Episode 49 Homes Under the Hammer

Hello and welcome to the show. Now, unfortunately

there's no bulletproof formula for knowing when and where

is best to invest in property.

Yeah, that is true, Martel.

But it doesn't mean that taking the plunge needs to be a scary

experience, because there's loads of good value out there.

Yeah, there is. And one place you might be able to find it

is your local property auction.

Well, at auction a lot of properties are bought and sold

and it is a fairly intense and frantic process.

Yes, but amongst all the hustle and bustle, the bidders have got to be

eagle-eyed to find out which property suits them.

So, what caught the eye of our bidders on today's show?

Let's find out.

In Birmingham, it's a case of rolling up your sleeves

and getting stuck in.

I do think the hard work could pay off on this project.

In Wales, I'm taking a more leisurely approach to the work.

I can imagine Sue Ellen sitting here and saying something like,

"I'll have a Scotch on the rocks."

No rest in Liverpool - there's a property bargain to be had.

£35,000 was the guide price for a mid-terrace.

Come on, that's got to be worth a look.

All these properties have been sold at auction,

and we'll find out who bought them and what they paid

when they went under the hammer.

Sold!

BLOCKBUSTER THEME PLAYS Which city am I closest to?

It's not New York.

It's not Madrid either,

but you'll find this water sculpture in the Bullring.

It's Birmingham, of course, which is also the home to

an old tea-time favourite quiz show, Blockbusters.

I'm four miles north east of the city centre in Erdington,

which is very close to a section of motorway which is named after

an Italian pasta type

and the very green space of Brookvale Park.

I'll have a B, please, Bob.

I'm two minutes' walk away from Brookvale Park,

and on this street is the end terrace, three-bed house

I'm here to see.

It had a guide price of £24,000 to £29,000.

And I've got to say, I've had better first impressions.

I'm taking a guess this is going to be a doer-upper.

Is it going to be any better inside? Let's have a look.

No gold run from this place on first impressions.

OK. Somebody has already started work in here.

We are back to the bare brick,

there's no ceiling,

so this is a "start from the very beginning" project.

This is the first reception room,

and as I come across the hallway here,

I can see there's some stairs going down to a cellar.

And the second reception room,

this is the same sort of condition as the first reception room.

The kitchen sink's even in here as well.

I like this room. Good-sized room, nice high ceilings, lots of space.

And then into the kitchen, a couple of stairs down into the kitchen.

OK, there's no kitchen in the kitchen. The sink's in there.

And it does feel a little bit tight, a little bit small,

compared to the size of the other two rooms I've already seen.

There's a lot of work to be done here.

This is not a project for the faint-hearted.

Having said that, it's obvious that the work has already started here.

That explains why everything, including the kitchen sink,

has been hauled out.

I sincerely hope this isn't a first timer on a first project,

because this is certainly not a job for a novice.

There are real challenges here, and it could all end in tears.

# All is lost There's no place for beginning

# All that's left is an unhappy ending

# Now what becomes of the broken hearted? #

If the inside's breaking your heart, wait till you see the garden.

It's just a little bit bigger as it's an end terrace.

That's nothing to do with the back garden, by the way.

The perimeter comes along here and just goes round the side there.

Over here, you've got all this earth that has come from the cellar.

It's all been dug out and put into the back garden.

The interesting thing for me is this.

Now, from what I can see, that roof looks pretty new to me.

You could knock this wall down,

cos on the other side of that wall is the kitchen.

You could knock it into a utility room,

you could knock it into a downstairs toilet.

But it's space that you could use on the inside of the house

instead of it being useless.

What's that you say? 'Course I didn't forget the...

Upstairs!

We have got three bedrooms.

The first bedroom at the front of the property is a really good size.

It's got a nice high ceiling,

it's got a huge window, letting loads of light in.

But like all the windows downstairs, they've all got to be replaced.

What else have we got down here?

Along the corridor, you've got a bedroom here.

Further down the hallway...

Now, the condition of upstairs is pretty much

the same as it is downstairs -

everything's been stripped back.

You've got to start again up here as well.

This is a family bathroom which isn't in great shape at all.

It would all have to be replaced.

But I'm glad it's upstairs on the first floor.

In here, this is the third bedroom.

Now, I'm taking a guess that this...

..has been put in at a later date,

and this would have been one big bedroom.

So the house would've been a two-bedroom back in the day.

Now, I'm not normally a fan of splitting up bedrooms

to make single rooms, but I think on this occasion,

this wall here actually works to make it a three-bed house.

If it's not for you, you could take this down

and have it as one big, luxurious bedroom.

But I do think the hard work could pay off on this project.

# Hard work! #

We invited an estate agent along

to get the benefit of her knowledge of the local area

and give us some valuations on the property after all the...

# Hard work! # ..has been done.

This area is very good with first-time buyers.

They do get a lot more house for their money.

This type of property would actually be worth £20,000 to £30,000 more

in its current standard if it was located in Birmingham city centre.

So what's the potential here for the house

that was guided at £24,000 to £29,000?

Once renovated, the property would be likely to sell for anywhere

in between £130,000 and £145,000.

For the rental market, you would be looking anywhere in between £625

and £675 per calendar month.

Clearly, this house needs a lot of work doing,

and someone brave enough to take it on.

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

So we go on to Lot 26...

I've got £40,000 as a proxy bid, ladies and gentlemen.

I am bidding on somebody's behalf.

