Commercial Zoning and Subsequent Options

Looking at a Residential property that at one time used to run a cigar shop out back (attached to main house). This property subsequently is zoned commercial. Looking at major interior rehab including tearing down the old “Cigar shop”. Roof is good.


  1. Just focus on the residential side and replace cigar shop with deck and re-seed for lawn…

  2. Take advantage of zoning variance (proximity to alley) and replace the Cigar shop building with an addition that can be used as an office (or whatever) and market the place as commercial.

  3. ???

Residential plan is a skinny deal: Purchase = 60,000
ARV = 130,000
Repairs = 35,000
Holding = 3,500
Selling = 10,000

But I am not familiar with marketing a commercial property, including how to estimate ARV…

What would you guys/gals do??

In most places, houses with a commercial zoning are useless. The highest and best use of this property is residential, not office or retail space, regardless of zoning. If this is in a residential area, rehab and sell it as such. Houses with commercial zoning are almost never successful as commercial outlets.

You can consult a commercial appraiser or broker. Perhaps that area doesn’t need a small retail shop or office. A commercial practitioner can determine what’s needed in the area based on a myriad of criteria, including demographics. If you’re not familiar with any of this, you could have a long road of learning ahead of you.

You may also want have to find a builder who is familiar with converting the space to office, rather than just coming in and rehabbing without knowing what is standard in the office market in your area. Depending on where the office market is going, the broker would be able to give you an idea of what an investor may purchase the property for and how long it may be on the market.

Thanks for the replies… This is exactly what this board should be used for… Ask opinions on possibilities, analyze replies and make a decision…

There is a recent vacancy in this town of a commercial property that was used as a Tax Service Office… I will keep tabs on how quickly this gets filled as well as talk to Commercial Broker about the outlook, but I have decided to pursue this deal on the Residential end working with the numbers I am familiar with…

Agree I have a long road ahead for learning, but THAT is the exciting part… and I desire to be as well-rounded as possible in REI and not be pigeon-holed into only looking for/at a certain situation…

Thanks Again!!