What ultimately worked was removing a door and opening up one of the bedrooms so it functioned more like a living space — that allowed the property to be viewed as a standard single-family rental.

I'm far from tech-savvy, I think when I set it up, I needed to run it through a PMS to make it work, however, that may have been a function of having 2 properties instead of 1.  

Property overview (high level): Stand-alone commercial buildingLarger and more functional interior layout than the prior locationFully built-out commercial kitchen (hood, suppression, bar, etc.)Adjacent outdoor patio space already set up for dining (big upside)Comes with all FF&E includedNo residential component — pure commercial use  Deal structure (seller carry): Purchase price written at $1.2M~$1.0M attributed to real estate~$200k attributed to FF&E (included in the sale) Seller financing on $900kBuyer cash in at closing: ~$275kInterest-only period initially (no balloon language currently in the contract)Target hold: 5 years, then refinance into a 25-year commercial loan  Business context: The restaurant historically did ~$950k/year in revenueWe are owner-operatorsConservative projections show the business can remain profitable even with slower $1k days mixed inGoal is consistency, margin cleanup, and NOI growth — not aggressive expansion  What I’m hoping to get feedback on: Does this structure make sense from a commercial real estate perspective?

OP use the lookup function.  

What I like most is that they are a fully functional accounting and payable system.

Those operators don’t function without reliable cold and frozen storage nearby.You’re also right about the all-or-nothing nature of the model.

That place needed work before it could even function as a rental.

But in spite of the handful of drawbacks, the software is so good at its core functionality - bookkeeping and accounting for real estate - that there's simply no reason to use anything else. 

This project reflects a disciplined renovation approach focused on improving functionality, appeal, and overall market positioning.What made you interested in investing in this type of deal?

If a property qualifies for conventional financing (functional kitchen, bath, working plumbing, etc.) you could absolutely move into one of the units, rehab others, and get the value add required to create a deal.