I've got that bid on the book.

But obviously you're here to bid against that.

So, do I hear £45,000 anywhere?

I've got 40,000 on the book.

45, I've got there.

50, I have here.

55, sir. 55, I'm bid.

And 60 I have here.

65, I'm bid. And the book is now out.

With the guide price and the proxy bid dead in the water,

the bidding continued.

We rejoin at £88,500.

88 and a half.

89, I'm bid. 89, I'm bid.

89 and a half, sir. 89 and a half. 90, now, sir. 90, I'm bid.

90 and a half, sir. 90,500. 90,500.

91, sir?

As you wish. The bid is there at £90,500.

For the first time... Second time...

Third and the very last time.

Are you coming back in, sir? No, he's not.

It's your bid, sir. 90,500 to number 195. Thank you.

Dilshad was the successful bidder,

purchasing the property for 60 grand over the top end guide price.

He's an electrical engineer and has a six-bed HMO to his name.

I think I know where this one's going.

-Dilshad.

-Nice to meet you.

-Nice to meet you, sir.

-Me, too.

-Thank you very much.

-Congratulations.

-Thank you very much.

-I was going to ask you why you bought this house.

BOTH LAUGH

Well, I didn't buy... I actually buy in a better position.

But we actually tried to renovate,

that's where you can see the house like that.

So you've started, haven't you?

Yeah, we actually took the plaster off from the wall

and the ceiling off, be ready for renovation.

So you viewed the property?

Yeah, I viewed before I went to auction.

Good man, good man - one of the rules is ticked off.

Did you read the legal pack as well?

I was actually reading the legal pack,

although I was actually...very quick

and actually skipped some paragraphs in the legal pack.

It is actually causing some problem for me as well, you know.

After the auction, I find out there is some additional fee as well.

So, um...

But the problem with the figure is it's not written as a number,

it's actually written as a word, so I was...

-Oh, I see. Oh, OK.

-I skipped the word, you know, so...

Oh, dear. That word that Dilshad missed out

has cost him eight grand in additional fees.

The legal pack might be daunting.

If you don't have time to read it through yourself properly,

get a professional to do it for you -

you don't want to be caught out with any unexpected expense.

Anyway, Dilshad has moved on and is getting on with his plans

to turn this into a HMO - a house of multiple occupancy.

Well, the ground floor,

the front room will actually be converted into a bedroom.

This room, stay as it is, a dining.

The kitchen will be new kitchen,

-plus the small...

-Extension at the back?

-Yeah.

I'll try to convert the cellar into a nice bedroom as well,

so we've got plenty of space.

We are going to take the ground off

and convert it into the very nice bedroom as well.

-Wow.

-Big size, quite same size as this one.

The planned layout for upstairs is to keep as is -

three bedrooms, bathroom and a toilet.

Obviously, as a fully qualified electrician,

Dilshad's going to do all the electrics.

He's certified to work to the latest

Institute of Electrical Engineers regulations.

A good job, because it's a criminal offence to get work done

that doesn't meet current practice.

But what about the rest of the work?

I've got a team for the central heating,

radiator system and boiler.

I already got a quotation for that, but it's very friendly quotation.

OK.

And for plastering, I already got the plastering quotation as well.

Again, this is very friendly as well.

So any left is just the tiling.

Tiling, a friend of mine will do the tiling for me as well.

-You've got some good friends.

-Yeah!

And another friend is doing the garden for me as well, so we will...

-It's just like a complete package ready for rock and roll.

-Yeah.

-Friendly pricing, friendly quotes, which is good.

-Exactly, exactly.

What have you got in the budget?

Something like £20,000 for me is the budget for now.

How long's it going to take?

Well, I'm expecting to take something like about...

two months, hopefully.

That's what I'm expecting because the teams are ready now, so...

So, Dilshad, are you going to continue to buy

and add to your portfolio?

Well, after completion of this project, we have another intent

to purchase new property from another popular area in Birmingham.

That's a secret one. We won't mention in here...

OK, so you're not going to tell us, are you?

Well, after the completion, you will find out!

Dilshad, good luck. I wish you all the best.

-Thank you very much.

-Take care, sir.

-Thank you.

So Dilshad has started the clear out,

but he's still got a big job to do,

turning this place into a five-bed house of multiple occupancy.

But don't forget, he's had those "friendly" quotations,

which should help him stick to his budget.

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

This is the quiet rural village of Llanfynydd in Carmarthenshire.

If you're looking for transport links and facilities galore,

look elsewhere.

This idyllic village takes life at a slower pace,

with residents and holiday-makers enjoying

the stunning surrounding countryside.

Not only are the residents worth mentioning -

I've just got to tell you how pretty this wee village is

with its windy roads, it's gorgeous Victorian buildings,

and there's even a little burn running through it.

The birdsong... It's all just gorgeous.

Can you tell I like the place?

So, this is the property I'm here to see.

It's a former vicarage, which would have been attached to this church.

It's since been carved up into six dwelling places,

and it has a guide price of £250,000.

Let's go explore.

Now, it's substantial,

but so far I can't imagine it being as many as six properties.

Ah, OK, this starts to make sense.

How much room is here?! This is great.

You've got a big courtyard, loads of spaces for parking,

over here, a two-bedroom house.

And then here we have the former vicarage, which has been extended

over the years and now houses five apartments.

I'm going to start with one of the two-beds.

Yes, there are two two-beds on the ground floor,

plus two one-beds on the first floor, and a studio flat.

