Who should I be talking to about changing from residential to commercial?
I am closing soon on a house I lucked into, smack in the middle of a small up and coming town in the thick of a redevelopment phase. It’s one of two residential properties left not owned by the town in a little sea of luxury apartments and condos. These two properties are side by side, my uncle owning the other one. The town wants the properties, all the usual land hoarding companies want the properties, and the two big wig real estate guys I have a faint connection with around here tighten up like a snare drum when I’ve asked about what I could do with this house/land. They only tell me that if ever I sell it that they need to be the first I call. 

After talking with some armchair real estate people, they seem to think there’s gold in combining these two properties and getting them changed to commercial. 

I guess my question is, Who should I be talking to that would give me unbiased advice? Just a yellow pages realtor? Or is there a better option? 

Any advice at all is greatly appreciated and sorry if this is a lame brain question.
[{"id": "i8l2zcd", "text": "Unbiased advice on getting rezoned? A lawyer would be my first stop.", "replies": [{"id": "i8l4s8k", "text": "Of course a lawyer, I feel silly not thinking of this. Thank you", "replies": [{"id": "i8l8ty3", "text": "Often there are just a handful of lawyers in a given area/city who do most of the zoning work. I\u2019d ask around.", "replies": [], "depth": 3}, {"id": "i8leuog", "text": "Not just a lawyer a real estate lawyer who hopefully specializes in land use and zoning", "replies": [], "depth": 3}, {"id": "i8luwww", "text": "\"Zoning Attorney\"", "replies": [{"id": "i8m2h3e", "text": "That title doesn\u2019t exist.", "replies": [{"id": "i8mfzep", "text": "Literally hundreds across the US. https://lawyers.findlaw.com/lawyer/practice/land-use-zoning", "replies": [{"id": "i8n46ws", "text": "Right - land use attorneys.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "i8ml7zt", "text": "No, at some point an attorney will be required, but for now a broker and/or developer should be the first stop. Need to determine the highest and best use first.", "replies": [{"id": "i8pmm5v", "text": "If he wants advice on whether it\u2019s a good business decision then of course not. That\u2019s why I specified if he wants advice on the process of re zoning, lawyer. On whether it\u2019s a good business decision, separate question/issue", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i8l4z3s", "text": "I'd be worried about re-zoning and eminent domain risk. Lawyer time for sure.\n\nWhat state?", "replies": [{"id": "i8l5l1w", "text": "Indiana. And forgive me, I\u2019m super ignorant of all things real estate, eminent domain can mean they can force me to sell yea?\n\nThey pulled something like this on the only other house on the block, said they needed to demolish it to expand the road, forced a young family with a newborn out, then didn\u2019t tear it down and rented it out lol. They DID get paid well, but still seemed pretty shitty.", "replies": [{"id": "i8l68l7", "text": "In eminent domain, the state forces you to sell your property to them *AT THEIR PRICE* for public use (like a roadway, in your example; or any other public development, library town hall low income housing whatever). In corrupt locales, it can be used as a weapon to further private interests with political capital.", "replies": [{"id": "i8lsjls", "text": "It's not at \"their price\", it's just compensation, so it should be market value + damages.  That said, always hire a lawyer and appraiser if the government is trying to take your property, more often than not the governments appraiser will be on the lower end of the range, and I've seen them ignore damages all together.\n\nI used to do a lot of appraisal work in eminent domain situations.", "replies": [{"id": "i8lwhx8", "text": "It's appraised value which is by definition the states price.", "replies": [{"id": "i8mwde1", "text": "That's not true.  What if it's a town using eminent domain?  County?  Federal government?  You can 100% get your own appraisal and argue that the original government offer is inadequate.  I have been hired by property owners who have done this, and were granted additional compensation above what the first offer was.", "replies": [{"id": "i8n26ou", "text": "I'm sure you are very important. Still, you're saying the same thing I'm saying.", "replies": [{"id": "i8q1ia5", "text": "I think what you mean is that the property is worth more to you than market value. The government will pay market value + some damages.\n\nIt will suck if it was your childhood home and you have sentimental value. Maybe you\u2019d never sell because to you, the home is priceless. To everyone else, including the government, it most likely has a defined value range, and that\u2019s what they are going to pay.