Help: Best use issues with mixed use zoning residential home

[George Hatch]

The address provided by the OP was used as a Business at one time

Massage and Body Works it is temporarily closed

Google Maps

Find local businesses, view maps and get driving directions in Google Maps.

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The 2012 street scene shows signage for a salon

 

[Dublin ohio]

Why not? This is more like a home with ADU rather than a real business enterprise.

What does that have to do with the appraiser's HBU determination of commercial

 

[Carnivore]

Yes, it is a salon and the rear of the house backyard is all concrete meaning off street parking.

 

[Dublin ohio]

The 2012 street scene shows signage for a salon

The most recent listing shows nothing more of the sign than a rusted out pole and sign frame. As far as the "beauty shop" portion of the house. The interior photos show a large room with vinyl floors and a 1/2 bath. No equipment.

 

[John Hassler]

The appraisal issue is certainly solvable although most non-AGs will struggle on non-cookie cutter assignments.

The complex part for the seller will likely be finding a buyer who is willing to pay all cash or is willing to work with a local or hard money lender. In that sense the value of the commercial component may be offset by the higher financing costs. (Much like how 5-unit residential building don’t sell proportionally more than 4-unit ones due to financing).

 

[George Hatch]

But if the appraiser determines HBU is commercial................................

The land values in the area aren't that high and neither are the commercial rents. I don't have access to the local data but there's no indication among the existing uses that the underlying land value is higher than the existing SFR usage. The SFR across the street just sold for $100/sf and its listing states the sellers never occupied it as residential. The pics show it being used as a showroom for a flooring retailer. Meanwhile, the SFR sales in the area seem to *start* at $150k for homes in the 1100+sf sizes. The subject is larger than most of the homes that are being shown as having sold recently.

Saying that that this property is worth less to an SFR buyer than to an office or retail buyer would really be saying something under the circumstances. When compared to the commercial pricing trends, the trends for rental and pricing for SFRs today is different than it was even 20 years ago.
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This is a very straightforward appraisal assignment for an appraiser who deals with HBU analyses on the regular AND who has access to the available data for the area. Regardless of their licensure level. HBU analysis for this shouldn't take more than about 10 minutes if you have the data. Which as outsiders we are lacking.

 

[Dublin ohio]

Yes, it is a salon and the rear of the house backyard is all concrete meaning off street parking.

I do not know the area. But on the surface. I would have a hard time believing that the HBU for this property is commercial. Just doesn't make sense

https://www.realtor.com/realestateandhomes-detail/523-Faith-Rd_Salisbury_NC_28146_M54226-83685

 

[George Hatch]

The most recent listing shows nothing more of the sign than a rusted out pole and sign frame. As far as the "beauty shop" portion of the house. The interior photos show a large room with vinyl floors and a 1/2 bath. No equipment.

View attachment 83518

Ramp to the doorway, ADA elements for the restroom, florescent overhead lighting, fixed window. It would be an ideal workspace for a self-employed accountant or appraiser or some Yankee WFH worker.

If I lived in the area I'd buy a property like that. It looks pretty functional to me. Except I'm not enthusiastic about the layout of the kitchen - I like to cook.

 

[Dublin ohio]

As I said, the property directly across the street and at the corner just sold earlier in 2023 (1500sf @ $155k) and it has been used as a business - with a sign out front - as well as a residence

Are we looking at the same subject. This is the google view across the street from subject



This is the subject

 

[Fernando]

As an investor, I like to have residential and commercal units on same parcel. Preferably commercial in front and residential unit in back.
As a lender, since subject has zoning to allow commercial, it's commercial property.
As a residential appraiser, I would pass on this appraisal because whenever there's a commercial unit, I'm not allowed to appraise such property (and I don't want to).
By changing the usage years ago to allow a commercial unit, the property is no longer just a residential property.