One of the one beds has an existing tenant in,

so I'll have a poke around the others.

Straight through to a kitchen, which...is dated,

not been touched for decades.

I get the feeling this has been used as a holiday let.

You know, you've got your pots and pans, everything you could need.

It's definitely not modern,

but you could walk in here and just start living.

You have a bedroom, your first bedroom, a shower room,

another bedroom, a bathroom,

a reception room and bathroom through there.

Now, originally this would have been two reception rooms.

You would have come in through this entrance here,

come all the way through

and then you'd have some lovely staircase here.

This would have been a fantastic house.

There's obviously plenty of work to do in this property.

To say it's dated is an understatement.

But it's pretty spacious, and it has two bathrooms, which is a bonus.

The other two-bed on the ground floor

is much the same as its neighbour, including the dated decor.

In such a rural setting, I'm definitely thinking holiday flats.

And so to our one-bedroom.

Come through to the hallway.

And down this corridor here you have a bathroom and bedroom,

and through here to a living area and kitchen.

Ah, more signs of the '80s. Things like this.

They were all the rage. They were acceptable in the '80s.

# It was acceptable in the '80s. #

The other one-bed flat is tenanted at the moment,

but I imagine it's pretty similar to this one.

Up on this first floor, there's also a studio flat.

It would do for a wee holiday let once it's been refurbished.

I love the potential of these flats,

and we haven't even seen the two-bed house, known as The Lodge.

It's kind of pristine, but '80s, dated, but clean.

And down the corridor, you've got two bedrooms and a bathroom.

And then I can see another bathroom, with an interesting maroon suite.

You might want to think about upgrading that.

A spiral staircase.

I love the character and charm in places like this.

I'd definitely keep this.

Upstairs. Wow!

Wow! We think open plan living is a thing that happened recently -

no, it's like somebody's walked out of here in the '80s.

Left it as it was, it's just a huge living space.

Talk about character - a fireplace right in the middle of your room.

Gorgeous views of these hills, light coming in.

A theme is definitely emerging and that is of decorative brickwork.

You got a column, you've got an archway.

It's '80s, but it's high-end '80s.

So often in auction properties,

you come and say, "This place is in need of modernisation."

Actually, this place is pristine,

it just hasn't been touched for a long time.

It screams, to me, Dallas.

I can imagine Sue Ellen sitting here and saying something like,

"I'll have a Scotch on the rocks."

DALLAS THEME PLAYS

However, I'm worried the size of the task here

might need a Texan oil baron's budget.

This house itself is pretty big,

with its big living area and two downstairs bedrooms.

And then there's those five flats.

It's certainly a lot of property for the guide price of £250,000,

with lots of possibilities either as a home, holiday let,

or as resale or rental.

Hmm...

Time to ask a local estate agent what he makes of it.

The flats themselves, very dated kitchens and bathrooms.

There's double glazing.

It's got the old aluminium with the wooden frames,

so those jump at me that need doing.

And possibly decor to change it to today's liking.

Good point about the windows.

And the agent reckons the entire lot is going

to need around 140 grand spent on it.

But what does the agent think should be done with the properties?

If it was mine, I'd consider moving into the cottage

and possibly doing some holiday lets from the flats and apartments.

That would generate more income,

although it would mean much more work on a weekly basis.

The agent thought the flats as holiday lets could rent

for £400 to £600 per week,

depending on the time of year and the size of the flats.

If you restored this,

think of the profit that could be made if you sold it on,

or think of the rental yield for six separate dwellings!

It's pretty exciting stuff.

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

This is the former vicarage

converted into five self-contained apartments,

including converted barn.

Start me, if you like, at £250,000.

250? £250,000, may I say?

£250,000, if you will.

How about we say 240, then?

240 to start things off.

£240,000.

Don't want to go much lower than that, folks.

No-one here for it? Don't want to go any lower than that.

No. OK, we can withdraw that one. We'll move on.

But anyone who's just being a bit shy, do come and have a word

and we'll see what we can do.

It may have had no bidders, but a deal was struck for £250,000

after the auction, by Derek and his wife Penny.

Retired tiler Derek and PR manager Penny have a little history

with this property,

so I was intrigued to find out the story from Derek.

# You're so shy. #

-Derek, congratulations.

-Thank you, Martel.

-What a property.

Oh, absolutely, absolutely.

-I want to do everything.

-OK.

Talk me through how you found out about this.

Well, we first saw it a couple of years ago,

and we came to see it, and we put an offer in,

which was accepted, but when we did the...

some homework, we thought, "No, it's too big a project."

So we pulled out, really.

And somebody we'd been e-mailing in the village,

they e-mailed us to say that the house was going to auction.

So myself and Penny, we said, "OK, well, let's go on auction day,

"go to the auction just to see what happens,"

because we'd already decided that it wasn't for us.

The auctioneer asked for opening bids, and there were none.

So he just simply said no bids,

but if anybody's interested, come and see us.

So we both looked at each other and we sort of said, "Shall we?"

And one said, "Yes,"

and the other then turned back and said, "Yes, OK,"

and that was it, we bought it.

-In that instant?

-Yeah.

So a couple of hours before that, we had no intention of buying it.

Well, it sounds like this was meant to be.

Well, yes, but we hadn't looked at the legal pack.

Oh! The golden rule.

We hadn't had any survey, and we hadn't even been to see it since...

But you had been to see it originally a couple of years ago?

