Before and after shots of 6702 Hanover Ave. (Submitted photos.)
Out with the old, in with the new.
That’s the business plan for Ellington Homes, a local homebuilder that tears down existing houses in popular city neighborhoods and replaces them with new ones.
Matt Ellington started Ellington Homes after doing similar work for six years as an employee of BCN Homes in Arlington. He thought the model would work well in his hometown of Richmond, so he moved back to start the business.
“Typically, what I do is, I buy houses, I tear them down completely, and I build on the lot,”
said Ellington, 35. “They have to fit certain criteria – monetarily – to make sense financially to buy, tear down and rebuild.”
Before and after shots of a project on Wythe Ave.
Right now, he’s putting the finishing touches on a house at 4607 Wythe Ave., near Libbie and Grove and Willow Lawn and a block off Monument Avenue. It is his fourth tear-down-rebuild project in the area.
Ellington purchased the 1950s, 1,900-square-foot ranch for $275,000. He demolished everything except the foundation and portions of first-floor brick walls, raised the ceiling height and added a second floor.
The new house is listed for sale at $799,000 with Mike Hanky, a real estate broker with Hanky & Harvey Group, Coldwell Banker Virginia Colony. It is 3,880 square feet and has 3 1/2 bathrooms and five bedrooms.
Hanky said homebuyers usually have two main options: a brand new house in the outer suburbs or a decades-old home closer to downtown.
“If you want a new home in this area, but you want the city lifestyle, this is the alternative,” Hanky said.
The craftsman-style house features a spacious, open kitchen and family room. It has lots of big windows, modern bathrooms and red oak floors.
“If you’re doing a renovation, you’re working with what you have. When you start fresh, you can really design the spaces so they work better,” Ellington said.
Because a small part of the original structure is still intact, the house qualifies for the city’s 10-year tax abatement program.
Ellington said the house will be taxed as though it was still assessed at $275,000 for seven years. The rate goes up 25 percent each of the next three years, until the current assessed value of the house is reached. That tax savings will be passed to the future homeowner. The program is designed to encourage revitalization, he said.
Ellington does some renovation and other construction work on the side but considers his tear-down-rebuild projects to be the “bread and butter” of his business.
“The challenging part of my business plan is finding properties that meet the criteria upfront that you can buy and tear down,” he said.
To find the right property, he looks for a house that’s in or close to a sought-after neighborhood and fits the price range for a rebuild.
Ellington said he isn’t aware of anyone else making a living locally with his business plan. There are a lot of house flippers in the area, but they don’t tear houses down and start fresh, he said.
Ellington is financing the project with a construction line of credit with Union First Market Bank and personal funds.
Before and after shots of 6702 Hanover Ave. (Submitted photos.)
Out with the old, in with the new.
That’s the business plan for Ellington Homes, a local homebuilder that tears down existing houses in popular city neighborhoods and replaces them with new ones.
Matt Ellington started Ellington Homes after doing similar work for six years as an employee of BCN Homes in Arlington. He thought the model would work well in his hometown of Richmond, so he moved back to start the business.
“Typically, what I do is, I buy houses, I tear them down completely, and I build on the lot,”
said Ellington, 35. “They have to fit certain criteria – monetarily – to make sense financially to buy, tear down and rebuild.”
Before and after shots of a project on Wythe Ave.
Right now, he’s putting the finishing touches on a house at 4607 Wythe Ave., near Libbie and Grove and Willow Lawn and a block off Monument Avenue. It is his fourth tear-down-rebuild project in the area.
Ellington purchased the 1950s, 1,900-square-foot ranch for $275,000. He demolished everything except the foundation and portions of first-floor brick walls, raised the ceiling height and added a second floor.
The new house is listed for sale at $799,000 with Mike Hanky, a real estate broker with Hanky & Harvey Group, Coldwell Banker Virginia Colony. It is 3,880 square feet and has 3 1/2 bathrooms and five bedrooms.
Hanky said homebuyers usually have two main options: a brand new house in the outer suburbs or a decades-old home closer to downtown.
“If you want a new home in this area, but you want the city lifestyle, this is the alternative,” Hanky said.
