Property Ladder S05E14

[Applause] property developing can be a profitable career if you don't get personal but that's exactly what jonathan tops did when he developed his first property three years ago he just couldn't help himself i think if you put a separate shower in it's going to feel quite crowded and it's actually quite a nice sized room jonathan what's this that's um what is that it's a shower oh it's a shower 18 months later not a lot seems to have changed so you put in a separate shower [Music] this week i'm in sydney south london 18 months ago this was home to jonathan tops he was looking for a new career as a property developer and hoped this house which had been on the market for six months would be his first success modernized victorian properties are very popular in london and this sort of house can be a developer's dream but only if you can make a decent profit on it so how much did you buy the house for 127.5 000. right how much do you plan on spending on it i think it's going to cost around about 20 000 and how much do you reckon you'll be able to sell it for um according to other properties on the street about 170 i think so you only take 22 000. if i can profit that'd be nice is that a realistic were you selfic or is that optimistic well you've got to always have an optimism i'm going to turn it okay so it's extremely optimistic i'll stop it yes well yeah hopefully yeah okay yeah jonathan sold a house last year giving him 58 000 pounds of capital but before he could buy a new property he lost his job in advertising now after six months of living in a friend's spare room he's itching to get back on the property ladder and become a full-time developer if i can set up in business fairly soon and start making a bit of money then i should just about straight through i don't want to be multi-millionaire but i also don't want to be sort of on the poverty line um just to be able to relax at night and think i'm okay jonathan has a part-time job at the minute and that plus bank loans and the money from the sale of his old house will pay for the development the cost of the house is 127.5 000 pounds that's cheap for london but it does need a lot of work and i'm concerned jonathan's six months twenty thousand pound development budget is optimistic however if all does go according to plan and he sells for a hundred and seventy thousand pounds he will make a profit of over 22 000 pounds very respectable for a first-time developer this has literally just gone up this development will be perfect for a young professional family but it will need complete renovation upstairs there are three bedrooms ranging in size from comfortable to children and babies only [Music] downstairs is divided into three reception rooms while at the back there's a tiny kitchen and that leads onto a lean two bathroom and wc so you're taking the bathroom down and you're going to put the bathroom upstairs yeah it's got to go it's an outside bathroom effectively it's got a plastic roof um and it's a wooden wall and it is no good i'm going to sacrifice a bedroom upstairs for a bathroom and the plan is to have the kitchen in this area take the wall out and take the chimney breast out so this becomes one large room and then there's an outside loo here which i want to lose as well and then up here where all these polystyrene tiles are i want to put a really big nice skylight window in losing the downstairs bathroom will immediately increase the appeal of this house as will the not through kitchen however i think the idea of a skylight is a wasted investment it won't actually add any value to the property on the other hand i'm very impressed by jonathan's unusual plans for the reception rooms well originally i was going to join these two lounges together i was going to have a wall take take this middle wall out but at the weekend i discovered that behind this wall here i have some original banisters and so i'd like to keep those it'll mean that i don't knock through which will save me a load of money and it'll make this room which at the moment is quite dark and enclosed a lot brighter more open and hopefully a nice dining room yeah cool okay this is a separate lounge i really do like jonathan's thinking on this it maximizes the flexibility of this downstairs space and keeping one reception room private should particularly appeal to parents upstairs two of the bedrooms just need to be decorating whilst the back room will make way for a new bathroom this does make sense for this market as they will not appreciate the stairs should nature call in the middle of the night so what i'd like to do in here and this is where advice will be useful is have a walk-in shower and a bath i don't think the room is big enough to take it and i think it whilst whilst you could have a nice sized bathroom yeah um with just a bath with a shower above and a door um i think if you put a separate shower in it's going to feel quite crowded and it's actually quite a nice size room otherwise your sail ability point of view any added value with putting in a walking show they're very nice obviously yeah they're very nice i i personally think it would be a mistake to do it at first glance this house does look a perfect candidate for developing as far as the market goes it's in a good area citnam is perfect for starter families a young professional couple with one or two children or a baby on the way it's close to some very nice parks and yet it's still less than half an hour to the centre of london this affordable house has the potential to be a dream home and it seems to me jonathan does have the enthusiasm the vision and the plans to make this conversion work but and it's a very big but developing is all about making profit and i think this house is a bad investment i think that your your resale prices i do need to add optimistic therefore it's important to try and keep the costs as low as possible yeah do you