Yeah, a few years ago.

Yep, they haven't seen it since several years before.

However, they've been lucky that there was only one major surprise -

that tenant I mentioned earlier, who they're happy to keep on.

The couple currently live in Sussex,

but have been planning to buy in the area for sometime.

So, what's the actual plan now they've got the properties?

-The plan is to restore it possibly to holiday use.

-Yes.

Because it's a great centre for

athletic activities, cycling, running,

and see what happens.

Are you debating in your head whether to do holiday lets

to restore it to...a sufficient standard

that people want to come in and holiday let,

or does part of you think about making it into a grand house again?

Aw, that's the vanity project - to look at the house and say,

"OK, wouldn't this be great as a single house?"

But I think cost-wise that's a bit out of the question.

OK. What is your budget?

Oh, that's a tricky one.

Top end, we've got, I should say, approaching 100,000.

£100,000 is a lot of money,

but I still worry whether it's going to be enough.

However, it looks like Derek's tiling skills

would be put to good use.

But with major jobs like the windows to resolve,

it might be a bit tight.

At least in the meantime he has income coming from one tenant,

and he hopes to be fully up and running in two years.

I'm really happy for you.

It sounds like this is something that's been on the back

of your mind for years.

And, "Should we have got it? We didn't get it.

"Should we have got it?" -

you would have regretted this if it had gone.

We thought that, because in the interim couple of years,

we've always, when we've been looking at other properties,

we've always flicked back at this one.

I can't wait to see what you do with the place. I really can't wait.

-Best of luck. Thanks, Derek.

-Thank you.

Some things in life are just meant to be,

and I get the feeling that with Penny and Derek,

this purchase was one of them.

What will they decide to do with the place?

There are so many options.

Will they go for the vanity project

and make it into one big, gorgeous home?

Or will they keep it as those holiday apartments?

You can find out what decision they came to later in the show.

Coming up near Liverpool, I see a house that needs

a little straightening out.

It's not actually perpendicular to the road.

It's going back at an angle,

so you've got these very strange shapes.

And in Wales, it might be a huge task, but Derek's undaunted.

Had we not bought it,

we'd have probably have regretted it for the rest of our lives.

Let's head back to Birmingham and, more specifically,

four miles north-east to Erdington.

It was in this suburb that I saw this three-bed end-terrace

guided at £24,000 to £29,000.

And by the time I had got there, work has already started.

We are back to the bare brick,

there's no ceiling,

so this is a "start from the very beginning" project.

# Start again

# It can't be over Let's start again. #

Downstairs, everything, including the kitchen sink,

had been stripped out.

Too bad it was in the wrong room.

I was intrigued by the cellar space,

and outside in the garden was a little outhouse

crying out to be incorporated into the main building.

Upstairs was also just bare bones.

This was a big project.

Enter electrical engineer Dilshad.

He was the man for the job.

He picked this up at auction for £90,500,

just a little over the guide price of £24,000 to £29,000.

He didn't help himself by missing an important clause in the legal pack

that saw him pay an extra eight grand in additional fees.

But, as they say, a man who has friends is never poor.

I've got quotes for central heating, radiator system and boiler.

-Well.

-I already got a quotation for that,

but it is a very friendly quotation.

-OK.

-For plastering, I already got the plastering quotation, as well.

Again, this is very friendly, as well.

So the only thing left is just the tiling.

Tiling, um, a friend of mine will do the tiling for me, as well.

All those mates' rates meant he had a modest budget of 20 grand,

and having already started work on the house,

when we met him he thought

it would take an additional two months to complete.

We're back, nine months later.

It may have taken a bit longer, but

Dilshad's house of multiple occupancy, or HMO, is taking shape.

By creating a corridor in the entranceway,

the front room is now a separate bedroom.

There's not only a brand-new kitchen,

but Dilshad has cleverly knocked through to the outhouse

for a downstairs shower room. Perfect for a HMO.

Upstairs, all the bedrooms are looking clean and fresh.

Everything has been re-plastered,

redecorated by Dilshad's team of builders and,

being a certified electrician,

it's all been rewired to HMO guidelines by the man himself.

And the piece de resistance?

A fully damp-proofed, insulated room where the cellar used to be.

Absolutely fantastic.

Over the last nine months, Dilshad has achieved everything

he set out to do, but I'm curious to know

what caused the seven-month delay.

I was actually studying full-time for my masters degree,

so I couldn't,

like, manage the project full-time.

So... And one of our main team

workers has actually had a leg operation,

so this has caused a little bit of a problem for us,

so we delayed something about a good four months.

So Dilshad really is a jack of all trades and master of all, too.

OK, so getting a masters degree is a pretty good excuse,

but did everything go as smoothly as he wanted it to?

There was damp from the roof.

We have some guttering problem leaking down on the wall,

and it caused a little problem for us,

so before we did any refurbishment

we try to get rid of the damp, leaking, first.

That's all done.

So the rest of the work was just normal building - normal,

regular building work.

While the damp problem was sorted with new guttering,

it was an unforeseen cost and the time delay was costly, too.

Dilshad ended up spending around 35 grand.

That does worry me.

Don't forget, he paid over the guide price

and he had to pay eight grand in unforeseen costs, as well.

So how does he hope to recoup this cash?

We want to sell the house,

if there is any good potential buyer.

But if this is not happening,

we actually, we can rent it out

exactly the same as the way we rented out our previous properties.

