Episode 63 Homes Under the Hammer

Hello and welcome to the show.

Now, one thing we notice here

on Homes Under The Hammer week after week

is that no matter where you are in the country, there are good deals

-to be had.

-Yes, from Glasgow to Grimsby, from Glossop to Gloucester,

it's really important to look around

-your local area and see what's on offer.

-Yes, you never know.

You might find exactly what you're looking for

down at your local property auction.

Whatever you're thinking of spending on your project,

making the right decisions and doing the hard work will go a long way.

Definitely. Especially when everyone's trying to add value

to their property.

Sometimes, a bit of elbow grease is just the thing you need.

So, whether any of today's buyers ready to get their hands dirty?

Let's find out what they bought.

I'm in Merseyside,

at this three-bed terraced

that gives a whole new meaning to "a room with a view".

Now, that is a bit weird.

This house in Derbyshire has already been converted to two flats

but it's still a long way off.

Everything just needs ripped out and taken down.

And I'll SPORE you the details,

but this mid-terrace in Porth has much room for improvement.

You've got mushrooms growing in the corner.

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!

I'm in Seacombe in Wallasey on the Wirral peninsula.

Sitting across the Mersey from the docks at central Liverpool,

Wallasey once accessed the city by ferry, until the Kingsway Tunnel was

opened in 1971, connecting Seacombe with northern Liverpool.

This crucial transport link means the Wirral gives commuters

a chance to escape hectic urban life and, for my money,

has the best views of the city.

Just a stone's throw from the entrance to the Wallasey tunnel

is the property I'm here to see.

35-£45,000

was the guide price for this three-bedroom mid-terrace.

Let's have a look.

# In my Mersey paradise... #

Those kind of numbers really are quite shocking

when you first hear them, aren't they? It's not a lot of money...

..at all, for a house.

But what do you get? Well, in its day,

I think this would have been a middle-level worker house.

It feels a bit grander than your average terrace.

So, through the front door,

a little internal porch area there with a door,

which is nice to keep the cold and the noise out.

Front sitting room, which is in reasonable condition.

You've got a bay window. It's not a bad size.

Stairs up to your bedrooms there, obviously.

Rear sitting room. You've seen designs like this 1,000 times,

of course. But, you know, they were designed like this

because it's a sort of...

what else can you do? It sort of works.

I won't even say, you know,

that wall should really go, open it all up.

A few signs of possible damp or remedial work to sort out damp

in that corner there. In fact, all along that wall,

which you'd want to probably have checked out

to make sure it's been done properly.

And the central heating looks like it might be a bit old.

But then, through to the rear of the property where you have got

a half-decent sized kitchen, actually.

Probably built as an extension at some point.

But it's a nice size.

It's a good space.

It needs, obviously, a new kitchen set-up in here.

Apart from that...

..yeah.

It's good.

MUSIC: I Got You (I Feel Good) By James Brown

Well, upstairs, the fairly sensible layout continues.

Something to note - no particular box room.

Which you might have expected.

All the bedrooms a good size.

This one above the kitchen,

obviously a kid's bedroom at some point.

And it's a nice-size space.

The extension here definitely benefits the property massively.

But yeah. Let's carry on exploring.

MUSIC: I'm The Urban Spaceman by Bonzo Dog Doo Dah Band

As well as the nice and spacey blue room,

there's also a smaller cream bedroom

and the rather fetching pink master bedroom with an additional feature.

Now, that is a bit weird. Yes, it's an internal window.

It's an internal window between one of the decently sized bedrooms

and the bathroom.

Now, in principle, I can see what they're doing with that.

It lets a lot of natural light into this internal room.

On the other hand, can you imagine

getting up in the middle of the night

and having a wee, the lights would go on,

the person in there would be disturbed.

There's just something not quite right about it,

so, I think probably block it up, on balance.

I think now I'm just nit-picking, because this is a good house.

What did the agent from the auction house who sold this lot

think of this terrace, guided at 35-40,000?

It's a good-sized three-bed terrace.

It's got a extended kitchen which is bigger than normal.

And it obviously has got

three bedrooms and a bathroom upstairs.

It's double glazed, centrally heated.

It just needs, mainly, decor, carpeting,

and then it would make a good investment.

Speaking of investments,

what's the stronger market in this part of Wallasey?

So, the local property market

in this area, at the moment, is improving.

It's more for a buy-to-let investor, rather than an owner occupier.

So, renting could be the way to go.

But what could the renovated house be worth on the sales market?

I think once it's done to a high standard,

the market value would be in the region of between 60 and £65,000.

There still could be a profit to be made in resale

if you got it close to the guide price.

But what about rental figures?

If this was to be put on the rental market,

the average rental income would be in the region of £500-£550

per calendar month.

Well, it's a good house for a very low guide price.

Who was tempted? Let's find out when it went under the hammer.

This is a three-bedroom mid-terrace house.

Two phone bidders. What is it?

35? Can I take the lower end?

Thank you very much, sir.

At 35. We're in. 36.

OK. So, either of the phones at 36,000?

Thank you. 37, sir.

38. Yeah.

38. 39,

sir? 40.

Let's speed this up. Can I take 40 from you?

Thank you very much. Can I say 41?

Excellent. Can I say 42?

43?

44?

45?

46?

47?

No? All right.

So, would you like to take 46 and a half, sir?

You would. 47 to you now, sir?

47. 47 and a half now.

48? And a half.

You, sir. Left it late. At £48,000, you're out in front.

Anyone want to contest this at 48 and a half thousand pounds.

Phone or in the room?

For the very first time, £48,000.