The craftsman-style house features a spacious, open kitchen and family room. It has lots of big windows, modern bathrooms and red oak floors.
“If you’re doing a renovation, you’re working with what you have. When you start fresh, you can really design the spaces so they work better,” Ellington said.
Because a small part of the original structure is still intact, the house qualifies for the city’s 10-year tax abatement program.
Ellington said the house will be taxed as though it was still assessed at $275,000 for seven years. The rate goes up 25 percent each of the next three years, until the current assessed value of the house is reached. That tax savings will be passed to the future homeowner. The program is designed to encourage revitalization, he said.
Ellington does some renovation and other construction work on the side but considers his tear-down-rebuild projects to be the “bread and butter” of his business.
“The challenging part of my business plan is finding properties that meet the criteria upfront that you can buy and tear down,” he said.
To find the right property, he looks for a house that’s in or close to a sought-after neighborhood and fits the price range for a rebuild.
Ellington said he isn’t aware of anyone else making a living locally with his business plan. There are a lot of house flippers in the area, but they don’t tear houses down and start fresh, he said.
Ellington is financing the project with a construction line of credit with Union First Market Bank and personal funds.
I would disagree that these houses would qualify for tax abatement due to the demolition of the original structure.
I didn’t see the part about the tax abatement!
Obviously this system is truly in need of reform.
There’s a basic misunderstanding about the abatement program. With tax abatement on this structure, the City will continue to get the taxes it was earning before the reconstruction. The City loses nothing with the abatement, but it gains in two ways: The property’s tax assessed value was deteriorating annually and that has ceased; after five years, the property’s newly assessed value will earn additional taxes for the City, adding at a rate of 25% per year until year seven when it will be assessed at full value. Its a good deal for everyone. It has an amazing history of success!
1. The assessed values of both properties were increasing until the “great recession” hit. Their values then declined along with the rest of the city’s properties. 2. The Virginia Constitution limits the tax abatement program to properties in need of rehabilitation due to age and use (i.e. deteriorated). The city program allows an abatement for a building in perfect condition. 3. The program allows an abatement for properties that would have been improved anyway. That is a pure gift to the owner and loss to the city. 4. The program is not available to owners of modest means who want… Read more »
Congratulations Matt! Your homes are just beautiful!
Tear-downs represent one of the worst of “bubble-era” development practices. With all due respect to Mr. Ellington, I’ve seen a few of his homes and they take away from the neighborhood more than they add. I encourage anyone to drive by the Wythe Ave house and see how terribly out of place it is among the neighbors. Don’t get me wrong; I’m not simply some NIMBY who is against any and all development. But the developer should take care to find a solution that is appropriate and complimentary to the fabric of these established (often historic) neighborhoods, both in style… Read more »
Nate, agreed. It’s a nice house, but now it’s this beautiful giant among average aged properties. He needs to be careful about where he selects his projects…. you can’t put this house on Wythe and then command Grove/Cary/Windsor Farms prices.
Congratulations to my friend and client, Matt Ellington. The homes Matt builds are first class in every regard. His business is truly enhancing our already beautiful existing Richmond neighborhoods.
Congratulations, Matt!! You certainly have done a fantastic job!!
I have lived in the neighborhood where a few of Mr. Ellington’s houses have been built for almost 6 years. If you drive down our streets, I think you’ll notice a very wide ranging variety of home sizes, architectural styles, ages, levels of upkeep, renovations. I find it to be a representation of the various types of residents who choose to stay within the city limits and make their home their own over the years. I appreciate that I can walk down our streets and see those differences. While I agree with Mr. Rich on true historically protected or homogenous… Read more »
Mr. Ellington ‘s homes are well thought out and beautifully constructed. They seem to entice young families to stay in the city instead of opting for new construction in the suburbs. As an owner of a house a few doors down from one of his projects, I was thrilled with the upgrade to my street. The builder even went through the headache of keeping the matured trees instead of just bulldozing the lot (which I assume is cheaper and easier). It brought a family with young kids to the block adding energy and excitement to the neighborhood! Looking forward to… Read more »
I love the homes Mr. Ellington designs from an aesthetic standpoint, but most importantly, I love the integrity he brings to his projects and the neighborhoods in which he builds. The Wythe Ave house adds just one more layer of evolution, beauty, and character to an already charming neighborhood. When I walk down that street and the surrounding streets, all I notice is the beauty and the character inherent in each property. I also appreciate the visual interest each house provides to the overall look of the area. Certainly, very few people want to live in a cookie-cutter development, where… Read more »
Bravo, Matt Ellington! The houses that I have seen are simply beautiful!