think i've paid too much bearing in mind i'm going to have to spend realistically around about 20 000 pounds on it i don't think anyone who was professionally developing in their right mind you were going to say you were going to say in their right anyone who had a brain would actually have horses really that's why it was on the market for so long they just had no imagination jonathan hasn't paid the right price for this house the tired decoration and unmodernized interior may make it look like an ideal developing opportunity but it will need a lot of work to bring it up to scratch [Music] however he could make this project work but as i'm also concerned about his resale price the only way to protect his profit is to cut back on his 20 000 budget he's set aside ten thousand pounds for modernizing the house including rewiring new central heating and changing the layout four thousand pounds is earmarked for the new kitchen area whilst moving the bathroom upstairs is budgeted at 1500 3750 will go on finishing the development including built-in wardrobes paint and the garden jonathan also has another thousand pounds in the kitty for contingencies bringing his development costs to just over 20 000 pounds i think that it's completely essential that you get these costs down as much as possible to stand a realistic chance of actually making a profit okay there you can lose the skylight that's the first thing you can use on that um and you may not need to re-point it entirely i think it only needs patch pointing right but i'm more worried about what's not on the list do you have the stamp duty when you bought it in solicitor's cost no okay well let's just pretend no we're thinking about we forget about those sort of things do we yeah no i know we don't but i don't sort of see them as house costs now because that's done do you know roughly how much the costs were when you did move in uh solicitors fees are about 400 pounds and stamp stamp duty i mean i didn't have to pay anything because i'm i bought it not selling it no no you might buy it pay for it when you buy it no you pay for it when you sell it no when you buy it sell it buying it you will have paid it yourself it wouldn't have let you buy it without saying did i i can't remember where i paid yeah and then when the next person buys it they have to pay stamp duty i'm not that organized okay i think i see a major problem here jonathan has the creative vision to be a developer he just hasn't got to grips with the financial side of things and you can't have one without the other i'm not really thinking like a developer am i no no no i also think he hasn't realized just how bad a state the house is in the roof in particular looks like it's had its day did you have a survey mortgage cost i had a basic survey yeah because i knew that everything needed doing and did you read that through i did yeah it told me pretty much everything that i knew it's an old house it's in need of total renovation it's essentially sound but it it's been left so and that's really all it said i think it needs removing myself to get the maximum maximum maximum sale value by my reckoning jonathan could already be ten thousand pounds over budget and he's only just started things aren't looking good [Music] 18 months ago jonathan tops bought this victorian house in south london for 127 and a half thousand pounds he hoped it would launch his new career as a property developer but three weeks in his profit is already under threat [Music] however he still can make this project work if he cuts back on his 20 000 hand development budget unfortunately that budget is now full of holes a bit like the roof how bad is it well basically just by looking at it it's come to the end of its natural life yeah you've got cracked slates there all the way down here you've got another cracked one there's a little bit negative part of your roof again but it's best really heck the whole lot out of them all again sure thanks very much hello i'm thanking you for it's gonna cost me a bloody fortune he's quoted four and a half thousand pounds which i think is is reasonable it sounds fair to me um budget was 20 so it's another four and a half five thousand pounds on top if only jonathan had spent a few hundred pounds on the right survey he would have known the roof needed replacing before he bought the house it could have saved him thousands before buying a property to develop it's crucial that you know what work needs to be done in order to maximize your profit the safest way to avoid making a big mistake is to pay for a full survey jonathan did have a valuation survey it's the one insisted upon by the mortgage lenders but it's next to useless for a new property developer all it effectively does is tell your lender if they'll get their money back should they have to repossess the property new developers should always go for at least a building survey also known as a flat or home buyers survey this fuller report on your property costs between 500 and 800 pounds but the surveyor should list everything that needs to be done to the house and give you an honest evaluation as to how much it's likely to cost this is not only useful for budgeting it can also be used as a negotiating tool to get some money off the price jonathan originally planned to spend twenty thousand pounds on the development the new roof means that figure is now closer to thirty thousand pounds if you include professional fees and loan repayments but he can still make a 12 000 profit if he sticks to this new budget however he's starting to buy expensive extras that i feel are luxuries for a house of this price he's making the classic mistake of buying things for himself not his target market of a young family the skylight fitted wardrobes and a separate shower will not necessarily add to his selling price but they will eat into his small budget his best friend helen an interior designer recognises this