Second time at £48,000.

You're back in, sir, at half.

So, I'm looking for 49.

And I have it straight away. 49 and a half?

Yep?

Thank you. 50?

And another half? Thought that might be your response.

At £50,000?

A fairly bold number. Anyone coming in above 50 and a half?

He just wants to hear what the result is, I'm guessing.

Anybody else at 50.5? This side of the room, sitting down.

If not, the gentleman right in front of me. 50,000, once.

50,000, twice.

Last chance. Are we all done at £50,000?

Sold.

The successful bid of 50 grand came from refrigeration

and air-conditioning engineer Dave.

And I caught up with him for a chat about his new acquisition.

# Daddy, daddy cool. #

Dave, good to meet you.

-Yep.

-Congratulations.

Tell me why you wanted to buy this place.

Just as an investment for the future.

Just to rent it out as part of a pension plan, really.

Is this something you've done before?

We've bought a house at auction before, three years ago,

it was a big house. Total wreck.

So we've done that one and then we just decided to do this one.

So, why this particular house?

Obviously, I'm not from Liverpool.

I'm from London, but my girlfriend's from Liverpool.

So, we're based up here. Even for investment purposes,

it seems more sensible to buy here for renting purposes.

Yes, a similar property in London, presumably,

would be ten times the price.

-Yes.

-What about this house in particular?

What was it that you liked?

This is the first time I've been in here.

-Oh, really? You didn't see it beforehand?

-No.

-Did your girlfriend see it?

-She did.

-Yes.

-Right, OK. So you trusted her?

Sort of.

He's only kidding, Jan.

You've done well here.

Local knowledge and all that.

This being a former local housing association house

suggests that it will generally be well maintained.

So, take a bow, Jan.

Now that Dave has it, what has he got planned?

Obviously, it's going to need a new bathroom, new kitchen.

Once I get into having a look properly,

-maybe change one or two things. I'm not sure yet.

-Yes, yes.

Do you like the layout? Do you think it works OK?

Yeah, I think it's pretty good.

Right, OK. Obviously, what about the bathroom upstairs?

On first glance, it's not ideal to have that window there, is it?

Actually, I'm not sure of too many options.

No. I'll probably just take the window out, though.

Just make it so that it is contained and tiled.

-OK.

-Maybe change it around a bit whilst I do it.

OK. There's no natural light but at least

you wouldn't have the window into the bedroom.

Now, it's strange having the window into the bedroom.

Someone's asleep and someone's in there.

So, how much of the work is going to be done by you

and how much is it going to be getting other people in?

-Virtually all of it by myself.

-Yeah?

-Yep.

-Are you handy?

Very handy.

Any mechanical services, I can generally do myself.

Most other bits, no problem.

So, being handy comes in,

well, handy.

That will definitely save some cash.

But it could slow things down a bit

as Dave does work full-time in London.

What is the timescale?

I would imagine round about four to six weeks.

-OK.

-Because it would mainly be weekends.

Maybe a couple of long weekends.

OK. Then is the plan to rent it out, or what?

-Yeah, rent it out. Long-term investment.

-Long-term.

What kind of money have you set aside for the work?

I haven't actually thought about it.

Whatever it needs, but looking at the property today,

I would imagine probably about £4,000 or £5,000 should do it.

What kind of rental do you think you might achieve?

Looking at other prices in the area, probably round about £500, £550.

-OK.

-That's the sort of figure

I think most are generally going for around here.

In total, then, your investment

with your three, four grand will be what?

In total, probably round about 55.

55 grand?

And you're getting that kind of return.

It's pretty impressive, isn't it?

Yeah, it does sound really good, so...

That's what I'm hoping for. Maybe I'm wrong,

but it's a long-term investment, anyway.

And how are you going to manage it?

Probably ourselves.

We've got another place that is rented out

-which we self-manage.

-OK.

We've had people in there for five years.

-Yeah, no problems.

-Brilliant.

After this one, going to expand the portfolio?

Yes. Once this one is done and rented,

want to buy another one this year

-and then buy one every year for the next four years.

-Oh, right?

So, then I can retire and that'll be my pension.

Great.

Congratulations. Good luck with it.

Look forward to seeing how you get on.

I think Dave has got himself a really good property here.

And when you look at those numbers, you can't really argue with it,

can you? In terms of the bathroom, yes,

get rid of that window and pretty much everything else,

just a simple refurb.

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

Today I'm right in the middle of England, in Ripley,

halfway between Derby and Nottingham.

Just 15 minutes from the M1 and half an hour from the Peak District.

Ripley is also the birthplace of Sir Barnes Wallis,

inventor of the bouncing bomb.

I'm just a few minutes' walk from Ripley town centre.

The property I'm here to see has a guide price of £38,000 plus.

Actually, I should say two properties,

because this lot is made up of two one-bedroom flats.

One up, and one down.

I'm guessing this is the ground-floor flat.

Let's have a look.

So, yes, this is our ground-floor flat.

Overwhelming smell of damp, amongst other things.

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

It feels very run down.

You get the sense that everything... needs ripped out.

But that's typical of many auction properties

and some people like the challenge,

to have a shell of a place

and really put their own mark on it.

And add value, ultimately.

Through to the corridor, I can see the kitchen is very dark.

It's actually boarded up.

Not inviting at all.

Again, needs to be ripped out, replaced.

And you have a bathroom off your kitchen.

So, not an ideal layout there.

Through to...

a bedroom. So many issues - damp, mould.

Let me tell you what is interesting about this property.

Although it is two separate flats,

planning permission was never granted for it to be that way.

So it's actually still considered to be one dwelling home.

