This Real Estate Investor Burned Down His House

When Jeff Rabinowitz purchased the house at an auction, it wasn’t clear to him how difficult it would be to remodel it.

The house had 4 bedrooms but only 1 bathroom. A staircase was also narrower than specified by the code. Jeff was able to rent the house and earned profit for a few years but then one day a crack formed in a pipe to the sewer, which called for an expensive fix.

Jeff decided that he would go with his backup plan of completely demolishing the house and building two spec houses on the same lot. “I try to buy properties that offer multiple backup plans”, Jeff said.

When it comes to demolishing the house, Jeff would have to pay for the process. Instead, he found out, he could donate the house to the local fire department for training purposes. The lot can be cleared up for free and there is a tax deduction for the real estate investor.

Jeff contacted his city fire department. The house fitted their requirements: the lot was big enough that it wouldn’t cause damage to neighboring properties. An appraisal is done to determine the value of the gift. Then, two training sessions were scheduled, one for the large garage and another for the main house.

The training lasted two days. Each time, the house and the garage was set on fire and put out a few times. Rescue operations were staged in different parts of the house. Finally, they were completely burned to the ground. The firemen were vigilant with safety measures throughout the sessions.

Real Estate Investor’s “Hot Deal”

Jeff called it a “hot deal”. “I solved a problem”, Jeff shared, “saved money on demo, received a significant tax deduction, and provided a service to my community.”

With plenty of room across the street, Jeff held a house warming party and invited others to watch the practice. Many family members and friends of the firemen also attended. It was the first time for many of them to watch their sons, husbands, and fathers at work.

At Sense Financial, many of our clients are successful real estate investors, each with their own stories to tell. Jeff Rabinowitz held one of the most unique stories, which shows that sometimes it pays to think outside the box. It is a great example of how a real estate investor can follow a tax-efficient strategy and give back to their community at the same time.

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