Episode 14 Homes Under the Hammer

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

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

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

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

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

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

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

You're right. Property can be really rewarding -

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

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

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

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

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

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

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

Let's find out what they went for.

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

gets a CUTTING remark about the garden.

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

There is an unusual view from the garden

at this three-bed semi in Camborne in Cornwall.

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

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

say it "benefits from a patio".

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

All of these properties have been sold at auction,

and we'll find out who bought them

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

Sold.

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

where a statue commemorates the role of the Merchant Navy seamen

in World War II.

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

Thankfully, it's more peaceful these days -

tourism and the import/export business

form the core of the town's commerce.

Along this residential road

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

Now, the catalogue describes it as being "substantial"

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

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

I hope it lives up to my expectations.

Into our living area.

OK, do you know what? It IS substantial.

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

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

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

You have double glazing windows,

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

you have central heating.

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

you need a new kitchen...

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

The kitchen could be bigger,

but what's described in the catalogue as the diner

is pretty spacious.

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

Up to the first floor.

The bathroom is a decent size.

Needs to come out, modern bathroom in.

Wow, the shower is very low -

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

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

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

because you have your living area downstairs.

The only problem, of course, is

you would be walking through someone's bedroom

to go upstairs to the FURTHER two bedrooms.

Possible solutions,

you could get rid of the chimney breast,

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

and here, put up a partition

with a hall corridor along here

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

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

Well, the smallest of the two

has slight damp issues, and the ubiquitous woodchip.

Next door, the second of the two bedrooms

is virtually identical to the first floor arrangement.

There are good views from up here,

but I'm yet to spy any outside space -

and you know what? That makes me wonder.

# Ooh, it makes me wonder... #

Out of the garden... Ah.

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

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

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

modernise it,

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

Someone not resting on his laurels either

is the local estate agent we invited along

to take a wee peek at the property,

and to give us the benefit of his experience.

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

Just needs some modernisation.

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

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

once refurbished, what would it sell and rent for?

Once renovated,

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

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

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

but this property DOES have loads going for it,

not least the potential to add that third bedroom.

And the catalogue DID live up to expectations -

it IS substantial, it IS in good nick.

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

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

Start me where you will, 115 anywhere?

110? 110 I have, thank you.

£110,000 I'm bid.

112 for anyone else?

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

112 I've got. 112.

Were you bidding? At 112.

It's not, sir. 115. 118.

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

118?

118. 120.

No. £118,000 I have,

gentleman on the right-hand side.

120 do I see?

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

For the second time at 118,000,

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

-HAMMER COMES DOWN

-Sold at 118. Well done, sir.

The top bidder was Bernie,

at the auction with his builder buddy Ray.

If you have a feeling of deja vu,

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

A self-confessed petrolhead,

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

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

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

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

A comfortable approach to making

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

on his buy-to-sell project,

and Martin asked if him he would invest it

in more petrol power, or property.

-HE LAUGHS

-I'm going to go with both!

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

Same set of wheels - new property.

-Bernie, pleased to meet you.

-Nice to meet you, too.

-Congratulations.

-Thank you.

What was it like watching yourself back?

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

with friends and family watching it.

And coming into this property,

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

This one is quite a simple one for us,

it doesn't need that much work.

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

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

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

We'll lose a part of the room upstairs

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

but that's just a simple internal wall.

We will use it as a third bedroom.

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

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

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

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

advertise it when we come to sell it.

Do you prefer it like this, or do you prefer

your work cut out for you?

We actually like them to be as appalling as possible.

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

the worse, the better.

Because there's so much value to be added?

That's correct, yes.

You are the spreadsheet/finance man,

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

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

personally, but we agree to disagree on that one.

And do you and Ray have a good relationship?

Because you'll be working together a lot.

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

A refurbishment expert like Ray and a savvy moneyman like Bernie

makes for a well thought-out bidding strategy,

uninfluenced by the guide price.

