software developer for a property website.

0:40:320:40:35

Oh, you see, it's all coming together now!

0:40:350:40:37

It's all coming together now!

0:40:370:40:39

-And your background?

-I used to work as a business development manager.

0:40:390:40:43

I quit my job two weeks ago, to try and focus on this and it's just

0:40:430:40:47

because I wanted something which was a bit more flexible,

0:40:470:40:50

so I can spend more time

0:40:500:40:52

-with my daughter, so that's the reason why.

-Gotcha.

0:40:520:40:54

How old's your daughter? What's her name?

0:40:540:40:56

-Give her a name check on TV!

-She'll love it.

0:40:560:40:58

She's eight and her name is Sophia.

0:40:580:41:00

Hello, eight-year-old Sophia!

0:41:000:41:03

You're going to spend a little bit more time with your mum,

0:41:030:41:06

but it doesn't always work out that way -

0:41:060:41:09

refurbishing property can be quite demanding on your time, too.

0:41:090:41:13

OK, tell us what you're going to do to this place, then.

0:41:130:41:15

Well, we had some builders in yesterday and this morning and we

0:41:150:41:20

are trying to get them to do all the skimming down and taking down

0:41:200:41:24

wallpaper, ceiling tiles, obviously a new kitchen, new bathroom, toilet.

0:41:240:41:30

There's nothing deep into this flat that needs to be done, though,

0:41:300:41:33

-is there?

-No, not that we can see.

0:41:330:41:35

It looks like it just needs a sort of a refurbishment, renovation...

0:41:350:41:39

-Yeah.

-..modernisation and that's what we're looking for,

0:41:390:41:42

-because we're looking at the buy-to-let market...

-OK.

0:41:420:41:45

..so we're going to rent this property out. We'd like tenants

0:41:450:41:49

who essentially are professionals, who are commuting into London,

0:41:490:41:52

so they look for high-quality, you know...

0:41:520:41:55

-Of course.

-..standards, so that's what we'd be looking at.

0:41:550:41:58

Tell me, then, what is your budget for the whole project?

0:41:580:42:01

-Well, we don't want to spend more than 15,000.

-OK.

0:42:010:42:04

But we've got a sneaky feeling that we probably will have to.

0:42:040:42:07

Along with the 15-grand budget,

0:42:070:42:09

they are hoping for a rapid turnaround of just a month.

0:42:090:42:12

Fine if it all goes to plan, but I think it might be a tad optimistic.

0:42:120:42:17

Is this something you want to do full-time or are you just thinking

0:42:170:42:22

-of it as a part-time job?

-I wanted to see how I go,

0:42:220:42:25

so what we talked about is I'll take a month out and then see how this

0:42:250:42:30

-goes.

-We hope this is the start of something new.

0:42:300:42:34

-Yeah.

-So, we definitely want to do this again.

0:42:340:42:36

Build that portfolio up?

0:42:360:42:38

Yeah, definitely.

0:42:380:42:39

We did see this one as a learning experience.

0:42:390:42:43

We got too carried away at the auction this time around!

0:42:430:42:47

DION LAUGHS

0:42:470:42:49

Raqqah, that's easily done.

0:42:490:42:50

We've learned our lesson and if

0:42:500:42:52

we are going to buy a property at auction again,

0:42:520:42:54

we just need to stick to what our limit was,

0:42:540:42:57

and we went over that by quite a considerable amount for us,

0:42:570:43:01

so that's why we are looking for buy-to-let because we don't...

0:43:010:43:05

Well, I don't see us making any profit from selling this property on,

0:43:050:43:09

so let's look at the next property and try and make a profit.

0:43:090:43:12

Raqqah, good luck. I hope it all works out.

0:43:120:43:15

All right, thank you so much.

0:43:150:43:16

-Jan, good luck, take care.

-Thank you.

0:43:160:43:19

I think Raqqah and Jan have chosen a very

0:43:190:43:21

manageable first project and they're willing to learn as they go along.

