Building expensive houses -- what else! -- in Potomac isn't enough for Brendan O'Neill. He wants his small groups of carefully designed houses to have a theme.

O'Neill began his newest undertaking, called the Hunt Club, by completely renovating a 70-year-old house. Originally, it was a farm house built by Charles Stearn, who set up his own sawmill to fashion beams and timbers used in the house. He later sold off some of the 75-acre farm, and in 1946 a later owner sold the house and other buildings to the Potomac Hunt Club.

O'Neill said the hunt club, of which he is a member, used the big house on Glen Road as the scene for its hunts and social gatherings until it moved to a new, more rural location in Barnesville last year. The clubhouse, 26 remaining acres and some other buildings were sold 14 months ago for $475,000 to the Hunt Club Partnership, which includes O'Neill Development Corp. and Permanent Financial (the service corporation of National Permanent Savings & Loan Association).

Because he got his start in home building six years ago by doing authentically styled Williamsburg homes in the Potomac area, O'Neill determined to set a theme for the Hunt Club development. "At first, I was enthused about doing a series of seven new houses resembling hunt clubhouses. My wife Susan and I even made a trip to Ireland to see some authentic old clubhouses. But we quickly learned, at least in the Cloneshire area of Limerick County, that the hunt clubs have only huntsman houses. They use local pubs for their entertaining."

But that didn't stop O'Neill from renovating the Potomac Hunt clubhouse.

He said he spent an estimated $200,000 to completely gut it, put on a major addition, renew plumbing, heating and the electrical system and put insulation to walls and ceilings. He also put in new three-pane windows. With veteran architect Wilfrid Worland as his designer, O'Neill changed the front entrance from Glen Road to a side where a circular driveway was established off a cul de sac extension of Three Sisters Road.

The original front door was rebuilt from scratch by Galliher and Huguely, which did all the millwork for the restoration. The new door was built to look old, and it has sidelights and appropriate brass fixtures. Also the l0-foot-wide front porch was extended around the entrance side to half-wrap the house, giving it sort of glorified Walton farmhouse appearance.

The restored house now has four large bedrooms, an attic studio bedroom with skylight and open beams, four full baths, pine flooring (about half of which is original), a den, a three-zone heating and cooling system, a large kitchen and a new two-car garage. Like other Potomac houses on two-acre lots, the restored clubhouse has a well and septic tank.

Undisputably, the main attraction of this redone farmhouse is the 25-by-45-foot room that is called a den. It's large enough to entertain more than a hundred friends, having earlier been built as an addition to accommodate hunt club parties. One couple visited the house last weekend, when the house was open to visitors, because they had been married in the cathedral-ceilinged room.

Architect Worland, who commented that the renovation "came off well," said that the den room was so large that he designed a loft over half of it to "make the scale more human."

The redone farm house currently is being offered for $388,000 through Peck Properties, for which Susan O'neill is a sales associate.

Asked who might buy the house, O'Neill said: "I've really got no definite idea, but it seems likely to be a family with a liking for entertaining and a desire to have a room where family members can gather regularly."

With the year-long renovation of the farm house completed, O'Neill Development Corp. now has started to build on one of seven two-acre lots subdivided on the property that also includes a smaller huntsman's house that was remodeled, expanded and sold earlier.

The theme for this subdivision called the Hunt Club will be Maryland historic homes. O'Neill has studied and photographed many notable houses in Maryland and has started the first, a two-story clapboard house that will have an attached white-washed log cabin to be used as a den. The house will be a copy of a Calvert County farm house. O'Neill also is considering doing a reproduction of Sotterley in St. Mary's County and also telescope and gambrel houses found in southern Maryland. Another under consideration is the reproduction of a mountain home in Washington County, Md.

Doing theme houses intrigues O'Neill, but he admits the difficulties of providing modern living interiors in houses designed for the more room-strictured patterns of earlier American living.

A graduate of Gonzaga High School and Georgetown University (where he majored in economics), O'Neill did a stint with the District's redevelopment Land Agency and then another with the James W. Rouse mortgage banking firm. He also worked briefly with veteran Washington home builder W. Evans (Bucky) Buchanan before going on his own in Potomac in 1975.

Brendan and Susan O'Neill have four children and live in one of the Williamsburg-styled houses he built a few years ago off Glen Mill Road. A younger brother, James O'Neill, recently joined the small home building firm after being a school teacher.

In the six years that he has been building homes in Potomac, Brendan O'Neill has seen two downturns in the housing market -- one when he began and the current one caused mostly by high mortgage rates. "The first house I built sold for $160,000," he commented. "Now our new houses at the Hunt Club will be in the $350,000 range. That's not all inflation because our houses tend to be bigger as we built more and land prices for lots increased."

o'Neill and other Potomac-area builders have been aware of a depressed market for houses that generally begin above $300,000 and extend into the $700,000 range for a few that are exceptionally large or have many custom features.

Speaking for Monroe Development, which builds Williamsburg-styled houses in a subdivision on the northeast side of River Road, Griff Gosnell said that the Beallmont houses have been getting increased attention from high-priced house shoppers in recent weeks. He also said that the inventory of finished but unsold houses in Potomac is relatively small now because most builder-developers cut back on the number of expensive dwellings that they have started without signed contracts from buyers.