Dilshad isn't short of options,

so let's see which could be the most lucrative way to go -

renting or selling. First,

what did two local estate agents make of that £133,500 investment,

starting with the agent who saw it nine months ago.

The changes on the properties since I was last here are absolutely

amazing, to a very high standard.

He's done very well on the property.

My first thought is that he's renovated this

to a very high standard, indeed.

I'm in agreement, but I do have one question.

Dilshad planned to convert this to a five-bed HMO.

But I'm not sure if, legally,

the basement can be classed as a bedroom.

The cellar room could not actually be classed as a fifth bedroom.

The window is actually too small for a fire escape.

Dilshad will have ensured that this meets current regulations

in order to use this area as a communal room,

but he spent £133,500 on the property.

What could it be worth on the resale market?

The current market value of the property would be between

£135,000 and £142,000.

If I was to offer this property onto the open market as an HMO at the

present moment, then I'd be looking in the region of £145,000.

I was expecting a little bit more than that,

so I think I will keep it for a while

to make sure I get the money that I'm actually asking.

The highest valuation could see

a potential pre-tax profit of £11,500.

But perhaps more encouragingly,

both agents thought the rental values of £1,200 per calendar month

would be possible, which would generate a yield of 10%.

So with two rental properties to look after, a full-time job,

a brand-new masters degree, how does he do it?

Well, thanks for my wife, she's made my life a little bit easier and

when I go home, she actually already select the colour and design type of

the fixtures that we are actually trying to fit in here in the kitchen

and, of course, in the bathroom, as well.

So she does make my life very, very easy.

Bootle, five miles north of Liverpool,

sits not only on the banks of the mighty Mersey,

but also on those of the Leeds and Liverpool Canal -

the longest canal in Britain built as a single waterway.

Well, there's a few less ripples in these waters than there were

in the Canal's 19th-century heyday.

It may yet host more activity in the future,

as multi-million pound plans to develop a district

of canalside bars and restaurants have recently been laid out.

When you're looking to invest in areas,

one thing to consider is places where there's a lot of regeneration

going on. That's certainly the case here.

I'm only two miles from Liverpool city centre.

Down there are the docks.

Well, that's undergoing a huge amount of investment at the moment,

so that's good news. So what about this place?

£35,000 was the guide price for a two, well, two-and-a-half-bedroom,

because of the boxroom, mid-terrace.

Come on, that's got to be worth a look.

Now, judging by the old signage above the row of houses here,

I reckon this was a row of shops at some point.

Certainly when you walk into the house,

you're struck by the height of the ceilings.

I mean, it's a really nice space as a result.

And that could have been something to do with the days when it was

a shop, maybe with a lowered ceiling with lighting or whatever.

Anyway, now, whatever, it's a really nice-sized space.

You've got this little porch area,

keeping the noise of the traffic and

the wind and rain out of the room here.

This is your living room. It's not a bad space.

A nice feature fireplace on there, yeah.

Good.

So, stairs in the middle of the property and a bit of bonus,

a covered area under the stairs there,

which makes them an ideal downstairs WC.

And finally through into the rear sitting room.

Again, not a bad sized space.

Slightly lower ceilings in here, which is kind of intriguing.

I need to explore upstairs and find out what's going on there.

But leading through to your kitchen,

it actually doesn't look to be in too bad a condition.

I mean, if you rented this place out, that might suffice,

but you might want to spend a bit of money sorting that out.

Stair, door out onto the rear courtyard.

So a lot of space downstairs.

Actually a lot more than it seems when you look at the front of the

property. Let's have a look upstairs.

Well, so far, so good.

And this is just downstairs.

There is still the upstairs to see.

# More than this... #

Well, down at the end of a bit of a long corridor upstairs

is the bathroom and loo. Bit of a bonus,

you've got a little cupboard there with a combi boiler in,

which looks relatively new, so that's good news.

And as I said, down this rather long corridor, one of the bedrooms there.

That's not a bad size.

Lots of damp over there in that corner,

so my guess is it something to do with the guttering or the roof.

That's the small, sort of half-bedroom that's mentioned.

I mean, it really is too small to call a bedroom legally, for sure.

But at the front of the property, you've got this really nice-sized...

I guess it's the master bedroom, but interesting, if you notice,

the way that the house is actually angled,

it's not actually perpendicular to the road.

It's going back out of angle.

So you've got these very strange shapes,

but we'll live with that. What can we do about this situation here,

though? I guess you've got two options.

One, you bring that wall this way.

You'd still have a reasonable-sized room here,

and then at least you'd have a half-decent third bedroom there.

That's not a bad option.

The other option, which you might prefer,

is keeping it as two bedrooms and convert that into an en-suite.

That would actually be really lovely.

I guess that decision comes down to whatever

you're going to use this for,

what difference it would make

in terms of the resale value, or rental, or just liveability.

So that small room is perhaps the

one area that you could consider changing.

The damp needs checking out and the

backyard could certainly do with some attention.

And then it's really a case of updating and sprucing up.

But, you know, if you really want to maximise your investment here,

actually sticking to the current layout

would probably make most sense.

MUSIC PLAYS: Leave Me Alone by The Corrs

# Leave me alone

-# Out on my own

-Out on my own

# Leave me alone... #

So would a local estate agent keep the status quo,

or does the house justify a few changes?

I'm thinking that it's an ideal buy

for an investor landlord, because,

actually, it doesn't need a great deal doing to it.