0:43:210:43:25

They've learned lesson one at the auction, already,

0:43:250:43:28

but how are they going to get on with less than two, three, four,

0:43:280:43:31

five and six? You can find out later in the programme.

0:43:310:43:34

Well, earlier we saw one completed project, but what about the other two?

0:43:390:43:42

Yes, did everything go to plan?

0:43:420:43:44

There's only one way to find out, let's take a look.

0:43:440:43:48

Time to head back

0:43:480:43:49

to North Cornwall, where our property in Camborne, this nice,

0:43:490:43:53

three-bed semi, had a suspiciously low guide price

0:43:530:43:57

of £75,000 to £100,000.

0:43:570:43:59

Too good to be true?

0:43:590:44:01

Well, you get no prizes for guessing the answer was a resounding yes.

0:44:010:44:06

The house was built with a nonstandard construction method,

0:44:060:44:09

using precast concrete and that wasn't the only undesirable thing...

0:44:090:44:15

That looks to me like something called mundic.

0:44:150:44:19

Very, very typical for this part of Cornwall.

0:44:190:44:25

Mundic is the local name for the waste from copper mines.

0:44:250:44:29

It contains sulphides, which, when mixed with water, turn into sulphuric acid.

0:44:290:44:33

Nasty! And if that wasn't enough,

0:44:330:44:35

the back of the building was in a right old state and the toilet was

0:44:350:44:39

in an airborne stained-glass shed.

0:44:390:44:42

So, why on earth did energy assessor and charity worker Mark pay

0:44:420:44:46

£80,000 for it?

0:44:460:44:49

I'm looking for a base for me in Cornwall,

0:44:490:44:51

but also to rent out the other rooms on a sort of room-by-room basis.

0:44:510:44:56

Mark had hoped that his plan would support his unpredictable voluntary

0:44:560:45:01

work for a locally-based charity and he hoped he would have it all

0:45:010:45:05

tickety-boo in two to three months.

0:45:050:45:08

But Mark was called to Haiti for disaster relief work,

0:45:080:45:13

causing a delay.

0:45:130:45:15

Seven months later, we're back.

0:45:150:45:17

The outside space is

0:45:220:45:25

much tidier and at least the first-floor garden shed has been

0:45:250:45:30

painted white to blend in more.

0:45:300:45:32

Now let's take a peek inside.

0:45:320:45:34

Mark has kept some of the period charm and original features

0:45:370:45:41

throughout the house.

0:45:410:45:42

And heading towards the back of the property,

0:45:490:45:52

the lean-to conservatory has been knocked down and rebuilt as a more

0:45:520:45:55

permanent structure.

0:45:550:45:57

The downstairs cloakroom has been squeezed under the stairs.

0:46:030:46:07

The bathroom, aka the first-floor garden shed,

0:46:090:46:12

has a much better use of space by swapping out the bath for a shower.

0:46:120:46:16

The master bedroom, with neutral tones, looks a lot bigger.

0:46:260:46:31

As do the other two bedrooms.

0:46:350:46:38

Mark has dry lined all of the walls and has installed thermal insulation

0:46:400:46:45

on the external ones and sound insulation behind the

0:46:450:46:50

new plasterboard dry line

0:46:500:46:52

on the wall connecting to next door.

0:46:520:46:55

Back downstairs, last but not least is the kitchen.

0:46:560:46:59

Here's Mark with the story of

0:47:060:47:07

how he made his mark on the kitchen.

0:47:070:47:09

The kitchen is where we made most of the changes.

0:47:130:47:15

It was all cladding wood so we ripped all that off,

0:47:150:47:18

ripped the floor up,

0:47:180:47:20

ripped the ceiling down,

0:47:200:47:22

ripped the kitchen out and then we

0:47:220:47:25

found a giant chimney blocking the way.

0:47:250:47:28

When we had removed that,

0:47:280:47:29

we found there was another sort of normal-size chimney just behind as

0:47:290:47:33

well, so we got shot of that one as well and the chimney was made of

0:47:330:47:37

mundic and it was quite soft, so it made it quite interesting

0:47:370:47:40

breaking through with the breaker.

