Family inherited Commercial property in OR- looking for advice

[Jake Arnold]

Hi everyone, thanks for all the great posts.  My mother and uncle just inherited through a trust a commercial property in Oregon.  Its a great location zoned as C2 (flexible for commercial, mixed use or multi-family residential).  I'm the son and am interested in buying the property for development (more commercial or residential).  

The issues: 

- Its expensive (too high of a sale price to justify keeping as is)- only two tenants today paying a very low yearly rates

- I don't have the funds to outright buy the property- I would like to see if the family is willing to partner on a development deal vs. me purchasing outright.

The positive:

- Its in a great area and the zoning and area seem perfect to develop a block of townhomes (the lot is .5 acres).

Any advice or those that have gone through a similar situation?  Thank you!!

[Dominic Mazzarella]

Quote from @Jake Arnold:

Hi everyone, thanks for all the great posts.  My mother and uncle just inherited through a trust a commercial property in Oregon.  Its a great location zoned as C2 (flexible for commercial, mixed use or multi-family residential).  I'm the son and am interested in buying the property for development (more commercial or residential).  

The issues: 

- Its expensive (too high of a sale price to justify keeping as is)- only two tenants today paying a very low yearly rates

- I don't have the funds to outright buy the property- I would like to see if the family is willing to partner on a development deal vs. me purchasing outright.

The positive:

- Its in a great area and the zoning and area seem perfect to develop a block of townhomes (the lot is .5 acres).

Any advice or those that have gone through a similar situation?  Thank you!!

If you can’t swing buying it outright, you might want to pitch the family on a joint venture where they contribute the property as equity and you bring in investors or a developer to fund and execute the build. That way, everyone shares in the upside without you needing to take on all the risk or capital outlay.

Since it’s already zoned C2, you’ve got flexibility, but the highest and best use is probably going to be driven by what the local market needs most. If the area is seeing strong residential demand, townhomes could be a win. If it’s more of a commercial corridor, mixed-use might make better sense. Before committing, I’d talk with a couple local developers or brokers who’ve built in that area recently to get a feel for current construction costs, absorption rates, and end values.

If the family isn’t on board with a partnership, you could explore seller financing where they carry the note for most of the purchase, sometimes relatives will be more flexible on terms than a bank would.