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Hot Property

Lydia Lee | September 8, 2016 | Story Real Estate National

One morning in late August of 2002, a fire engine pulled up to a modest, low-slung house in Los Altos. A couple of firefighters proceeded to use a chainsaw to cut a 4-by-4-foot hole in the roof, allowing smoke to escape; later on, they dragged out a limp figure that was holding on to their shoulders and legs. But there was no fire: The smoke was artificially generated, and the “victim” was another firefighter. The saviors were new recruits of the Santa Clara County Fire Department practicing rescue techniques. The homeowner, Melvin Vaughn, was a fellow firefighter who knew that the training would be invaluable. But he also donated the dwelling because it was good business: He was going to tear the house down anyway and could get a tax credit for the donation.

Vaughn, a friendly, unassuming man of modest proportions—5 feet 8 inches, 150 pounds—doesn’t look like a stereotypical firefighter. But it’s clear that he has a high level of physical and mental stamina: the kind required to deal with all sorts of catastrophes and traumatic deaths, including those of child victims. He’s also been able to stay cool under pressure in his parallel career as a developer of residential real estate. He’s reluctant to disclose exactly what his holdings are worth, preferring to leave it at “tens of millions.” Of his aspirations, Vaughn—a fan of Selling New York, a reality show about big-ticket real estate transactions—says: “I’d like to build trophy houses for successful dot-com people and professional athletes. I want to give them a cutting-edge product that feels like a high-end hotel or retreat.”

After flipping more than 15 homes, he’s just unveiled the first complete manifestation of his vision. It’s a brand-new 11,000-square-foot contemporary estate in Los Altos Hills, a series of volumes clad in glass, stucco and Brazilian hardwood. From the back deck, you have a distant view of the Apple “spaceship” campus, and the backyard flows into the vast open space of Rancho San Antonio. Vaughn proudly points out the home’s many bells and whistles, including—but by no means limited to—a Poggenpohl kitchen, an infinity-edge pool, a spacious guesthouse and an exceptionally nice home theater. “I’m going to miss this,” says Vaughn, who watched the NBA Finals here as he readied the home for sale. The asking price is $18 million.

The architect of this temple to modernism is Robert Swatt of Emeryville-based Swatt Miers Architects. Known for his custom homes, Swatt was understandably wary when Vaughn first approached him. “We’re very careful about [doing spec homes], because the owner could decide to cut corners and details, and our name would still be attached to the building,” says Swatt, who has signed up to do Vaughn’s next few projects. “Melvin has followed the intent of the drawings and protected our reputation. He’s really looking for a buyer with discriminating tastes, which makes him great to work with.”

It also helps that Vaughn is very much a hands-on guy who knows construction. Modern architecture looks simple but is notoriously difficult to build well, with no baseboards or trim to cover up gaps, and vast walls of glass that open to the outdoors. Vaughn acts as the general contractor and is at the job site every day keeping a close eye on things. By his estimation, he’s managed 100 subcontractors on this Los Altos Hills project alone. One of them is Robert Goodwin, a Palo Alto-based finish carpenter with more than 30 years of experience. “Some contractors will say, ‘Call it good,’ but [the work] isn’t quite there—you haven’t hit the mark,” says Goodwin. “That’s something you’ll never hear Melvin say because he’s a perfectionist. I’ve seen him tell guys to tear it out and do it again.”

From a young age, Vaughn has been fascinated with building things. He was born in St. Louis, where his father worked on an assembly line, producing cars for Ford. When Vaughn was 12, his father transferred over to Ford’s new factory in Milpitas (now the Great Mall of America) and the family moved to the South Bay. When he graduated from Campbell High School in 1981, Vaughn was determined to be self-supporting. His parents had divorced shortly after the move west, and his mother was raising five kids on her nurse’s aide salary. He studied accounting at San Jose State University by night and worked full-time in the finance department for the video game company Atari. He also had good memories of visiting an uncle who was a firefighter in Mississippi, so when an opportunity came up to apply for the fire service, he took the test. Around the same time Atari ran into financial difficulties, the chief of the Milpitas Fire Department gave him a call. He took the job and quickly moved up the ranks, eventually becoming battalion chief. In 2013, after 30 years on the job, Vaughn retired from the fire service.

But he didn’t stop working. Early on in his career, he took advantage of the downtime built into the firefighter schedule—10 24-hour shifts a month—to develop other hobbies. Initially, Vaughn restored Porsches for fun and profit (he currently owns a 1959 356 coupe and a 1994 911 Speedster convertible). Starting in 1986, he decided to tackle a different type of fixer-upper: He bought his first home, a 1950s ranch in Campbell with serious termite damage but an appealing price of $150,000. Though he knew nothing about house construction, he taught himself what needed to be done with a stack of VHS tapes, how-to books and the help of family and friends. When he ended up with the nicest house on the block, he looked for a new project in a better location. “The guys at work thought I was crazy because I was spending $300,000 on a two-bedroom, one-bath, 880-square-foot house in Los Altos, and they had bought these big houses out in the [Central] Valley, like in Manteca,” he says. He gutted the house completely and rebuilt it, selling it two years later for nearly $600,000.

As his side business grew, he learned to look for homes that were undervalued based on comps—similar houses in the neighborhood—then evaluate how much money, work and time it would take to get them up to scratch. So far, he hasn’t lost money on any of the properties he’s invested in. But he also notes that, without a family to support, he’s been able to take on a lot more risk. He’s also comfortable adapting to circumstances: After the firefighters were done with their rescue drills in that house in Los Altos, he lived in an old trailer in the driveway for a year while overseeing the construction of a new seven-bedroom Mediterranean villa on the property. For Vaughn, the goal is to just have a steady business building a few really nice homes at a time. Says Swatt, “The next house we’re designing has superlong cantilevers that soar into the sky and is like, ‘Look, Ma, no hands!’ and Melvin says, ‘Let’s go for it!’ His enthusiasm hasn’t diminished over the years. You can see the sparkle in his eyes.”

Originally published in the September issue of Silicon Valley

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