0:47:400:47:44

Mark found the reason why this part of the mundic structure was so soft...

0:47:440:47:48

There was about a half-inch gap all around the base of the chimney and

0:47:480:47:51

it wobbled quite a bit just from pushing it,

0:47:510:47:54

so as we re-roofed the property,

0:47:540:47:56

we removed both chimneys and then covered it over, so it's all nice

0:47:560:48:00

and watertight now.

0:48:000:48:01

Proof, if it were needed, that when mundic mixes with water,

0:48:010:48:05

it's about as stable as a sugar cube splashed with hot coffee.

0:48:050:48:09

Speaking of water, what has the rain-harvesting system reaped?

0:48:090:48:15

We decided to knock it on the head.

0:48:150:48:17

Basically, this follows a phone call with the local water company

0:48:170:48:20

who said it wasn't possible to put us on a water meter here,

0:48:200:48:24

so there will be no saving from doing that,

0:48:240:48:27

despite the large amount of rain we have done here in Cornwall.

0:48:270:48:30

What a shame.

0:48:300:48:31

I thought that would have saved a tidy sum on the water bill.

0:48:310:48:36

So his washing machine, once installed, won't be quite as green.

0:48:360:48:40

How did Mark get on with the rest of the work?

0:48:400:48:43

My initial approach was to not do too much of the work myself.

0:48:430:48:47

That fell out the window as the money ran out quite quickly.

0:48:470:48:49

And, talking of falling out of a window,

0:48:490:48:52

did you fall out with the stained-glass one

0:48:520:48:54

that was in the bathroom?

0:48:540:48:56

Unfortunately, it was quite a nice window,

0:48:560:48:58

but there just wasn't any way of getting a shower in there

0:48:580:49:02

without obscuring it.

0:49:020:49:03

Mark's always intended renting out on a room basis,

0:49:030:49:07

but first let's see if the refurbished sales valuations

0:49:070:49:10

are worth his £80,000 purchase and around £50,000 refurbishment.

0:49:100:49:15

It takes about 30% off of the value by being non-mortgage-able,

0:49:170:49:22

but in the current market conditions,

0:49:220:49:24

£130,000 would be a realistic figure.

0:49:240:49:26

I believe the resale value of this property due to the type of

0:49:260:49:29

construction is between 125,000-130,000.

0:49:290:49:34

That top figure of 130,000 would mean Mark would break even,

0:49:340:49:40

but he went into this property knowing the problems,

0:49:400:49:43

so he may not be surprised.

0:49:430:49:45

I was expecting it to be more like 130,

0:49:470:49:50

because that's what the house at the back has sold for

0:49:500:49:54

that's a similar size. Also mundic, as well.

0:49:540:49:57

Mark checked with the local authority about their rules

0:49:570:50:01

for house sharers to make sure that he complied with any regulations

0:50:010:50:06

regarding safety and so on.

0:50:060:50:08

What rental does Mark think he can get

0:50:080:50:10

from renting out four rooms,

0:50:100:50:11

the two large bedrooms and the former dining and living rooms?

0:50:110:50:15

I'm planning to rent the rooms out

0:50:150:50:17

for about 1,400 a month, including bills.

0:50:170:50:19

That's £350 a month per room

0:50:190:50:22

and a yield of nearly 13%, plus, of course,

0:50:220:50:26

he gets to house share

0:50:260:50:27

when he's not off with his erratic missions abroad.

0:50:270:50:29

So, what's next?

0:50:290:50:31

Once the house is let out, I'll be going to Thailand for a holiday.

0:50:330:50:37

But we couldn't let our domestic energy assessor jet off

0:50:370:50:40

without a comment on his proudest achievement.

0:50:400:50:43

The EPC rating - energy performance certificate -

0:50:430:50:46

for the house has gone from the bottom band G

0:50:460:50:50

to a more respectable C rating,

0:50:500:50:52

meaning Mark's in the 69 to 80 Sap point range.

