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.”
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.