So, if you did want to keep it as two flats,

you're in the funny position where you'd have to apply for

planning permission to do so, even though that's the way it already is.

# That's just the way it is, baby. #

And, then again, maybe not.

If it doesn't have planning permission,

a lot depends on how long it has been two flats because,

if the local authority hasn't taken enforcement action

within a specified period of time,

you might be OK to keep it as it is.

But do always seek legal advice.

Upstairs, immediate thought is it's very small.

I was expecting something more.

There,

probably your bedroom and, essentially, in a cupboard

you've got a shower, just by itself.

And you've got a toilet and sink in here.

Not a great layout. The smell of damp,

you'll have to take my word for it, is pretty overwhelming.

Everything just needs ripped out and taken down.

It's coming off anyway.

Into the living area.

You've got a kitchen and there is some storage heaters which you would

definitely want to upgrade.

Essentially, this is a flat that is two rooms.

Just two rooms. So, it is a small flat.

Not only that, it's very impractical.

It doesn't feel like a flat.

But, perhaps it could be a house.

Put the two together, you've got a house.

That's what I'm thinking.

Well, that's what I'M thinking.

But would a local property expert think along the same lines?

Guess what. We called in a local estate agent.

It's got low ceilings.

It could be quite quirky if it was renovated in the right way.

With a kind of cottage-style kitchen.

Get the bathroom back upstairs.

What we have to bear in mind, there's no garden with this.

So, will that be the right option to go down?

Or is there a marketplace out there for somebody,

like an elderly couple who don't want the garden,

won't need the parking?

but we do have to bear in mind the stairs.

OK. What if you wanted to keep it as flats

and make them planning compliant? What would you need to do?

Various things to bear in mind.

There's the regulations, for one.

We've got to have fire doors, fire exits, etc.

That does become a costly job.

Two bathrooms, two kitchens.

So, there is more cost involved with that.

For me, estimation wise, two flats,

looking at spending 20-25,000 on this.

Whereas, with a residential, turning it back into a cottage,

probably looking at 15-18,000 on that.

So, even without the cost and delays of plans and planning permission,

keeping it as two flats would be more expensive

than restoring to one dwelling.

What about the rental income?

Two-bedroom cottages in Ripley, in this location,

tend to achieve around the £450 per calendar month.

And for a one-bedroom flat?

You're going to be looking at £325 per calendar month.

So, two flats when on the rental stakes,

but when it comes to selling,

the agent explained that due to flying freehold issues,

it would be impossible to sell the flats individually.

The flats would have to be sold to a property investor

as a going concern. So, what about the sales values?

Starting with the cottage option,

considering the guide price at £38,000 plus.

Going to be looking at somewhere around about

£75,000 - £80,000 in the Ripley area.

If you were to turn this property into two one-bedroom apartments,

given the yield that it returns,

that two would fall in the same bracket of around 75-£80,000.

So, costing of conversion, I think,

is what is going to be important in this property.

Well, if it was up to me, it would be one house.

But it's not my decision.

Let's find out who WILL decide, as we go to auction.

So, start me on that.

Where would you like to be on it? Can I say 45,000 on it?

40,000? 38?

Don't mind where we begin.

36, will you? 36 I've got here.

Thank you. At £36,000, the opening bid.

37 is bid.

At 37?

38?

39.

With the guide price exceeded, we rejoin the bidding at £47,000.

That's 47.5.

47 and a half.

48. At 48,000.

48.5. 48.5. 49, sir? 49.

At 49. Can I tempt you again?

Are you sure?

At £49,000, he's playing with you.

At 49,000, once, twice, third chance.

And a half.

49 and a half.

At £49,500.

Any higher bidding? If not, we're selling it.

Sold at 49 and a half at the back.

Thank you.

The successful bid came from decorator Gary.

He already has two rentals and a freehold in Central Derby,

where he lives. We met up at his latest £49,500 purchase,

the first one he has bought at auction.

Gary, congratulations.

-Thank you very much.

-This is your first successful auction property.

Had you been to see it?

Yes. Visited the property twice.

Not internally.

On the outside. Peeked through the windows, round the back.

Dare I say, Gary, there's a lot to see inside.

Be honest with me, when you came in did your heart sink

because you thought, "There's a lot to be done"?

A little bit, yes.

I can see past that, though.

The finished touch, cosmetics.

I bought it as a blank canvas, really.

o knock it about, rip it up and start afresh.

OK. Read the legal pack?

No.

Gary, Gary.

Gary, Gary, indeed.

The golden rule of buying at auction -

always read the legal pack.

And does peeking in the window really count as viewing a property?

I'm not so sure.

Let's talk about what IS OK...

-..in the property.

-Not a lot.

I think the electrics want replacing.

Roof looks OK.

Wants a bit of work. So, I'll start from the top.

Get the property watertight.

Windows, get it secure.

And then just start ripping out.

What's your plan for the place?

I'm going to get some legal advice

but I think I want to put it back to a terrace. Two-bed terraced house.

And do away with the two flats.

Get rid of the rear entrance at the back.

Put an internal staircase back up.

Do you think that would be more sought-after,

having a house here,

rather than having two flats?

Possibly not...

..but that's my plans for it.

I think it'd be an easier project for me.

Instead of two kitchens, two bathrooms,

there will be one of everything, so...

I'm glad we're agreeing on this.

And it seems that Gary has the same misgivings as me about upstairs.

The upstairs is substantially smaller.

Ten square metres smaller than the downstairs.

I don't see that you could rent the two flats out on equal proportions.

-Equal price.

-And do you plan to rent out or sell on?