0:50:520:50:56

Eh? What does that all mean, Mark?

0:50:560:50:58

In real terms, that means an estimated savings of about £2,000

0:51:010:51:04

a year in running costs.

0:51:040:51:06

And all that achieved without saving rainwater.

0:51:060:51:08

Now back to Woodford Green in north-east London,

0:51:160:51:19

where I saw a two-bedroom,

0:51:190:51:20

ground-floor flat with a retro '70s feeling,

0:51:200:51:24

the era that gave us glam rock,

0:51:240:51:26

but there was nothing glam about this place -

0:51:260:51:29

a toilet without a sink and a bathroom without a toilet.

0:51:290:51:33

But what it lacked in facilities,

0:51:330:51:35

it made up for in the heating department.

0:51:350:51:37

It had two systems and was leading green, but not in the eco way.

0:51:370:51:42

Everything hasn't been touched for some time.

0:51:420:51:45

Take it all out, brighten it up,

0:51:450:51:48

and I think this kitchen would look a lot better.

0:51:480:51:51

Stepping up to the plate was Jan and his wife Raqqah.

0:51:510:51:54

They paid 67 grand over the guide price.

0:51:540:51:57

-Ow.

-We got too carried away at the auction this time around.

0:51:570:52:02

-Raqqah, that's easily done.

-We've learned our lesson.

0:52:020:52:06

That's why we are looking for buy-to-let, because we don't...

0:52:060:52:10

Well, I don't see us making any profit

0:52:100:52:12

from selling this property on.

0:52:120:52:14

After that, you'd think they'd be more cautious.

0:52:150:52:18

You'd be wrong.

0:52:180:52:20

I quit my job two weeks ago.

0:52:200:52:22

To try and focus on this

0:52:220:52:23

and it's just because I wanted something which

0:52:230:52:27

was a bit more flexible so I can spend more time with my daughter.

0:52:270:52:30

We hope this is the start of something new.

0:52:300:52:32

So have Raqqah and Jan pulled it off?

0:52:340:52:37

Seven weeks later, we're back.

0:52:370:52:40

-# We girls gonna run this, run this

-All I want is something new

0:52:410:52:45

# Something I can hold on to

0:52:450:52:49

# I don't wanna talk

0:52:490:52:51

# I just wanna dance

0:52:510:52:53

# Baby, let it drop

0:52:530:52:56

# Catch me if you can

0:52:560:52:57

# We girls gonna run this, run this... #

0:52:570:52:59

The flat has been completely overhauled.

0:53:000:53:03

The walls and ceilings have been re-plastered and painted.

0:53:030:53:06

The flat has also been rewired and has a new central heating system

0:53:060:53:10

installed. Just the one this time.

0:53:100:53:12

The clean and modern look continues in the rest of the flat.

0:53:180:53:22

The laminate flooring works very well

0:53:220:53:24

and is relatively easy to maintain,

0:53:240:53:26

which is ideal for this rental investment.

0:53:260:53:28

# ..We girls gonna run this, run this

0:53:280:53:31

# All I want is something new

0:53:310:53:33

# Something I can hold on to... #

0:53:330:53:37

The new dual colour scheme really does make this place look bigger.

0:53:380:53:42

So, how did they get on?

0:53:480:53:49

Did they do all this themselves as planned?

0:53:490:53:52

Once we realised the scale of the work that is required,

0:53:520:53:57

we decided not to do that.

0:53:570:53:58

Our builder gave us a quote of four to five weeks.

0:53:580:54:02

It would have taken us much longer than that.

0:54:020:54:04

It makes more economical sense for the builder to do all of the work in

0:54:040:54:09

five weeks so that we can rent it out after the five weeks,

0:54:090:54:13

rather than us doing the work, saving money there,

0:54:130:54:16

but losing rental income.

0:54:160:54:18

I did most of the project management, you know,

0:54:180:54:20

going to the shops et cetera and ordering things online.