“The purpose of §§ 58.1-3220 and 58.1-3221 is to encourage the redevelopment of property falling into disrepair by offering tax relief to improve the property.” Attorney General Opinion Number 03-043 to City Attorney for the City of Richmond, August 5, 2003. The law was intended to allow localities to offer a tax break to property owners to encourage them to restore dilapidated buildings. Councilperson Graziano did not directly answer this question: “Under the Graziano/Agelasto proposed rehabilitation tax credit program ordinance, could a proposed expansion of a 20 year old 2,000 square foot building assessed at $1 million and already in… Read more »
I’m impressed with the man, his homes, and his vision. Congratulations and good luck in the future.
I’ve walked through one of Matt Ellington’s rehabilitated houses and it was absolutely stunning. The detail of the home and his eye for beautiful building materials was obvious and refreshing. I think if one is in the market for cookie cutter neighborhoods then county subdivisions are a better place to look – not the city.
I hope things continue to go well for you, Matt. Keep fighting the good fight – all press is good press.
I think what Ellington Homes offers is wonderful. What a great way for people who want to live in the city to have a new custom home with excellent craftsmanship. I look forward to seeing more of his work around town.
Keep up the good work Matt.
How is a bank going to make a loan for 600 or 700 thousand dollars on a residence where a 275k home once stood?? The first one on a block that goes up has to be way out of the range for comps! No financial institution I know of is going to make that loan… and what that says is, that an all cash or 50% down buyer is out of their mind. Love the architecture and idea… but common sense doesn’t seem to be a factor? Essentially what you’re trying to tell me is that – the building lot… Read more »
Nothing says “Welcome to the neighborhood” like tearing down a piece of it and building something new that stands out like a sore thumb….
I think it is outrageous that tearing down old, historic homes in favor of new builds is considered a good thing. Every effort should be made to restore, not replace, historic Richmond homes, unless you want the city’s history to go the way of the wooly mammoth. I cannot believe the Wythe Ave home… it looks like a McDonald’s was plopped in the middle of a street of family-owned restaurants… out of place. We should not be celebrating this practice, we should be finding contractors who will take the beauty of what’s there and restore and enhance it.
Adrienne: None of these homes are historic. If you read the article and look at all of the before/after photos, then it’s clear the homes Matt tears down fit a certain criteria (ex. the 1950s rancher in the photo). What is debatable: 1) Does plopping down a house that is nearly twice the size as its neighboring homes destroy the character of the area? 2) Should what Matt’s projects qualify for historic tax abatement for the new homeowner? Matt uses high quality materials and what he’s doing ultimately increases the city’s tax base over time. Therefore, I approve of the… Read more »
Also, it looks like the Wythe property was originally listed for $849,000 and has been reduced to $779,000 after sitting on the market for six months. It looks like the community doesn’t support this method, nor does the housing market.
Adrienne, exactly……
My comment from May 13 was, “…. you can’t put this house on Wythe and then command Grove/Cary/Windsor Farms prices.”
Not an issue of whether the community supports it; or that it isn’t in the “best interest of Richmond”. People are free to buy, develop, build anything they want within the confinements of law. For someone to be able to say – “you can’t do that because I don’t like it” – is moronic. But what is common sense, and will be set straight by pure economic fundamentals is – You cannot start with a 250,000 dollar lot, in an area of 1400 – 2200 square foot homes! Perhaps people with a huge cache of unneeded money will buy one…… Read more »
Had to cut through Wythe the other day due to an accident on Monument and noticed their house on Wythe was still for sale…….guess nobody wants to buy this ugly thing.