It was a run-down but pleasant two-bedroom house that Michael Zacha picked up for $325,000 after the previous owner died.

With a pool and a hillside view, it has potential. And with $125,000 in remodeling, it fetched a price of $675,000 and a profit for Zacha of $180,000 after commissions and financing costs.

The deal took a year. "Back in the good old days of 1978," Zacha reminisces, "I bought an old Spanish-style house for $90,000 and sold it two weeks later for $130,000.

Zacha is a housing speculator, and his recent venture, consummated three months ago in the depths of the housing crunch, illustrates a surprising fact. The demise of the real-estate speculator, to paraphrase Mark Twain, has been greatly exaggerated.

Despite the pressure of high interest rates, discouragement from lenders reluctant to make loans to investor-owners, and a generally slumping market, the real-estate speculator, is a hardy breed. Far from being extinct, not only has the species survived but also some members have flourished through adeptness and adaptability.

"There are still a number of very active speculators out there. And why not?" says Michael Salkin, an economist with Bank of America. Housing appreciation still keeps pace with inflation in many places, he notes, making them meccas for housing investment. Oklahoma City and Phoenix both experience an average 13 percent housing-price increase in 1980, and both cities currently draw significant investment dollars from California because of lower prices. In Dallas, housing appreciation averaged 14 1/2 percent in 1980. In Miami, where foreign speculation runs rampant, and in the San Francisco Bay area, home prices in 1980 surged about 20 percent.

Housing speculators have always played a controversial role, with experts often blaming them for driving up housing prices unreasonably. Michael Jessee, senior vice president of the Federal Home Loan Bank of San Francisco, says that speculators who bought and resold properties overnight at grossly inflated prices "distorted housing values." But in today's market, he adds, "speculators can actually help by carrying housing inventory. Now, when the cost of debt is so high, this is an important economic function."

Whatever function they serve, speculators have had to be as changeable as chameleons to survive the recent dramatic changes in the housing market. California, the classic example, had all the necessary elements for wild speculation in the mid-to-late 1970s: steady basic appreciation, a growth economy, a strong job market and a high proportion of professional and high-technology workers with considerable disposable income. A housing shortage helped maintain high prices. And financing funds were ample and moderately priced.

"California also tends to have a speculative view of the world," says Bruce Ricks, former chief economist for the Federal Home Loan Bank Board.

Both amateurs and professionals joined the bidding with lively enthusiasm. "Five years ago, the biggest game in town was to buy single-family houses, hold them six months, and then dump them and make a fortune," says one former speculator. "It was a circus. People were caught up in the euphoria of runaway values."

The annual appreciation rate of 25 percent that prevailed could often be collected overnight. Speculators would sometimes grab up several new tract homes and resell them at substantial profit before they were ever occupied.

But the financial landscape that had nourished speculation in California and elsewhere changed drastically. Lenders stemmed the tide of loan monies for purchasing non-owner-occupied investment property. Then high interest rates chilled the resale market, reducing opportunities for the quick cash turnover.

Fewer chances to draw out cash brought a shakeout among speculators. The survivors say they now play by a new set of rules.

They generally most hold on to properties longer and sustain several months of cash outflow because rents rarely cover mortgage and improved costs.

They must often use "creative financing," both as buyers taking advantage of deals financed by the old owners and later as sellers carrying mortgages for the new buyers.

They must be more selective in remodeling, limiting it to work calculated to pay off in resale value.

They often find more profit in focusing on a narrow slice of the market, such as slum properties or mansions.

They may, if resale is thwarted, get a loan on the property and use the money to buy more property -- a practice known as pyramiding.

Fairly typical of the speculators who have survived and thrived in the current market are these Californians: Michael Zacha

A high-school graduate who bought his first piece of residential real estate at the age of 17, Zacha, now 35, is a classic example of the successful small-scale speculator. "I like to buy, rehabilitate and sell a house before I buy another one," he explains. "Otherwise, you get into a real long cash drain. The longest I've held a house is 18 months. Usually, they're gone within three months."

His specialty has been revamping dated hillside homes in West Hollywood. Often, he says, they are vintage 1950s ranch-style houses "with pink tile, aluminum windows, cottage-cheese ceilings and blond cabinets nailed up eveywhere." One such house bought last September for $370,000 and remodeled for $40,000 has been placed back on the market for $585,000.

It used to be that what you did to the house would dictate what you could sell it for," he says. "Now, what you can sell it for dictates what you can do to it. Instead of automatically remodeling the kitchen, I try to figure out whether it will get me $30,000 or $40,000 more. The last thing you want to do is make it the most expensive house on the block, or more expensive than the area will support."