The auctions tend to have the guide prices lower,

because they want to attract people to the auction.

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

We had a maximum bid of this one of 125,

and we got it for 118, so...

The budget, erm...

25 to 30.

And then we will sell it for 180, hopefully.

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

He subtracts Ray's refurbishment budget, taxes,

fees and a profit

from his forecasted selling price, giving his top bid.

Using this method,

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

and happily watched the others go by to higher bidders.

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

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

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

split the guys between the two properties, so

I'm going to say three months.

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

Yes. With these ones where we buy

frankly absolute rubbish at auction

and then do them up, make them all into

very nice, very modern, very clean,

and then we sell them very fast.

I don't think it's rubbish.

No. We have had considerably worse,

with ceilings falling down and

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

We had a ladder going up to the next floor.

And how many properties do you have on your portfolio?

Mm...

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

which is really my pension plan.

So these are properties you rent out?

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

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

there's probably about eight

in various stages, so two -

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

Obviously not started yet.

We've got others with estate agents,

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

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

tend to be mainly in south-east London,

because that WAS the up-and-coming area

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

but then kept them, and rented them out.

More recently we've been down

in this area in Kent - Chatham, Maidstone,

Dover, Ramsgate, Folkestone.

Bernie knows his home London market well,

but branching out to relatively unknown territory

means his research had to be thorough,

exploring prices and the market in all these places.

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

With dozens of properties on the go...

-HE LAUGHS

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

There's three aspects to my life -

one is I run an IT recruitment agency,

have done for 32 years now -

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

Erm,

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

Keeps me out the pubs.

SHE LAUGHS

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

well, do a spreadsheet(?)

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

Yes, that's exactly...

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

probably annoy the neighbours with skips out the front

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

and then, as you say, crack on.

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

Congratulations again, and good luck.

Thank you.

Well, Bernie is a seasoned property developer

and his latest purchase does seem pretty straightforward,

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

Will it all go according to plan?

You can find out later in the show.

Camborne in North Cornwall enjoyed boom-town status

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

It's that proud heritage

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

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

Now - here's a lesson.

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

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

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

is 175,000 quid.

The one that was up for auction - that one -

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

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

Or is it perhaps too good to be true,

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

So, on with our slightly suspicious

property detective face, and see what we can find.

Well, through the front door,

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

well, whatever. Looks a bit higgledy-piggledy.

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

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

you've got the bay window there,

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

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

Behind the wallpaper here... Look at that.

Hmm...

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

Well, it's what is BEHIND that hole

that is concerning me, because

that looks to me like something called mundic.

Very, very typical for this part of Cornwall.

Basically, mundic was made from mining waste.

It was incorporated as aggregate in concrete construction,

either in prefabricated sections or blocks.

In this case, the house is PRC -

that's precast reinforced concrete -

so it's already nonstandard construction.

With mundic, damp can cause it to deteriorate,

so you need a mundic report -

which is why this hole is here.

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

if you are thinking about buying houses

in the potentially mundic area in Cornwall.

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

Second sort of reception room here,

with a strange kind of conservatory built off it.

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

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

it all starts to feel rather cramped

as you head into the property.

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

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

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

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

almost tacked onto the back of the property.

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

it feels dark, it feels dingy,

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

Above the front room bay on the first floor,

the largest of the three bedrooms

also has the benefit of a bay window.

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

Bedroom three is not much more than a box room.

The family bathroom on the half landing

needs a new suite and decoration,

and it completes the upstairs rooms.

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

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

The most common waste product is iron pyrites,

often known as fool's gold -

something the house might turn out to be,

depending on the results of the mundic report.

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

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

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

what you are going to find,

but in this case...

this is a complete hotchpotch disaster area,

I mean - look at that.

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

with a corrugated iron roof.

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

This is that kitchen area here, underneath this extension

but what's that?!

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

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

Bleurgh!

Eagle-eyed viewers might have spotted a clue.