So a smartening up of the kitchen and bathroom,

laminate floors downstairs, new carpets upstairs,

perhaps venetian blinds.

Decorating, lots of cosmetic,

get it looking sweet enough that, when you do your viewings,

your tenants like what they see and they move in.

Of course, as a landlord,

it's not just the appearance of a property that matters.

You're responsible for health and safety issues,

so make sure all the electrics,

gas and installations are all safe

and certified by appropriately qualified tradespeople.

So what kind of numbers could we be looking at

on this property, guided at 35,000?

With regards to sales value, I would reckon when the property was done,

made to look good, it would easily achieve between 45 to £48,000.

As far as the rental is concerned,

I would imagine that there would be no problem achieving a rental

of around £400 per calendar month for this house.

£400 a calendar month and let's say £50,000 investment to buy and

renovate and you'd be looking at a yield of around 10%.

No wonder buy-to-let investors like this area.

For a guide price of £35,000, it's almost like

I'm doing the show ten years ago.

That seems like a really good opportunity to me.

Let's see who agreed when it went under the hammer.

A mid-terrace building.

You've got double glazing and central heating.

The guide's £35,000. Who's in on this one at 30?

Thank you, sir, straight in at 30.

32? 32 I have. 34?

34, you're back.

36? 38?

Anybody here for this at £38,000?

Shall we make it 37?

Can I say 37 to my other bidders?

Anybody else, 37,000?

If not, 36 and a half.

37, may I say?

Thank you. 37 and a half.

37 and a half.

Thank you. 38? You're now in.

There's a new bidder. 38.

38 and a half, may I say?

You're saying no.

38,000, stood up, then.

For the first time. 38 for the second time.

It's against a couple of you sitting down.

Are we all done? Third and final time.

At £38,000, all done?

You won it, sir, well done at 38.

And so just slightly above the guide price at 38,000,

the successful bidder was Norman.

He has bought this house as a buy to let investment and,

with 45 properties to his name,

it's something he's done a few times.

# Again and again and again and again and again and again and again

# Why don't you do it Why don't you do it again? #

Norman, very good to meet you.

-Nice to meet you.

-Congratulations.

-Thank you.

-So, amazing, isn't it?

2017, you can pick up a pretty decent house for 38,000 quid.

-It is, yeah.

-Yeah.

Tell me, apart from the price, why you wanted to buy it.

Basically on the price and its current condition.

-Yeah.

-And location, obviously.

-Yeah.

-What do you know about what's happening in this area,

because it has got good things happening, hasn't it?

-Yeah.

-You've got the docks at the end of the road,

which obviously they invested and spent a lot of money recently.

-Right.

-So it's an up-and-coming area.

What kind of rental do you think this place might...?

About 450 a month. Maybe a little bit more.

OK. But way over 5,000 quid, then, per year?

Oh, yeah, definitely, yeah.

On a £38,000 investment.

-That's right, yeah.

-It's like...

-Very good, isn't it?

-Yeah! Definitely!

Norman's been building his 45-property portfolio

over the past 25 years...

..buying most of his properties in the local area.

And, after all those years of experience,

he knows exactly what makes a good buy to let investment.

How many times have you had a situation where you've thought,

"I don't want to do this any more?"

Well, several times.

THEY LAUGH

-Definitely.

-What have been those circumstances?

Bad tenants, not paying, etc, you know.

And obviously you buy a property and you start renovating it

and not realising there's a lot more problems with the house.

-Right.

-That's why I tend to buy properties like this now.

That don't want too much doing to them.

-Right.

-You can turn them over a lot quicker, as well, you see.

Exactly. Have you got a team of people that you work with?

No, it's just me and Ken, who works for me.

Just the two of us.

-Oh.

-The only people I get in is an electrician, obviously,

check all the electrics and do his job.

I've got a guy to do the gas side, as well, check the boiler out.

-Right.

-And check all that out.

And I've got another guy who does all the carpets and that, as well.

-Right.

-All the laminating and that.

OK. So, what are you going to do to this place?

Obviously in the back bedroom

there's a leak on the roof at the back,

so I need to get that sorted out.

In the bathroom, I'm going to put an electric shower in.

What about the kitchen? What are you doing about that?

I probably might retile it, something like that.

-Just clean it up.

-Keep the units?

-Yeah, keep the units in.

Yeah, they're in good condition, yeah.

OK. What's the budget for all that?

It'll be about £3,000.

-Three!

-Three grand, yeah.

-A fully renovated house.

-Keep it tight.

No kidding.

And along with that VERY tight £3,000 budget,

he's aiming to complete the work in just three weeks,

so it really will be bing, bang, boom and then onto the next one.

So you've got 45.

-Yeah.

-When do you stop?

Probably the next couple of years, I'll probably stop then.

How many do you want to get? 60?

No, probably about 50, 55, maybe, you know.

And is that enough to provide a residual income?

Yeah. With a decent income, yeah. Definitely, yeah.

Did you set out with this in mind, 25 years ago?

Well, I was doing it part time there.

I've been working for different companies and doing it at weekends

and nights and that, you know.

It's only the last five years I've been doing it full-time, you know.

What's the best bits about it?

When I finish!

THEY LAUGH

Well, listen, congratulations.

-Yeah.

-And good luck with it.

-Yeah.

-I look forward to seeing how you get on.

All right, thanks.

Well, Norman really making the most of the opportunities

there seem to be here in Liverpool at the moment for buy to let.

