I have to disagree coming from a more architectural and visualization back ground than a video game environment artist.
Applications like 3ds Max, or even Blender, already have the tools sets based on architectural needs that is both modular and highly productive as far as environment design goes and the buzz words here to figuring it all out are “iteration” and “edit in place”.
As a primer as to design in general understanding top down bottom up design flow is a good start as far as frame of mind goes.
Your probably having trouble understanding as you have yet decided what direction your going. 
As an example your 5 bed room house I would start top down by building a 5 bed room house and get it into UE4 with little regard as to best practice. The work flow at this stage is to establish a source chain, which is not source control, from the host to the target application that allows for progressive iterations. Once I have the foundation in place, pun intended, I would then switch to bottom up as to fit to finish.
Yes it’s ugly, messy, and people will laugh at you if you let them see it but “modular” means you solve the problems when needed rather than wasting a lot of time figuring out the problems before they even happen which is typical of a bottom up work flow.