The stained-glass window frame indicates that this shed

houses the bathroom.

You get them adorning churches and palaces -

so why not a wooden throne room?

This place is not short on issues,

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

We asked a local estate agent along

to give me a breather.

I wouldn't demolish it -

I would repair what needs to be done,

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

probably lose money if you tried demolishing it and then

building it back up,

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

Demolition can be really costly,

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

The good news is that after testing,

some 80% of houses with mundic are deemed OK,

but the fact that this house is nonstandard construction

likely means a cash buyer.

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

and there's a shortage of supply versus demand

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

In terms of sales,

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

so we're always very busy.

I suppose if good rental yields can be achieved,

this gets all the more appealing.

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

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

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

Well, that's probably because of local demand.

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

you'll be quids in.

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

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

how much it's going to cost to actually

sort out the problems - if indeed they are

surmountable.

-HE EXHALES

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

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

To the next available lot,

which is lot 126.

£75,000, may I say.

Straightaway at 75. Thank you. 76, then.

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

77,000.

77. 78.

79, 80.

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

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

For the first time at £80,000...

Second...

Third and final time, all finished...?

Yours, madam. Well done.

The top bid of £80,000

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

I had a chat with Mark,

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

-Mark, good to meet you.

-Nice to meet you.

-Congratulations.

Tell me why you wanted to buy this house.

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

-Right.

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

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

Right. Do you know the area quite well?

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

-Oh, wow.

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

following natural or man-made disasters,

to help the people affected by the disaster

by supplying tents and other equipment

-such as blankets and things like that.

-Oh, wow.

So what sort of places have you been to?

The most recent deployment was to Fiji.

Prior to that last year I went to Nepal,

following the flooding and landslides rather than the earthquake.

Right. You must see some awful stuff.

Erm, it's a lot of destruction,

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

how resilient people are following the destruction and

how they rebuild their lives.

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

Given Mark's experiences,

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

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

and that means it's essentially un-mortgageable.

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

with damp penetration, largely due

to the roof being the original roof,

and also nonexistent gutters.

-Right. Never good.

-Yeah. Not great,

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

a lot of the insides of the house,

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

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

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

Yeah. So the back two parts of the building

are basically the garage and the shed,

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

and caused quite a lot of damage to the garage,

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

The kitchen and the sort of dining room area,

I'm looking to clear that through,

and remove the chimney breast to hopefully

-create a reasonable living space there.

-Right.

Mark has a lot to organise -

new central heating, wiring, double glazed windows -

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

natural free resources. The plentiful rain.

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

and also for the washing machine.

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

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

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

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

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

around a separate sort of system in the house.

Oh, great. Brilliant.

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

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

There's not too much flex in that,

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

And what's the timescale?

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

It being the summer, and in Cornwall,

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

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

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

-Are you a surfer?

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

-MARTIN LAUGHS

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

Well, congratulations, good luck.

-Thank you.

-Look forward to seeing how you get on.

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

that this property has. And you know what?

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

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

so for him, it's perfect.

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

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

Still to come,

detective work at my Woodford Green two-bed flat

makes me think a smoker lived here.

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

And energy assessor Mark saves more than energy...

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

MUSIC: Albatross by Fleetwood Mac

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

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

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

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

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

with the intention of refurbishing by his builder mate Ray.

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

he does all the hard, physical graft...

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

personally, but we agree to disagree on that one.

We're back three and a half months later,

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

and Ray's graft with his tool kit.

I know which one I'd prefer.

# I'm waking up to ash and dust

# I wipe my brow and I sweat my rust

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

Yeah, paint stripper does that to me.

Well, downstairs everything is new -

plaster, plumbing, glazing and so on...

Even the staircase to the first floor.

Although, I would definitely recommend a banister.

And is that...

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

# Welcome to the new age, to the new age

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

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

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

I thought that would help.

The old bathroom redefined the phrase,

"Just going for a short shower, dear."