Keeping his renovation project down really low, that £3,000,

not doing anything that he doesn't have to do.

How will he get on? You can find out later in the show.

That's one property down, but what about the other two?

How have they done? Will we see amazing achievements,

or arduous anti-climaxes?

I'm definitely keen to find out.

Let's go back right now.

It was in south-west Wales, in the village of Llanfyndd,

where we first saw a rather large

collection of properties up for sale.

You've got a big courtyard, loads of spaces for parking.

Over here, a two-bedroomed house and then here,

we have the former vicarage, which has been extended over the years

and now houses five apartments.

Yes, we had six potential properties here with a two-bed house,

known as The Lodge, and those five apartments,

ranging from one studio flat

to two one-bed flats and two two-bed flats.

So, if you were looking to get a collection of properties,

this was a ready-made property portfolio.

But with a fair amount of renovation and updating to do,

this monster of a project scared off

all potential bidders in the auction room.

No-one here for it?

But it was bought after the auction by Derek and his wife Penny, who,

having nearly brought the property a few years ago,

decided just to go along out of interest to see what it sold for,

only to end up buying it for 250 grand.

Well, it sounds like this was meant to be.

Well, yes, but we hadn't looked at the legal pack.

Oh. The golden rule.

We haven't had any survey.

And we hadn't even been to see it since...

You had been to see it originally a couple of years ago?

Yeah, a few years ago.

# Call it fate or what you want

# You might try to fight the feeling but... #

Well, fate or otherwise, it was now Derek and Penny's,

and they hoped they'd found an option

to maximise all the properties here.

The plan is to restore it, possibly, to holiday use.

-Yes.

-Because it's a great centre for athletic activities, cycling,

running. But, yeah, and see what happens.

And retired tiler Derek wasn't going to rush this,

with a two-year timescale, and he'd given himself a 100 grand budget.

And now, just four months on,

we thought we'd pop back just to see how it was all going.

# Let's begin... #

This is The Lodge, which is my home at the moment.

Very little has changed here,

except that I've cleaned it thoroughly from top to bottom,

so it's a reasonably nice place to live.

The windows obviously have been changed

and I've done a quick tart-up of the kitchen

and the tiles behind the units and the kitchen.

It was easier to take them off than to clean them,

to give you some idea how dirty it was.

Derek's returned home to his wife Penny and their house in Sussex most

weekends, but the Lodge has been his base camp during the week,

enabling him to crack on with various-sized flats.

With one of the flats already occupied with a long-term tenant,

his main focus has been on the other four flats.

This is flat four, where some of the major work is going on

and we've stripped off all the mortar from the walls,

because the damp-proof company are going to put a membrane on the wall

before we put insulated plasterboard back,

which will give us a higher degree of insulation.

And we've also revealed a lovely arch over the door,

which we are going to leave uncovered.

And once all that's done,

then it's just to continue with the kitchens and bathrooms

and dealing with the miles and miles of textured coving.

Sorting out damp issues and starting from a solid base makes sense.

And elsewhere, he's started some of the kitchen spaces

and even decorated some of the rooms.

But where does he feel he's currently at?

Now we've got a good team of people working for us

and we're at the end of the beginning,

so we know what we're doing and, generally, it's going OK, I think.

# This is the end of the beginning

# Not the beginning of the end... #

Yes, well, at least he can see the starting line.

This project is definitely more of a marathon than a sprint,

which will suit keen runner Derek down to the ground,

having just reached an impressive landmark with his running.

I did my 100th marathon, which was at Brighton.

So I did that successfully.

I then did London two weeks later

and got my good-for-age place, which,

for the over 60s, is 3:45

and I did 3.43, which was good.

I've done three marathons since

and I've got my next one this coming Sunday, which will be number 104.

# Ooh runnin' runnin' runnin'

# Runnin' runnin' runnin runnin' from myself no more... #

Derek's definitely in this project for the long run,

with at least another year and a half of work ahead of him.

But, at this stage, how far is he into his 100 grand budget?

So far, we've spent...

I haven't added it up the last couple of weeks,

but I think it's between £32-33,000,

so possibly 35, top end.

Are we on track?

Yes, I think we are.

With a £250,000 purchase price and,

if he sticks to that 100 grand budget,

that's £350,000 sunk into this potential holiday let business.

But is he making steps in the right direction with his current plans?

What do two local estate agents think?

The Lodge, the layout is absolutely fine.

Obviously, it needs to be dragged back into the 21st century.

The key thing, at the moment, obviously,

is to modernise the five flats, replace bathrooms and kitchens.

They are

retro, to say the least.

The only way he's going to get good demand in this area,

because we are so far away from the city centre,

and for holiday lets or otherwise, is high spec.

So it needs to be granite worktops, stone, oak,

and really appealing to the general public.

OK, let's break this project down a bit and look at the numbers.

A two-bedroomed lodge could be sold separately,

so what might that be worth?

I believe that the value of the lodge would be £190,000-£200,000.

This two-bed lodge, once done up, would be £145,000.

So, VERY different valuations there,

but it's always tricky valuing unfinished properties.

What about the apartment blocks?

Flats are very difficult, if not impossible to sell on their own,

so you have to really sell the building with the flats in it.

The building on its own, with flats all finished, would be £420,000.

So, with combined resale values in excess of £550,000,

it seems Derek and Penny's 350 grand investment's pretty safe.