I plan to sell this one on.

I don't plan to keep it.

With 25 years' experience

refurbishing his own and clients' property,

Gary can turn his hand to most things.

Tiling, joinery, and of course decorating.

He is planning to get a Gas Safe engineer and electrician

for all the legally sensitive work.

But my main concern for the property, I think,

also needs a professional approach.

Have you looked into how substantial the damp problem is?

I have had a look around.

The front of the building has been damp-proofed.

But walking down the side of the building, the access to the rear,

I noticed that all the pathways

are substantially higher than the internal floors.

So I'm hoping that by lowering the pathway will start to alleviate

-some of the damp.

-Considering just about everything needs done,

you've got a really calm approach.

You seem pretty calm.

-Why?

-There's a lot of hard work, I'm not doubting that.

But there's nothing that fazes me, to be fair.

Timescale?

That's a good one. I'd like to think

that it'll be done within six months.

Bit of a winter project.

Having said that, I have just taken quite a large job on.

So, it may take longer than six months

but it's just going to be weekend nights - drop-in job.

On the plus side, if there is so much to be done

and you do have this almost blank canvas,

because you have a shell, you're going to add so much value.

Well, that's what I'd like to think. I've done a bit of homework.

You know, with the monies that I'm going to spend on it,

I do believe that there is a reasonable profit margin in it

once it is completed and I do believe there is a market

for this style of property and this value of property.

-So...

-What's your budget?

10,000, I think, would quite nicely turn it back into a good standard.

And a nice finished house.

10,000 seems quite low.

Just in that there is much to be done.

You're changing everything

and you're changing it from two flats to a house.

You're changing the stairs, you're knocking down the walls,

you're changing the ceilings. There's a lot of damp issues.

Why do you think you can do it in 10,000?

Because I can do so much myself.

And your labour is where a lot of your money goes on renovating.

I've lent a hand in many cases myself.

So it's about time I knocked on a few doors and said,

"Come and give me a hand."

Gary, can't wait to see what you do with the place.

Best of luck, and congratulations again.

Thank you very much. Thank you.

It's great that Gary's a decorator by trade,

but there's so much that needs to be done before you even think about

opening a can of paint.

I know I might have given him a hard time about that £10,000 budget,

but when everything needs done, will that really cut it?

You can find out later in the show.

Still to come... You'd struggle to hit the ground running

at this mid-terrace house in Porth.

There's no floor, you can see there's rot on the joists.

But Gary's daughter, Chloe, has been lending a hand in Derbyshire.

It took me longer to correct her work than it did for her to do it.

We're heading back to Wallasey, on Merseyside,

where I saw a three-bedroom house that seemed like a good buy.

As a former housing association property,

it had been kept in good nick,

but upstairs there was one thing I'd definitely get rid of.

Now, that is a bit weird.

Yes, it's an internal window.

Now, in principle, I can see what they're doing with that -

it lets a lot of natural light into this internal room.

On the other hand, can you imagine

getting up in the middle of the night and having a wee,

the lights would go on and the person in there would be disturbed.

There's just something a little bit not quite right about it,

so I think probably block it up, on balance.

# Private eyes They're watching you

# They see your every move... #

It was Dave who had eyes on it

and purchased the property for £50,000.

He was planning on renting it out

after renovations which included a new kitchen

and blocking up that window between the bedroom and bathroom.

As a refrigeration and air conditioning engineer,

he'd be able to keep a cool head

and give this property a breath of fresh air,

pretty much all by himself.

Are you handy?

Very handy. Yeah, any mechanical services I can generally do myself.

Most other bits, no problem.

Dave was armed with a budget of £5,000

and hoped to get the work done in four to six weeks.

But we're returning seven months later to see how things have gone.

So far, it's looking good down here,

but I'm really keen to head upstairs

and see what's happened to that internal window.

JLS: # Cos what nobody sees

# They've no reason to believe

# Girl, it should stay between you and me

# We should keep it private

# Nobody's got to know

# Keep this thing on the low

# Don't need nobody else

# Just you and me invited

# No need to shout it out

# It's not what it's about

# If you can keep a secret

# We can make it private, private, private

# Let's keep it private, private, private... #

Now, that's a big improvement.

Down the hall, the other two bedrooms

have been freshened up as well.

Air conditioning engineer Dave

has indeed made this whole house fresh and airy.

Being an engineer and self-confessed handyman,

he's done most of the work himself, but got in the trades when required.

But he's had to do the renovations

at the weekends, and considering he's got to travel up

from working in London, well, I'm not surprised

it's taken longer than his initial four- to six-week timescale.

However, seven months does seem like quite a long time indeed,

so what's happened?

Well, the delay was partly my fault.

I should have read the legal pack,

because it did actually say in there that it would be 28 days

or whenever the Housing Association had their paperwork ready.

Unfortunately, that took nearly three months from auction

to me getting the keys to the house.

Ah, yes, a three-month delay in actually purchasing the property

will throw a spanner into any timescale.

Dave stuck to his plan and didn't tackle any major structural changes

as he wants it for rental purposes

and it makes sense to keep his costs down.

Originally, he wanted to spend no more than £5,000,

so has he managed it?

I've gone over budget on the property,

I've spent roughly 8,000.

That's down to including the legal costs, the carpets, the blinds.

So you know, all in all, I'm happy with what I've spent, anyway.

So he's happy with his spend and I think he deserves to feel

pretty chuffed with the standard of finish he's achieved here.

The most pleasing thing that we've done to the house, I would say,

would be the kitchen and the bathroom because they were both in

a pretty poor state, and now they look really good.