but can't persuade him that a walk-in shower is a waste of money sarah said no right why because i run a lot and cycle a lot yeah but it's not your house i think you can get some really good showers fitted in the end of the bath that will do just the same sort of job don't like them don't like them don't like them you're not getting emotionally attached now are you no i think you are might be great so he's now bought two things i told him not to i can hear sarah saying it well he didn't listen to me i don't care about her because she's smaller than me jonathan what's this that's um what is that it's a shower oh it's a shower did i order that you're probably sarah and then are you yeah okay thank you how much does it cost then well in two womanly terms it's not what i spend it's what i saved right so the um the bath and the sink and the toilet and everything are all x display right which means they were less than half price yeah so that meant i could afford to have the shower and still spend less money but you can still save money more money i love showers i hate baths but the point is that i'm i know no not another word you're wrong jonathan has wasted an ideal opportunity to save some money and he really needs to one of the reasons he's so attached to these extras is that he's lived in a friend's spare room for the past six months he can't help but buy things for his own vision of the perfect house it's understandable but it doesn't work if he wants to be a property developer you know i'm not saying that the house isn't going to be beautiful because i'm quite certain it is but at the end of the day you have to work out whether you're doing this for profit or whether you're doing it because it's your home and you just like it like that there's a bit of that in it but then i think you do need to put something of yourself into a property if you don't it's just because i think it but it looks like soulless it feels solace but not to replace the profit no what's bothering me is as the costs go up obviously the resale price stays where it is and your profit margin which was small is sort of disappearing almost jonathan needs reminding just how much he can expect to get for his development if only to stop his budget rising so much he spends all his profit that means checking out the market and we're starting with a similar sized house further up jonathan street so what do you reckon um looking at a property round about sort of late 160s maybe even 170. roundabouts even 165. having seen duncan's house on the other side of the road yeah um do you think that that would be worth how much time is this if you've done it sort of i'm sure it'd be as nice as this but around about the same sort of price definitely sort of put on the market for 170. if i could get to 180 then i'll be delighted absolutely delighted but i do need to be realistic yeah because every area is going to have its ceiling every street's going to have a ceiling level and that's obviously what it is it's 170. the news hasn't been good for jonathan who's funding this development with a part-time job however he could still make a profit of 10 000 pounds if he stops spending and sells the ceiling price of 170 000 pounds but to get that top price his house will have to be irresistible to his target market of a family the kitchen will play a key part in this but i think he is not making the best use of the available space we spoke to the guys who are going to be putting the kitchen in a little while ago when this wall was here and i thought if if i have a unit to work unit there with the fridge freezer underneath it means it's a breakfast bar so people could eat there if they wanted to why do you want to carve the room in half that's such a shame no you've got a nice room because i wanted to have like a almost a kitchen diner so that want to be like a garden room jonathan's idea for a breakfast bar looks fine on paper but in three dimensions the problem becomes immediately apparent having knocked down a wall in here to maximize the feeling of space jonathan will effectively be putting up another one it will cut the kitchen in two diminish the effect of the french windows and make the room so small you couldn't have a table it could alienate a large part of his market i'm just concerned about having a breakfast bar carving this room in half it's not that big a room and once you've got a um kitchen units here yeah you then have a a space for a table and chairs no this is not going to be the dining room this is just going to be but that's happened i suppose but that's how people really live in a house don't know they live they eat in their kitchen nowadays i don't know be because this room next door is as close to my kitchen as that room is but i wanted that as like the garden room so you could sit and have drinks or nibbles and snacks but eat in there jonathan feels his dining area will be perfect because it's right beside the kitchen but that's not the same as being in the kitchen and that's important particularly to parents of young children i feel versatility is the key and he should have units either side leaving the space at the back for a sofa or a table in other words the kitchen dining area the modern family wants but sometimes you can be too close to something to see the most obvious solution if i put table and chairs in there then i've got a spare room effectively next door i don't want to have two sets of dining surely whoever buys it may what they want they're going to want to have it flexible space and it's not flexible you're deciding that they're not going to have don't you think this would feel like a corridor though if i had like kitchen units this side kitchen units the other side you'd just be sort of walking through the kitchen to get somewhere else almost no because then you'd go past the table jonathan has to make this house appeal to his market it's crucial he sells at the ceiling