Jeff Rabinowitz is a seasoned and active real estate investor with many years of experience. When he purchased this rental property at an auction, however, he realized that it needed much work.
The house comes with four bedrooms but only one bath. There was a staircase that was not wide enough to meet the codes. The house was rented for a few years and earned a decent profit to Jeff, but he knows that eventually he would need to put more money into it.
One day a crack formed in a pipe to a sewer. Instead of trying to cover up with an expensive fix, Jeff decided to demolish the house and rebuilt two spec houses on the land. As a seasoned investor, he often has multiple backup plans before entering a purchase.
Through his contractor, Jeff learned that instead of paying for the demo, he can instead donate the house to a local fire department for training purposes. Jeff called this a “hot deal” when everyone wins. “I solved a problem”, Jeff shared, “saved money on the demo, received a significant tax deduction, and provided a service to my community.”
After talking to his city fire department, Jeff learned that the house fitted the requirements. The lot was big enough that the fire training sessions would not affect neighboring houses. The value of the donation was determined by an appraisal of the house. This helps Jeff decide the amount of tax deduction he can claim.
When all the prep works were done, all they had to do was to schedule two training sessions for the fire team. The house and the garage were set to be put on fire in each session.
The date finally came. Local firemen from five different fire houses came to the practice. Fires were lit up and then put out in different parts of the house and the garage. Rescue operations were staged to mimic different situations while safety measures were carefully put in place throughout the practice. Eventually, the house was completely burned to the ground.
Since there was enough space across the street for people to watch safely, Jeff decided to host a house warming party for his friends and business associates. The firemen also invited their family and friends. As firemen often don’t know where they would be in a particular day, it was the first time for many family members to watch their sons, husbands, and fathers at work.
Many Sense Financial clients are experienced real estate investors and each has their unique deals. Jeff Rabinowitz, however, has one of the best stories to tell. The creative solution has his lot cleaned up for free and earned him a big tax deduction for the year. More importantly, it was a great way to give back to the community.
Jeff’s story shows that sometimes it really pays to be a creative real estate investor. He encouraged others to do the same if they have a chance. “It would be great if more people donated houses to their local fire departments”, Jeff said.