I'm impressed. And Dave is happy as well.

But will the professionals be as pleased with

the work Dave has put in here?

We asked two local estate agents for their opinions, so first,

let's hear from the agent who saw it last time.

I think the changes definitely work. He's put a brand-new kitchen in.

He's changed the bathroom around. I do like the bathroom.

And he's painted it right through.

New carpeting. So, it is ready for someone just to move straight into.

My first impressions of the property

are that he's done a really nice job.

He's obviously spent a lot of time and effort and money in getting it

to look like this. Throughout, it's immaculate,

and the kitchens and bathrooms are of a particularly high standard.

That sounds like two impressed agents to me.

And as Dave is finally able to rent out this property

seven months after the auction, what is the demand like in the area now?

In this area, there is a high demand for properties like this.

A lot do get sold to investors looking to rent out.

But there's a high demand for that because they like properties now

that are quite easy to turn around.

With this one, with it being presented so nicely,

it would rent out straightaway,

so there would be a good demand for investors to purchase this.

With the agents being impressed by

its ready-to-sell standard of finish,

I guess it wouldn't hurt to find out

what they think Dave's £58,000 investment is worth now.

I would say in the sales market, I would advertise this property

at offers over £70,000.

OK, if I was to put this property on the open market,

I would recommend an asking price of offers in the region of £75,000.

Yeah, I've spent 58,000 on it.

If it was worth 70, 75, it's a good investment for the future.

But long-term, I'm keeping it anyway.

Dave has a long-term plan to add a house to his rental portfolio

every year for the next four years.

So it's no surprise that he is not looking for

that potential 17-grand pre-tax profit.

So, what sort of rental will this nice house command?

In the rental market,

I would advertise this for in the region of £550 per month.

In the rental market,

I would recommend a rental income of £550 per calendar month.

My thoughts on the valuation -

they are at the top end of what I was hoping for.

So yeah, I'm obviously really pleased.

That's an 11% yield, which isn't bad going at all.

So, what's next, once this house is rented out?

I would be looking to buy another property at auction

and then next year getting married to Jan, and also, of course,

hoping to watch Liverpool win the Champions League.

Well, Dave, congratulations on your engagement.

And best of luck in your future property ventures.

Maybe we'll see him again down the line,

although I can't promise that he'll be celebrating

the Reds lifting some silverware.

At least two out of three ain't bad, eh, Dave?

Porth in South Wales is one of many ex-mining towns that are found

throughout the Welsh valleys.

The arrival of railway to the area revolutionised the mining industry

and Porth is lucky enough to retain its railway station today.

This allows Porth commuters to travel to Cardiff

through the Rhondda Valley in under 40 minutes.

I'm just a short ten-minute walk away from Porth train station

and the property I am here to see is this three-bed mid-terraced house

with a guide price of £45,000 plus.

Now, before I go in, I just want to mention this.

It gives a terraced house a little bit of character.

I hope the same is to be said on the inside.

Nice and bright...

..in this hallway.

But you've got two lots of textured finishes and I'm not a massive fan

of textured finishes.

One on the ceiling and one on the walls.

Central heating, as well, in the hallway,

which is good. There are your stairs, off the hallway,

going into the bedrooms and then you come round the corner

into this really large living space.

We've got dual aspect, as well, two big windows.

You've got a fireplace. Loads of space to play with in here.

And there doesn't seem to be any problems anywhere at all,

apart from... Have a look at this.

Behind the door, you have got signs of damp and moisture.

You've got - inside - mushrooms growing in the corner.

MUSIC: Fun Fun Fun by The Beach Boys

Well, you know me, I'm a fun guy - but seriously,

there is nothing funny about this fungus garden growing indoors.

The new owner will want to sort this problem

before they have a larger group of mushrooms on their hands.

Bear in mind, apart from potential structural damage,

some mushrooms release spores which can be harmful to health.

Now, let's see if there is much room elsewhere!

Through into the kitchen, then, and it is a good size,

looks in good condition.

You'd be able to keep this kitchen, no problem at all.

And as I look in the oven...

I can see there's instructions.

So this looks like it hasn't been used.

So keep all this, which is a massive saving on the old budget.

And right at the end, you've got a toilet, a sink and a shower.

So you've got a downstairs wet room, with toilet as well.

There's a bit of a crack up here,

right round the edge of this ceiling.

And there's a bit of movement as well.

# And now is the time to explore... #

Upstairs, to see where this movement is coming from.

Right then...

Top of the stairs, look no further, and you can see into the bathroom,

there is no floor. You can see there's rot on the joists.

Straight away, they would have to be checked and I'm guessing

they would have to be changed as well, for the safety aspect.

But look at the size of the bathroom.

It's massive. Loads to work with there.

Anyway, the three bedrooms...

Bedroom one. Looking on to the back garden.

Double bedroom. Good size.

No problems with that at all.

Across the landing,

we've got bedroom number two.

It's a double bedroom, in good condition, and it's a nice size.

Bedroom number three is a little bit small, more of a box bedroom.

You could get a single bed in here, could be an office.

Could be a nursery, whatever you wanted.

A couple of issues you're going to have to sort out in this place.

The damp, the moisture.

And that bathroom.

Apart from that, I do like this venture.

So, that's the house inspected.

But a quick spy through the window in the back bedroom will show that

this three-bed terrace has something else to offer.

So, there is a bit of outside space here.

It is a bit tight.

But I can see there's more.

I'm going in. Wish me luck.

MUSIC: When Your Garden's Overgrown by Paul Weller

# Did you know your garden's overgrown?

Wow! This isn't too bad at all.