price of 170 000 pounds if he's to salvage a profit from this project but even then that profit could be lost because he's still not budgeting properly you still don't have your legal costs in here no you don't or you're stamped before buying it no i don't or your estate agency is just selling you you need to make a profit and and there's only any point in making a profit if it's a real profit and it's not a real profit if you don't add on all your costs yeah because then it's a fake profit and you've just invented a profit for yourself so if you've got to have all those costs in you've got to see the total because i'm like you're going to come in it's about 160 thousand it all in the cost certainly what's important 130 155 plus the selling fees and stamp duty yes of course yes okay yeah there will be 160 000 at the moment he really can't spend any more than 160 000 pounds if he's to have any chance of a decent profit and there's now something else that could threaten this development i've got two full-time jobs now one full-time job is doing the house the other full-time job is finding another job because i lost it yesterday oh no that's awful actually so so you've lost your job and and you're trying to stay at this house with no income no no i'm now seriously worried for jonathan's development [Music] it's the end of march in sydney south london and jonathan tops is halfway through his six-month development his 14 000 pounds over budget and the now unemployed jonathan is relying on his savings to finish the job along with his interior designer friend helen he's creating a home that should appeal to a young professional family if it was pink it'd be girly but i don't think it is i think but being out of work hasn't stopped him spending and his budget is continuing to rise we sell a lot of those fireplaces to victoria edwardian his profit is slipping away but jonathan feels his luck is about to change because the end of march sees sydney declared a property hot spot they're saying that scientists think they've cracked the formula for predicting where property values will rise they're putting something like 155 separate statistics to come up with places that are up and on the up number no se26 no and there it is look yeah i know oh fantastic well this makes you feel a bit more positive doesn't it yeah it's um maybe you should maybe you should laminate that and have that on on the front door every time you come in with a little glum face and you'll think that's it this upturn in sydney's fortunes could save jonathan's development i really hope it does because the house is coming along brilliantly wow let's see let's see okay where'd you want to go oh my word wow and you put that you put the skylight in yeah went for it good idea bad idea it looks great i mean it actually looks fantastic i still don't think you needed to do it no but it does look amazing the structural changes have opened up this once dark claustrophobic building with the kitchen area now very much the focus of the house my only concern here is the proposed breakfast bar which i feel would once again cut this room into last time i saw you you were going to have a peninsula unit in the middle of the kitchen have you decided to go with that against it you're going against it what a good boy then your advice would work full out designed it with the kitchen guys and everything it did fit but then i got a load of timber planks of wood and cobble boxes and everything and effectively built the kitchen so you built a blue pizza kitchen yeah yeah exactly it worked really good idea that's because i had marked it out on the floor but down there to up here is a big big difference and so it would have come to about here the gap was going to be bigger than a conventional door but it it would have made it a little bit of a chicane to get through and out credits where credits do by losing the breakfast bar jonathan is offering his market the maximum amount of flexibility he might not want to use the space at the back for a table but now he's giving the option to whoever buys the house upstairs jonathan's new bathroom is also taking shape including the walk-in shower i've always felt was a wasted investment there's enough space for it yeah i still think that you would have sold the house for the same amount of money without a separate shower you're probably right and therefore it wasn't necessary to do it in terms of property developing but whoever buys this house is going to love you for it you can't fault the redesign of this house but good design is only part of successful developing at the end of the day it's about making a profit and that's where we have a problem jonathan still has a very selective approach to budgeting i started out at 20 and it's probably going to go to something like 28 something like that but i had the roof remember which i wasn't bargaining for and it's 28 000 including the fees no i haven't included that obviously i never do you know that i never include the fees i just forget about those so we're talking about kind of 33 34 would it be that much yeah probably realistically yes it will be are you a bit scared by the mat you've gone up don't think about it no because i've got to keep going but it is nearly half your budget again you spent isn't it it's a learning process this is the first one i've done so get on with it learning the importance of financial planning has been a painful process for jonathan but he is doing something about it by enrolling in a part-time business course without doing this i would just go into the business i think sort of blind in a way not knowing anything about costs involved people you need to inform as to when you're starting up by the inland revenue social security there are different levels of national insurance which one you should be paying what you need to pay in order to keep your pensions going and all this sort of stuff state pensions just