0:54:200:54:24

Organised project management is the key to a smooth renovation -

0:54:260:54:30

coordinating trades, ordering materials to be delivered

0:54:300:54:33

and making sure jobs are completed on time

0:54:330:54:36

can be very demanding and sometimes frustrating.

0:54:360:54:39

There were some serious problems with the kitchen being delivered,

0:54:410:54:46

so we had quite a lot of challenges there.

0:54:460:54:50

Besides that, I think everything's gone quite smoothly.

0:54:500:54:53

# If you can't stand the heat

0:54:530:54:56

# Keep out of the kitchen... #

0:54:560:54:59

Raqqah has also been in the hot seat when it comes to the finances,

0:54:590:55:03

so how has sticking to the 15 grand budget gone?

0:55:030:55:06

Unfortunately, we've gone over that budget,

0:55:080:55:11

so it's just under 20

0:55:110:55:13

and there are a number of reasons why that is the case.

0:55:130:55:17

We've had to replace the central heating system,

0:55:170:55:20

we've re-plastered, rewired,

0:55:200:55:23

we had spotlights put into the kitchen and bathroom

0:55:230:55:27

and so, that is the reason why it's gone over.

0:55:270:55:31

The property and renovation costs take their investment to

0:55:310:55:34

£327,000, but stamp duty,

0:55:340:55:37

auction fees and so on, account for another 22 grand,

0:55:370:55:41

bringing their total investment to £349,000.

0:55:410:55:45

So, let's see if two local estate agents are impressed.

0:55:460:55:50

I think the property condition is great.

0:55:520:55:55

It's been done up to a very high standard, modern appliances,

0:55:550:55:59

modern bathrooms, and a nice finish throughout.

0:55:590:56:02

The standard of finish is to a very good standard

0:56:020:56:05

throughout the property.

0:56:050:56:07

Clearly, the vendor has refurbished the property.

0:56:070:56:09

Compared to others on the market, this will stand out,

0:56:090:56:12

they will be able to market it very,

0:56:120:56:13

very well and we should attract plenty of buyers for the property.

0:56:130:56:16

The agents are positive about the sales potential,

0:56:170:56:20

but Jan and Raqqah did get carried away at the auction,

0:56:200:56:24

so could their 349 grand investment give them any profit at all?

0:56:240:56:28

In regards to resale,

0:56:290:56:32

I would say approximately £350,000 to £355,000.

0:56:320:56:36

I would value this property between £350,000-360,000.

0:56:360:56:41

It could have been a lot worse,

0:56:410:56:43

and at least they could just about break even,

0:56:430:56:46

but they do intend to rent for the time being,

0:56:460:56:49

so what could it rent for?

0:56:490:56:50

I would approximately say £1,250-1,300.

0:56:510:56:57

I would expect the rental value of this property to be around 1,300

0:56:570:57:00

to 1,350 per calendar month.

0:57:000:57:02

The top rental figure would mean a yield of nearly 5%,

0:57:030:57:07

so what do the couple make of their first experience developing?

0:57:070:57:10

As we said before, it was always about the experience,

0:57:100:57:14

about meeting a good builder, building a relationship,

0:57:140:57:19

so we've done all that, so, overall, we are very happy.

0:57:190:57:22

That's a great, positive outlook.

0:57:240:57:26

They overcame the first hurdle of paying too much

0:57:260:57:29

and focused on finding a reliable team of trades, which is vital.

0:57:290:57:33

Raqqah has achieved a lot here, but would she do it again?

0:57:350:57:38

I've had so much fun during this project,

0:57:400:57:43

I've learnt so many new things that I really didn't know previously

0:57:430:57:47

and I can't wait to move on to the next project.

0:57:470:57:50

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

0:57:530:57:55

We'll be back next time with more tales from the auction.

0:57:550:57:57

Yes, from Stoke to Surrey, Durham to Dagenham and Eccles to Essex,

0:57:570:58:01

we get around the country.

0:58:010:58:02

And maybe next time we'll be in your area,

0:58:020:58:04

-so join us again on Homes Under The Hammer.

-Bye-bye.

-Bye-bye.

0:58:040:58:07

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