You can see that it's completely overgrown,

but there's a bit of space to work with here.

Get this all chopped back, you would have a decent-sized back garden.

Something to work with. I'm surprised and I'm happy.

This property might have a garden growing both outside and in,

but whoever buys this property could come up smelling of roses.

We called along a local estate agent

to see if he thinks there are any problems to weed out

with this three-bed terrace, guided at 45 grand plus.

This property is more or less done upstairs, doesn't need much at all,

apart from a good looking-at in the bathroom.

Looks like there's either wet or dry rot in that bathroom.

But apart from that, it's partially glazed, most things are done.

The decor is excellent.

It's ready to go.

I totally agree.

This place seems like a good buy.

Would he change anything?

Many people take the bathroom downstairs to upstairs.

That's already been done.

And the only thing I would do is put some nice carpets in here.

It should be really good.

Looks like he and I have the same idea.

Keep the layout as is.

Once the rot has been cleared and the home has been tidied up,

how much does he think the property could make if resold?

If this property is renovated to a sale standard,

you could easily achieve 80- £85,000.

I don't think there's an awful lot wrong with this place.

Obviously you've got to get to the bottom of the bathroom joist issue

and that damp. But downstairs, I think you've got a good layout,

loads of space. Three good-sized bedrooms.

Toilet downstairs, big bathroom upstairs.

What is not to love?

Let's see who liked it or loved it when it went under the hammer.

A mid-terraced house.

Guided at 45.

Will you start me at £40,000, somebody?

40, can we see? Thank you.

Right at the back at 40. 41 here.

42. 42. 43. 44? 45.

46. 47. 48. 48?

48. 49. 50. 50. 51. 52.

The bidding got off to a flying start but as it started to slow,

a last-minute bid of 57 grand came in to try and clinch the deal.

57, new bidder.

57. 57 and a half?

No. 57.

He's come in with a late cheeky bid at 57,000.

Is he going to get it? For the first time...

Second time... Third and last time...

..57,500. 58. 58.

And a half. No. At £58,000.

For the first time...

Second time... Third and last time.

£58,000.

Sold. Thank you.

Number 31.

Jumping in with that final bid of 58 grand was Michael,

who bought it with his dad Dan and sister Joanna.

Dan originally hails from the East African country of Mauritius.

Just because he's swapped sea and sand for sandstone,

doesn't mean we can't add a bit of sunshine to this three-bed terrace.

Let those trumpets play.

TRUMPET MUSIC

-Michael, nice to meet you.

-Nice to meet you.

-And you, Dan.

-Nice to meet you.

-Nice to meet you both.

-Yes.

-Before we get to the house,

tell us a bit about how this collaboration came together.

Well, I mean, money is not doing anything sat in the bank,

so we thought we might as well invest in property.

Any experience in property developing at all?

-No.

-No.

-First time.

OK, then. So this is a scratch.

-Yes.

-Yeah, yeah.

-Starting from scratch.

So who, then... Who found this place, then?

I was looking around, around about online

and we get a catalogue from the auction house

and then, yeah, we just thought we would check it out.

Well, if they've checked it out,

they'll no doubt know about the rot upstairs.

We could see it was possible problem with the bathroom, but we knew that.

We could see something had been covered up.

Apart from that, everything seems pretty hunky-dory.

You know. Just a quick refurb.

Tell us in a bit more detail, the problems you've got in the bathroom.

Well, we knew there was going to be a problem, when we had a look,

when we came round for the viewing. So yeah,

we knew there would be something under there

that we needed to sort out, and all the joists need replacing.

The floor needs replacing.

So subsequently, the roof in the kitchen,

the ceiling in the kitchen, sorry, needs replacing as well.

So yeah, apart from that, I mean, that's the only snag that I can see.

But the builder said it's not going to be a problem.

OK, as we know, this house isn't bad at all, but Dan and Michael aren't

stopping there. They have plans to remove the wall between the kitchen

and downstairs shower room.

Are you making the kitchen bigger or are you making a better bathroom?

-No, we are making the kitchen bigger.

-Kitchen.

-No toilet downstairs?

-No toilet downstairs.

-Wow!

-We've got the toilet upstairs.

We are hoping to bash this through here, open some French doors out

and also at the back, make the kitchen larger,

so...

You've not even stood still, have you?

-The window is going?

-Yeah.

The doors, just here, the windows are going,

-the doors are going in.

-Yeah, French doors.

Tell us what else you are going to do to this place.

Just, you know, spruce up, new kitchen, new bathroom,

spruce it up and you know, new carpets, obviously.

Yeah, just make it look as if it's presentable

and hopefully sell it on.

OK, the guys, in my opinion, are doing a lot of unnecessary work.

They have a timescale of four months but time is money.

So maybe doing less would be better.

They have a budget of 15 grand

but all these extras could soon eat that up.

And of course, there's the moisture problem and a growing problem

in the living room.

What are you going to do with the mushrooms?

-Sell them down the market!

-LAUGHTER

I don't think you get much for them kind, to be fair.

Cook it, man. Cook it.

Exactly, yes. You would, back home in Mauritius, wouldn't you?

Get it on the frying pan.

Salt and pepper. The guys are obviously kidding around.

Major warning alert.

Do not eat mushrooms like these.

Certain moulds can be toxic

and even their spores can trigger asthma attacks.

I'm hoping these two won't be out of the frying pan into the fire

with their ambitious to-do list.

Listen, I wish you both really well.

I hope this first project goes good for you.

OK, good luck to you, Michael.

-Cheers.

-Take it easy.

-Thank you very much.