A house must also have creative-financing potential, Zacha says. "You have to find sellers willing to carry financing themselves." Also, he says he is willing to use his profits to provide mortgage financing to the buyer. "You have to be flexible," he says. "Attractive financing is the trick in today's market."

Although market pressures make it tougher to speculate, Zacha says, "I'm still doing it." And speculation has made the brash Zacha a millionaire on paper.

"It's a more precise business today," he says. He has invested a little in restaurants and common stocks, but his profits have been realized from buying and selling real estate, he says, and from "pyramiding my holdings. That makes it fun. It's a monopoly game." Chris & Denise Patton

A polished young married couple based in Laguna Beach, Calif., the Pattons say they discovered the rich yields of real estate by chance. Patton, 30, had aimed for a career teaching his first love, Biblical archaeology. Mrs. Patton, 29, began a small design business. Then, they bought and sold their first home, turning a tidy profit, and glimpsed the future.

"We said, 'Hey, we're making more money by accident than Chris could make as an academic,'" Mrs. Patton relates.

They entered the market in earnest in 1979 and have since parlayed their real estate transactions and Mrs. Patton's design business into a cluster of enterprises from renovation to property management. Real estate has made them wealthy (though they decline to specify their assets). In 1980 they bought $3 million in residential income property, they say, all financed in a series of no-money-down deals. They say they expect their holdings to appreciate this year at 10 percent to 15 percent.

"We own everthing from slums to luxury areas," Patton says. But the couple's specialty has become buying "problem property" and restoring it. In the honeyed accent of her native North Carolina, Mrs. Patton says, "I knew if we could get our hands on some of those fixer-uppers, we could make a bunch . . .

In one of their highest-risk deals, the Pattons ventured into the ghetto of south-central Los Angeles and bought the site of the fiery 1974 shootout between Los Angeles police and the so-called Symbionese Liberation Army, which had kidnapped heiress Patricia Hearst.

The purchase included seven adjacent houses and one burned-out foundation. "The roaches and rats," Mrs. Patton recalls with a shudder. "I was there scraping grease from behind the stove."

There were also tenants to be removed. "One of the houses was inhabited by a blind woman with seven children," she says. "We worked with her until she could find a new place in HUD housing. But it cost us eight months of lost rents."

The Pattons bought the properties for $75,000 in a complex deal: They obtained a new mortgage loan for $30,000, of which they gave $20,000 to the seller as a down payment and kept 10,000 to begin renovation. The seller provided a second mortgage of $55,000. Renovation costs were $40,000, some of which funded by a subsequent loan on the property and $12,000 of which the couple paid out of pocket. Last December, they resold the neatly transformed cottages for $210,000. After payment of the various loans, the Pattons say, they realized a net appreciation of about $75,000, and they are earning 12 percent interest on a mortgage in that amount provided for the new owner.

"We don't look at what we do as speculation, but as measured risk," Patton says. He adds, "We replace with quality what wasn't quality before." Jack Merkel

Having endured a "desperatly poor" childhood in St. Louis, Merkel arrived in San Francisco at age 17 with $400 in his pocket. Today, at 50, he drives a brown 1981 Rolls-Royce Shadow, with a fox fur draped over the cafe au lait leather interior. He reveals in his wealth. "See a real Cartier money clip," he says, withdrawing a small gold object from his pocket.

Merkel chuckles about talk that speculators have been driven from the market. "We're alive and well, thank you," he says, though admitting business isn't as lucrative as it was two years ago. "The real problem in today's market is lack of liquidity. I've had to do my own financing."

He scrutinizes buyers more carefully "if I'm carrying back a rather large mortgage," he says. But he doens't mind carrying the mortgages, because it means a steady income. "I love it. I get checks every day," he says.

Although he has made much of his real-estate wealth in "fringe areas," his recession strategy has dictated a shift to luxury properties. "Right now, the market is expensive homes and condominiums because there's plenty of money at the top," he explains.

Today, his main turf is San Francisco's swak Pacific Heights. "I redid an 1875 Victorian house with tennis courts that once belonged to Theodore Roosevelt," he says. He bought the house for $200,000, did $30,000 of rehabilitation, and sold it for $350,000 after six months, he says.

Merkel observes that he didn't get rich by employing union labor. "I use a small army of young people: They're talented, reasonably priced, they work like beavers and do what I tell'em," he says.