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

change ends, and mount the shower on the wall.

Genius!

Once showered,

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

where the largest of the two bedrooms up here

is little-changed - just freshened up.

# Welcome to the new age, to the new age

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

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

and I think apart from the interior looking like

there's been an explosion in a magnolia factory,

well, it's all good.

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

We had a couple of minor issues with the roof

when the chimney came out,

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

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

Was it worth sacrificing the space

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

Generally speaking,

the more you can get for the estate agents

on their three beds instead of two,

two receptions instead of one, whatever

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

And actually, creating an extra room

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

is surprisingly cheap to do.

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

is the teeny-weeny garden.

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

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

It was filthy before, so

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

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

The timescale was planned to be ten to 12 weeks.

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

despite those issues dismantling the chimney.

But - how did Bernie's spreadsheets fare?

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

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

but that does include non-building things

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

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

Taking Bernie's £34,000 spend

for once including all taxes and expenses,

and adding it to his £118,000 purchase price

gives a total of £152,000.

So - will Bernie be as successful with THIS project

as he has been in the past?

Will his formula for working at a top bid price

serve him well this time?

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

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

They've done a very nice job on it,

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

the colours are very nice.

Nice contemporary fitted kitchen

and nice bathroom suite,

so it is a very nice property now.

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

The finishes in the kitchen are tidy,

everything is there as it should be.

Quality of finishes perhaps at the lower end,

but still nicely presentable.

Although he has plenty of rental properties in his portfolio,

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

So, what is it worth now?

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

and expect to achieve

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

If we were to put this property on the market,

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

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

Perhaps a LITTLE disappointing,

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

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

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

we have it on the market funnily enough with

the highest one.

So it's on the market at £180,000.

We will leave it a few weeks,

and if there's no suitable offers,

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

rent it out to offset the costs of the mortgage.

But I'll have my investment money back

by getting an 80% mortgage on

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

Bernie would rent for a year

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

but this strategy does depend on property prices going UP -

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

More properties, for certain, more auctions,

more investments...

Hopefully, more profits. More of the same.

We already have

several more in progress at the moment.

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

-HE LAUGHS

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

No intentions on retirement -

I like my skiing, I like my holidays,

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

# Gonna get myself, I'm gonna get myself

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

I'm here in Woodford Green,

and Woodford Tube

is a short walk in that direction,

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

so this is a very good location.

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

It's a ground-floor flat,

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

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

Well, for a start,

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

service charge of £900 per year.

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

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

My dodgy knees are happy.

Right.

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

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

we've got a bit more storage in there.

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

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

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

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

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

central heating and I can also see

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

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

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

A little bit smaller, it is a double bedroom.

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

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

tidy at all up a little bit.

It just looks a bit dated and tired.

And across the hallway, the green theme continues,

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

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

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

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

Space is definitely my first thought.

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

I would prefer the bathroom and toilet together

but I've got to find it first.

# We'll find it

# We'll find it... #

OK, still no sign of the toilet.

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

It's dated like the rest of the flat.

You've got an old gas fire

just there. It has got central heating,

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

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

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

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

this building was assembled back in the 1970s.

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

Now, you don't have to believe me,

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

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

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

we have the elusive toilet.

Well, that doesn't work, does it?

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

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

soil pipes and freeholders permitting.

And...last

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

kitchen, as well.

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

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

the cupboards themselves, the work surfaces,

everything hasn't been touched for some time.

Take it all out, brighten it up with nice,

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

space would be used a lot better, as well.

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

back door and some communal space, as well.

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

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

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

# Bright eyes

# Burning in like fire... #

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

Well, perhaps not those.

MUSIC: The Hustle by Van McCoy

Ah, better!

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

and those ceiling tiles, given their age,

are likely to be a hazard in a fire.

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

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

Is it likely to be a hustle or a hassle?

Feel the funk.