vast amounts of information i hope this course will change the way jonathan deals with his finances this project has to work if he's to continue being a developer jonathan's now almost 15 000 pounds over his planned redevelopment costs but with no job he's having to use savings to pay off his loans and as the budget continues to rise the savings are dwindling i'm starting to feel the strain somewhat on the days that i come down the house i i come down as early as i do because the time i spend lying in bed is just worries me and it's not particularly pleasant um a pleasant feeling i don't like it at all i'm used to being employed and um this unemployment it's it's dreadful it really really shakes your confidence every development includes bats of depression so it's important jonathan realizes just how far he's come in the last four months this is this is this room before it was like this look at that it was so tiny it felt so small so small and now it feels like cavernous and it's about to feel even better as the made to measure kitchen has now arrived in fact the whole house is now in its final few weeks of being transformed from a run-down wreck into a bright modern family home the end of the day i'll be able to make a cup of tea in a kitchen and i can well i can even have a shower cause i finish that and finish the shower over the weekend or a bath or go to the loo i mean the world is my house i will not want to work again but this flurry of activity has pushed jonathan's budget even higher after all this time i can have a shower the total redevelopment costs are now edging towards the 40 000 pound mark twice his original estimate the obvious solution would be to sell the house and clear his debts but there's a problem the last time his house was valued the estate agents told him he'd be lucky to get 170 000 pounds for his development that would give him a profit of barely two thousand pounds for six months hard work good job cool i'm gonna get a lot less work done the house will be the best in the street but is that enough to save his new career as a property developer [Music] it's july and after six months hard work the finishing touches are being added to jonathan top's sydney development the house is now everything he could ever have hoped for but it's come at a price the original budget is only a dim and distant memory anyway well boys don't you want to do that on my dvd it's really important yeah jonathan had originally planned to spend 20 000 pounds on this development but the costs have spiraled in the end he spent over eight thousand pounds more than he expected on modernisation the kitchen costs have gone up by a thousand pounds yet surprisingly the bathroom has come in at a hundred pounds under although he would have saved even more if he hadn't bought the shower however finishing touches have increased by almost 700 pounds finally jonathan has set aside a thousand pounds for unexpected costs but that wasn't nearly enough to cover the cost of a new roof this brings the total of the renovation to over 35 000 pounds but if you include professional fees and loan repayments which you always should the total cost of developing the house rises to 42 069 pounds over twice jonathan's original estimate the big question has to be is it worth it [Music] outside the new roof and repainted windows offer a hint of the transformation this house has undergone but it's only when you go inside that you realize jonathan has created the perfect first home for a starter family the dark claustrophobic jumble of rooms is gone replaced by a bright airy interior with an open plan dining room and the kitchen and garden beyond [Music] jonathan's clever reorganization of the downstairs space means the front room becomes a grown-up sanctuary an oasis of calm where parents can escape to of an evening [Music] the rest of the downstairs is family heaven the back of the house has been transformed beyond recognition this kitchen diner simple layout is the best use of the available space and the deceptively spacious dining area leading onto the garden could sell the property by itself the low maintenance garden is another selling point few flats in this price bracket could offer such a large secure outside area once again it's perfect for the family market although the hammock will appeal to any buyer getting rid of the makeshift lean-to bathroom has allowed jonathan to realise the full potential of this garden he's had to lose a bedroom upstairs but the new bathroom that takes its place means he won't lose a single penny on his sale price the feel of the house is perfect it may be painted in neutral tones but the variety of colors adds to its character the original features that have remained add to the overall effect [Music] this house should sell itself oh it's looking fantastic it's a beautiful family home but is it a successful development jonathan bought the house for 127 and a half thousand pounds and budgeted 20 000 to redevelop it but the final costs are more than double that so his total investment in the property is a hundred and sixty nine and a half thousand pounds but during the development estate agents weren't optimistic about a much higher sale price 170 would be the max all right a sale at 170 000 pounds would give jonathan a profit of only 500 pounds so jonathan you bought the house for 127 and a half thousand pounds and you were originally planning on spending twenty thousand pounds don't up to then end up spending over double yeah what you originally intended to spend now i accept that some of that is because you weren't realistic with your original budget yeah that's the inexperience yeah but i would have thought you could have saved at least ten thousand pounds and therefore made ten thousand five hundred pounds profit if you hadn't bought certain things for the house which you really bought for yourself i think the difficulty is that trying not to do