In addition, with holiday lets predicted by the agent

to bring in around in the region of £40-50,000 a year,

that could see an annual rental yield of around the 10% mark.

But there's still a long road ahead for marathon man Derek.

So, does he now regret the decision to take on such a big task?

Had we not bought it,

we'd have probably regretted it for the rest of our lives,

so it's a project, we've done it,

hopefully it's going to work, but, hey, at the end of the day,

you know, what's the phrase - you Yolo?

You only live once. So, yeah, there we go.

Quite right, Derek.

And I, for one, can't wait to see it when it's all finished.

# And this is the end of the beginning

# Not the beginning of the end

# No matter where the river beds

# Some day we both will meet again. #

Back to Bootle in Merseyside now we go,

where this two and a half bed property caught my eye,

not just because of its £35,000 guide price,

or its relatively good condition,

but with something of an optical illusion upstairs.

You notice the way that the house is actually angled,

it's not actually perpendicular to the road, it's going back

at an angle, so you've got these very strange shapes.

# Oh watch a man

# There goes Norman

# He'll get you if he can There goes Norman

# There goes Norman... #

Norman certainly had a keen eye for property, as this became his 45th

purchase when he added to his rental portfolio for 38 grand.

So you've got 45.

-Yeah.

-When do you stop?

Probably the next couple of years. I'll probably stop then.

How many times have you had a situation where you've thought,

"I don't want to do this any more?"

Several times!

THEY LAUGH

-Definitely.

-What's the best bit about it?

When I finish!

With such an experienced pair of hands on this property,

the only problem I could see was the very tight £3,000 budget.

Well, seven weeks on, has Norman got this place ready to rent?

MUSIC PLAYS: It's All Good by MC Hammer

# It's all good

# Y'all ready for this?

# Uh-huh it's all good

# Hey

# It's all good

As rented properties go, this one is smart, clean and welcoming,

with the fireplace giving the place some character.

And you'd think this was the new kitchen,

but it's in fact it's the old one scrubbed up well.

While upstairs the damp has been fixed

and that quality floor and decoration is throughout.

The bathroom is also looking great,

with modern tiling and an electric shower.

But what's Norman most pleased with?

I'm most pleased with this room

because it looked so grim and dirty before.

We bought a second-hand fireplace off the internet and also painted

a couple of walls grey and put new flooring down.

It just looks completely different

and brighter and fresher.

What we tried to do...

The normal colour for, obviously, landlords, is magnolia!

So what we've done, in a few areas, is to paint certain walls grey,

which is obviously the in colour at the moment,

just to break the magnolia up and look at bit more, obviously, homely.

Yes, it's nice to see some thought

put into the look of a rental property.

But while this was a straightforward renovation for an experienced

developer, there's always something new to learn.

Probably one thing I have learnt is, obviously with the consumer meter,

really, that someone's done a job

and obviously never done it correctly.

I got a qualified electrician to, obviously,

come and check the electrics,

and when he looked at the consumer meter,

he noticed there was a panel missing at the back,

which could be a fire hazard, so obviously we changed that.

Building regulations are strict about the height,

positioning and type of wiring for consumer units.

In addition, the UK Government has plans to change

ALL electricity meters to smart meters by 2020,

and they can be beneficial to tenants as it helps

them control energy use better.

Norman had help from his friend and employee Ken

and qualified tradesmen,

but they did go over their three-week timescale by a month,

as there was a delay in getting started.

And how about that tight three grand budget?

The budget - we were going to spend about £3,000,

but we ended up spending about £3,500.

Because a few extra jobs needed to be done.

One was the consumer meter.

The other couple of things was we replaced the two smoke alarms

and also put a heat detector in the kitchen

and put two carbon monoxide detectors in.

Well, still good control of the purse strings,

but what's the plans now?

We decided we were going to rent the

property out and we have actually got a tenant lined up.

She's going to be moving in next week.

Great to hear, but will the thoughts

of two local estate agents be equally pleasing?

Let's start with the thoughts of the agent

who saw it before the renovation.

This is my second visit to the property.

I think the buyer's done tremendous things here.

They haven't overspent, so

I would guess that they're a seasoned landlord.

They know what they're doing. They know if they overspend,

they don't really get their money back,

so they've spent what's needed to enable them

to get a tenant quite quickly. So, all in all,

they've done all the right things and it looks smashing.

I think there's a demand for property that is done

to quite a high standard.

I see a lot of properties that are little bit rundown,

so it's nice to be in one that's been recently renovated.

Norman paid £38,000 at auction and a renovation spend of 3,500

means his total spend is £41,500.

What kind of figure can we expect for rental?

I think, as a rental, per calendar month,

this property would achieve £450.

As far as rental is concerned, I would expect the house to be able

to be easily let for somewhere around about

£450- £460 per calendar month.

It's a bit lower than what I thought.

I've actually got a tenant moving in next week

and I'll be getting £500 per calendar month.

And at £500 per calendar month, it gives Norman a storming 14.5% yield.

A great return and an easy turnaround.

But what can we learn about Norman's experience doing 40-plus properties?

First bit of advice I'd give to anyone is obviously make sure

you check the property and if you're not too sure of anything,

obviously get the experts in to look at it for you,

any structural issues, etc.

And a must at auction is always check the legal pack.

That's a must.

Well, there are auctions taking place all over the country

at most times of the year.

And we're at a fair share to capture the action.

Yeah, so join us next time for more Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Bye.