When Hinnerk Ehlers and Katja Winterhalder moved their family to Hamburg, Germany, after seven years abroad in Canada, they knew what they wanted: a supercool, minimal, modernist house. Ehlers and Winterhalder were after lots of light, lots of functionality, and something durable enough for the kids to run around in. Ideally, they'd also get a chance to implement some of the ideas for better everyday living they’d aggregated over the years. Integrating state-of-the-art energy efficiency was nonnegotiable. Everything they found, however, was too old-fashioned, and it was all too expensive. So the couple—he works for a large frozen-foods company; she was a creative in an ad agency—went back to take a second look at a tiny 1907 villa in a great location they had dismissed the first time around.

Their initial reaction was understandable. In the 1960s, the two-story, 1,070-square-foot villa with pea-green faux masonry had been all but swallowed by an L-shaped addition that once served as a minimart. The whole thing—2,200 square feet between the two structures—had since been carved into three separate living units. Only two rooms were inhabitable; the rest were filled to the brim with electronics parts and junk. “It was the black sheep of the block,” says Winterhalder. But the price was right, and an S-Bahn transit station, a school, and a bakery were each a minute’s walk away. So, even though the family couldn’t do anything to change the odd layout without giving up space under new zoning ordinances, they decided to take a chance.

With just a few months to go on their temporary housing’s lease, Ehlers and Winterhalder had to get to work. For assistance, they drew on the know-how of Berlin-based architect Frank Drewes, of the firm Drewes+Strenge Arkitekten, whose father designed the modernist house Winterhalder grew up in.

While Drewes’s high-end, high-drama, high-design work fit right in with the cool Asian flats pictured in Winterhalder’s inspiration scrapbook, one issue remained. “We told Frank, ‘We have a small budget and no time,’” says Ehlers. “He said, ‘That’s a problem.’” They had spent two-thirds of what they could afford on the property, and the remaining third had to cover all the major renovations, repairs, and energy-savings measures required, leaving almost nothing for stylistic flourishes. Instead, the cool had to be built in from the beginning, along with the new walls and wiring.

With the help of Volker Schmidt—a laid-back, experimentally minded local who served as the construction architect—20 debris boxes to haul away junk, and lots of hours clocked on the Internet looking for the right raw materials, the team made it happen. A mere six months after signing the purchase papers, Ehlers, Winterhalder, and their two kids, Jonne and Oona, moved into a truly modernist miracle.