things that you like oh yes that's that is so hard to detach yourself from it so hard it's a big learn um i've i've learned um and that costs doesn't it absolutely i i totally agree my instincts tell me that jonathan should sell now clear all his debts and start a new project with a clean slate but i really want him to come out of this with more than 500 pounds on the plus side sydnem has become a property hotspot where prices are rising fast and although i would never recommend relying on the market for a profit could an estate agent now sell this house for more than 170 pounds deciding to keep separate dining rooms and loud i think that's quite wise if you do have children or a child you've got a room that you can actually shut off yeah from the rest of the house they've got plenty of space out there and this is just your haven really you've got everything you need as a guest room or as you know the children's room or whether you've got ample space it's good that you've managed to get the shower in here as well you like that again with with professional young couples which is a type of market i think you're looking at they're really going to appreciate something like that now is the time that you can ask the very best price yeah um and i think at 179 950 we wouldn't be too far out the market is very strong now the way your house is looking i'd definitely say to you marked it for about 190 maybe even 195. [Music] you've got a huge falling enough factor here okay and there's every chance that somebody will come in look at it and say well look you know we love it and i would certainly say to a marketing figure in excess of 195 somewhere around a figure of 196 950. remember this price rise is mainly due to the booming property market not what jonathan's done to the house but if he could sell for almost 197 000 pounds he'd make over 27 000 pounds profit most of that profit would be eaten up by buying his next property as the whole market will have risen by a similar amount but if jonathan sells now he can pay off his loans and put his newfound experience to work on his next project however there's a problem at the moment i'm in a bit of a difficult position because i can't afford to sell i'm unemployed i lost my job a little while ago so if i sell i won't get another mortgage so i kind of have to hang on to it until my circumstances change which enables me to get another mortgage so i can't afford to buy a kind of sale it's so good i can understand that um it's a shame because like i say it is the time to sell i can understand why jonathan feels he can't sell right now but he needs to if he wants to maximize his profit he's paying out a fortune in loan and mortgage repayments and that eats into any profit he'll make and despite being temporarily unemployed i think most banks would be eager to strike a deal with him how much capital do you have in this though if you sold it a hundred thousand but that would be plenty to be able to put a down payment on a non-status mortgage you only need 20 or 30 percent capital to put down on a non-status mortgage and that would be enough for the banks or building society to be happy yeah for you to take something else on even though freelance don't have an income yeah they would do that they would do that and at the end of the day you either are developing or not developing if you are developing you need that capital out to do another deal that's going to be as good as this but you won't spend as much money you won't get as personal you'll buy it for less and you'll really really make your twenty thousand pounds proper profit and maybe you'll make twenty thousand pounds on another rising market as well but you'll have made twenty thousand pounds real profit and that's what developer is about in fact it was another 18 months before he finally did put it on the market somehow life got in the way and he was kept busy elsewhere acquiring a wife and soon followed by a new baby in that time the market rose considerably and although you should never rely on that happening luckily for jonathan this time it did pay off by holding on to the development until january 2004 he managed to sell for a staggering 205 thousand pounds walking away with a profit of just over 35 000 pounds i was really pleased with the profit that i made in the end um at one point it was down to about 500 pounds because of the market and what i'd spent but ultimately it was a good profit that i came away with and i'd like to think that it wasn't entirely down to a rising market the search for his next development could now begin priced out of the london market he decided to look further afield settling on the town of stroud in gloucestershire i knew the area quite well from when i was a student i spent two years studying in gloucester and we had friends who lived out this way so it was fairly easy place to come to because we already knew a little bit about it again jonathan's chosen well right on the edge of the beautiful cotswolds yet minutes from the m5 stroud is a popular choice for home buyers even so with the market starting to slow down across the country it's more important than ever to buy the right property and pay the right price after just three weeks scouring the local market jonathan finds just the property a rundown semi in dire need of modernization but with great scope to extend it was in a good location good village good views space for development and had been largely untouched he bought it for 204 000 pounds his budget is 120 000 pounds he hopes to sell it for 400 000 which would give him a healthy profit of 76 000 pounds jonathan has big ideas he believes he can completely transform this tired old property into a stunning five-bedroom house by adding a huge three-story extension extending the kitchen into the old coal shed converting the loft and building a new garage this is an ambitious project and although he will have to bring in a