commercial or residential?

[Oak Hills Financial]

This property is located in unincorporated county officially zoned Rural Living. It is low-density res. from all the sources I have seen. The site is 2.5 acres with fencing and a 2500 sq ft. permitted steel building. In the building is 800 sq ft of office space/living space with a full kitchen/bath.Upstairs is 2 areas that look like they could be small bedrooms or office space.
One lender told me the construction of the building makes it a comm appraisal and loan. Another told me that due to the zoning it must be a residential appraisal and loan. Original owner used it to house race cars, never got around to building the house to go with it.
Buyer wants to use it as a business but all transactions are online so not really like a store per say.
Any ideas on which way to go? Currently owner is carrying the loan for up to 2 yrs until financing can be secured.
Thankyou for your help!m2:

 

[Kali the Boston Terrier]

What does your supervisor say about it?

 

[The Warrior Monk]

The long and short of it is that you have to determine the HBU of the property, which will determine whether the property has higher value as a residential or commercial property.

 

[Greenback]

Do commercial improvements compete within the neigborhood boundary, and/or, can specific commercial improvements compete/evolve within the neighborhood boundary in the future? If so, why? This is a question or two I would ask myself.

I agree with Mr. Kirksey, what does your Mentor say?

Sincerely,

 

[CANative]

One lender told me the construction of the building makes it a comm appraisal and loan. Another told me that due to the zoning it must be a residential appraisal and loan.

Don't let clients tell you what to think. It's a really bad habit. You tell them what they've got to work with and then they can decide on what they need to do.

Is this area near Twenty Nine Palms? If so, have you read the chapter on Rural Living District? In my area, similar zoning is called Rural Community. Almost anything goes. In the 29 palms district the emphasis seems to be on "quiet" uses. I notice retail is not among the legal uses and I would think retail is the only use that would bring more value to the land than residential use.

http://www.ci.twentynine-palms.ca.us/pdf/19_07_rl_land_use.pdf

This one sounds like it might be beyond your experience at this time. Perhaps you should have a good conversation wtih your supervisor or both of you team with a more experienced appraiser.

 

[George Hatch]

This assignment may or may not be beyond the scope of practice for your supervisor's license.

 

[CCAAMO]

What do the permits say?

 

[Mztk1]

It sounds like an accessory building legal in the rural residential zone. I'd check to see if it was permitted for occupany as a residence, but if not check what the legal use of the building is (what it was permitted for).

I appraised one where an ugly metal barn was actually legally changed into the house on the lot. It was real nice on the inside, but from the outside was a metal shed like building shaped like a horse barn (high center and two low sides).

Anyway, if it is only permitted as an accessory building, then maybe you are looking at a vacant lot with permitted building and well & septic.

Check HBU. Check Permits.

 

[Michigan CG]

....Another told me that due to the zoning it must be a residential appraisal and loan......

Beware of that guy...until you know the whole story.

 

[Kevin A. Spellman]

Is there a buyer for this unique property with respect to the highest and best use? Does the onsite sewerage disposal system design for bedrooms or for this interim use? This assignment would require profiling a specific buyer for mixed use if the building can function with sleeping quarters.

If you went the residential use, the quality of construction, the utility and the traffic pattern of this building would have excessive negative adjustments. Would this property attract a renter and keep a tenant? Is there salvage value for the building? Could the foundation be used for residential? I would guess and the market value is most likely quite close to the land value. I would seek the most credible evidence for the land value.