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

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

Ground floors are always in demand and there's

so many facilities locally.

You don't need a car.

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

guide price afford any possibility of profit?

Once this flat has been well refurbished,

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

And rental returns?

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

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

-per calendar month.

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

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

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

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

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

Well done, 250 sitting down.

255. 255. 260. 265, sir.

270. 275.

280. 285. 290. 290.

295. 300. 305. 310. 305.

310 elsewhere. 310?

If not, 307, sir?

Another go?

Yes, 307.

First time, second time,

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

Sold for 307.

Well done.

So, for £67,000 over

the guide price, and for 307 grand,

the Woodford Green two-bed, ground-floor flat

was bought by Raqqah and Jan.

This was to be their first development project.

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

Raqqah, nice to meet you.

-Yeah, nice to meet you, too.

-Nice to meet you, Jan.

-Hello, nice to meet you.

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

I think so, yeah.

-Yeah?

-Yeah.

-So who found the property, then?

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

-OK.

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

I mean, to be honest,

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

"looking at the pluses and minuses..."

He put a spreadsheet together.

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

-Tell me.

-I deal with the finances,

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

assesses what we need done to the property.

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

I'm a software developer for a property website.

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

It's all coming together now!

-And your background?

-I used to work as a business development manager.

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

because I wanted something which was a bit more flexible,

so I can spend more time

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

-Gotcha.

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

-Give her a name check on TV!

-She'll love it.

She's eight and her name is Sophia.

Hello, eight-year-old Sophia!

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

but it doesn't always work out that way -

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

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

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

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

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

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

-is there?

-No, not that we can see.

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

-Yeah.

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

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

-OK.

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

who essentially are professionals, who are commuting into London,

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

-Of course.

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

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

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

-OK.

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

Along with the 15-grand budget,

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

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

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

-of it as a part-time job?

-I wanted to see how I go,

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

-goes.

-We hope this is the start of something new.

-Yeah.

-So, we definitely want to do this again.

Build that portfolio up?

Yeah, definitely.

We did see this one as a learning experience.

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

DION LAUGHS

Raqqah, that's easily done.

We've learned our lesson and if

we are going to buy a property at auction again,

we just need to stick to what our limit was,

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

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

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

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

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

All right, thank you so much.

-Jan, good luck, take care.

-Thank you.

I think Raqqah and Jan have chosen a very

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

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

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

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

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

Yes, did everything go to plan?

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

Time to head back

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

three-bed semi, had a suspiciously low guide price

of £75,000 to £100,000.

Too good to be true?

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

The house was built with a nonstandard construction method,

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

That looks to me like something called mundic.

Very, very typical for this part of Cornwall.

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

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

Nasty! And if that wasn't enough,

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

in an airborne stained-glass shed.

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

£80,000 for it?

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

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

Mark had hoped that his plan would support his unpredictable voluntary

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

tickety-boo in two to three months.

But Mark was called to Haiti for disaster relief work,

causing a delay.

Seven months later, we're back.

The outside space is

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

painted white to blend in more.

Now let's take a peek inside.

Mark has kept some of the period charm and original features

throughout the house.

And heading towards the back of the property,

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

permanent structure.

The downstairs cloakroom has been squeezed under the stairs.

The bathroom, aka the first-floor garden shed,

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

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

As do the other two bedrooms.

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

on the external ones and sound insulation behind the

new plasterboard dry line

on the wall connecting to next door.

Back downstairs, last but not least is the kitchen.

Here's Mark with the story of

how he made his mark on the kitchen.

The kitchen is where we made most of the changes.

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

ripped the floor up,

ripped the ceiling down,

ripped the kitchen out and then we

found a giant chimney blocking the way.

When we had removed that,

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

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

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

breaking through with the breaker.

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

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

it wobbled quite a bit just from pushing it,

so as we re-roofed the property,

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

and watertight now.

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

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

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

We decided to knock it on the head.