-Take care, Dan.

I don't think the lads have done too bad for their first project.

They have got that issue of the rot in the joists in the bathroom,

which has led to the kitchen ceiling falling slightly.

But I think everything else in this house seems to be OK,

apart from the indoor mushrooms, of course.

I'm not quite sure what to expect of this venture.

You can find out, and I can find out, later in the programme.

Well, there's still two more properties to come but I wonder if

there's any advice we can give from what we've learnt so far.

Well, maybe it's that every project has its ups and downs,

but no matter what, keep calm and carry on.

Yes, correct, that's good advice, Martel.

Let's see if that was the case with the two remaining properties.

MUSIC: Hung Up by Madonna

# Time goes by so slowly... #

Time to go back to Ripley, Derbyshire, where earlier,

I saw two one-bed flats within this former end-of-terrace.

The flat upstairs was accessed from what had once been the back door.

Essentially, this is a flat that is two rooms.

Just two rooms. So it is a small flat.

Not only that, it is very impractical.

It just doesn't feel like a flat.

The downstairs flat, although larger in area,

wasn't very inviting either, with dark and damp rooms.

The man taking on the task of refurbishment,

having paid 49 and a half grand for the privilege, was Gary,

a painter and decorator by trade,

who also has experience with refurbishing for clients.

I've bought it as a blank canvas really, to knock it about,

rip it out and start afresh.

What's your plan for the place?

I'm going to get some legal advice,

but I think I'm going to put it back

to a terrace, two-bed terraced house.

Do you think that would be more sought-after,

having a house here rather than two flats?

Possibly not.

But that's my plans for it.

I think it'll be an easier project for me instead of two kitchens,

two bathrooms, there'll be one of everything, so...

He thought it would take him six months to create one house.

One year on, he's stripped everything upstairs and down

back to brick.

But so far, he's only refurbished the upstairs

and it's taken him almost a year.

MUSIC: It's The Same Old Song by The Supremes

Why the same layout?

Gary will tell us shortly.

The changes may be small, but Gary has created a funky flat.

He's moved the entrance door nearer the top of the stairs, to create

a longer hall, and the flat has had a full damp course.

# It used to bring sweet, sweet memories... #

The not-so-sweet memory was the chimney breast.

After reinforcing the roof and loft timbers,

Gary stripped it out and it's now the shower room.

It's made a bigger shower.

Bedroom and toilet just the other side of this chorus.

# It's the same old song

# With a different meaning since you've been gone... #

See? Much bigger. The plan was to convert it back to a house.

So what's happened since we've been gone?

I contacted the local council, to do with the council tax,

to put that in my name,

and it was already registered with them for two addresses,

so there was no problem there.

So, Gary changed his plans and after checks found he could legally leave the house as two flats

because they were two distinct addresses with two postcodes.

Of course, that didn't guarantee that the previous conversion

to two flats would have passed building control

if planning permission had been sought.

But Gary was doing a full refurb anyway.

Clarifying the position took time but the major delay came about when

his neighbours approached him to do their similar scheme of renovation.

So in actual fact I've done the one next door first.

That is completed.

Identical layout to this, which was a lot more work than this.

And the bottom one next door has also been sort of 50-60% complete.

I'm happy in the end with the finish and the timescale.

Gary's budget was ten grand plus a two-grand contingency,

but he's benefited from the economy of scale

of doing four flats at once.

How much has he spent on this project?

Up to this point, I've spent about seven.

That has included quite a few materials, which I've purchased

on a bulk-buy basis, which will cover the lower flat.

So, I'm well on scale to do the two at the moment for the 10,000,

with a couple of thousand contingency in place,

and I feel quite confident that we will come in on budget.

Gary's plans to call in favours from his mates didn't bear fruit,

but he did get one volunteer.

My daughter did come and help one day, to do a bit of painting

for a few hours.

It took me longer to correct her work than it did for her to do it.

But it's not something I would have wanted to tell her and upset her,

so I was quite happy for the company, more so than anything.

Oops. Let's hope she's not watching, eh, Gary.

And it turns out daughter Chloe will have plenty of time

to look at her dad's corrective paintwork,

as she is going to be moving in whilst Gary continues working on

the downstairs flat.

She'll be living in the upstairs flat,

so I've always got a door to knock on for a cup of tea.

Gary bought for 49 and a half grand and projects a total spend of ten.

We called in two local estate agents to do the maths bit.

Both agents agreed that for both sales and rentals Gary had maximised

the value making two dwellings.

First, the resale values.

I would expect the top-floor apartment to fetch around £50,000,

with the ground-floor apartment,

assuming it's done to the same sort of standard,

because it's a bit bigger as well, around £55,000.

The price for resale, I would say, for the ground-floor flat,

would be £55,000, and for the upper-floor flat here,

I would say £50,000.

A £45,500 profit before taxes and expenses.

Very surprised, but pleasantly surprised.

I'm very happy with both of those.

When it came to the rental values,

the agents again were in total agreement,

valuing the top-floor flat at £375 per calendar month

and the larger lower flat at £395 per calendar month.

Yeah, I'm pleasantly surprised with both of those prices, yeah.

Gary's total projected spend is £59,500,

which equates to an annual yield of just over 15.5%.

We thought it would be rude to ask

if Gary's daughter would be getting a discount,

but he will hopefully be in a position to rent out downstairs

within six months.

So, will he repeat the process?

Once we get the bottom one rented out

and have got some money coming back in again,

yes, I'll be back at the auctions and I'll be doing it again.

Any signs of taking things a bit easier, Gary, and, dare I say,

semi-retire?

