When John O'Neill left his job as vice president of marketing at Ryan Homes earlier this year, he decided it wasn't exactly a superb time to launch his own home-building company.

But as he looked around, he realized there was a $2 billion opportunity waiting to be tapped. In July, O'Neill and his partners launched New Century Enterprises Inc., a general contracting firm specializing in replacing crumbling fire-retardant-treated (FRT) plywood on the roofs of homes built over the last decade.

Since then, the company has replaced the deteriorated roofs on 275 homes and has plans to work on 1,600 roofs in the first six months of 1991. The tiny company -- just O'Neill, his two partners and two other employees -- also is planning to expand in the coming months by hiring two more workers.

It is likely that the FRT plywood debacle will produce some healthy profits for somebody. The National Association of Home Builders has estimated that up to 1 million roofs, mostly on town houses and condominiums in the eastern United States, were constructed with FRT plywood that eventually will need to be replaced. That will cost money: The association puts the tab at $2 billion.

Last week, McLean home builder NVR L.P. announced that it had set aside $9.4 million to help cover the costs of replacing deteriorating roofs. The home-building company said it has identified more than 5,000 homes built by its subsidiaries, NVHomes and Ryan Homes, on which the plywood roofs are failing.

Last month, Winchester Homes said it expected to replace up to 2,500 roofs constructed with FRT plywood at an estimated cost of $7.5 million. And Pulte Home Corp. is spending millions of dollars in the Washington area to replace 10,000 roofs made with fire-retardant plywood.

Condominium associations and town house owners who also bought homes from builders who can't, or won't, pay for roof replacements are having their old FRT plywood roofs taken off and replaced at a cost of up to $3,000 per roof.

NVR, Winchester and Pulte -- along with dozens of other home builders, condo associations and individual homeowners -- have filed suit against the plywood treaters and others, seeking reimbursement for their costs of replacing the crumbling roofs.

Those treating the FRT plywood have claimed that the problems have been caused by faulty construction techniques. In turn, the builders said the chemical formulations used by some of the FRT production firms were flawed.

Winchester Homes President Douglas Noakes said: "It certainly wasn't their {the homeowners'} fault. It certainly wasn't our fault either. {But} we'll stand behind our products."

While the protagonists battle in court, an increasing number of entrepreneurs have been lured to the business of helping builders and homeowners cope with the problem.

Stanley Sersen, a Columbia architect, has developed a device that allows his firm's home inspectors to test the strength of FRT plywood without having to remove the wood and take it to a laboratory.

Sersen's device, which weighs less than 10 pounds, screws onto the roof's trusses. The device applies up to 400 pounds of pressure to the plywood covering the roof. A gauge measures the pressure and records whether the roof withstands the pressure. Readings are taken at various spots on the roof in a test that takes about two hours per roof to conduct.

Sersen said his device, designed using specifications issued by the American Plywood Association, lets builders or homeowners know whether they need to replace the roof.

Sersen -- who runs Master Home Surveyors Inc., a home-inspection company, as well as an architectural consulting company -- has done work for condominium associations interested in assessing the condition of their roofs before beginning repairs, as well as for home buyers who want a roof checked out before purchasing a house.

Sersen is preparing to hire two more people to help him with the workload.

"We're getting ready to step up into a growth spurt," he said.

New Century also is gearing up for a little growth. Operating out of a modest suite of offices in a Falls Church office building owned by one of New Century's partners, the small firm has big plans.

Aside from O'Neill, the two other partners are William Clayborne, a local general contractor, and his younger brother, John, formerly chief operating officer of Stanley Martin Cos., a Vienna home builder.

The company has so far done work for Ryan Homes in Atlanta and Dayton, Ohio, as well as for Water's Edge, the Falls Church condominium association that earlier this year won a lawsuit it filed against its builder over the crumbling FRT plywood roofs on its 119 units.

New Century hires the subcontractors, supervises the roof replacements and labels all removed samples for use in lawsuits.

"It's a $2 billion industry," said O'Neill, who noted that the company is already turning a profit.

The fledgling firm has kept its start-up costs to a minimum by taking advantage of other firms' downsizing: It bought its office furniture from a home builder that was closing its offices and got its phone from a carpet supplier that was scaling back.

O'Neill said New Century doesn't plan to stick just with fire-retardant roof replacement forever.

"We'll take on any project," he said. At the same time, he's hoping it will be a calm port in the stormy seas of today's home-building business.