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

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

so there will be no saving from doing that,

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

What a shame.

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

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

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

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

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

And, talking of falling out of a window,

did you fall out with the stained-glass one

that was in the bathroom?

Unfortunately, it was quite a nice window,

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

without obscuring it.

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

but first let's see if the refurbished sales valuations

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

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

but in the current market conditions,

£130,000 would be a realistic figure.

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

construction is between 125,000-130,000.

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

but he went into this property knowing the problems,

so he may not be surprised.

I was expecting it to be more like 130,

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

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

Mark checked with the local authority about their rules

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

regarding safety and so on.

What rental does Mark think he can get

from renting out four rooms,

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

I'm planning to rent the rooms out

for about 1,400 a month, including bills.

That's £350 a month per room

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

he gets to house share

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

So, what's next?

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

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

without a comment on his proudest achievement.

The EPC rating - energy performance certificate -

for the house has gone from the bottom band G

to a more respectable C rating,

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

Eh? What does that all mean, Mark?

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

a year in running costs.

And all that achieved without saving rainwater.

Now back to Woodford Green in north-east London,

where I saw a two-bedroom,

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

the era that gave us glam rock,

but there was nothing glam about this place -

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

But what it lacked in facilities,

it made up for in the heating department.

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

Everything hasn't been touched for some time.

Take it all out, brighten it up,

and I think this kitchen would look a lot better.

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

They paid 67 grand over the guide price.

-Ow.

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

-Raqqah, that's easily done.

-We've learned our lesson.

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

Well, I don't see us making any profit

from selling this property on.

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

You'd be wrong.

I quit my job two weeks ago.

To try and focus on this

and it's just because I wanted something which

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

We hope this is the start of something new.

So have Raqqah and Jan pulled it off?

Seven weeks later, we're back.

-# We girls gonna run this, run this

-All I want is something new

# Something I can hold on to

# I don't wanna talk

# I just wanna dance

# Baby, let it drop

# Catch me if you can

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

The flat has been completely overhauled.

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

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

installed. Just the one this time.

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

The laminate flooring works very well

and is relatively easy to maintain,

which is ideal for this rental investment.

# ..We girls gonna run this, run this

# All I want is something new

# Something I can hold on to... #

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

So, how did they get on?

Did they do all this themselves as planned?

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

we decided not to do that.

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

It would have taken us much longer than that.

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

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

rather than us doing the work, saving money there,

but losing rental income.

I did most of the project management, you know,

going to the shops et cetera and ordering things online.

Organised project management is the key to a smooth renovation -

coordinating trades, ordering materials to be delivered

and making sure jobs are completed on time

can be very demanding and sometimes frustrating.

There were some serious problems with the kitchen being delivered,

so we had quite a lot of challenges there.

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

# If you can't stand the heat

# Keep out of the kitchen... #

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

so how has sticking to the 15 grand budget gone?

Unfortunately, we've gone over that budget,

so it's just under 20

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

We've had to replace the central heating system,

we've re-plastered, rewired,

we had spotlights put into the kitchen and bathroom

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

The property and renovation costs take their investment to

£327,000, but stamp duty,

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

bringing their total investment to £349,000.

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

I think the property condition is great.

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

modern bathrooms, and a nice finish throughout.

The standard of finish is to a very good standard

throughout the property.

Clearly, the vendor has refurbished the property.

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

they will be able to market it very,

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

The agents are positive about the sales potential,

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

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

In regards to resale,

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

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

It could have been a lot worse,

and at least they could just about break even,

but they do intend to rent for the time being,

so what could it rent for?

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

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

to 1,350 per calendar month.

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

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

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

about meeting a good builder, building a relationship,

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

That's a great, positive outlook.

They overcame the first hurdle of paying too much

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

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

I've had so much fun during this project,

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

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

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

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

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

we get around the country.

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

-so join us again on Homes Under The Hammer.

-Bye-bye.

-Bye-bye.