I think I'm a little bit too young, just at the moment,

but I think I need to be taking it a little bit easier

than I have been doing, so, yeah,

I just want to sort of pick and choose my jobs and my work now

and slow down a little bit. I've done my stint, so, yeah.

Time to catch a train back to the Welsh valleys, to the town of Porth,

where I visited this three-bed terrace.

The lot was guided at 45 grand plus.

It was fairly spacious, with three good-sized bedrooms

and a downstairs toilet, but things got a bit wobbly in the kitchen.

There's a crack up here.

Right around the edge of this ceiling.

And there's a bit of movement, as well.

And the reason for it wasn't hard to spot.

It came from upstairs.

You can see into the bathroom.

There's no floor. You can see there's rot on the joists.

Straight away, they would have to be checked.

That didn't worry me.

It seemed very fixable with a decent budget.

Dan, his son Michael, and daughter Joanna

bought this house for £48,000

and they weren't worried either.

But when I heard how much they were planning to do with it,

I did begin to worry.

Are you making the kitchen bigger, or are you making a better bathroom?

-No, making the kitchen bigger.

-Kitchen.

-No toilet downstairs?

-No toilet downstairs.

-Wow.

-We've got the toilet upstairs.

We are hoping to bash this through here,

open some French doors out and also at the back there,

make the kitchen larger.

While that to-do list was growing, so were the mushrooms in the house,

and the garden was, too.

So I thought these first-time developers had enough on their plate

without looking for more work.

They aimed to overhaul this home with a budget of £15,000

and complete the project within four months.

We're back five months later, to see how they've got on.

MUSIC: Gone, Gone, Gone by Alison Krauss and Robert Plant

# Really gone (Done moved on)... #

The monochrome kitchen looks super-fresh,

but all those pesky mushrooms...?

They've been chopped away by the professionals,

and now the only thing to add are the carpets.

They have also put in a cracking new bathroom, which means the lot is...

# Really gone (Done moved on)

# Cos you done me wrong... #

One thing I've noticed, which hasn't gone is the downstairs bathroom.

Care to explain, lads?

The plan for the kitchen was to knock through into the utility

and make it into one big, large kitchen.

We decided not to do that.

We decided to just decorate the utility and make it an area

to put in some white goods.

Yes, because, you know,

we thought it would have been too costly to do that for the budget.

I think they made the right call here.

And the utility area?

Well, who doesn't like a utility area?

They idea to put in French doors was abandoned, too,

and that's because they decided

they needed to focus their investment upstairs.

We wanted a high-spec bathroom

because we realise the bathroom, you know,

is important to a property and people, you know,

if they're purchasing a property,

it's always the kitchen and the bathroom which sell it.

The bathroom joists cost us probably double what we wanted to pay for it.

We've had some good builders that have worked with us.

The chap we work with, he's got a good eye for detail,

which we've trusted him with most of the way

and we're quite happy with the finish.

The three bedrooms also have a coat of paint

courtesy of Dan and Michael.

We did try and do some painting, but, again,

we leave that up to the professionals.

I mean, they had to go back after us and patch some stuff up.

But yeah, you know, it's all a learning experience.

The textured wallpaper and ceilings are a thing of the past,

but who did the better paint job?

-I was better than him.

-He was better.

I can't see much and he kept telling me that it was no good.

He's got bad eyes. He couldn't really see where he was leaving

drips on the walls and all sorts, so I said...

-"This is no good."

-I said, "That's it,

"we've got to leave it up to the pros."

Dan and Michael also put their gardening gloves on

and helped clear out the overgrown mess up the back.

Did this father/son team enjoy working together?

It's been good. Yeah.

It's been all right.

-We've enjoyed it.

-It's his business, mostly,

I just give him a hand. He argues with me.

No, there's no arguments.

LAUGHTER

I can't win.

So, did they win when it came to their £15,000 budget?

We have overspent by approximately £2,000.

So we've come in at about £17,000, which isn't too bad.

-Because of the bathroom.

-The bathroom cost us double the amount

it should have.

That means a total investment of £75,000.

So let's find out what two local estate agents

made of this first project, starting with the thoughts of

the agent who saw it before the renovations.

It's quite a transformation from the first impression.

When I came in first, the garden was very overgrown,

the windows and doors.

Basic things. I think they probably spent a little bit too much because

they've done quite a few designer touches, which I wouldn't have done,

but it has turned out very nice.

When they were thinking about knocking through into the utility,

I think they've done a good job leaving it as it is,

because a downstairs WC is quite beneficial for a family.

I think what's been done is really, really good.

What I'm pleased about is the fact that they've kept three bedrooms

and the bathroom upstairs, together with the downstairs' cloaks.

Great for families.

Dan and Michael always intended on selling.

Will they make a profit on that £75,000 investment?

I think the value of this property,

I would start at £90,000 and it would probably achieve anywhere

between 85 and £90,000.

I would look to market at £89,950.

And I would expect offers around £85,000 and above.

We were thinking of putting it on the market for around about £95,000.

With a view to getting about 90,000 or thereabouts.

I think it's about the right price.

Selling for £90,000 would mean a potential profit of £15,000

minus taxes and fees.

Now that they've done it once, what advice would they give to others?

-Go for it.

-Go for it. Yes.

-I would.

-It's worth it. And it's a good, fun experience.

And I can see why people go to the auction

and they get a buzz out of it, like.

Well, that is all the property stories we have for you today.

But do not worry, because we've got plenty more to tell.

Yes. So join us again soon, with more investment tales

-here on Homes Under The Hammer. See you.

-Bye-bye.

-Goodbye.