team of builders he will do as much as he can himself [Music] saves enormously in terms of costs because so much of the work i take on myself it just it works really well for us saves a fortune and it seems he's also picked up some tricks to keep the costs down can i get a reasonable discount from you based upon the volume of stuff that i'm actually buying seven months later and with a small pair of helping hands he is putting the final touches to the development the house is unrecognizable i can't wait to see the end result hi how are you very well how are you this is an exciting development it's really grand doesn't it yeah we built the decking at the front and rather than using conventional decking we use scaffolding plants to make it a bit bigger and wider and weightier but also a lot cheaper yeah and it kind of sort of sets it off it just balances it out a little bit i couldn't agree more jonathan has done wonders to the front of this property and as lots of viewers decide to buy before they even walk through the front door it's important to make sure your property appeals from the road especially in a stagnant market excellence inside [Music] the extension along the side of the house has created a spacious and inviting living area and the log burning stove works as a focal feature [Music] at the back of the house the old kitchen has been extended back into what was the old coal shed the result is a stunning new kitchen diner it's exactly what a modern family looks for but i'm wondering what lessons he's left from his previous experience were you tempted to put a breakfast bar in it not for a moment no great the room works really well as a u-shape so we left it like that but you couldn't resist putting skylights in again no but there is a good reason um on this development we're on quite a steep hill and that's west facing and the sun sets really early in the evening and so it gets quite dark at that end of the house so we thought that for the sake of this room it would be a good a good thing to do but would you accept that actually strictly in terms of development it probably wasn't necessary definitely i mean you're right you are right i know that but you couldn't resist it anyway no the skylights look good but they are an unnecessary cost which will once again eat into his profits and the kitchen's not the only room where he's given in to temptation and i notice you've put in a separate shower cleaner we have we did we did i did listen to what you said last time but this is a much bigger development i mean i have to say i i will let you have this one because i do think it is right that in a bigger house it's more appropriate to have a separate shower cubicle this time around jonathan has made some good decisions he's got three good sized double bedrooms and a family bathroom on the first floor the loft conversion has a further two bedrooms making this house perfect for the family market again the finish is superb but it looks as though it's come at a price you're planning on spending 120 doing it up how much did you end that spending 130 right so so where did you run over well 10 000 pounds most of that went on the garage did you include the fees this time we did you did excellent jonathan originally wants to make a 76 000 gross profit which means he needs to sell the house for 400 000 pounds but i don't know whether he's done enough to reach that sale price this is a fantastic room this is really what buyers want at the moment the open plan living space you can dine you've got the kitchen you've got a seating area converting the attic into two extra double bedrooms and a bathroom fantastic usage of space the attention to detail on this property is fantastic the working fireplace is a real gem having an ensuite bathroom off the main bedroom is what every buyer is looking for i would recommend an asking price of 370 000 pounds in today's market i'd recommend putting it on at 365 000 pounds we've had two valuations and they came in at 365 and 370 000 how do you feel about that a little more would have been nice i think it would always be nice but we've still yeah we've still made money at that and we've actually made money in either a very static market so the 400 000 was slightly banking on a rising market i think traditionally over the last sort of eight to ten years the market has risen gradually and um and so yeah i mean you do expect you shouldn't do but you do to a certain extent but the fact that we've made money without that is really good i think it just goes to prove how important it is that you don't bank on a rising market when you're developing because it is a very quick way to come very unstuck credit where credit's due jonathan will have made a 36 000 gross profit despite the market if he sells for the top valuation of 370 000 pounds which is more than can be said of last time so what does the future hold well we're still going to keep buying houses to do up and live in and create home but in terms of full-time development i don't think so so developing is not for you but what advice would you give to somebody who was planning on developing buy at the right price get a survey done don't personalize it no skylights no showers no dodgy roofs oh my goodness you sound like me maybe i did learn a little bit of something from you learning from your mistakes is one of the advantages of moving on to a second development and it always pays to remember some basic rules [Music] the key to successful property developing is buy at the right price stick to your budget and sell quickly jonathan didn't manage to do this on his first project but he came closer on his second and if you stick to these basic principles you can make money whatever the state of the market [Music] [Music] hello

Channel: The Forgotten Vault

Views: 15,453

Rating: 4.8769231 out of 5

Keywords:

Id: Tt85fiQ3eGA

Length: 48min 34sec (2914 seconds)

Published: Sat Dec 19 2020