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Jeff Rabinowitz
  • Investor/Landlord
  • Farmington Hills, MI
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I Burned My House To The Ground

Jeff Rabinowitz
  • Investor/Landlord
  • Farmington Hills, MI
Posted Nov 18 2015, 08:38

     I purchased this house at an auction. The owner had died and the house was auctioned by the estate. The house was in good condition. It was located across the street from an elementary school. The large lot backs to a stream. The house had some functional obsolescence. There were 4 bedrooms (all upstairs) and only one bathroom (also upstairs). My plan was to rent this for a while, then remodel it (add another bathroom and do some updating) at some point. Finding a tenant was easy. The first family I rented to had two kids attending the elementary school.

     However, I soon learned that the house would be more difficult to remodel than I had thought. The house had a staircase to the upper floor which was narrower than current code specified. That would be too expensive to remediate and make a decent profit. So, I rented the house, profitably, for several years.

     The house required little maintenance until…a crack formed in a large pipe which exited to the sewer. (This was an old house which originally had a septic field—this pipe was cast iron and was larger than any I had at any other house—I recall it was ~8 inches in diameter). This would be expensive to fix. It was time for plan C. (I try to buy properties that offer multiple backup plans).

     This house was on a lot which was large enough to be split according to the city zoning. Plan C was to knock the house down, split the lot and build 2 spec houses. My handyman at the time was an active firefighter. I jokingly asked him whether he and his friends would like to burn this down. He responded that they would. He explained that finding houses to train in was a problem for urban fire departments. Since my house was quite far from the neighboring houses it would be a good training location.

     My handyman worked for a different city. I contacted the local fire department and the Lt. was thrilled with the idea. I called my accountant to develop a plan to maximize the benefit. I decided to gift the house (just the house) to the fire department. I obtained an appraisal for the house to substantiate the value of the gift. (There are not many appraisers who can do this type of appraisal. It is more involved than just valuing the house and property and then subtracting the value of the lot. The appraisal was more expensive than a standard appraisal but well worth the expense. This appraisal was attached to my income tax return for that year and the deduction for the rather large gift was not questioned). There was prep that had to done before the fire department could burn the house (disconnecting utilities, asbestos survey, demo permit, etc). (The expenses associated with the prep were also deductible on my tax return.)

      Firemen really understand fires. I visited when they were positioning the pallets and wadding up newspaper in preparation for the burn and they were happy to explain what they were doing and what to expect when they set and extinguished the fire. They appreciated my gift.

     The training exercises were scheduled for two different days. The garage was very large—it contained a workshop and a chicken coop. The garage was burned on the first day. It was set ablaze once and put out. Then a rescue operation was staged, the garage burned again, then put out again. Finally, the garage was set ablaze and burned to the ground.

     The house was scheduled to be burned a couple days later. There was plenty of room across the street from the house for people to watch safely so I scheduled a house warming party. I invited several friends and business associates. The firemen involved in the exercises also invited their family and friends. (Firemen do not usually know where they will be working on a specific day.) It turned out to be quite an event. The house was burned, put out and burned several times over the better part of the day and into the night. There were rookies from five different fire houses (most of whom had never been in a fire before) who participated in the training. Two different fire chiefs thanked me for the donation.

      In the end the fire was allowed to burn through the supports of the house while the outside walls of the house were kept cool with firehouses from different pumpers. All of the debris except for a few bricks from the chimney fell into the basement where it continued to burn and was almost entirely consumed. Did I mention that firemen really know how to build fires? Cleanup consisted of hiring a bulldozer to push the surrounding dirt into the basement and grade the area. I solved a problem, saved money on demo, received a significant tax deduction, and provided a service to my community. How’s that for a hot idea?

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