\n\nIs it fair? Not always. Houston displaced lots of low income folks when they decided to buy up poor neighborhoods for a roadway. You often see it happening to poor folks; rich folks make too much noise when you try to bulldoze their house.", "replies": [], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i8lbr1b", "text": "The others say lawyer, I say broker and/or commercial developer. Around here getting a change in zoning is a long, complicated and expensive process, and definitely not for the faint of heart. \n\nYou don't say how old you are and if you have the time and energy to work on something where the timeline can run years, not months. Also commercial financing is more expensive and shorter term than residential, so don't base your estimates on what you see happening in the world of houses and condos. \n\nJust in case you are a true beginner, start with a COMMERCIAL Realtor (not residential) and shop until you find a good fit. Ask about their track record. \n\nRezoning and  developing a commercial project is not the same as buying or selling residential property, almost zero overlap. I'm not saying don't get a lawyer, I am saying a lawyer will bill you by the hour from the first minute, while a broker doesn't get paid until the deal goes through. It's a big difference.", "replies": [{"id": "i8lgyiy", "text": "I agree with this. Most people are better off just selling than attempting to manage the project themselves, the developers already know how to deal with architects, GCs, bankers, the city, etc.\n\nAnother option - I've seen this a few times - is if you think it's truly a one of a kind opportunity is to work with your friends or another developer. You sell them a share of the houses and keep a share for yourself. This would allow you to have an equity stake in their development.", "replies": [{"id": "i8lywjj", "text": "I really appreciate both your guys\u2019 more in depth responses.\nAnd I think that maybe more the question I need answered, Should I even consider starting the re zoning process if I don\u2019t plan on developing myself. I\u2019ve never even considered developing the land myself, I\u2019m out my depth just here, let alone in that deep water. And of course I would LOVE to sit back and take a cut off someone else developing.", "replies": [{"id": "i8mjfnm", "text": "Even if you don't want to rezone yourself, an experienced commercial broker with redevelopment experience will help you price the property correctly based on the potential for the site. Highlight on needing to be someone experience in redevelopment!", "replies": [], "depth": 4}, {"id": "i8ms5w7", "text": "No. I think the ideal situation is finding a developer who will allow you to contribute the land as equity into the new deal/redevelopment. As people have said, the rezoning process is no small undertaking and really requires a niche set of knowledge and skills. Without knowing more about the market and deal, this would be the best way to realize the lands upside in value imho.", "replies": [{"id": "i8mve3v", "text": "Very much this. Interview to find a good commercial broker that will present it to the most qualified developers (with whom they will be familiar). Give the developers the opportunity to do some homework and come show you their program for the site and how they would structure a joint venture (with your entire or piece of your land value as part of the equity). If it is that good of a piece of land you will then have multiple proposals that you can leverage off of and choose a partner. But remember that you are very much choosing a partner because as others have said, the zoning process will be long and not without its challenges.", "replies": [{"id": "i8mwk2i", "text": "You guys are great I appreciate it.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "i8q05dm", "text": "Commercial realtor here, specifically one that deals with development and land.\n\nYou can find out the possibilities for your property by talking with the city/planning and zoning. While true uses are based on the imagination of the developer, cities often have already done good research on population trends and needs and will have outlined that in their Future Land Use Plan. Taking a look at that can give you a hint at what might work there.\n\nYou can also get a good idea if something will rezone by talking to the city planners. Ask if staff would recommend the zoning request to council for your proposed zoning type. You need a yes from them. Often they will say that it depends on your plans, and that\u2019s where it can get tricky/expensive. Also, attend a few council meetings and get an idea on the townspeople\u2019s sentiments on certain types of projects in your area. Do people want more apartments? More mixed use commercial? More retail strips? Do they like density (the moneymaker)?\n\nIf these point you to a yes, you should pair with an experienced broker and ask how they propose to market your property. You want data like traffic counts, demographic info, and what other major projects or trends are going on nearby. A good brokerage will have that info for you through their systems. \n\n\nOh yes, and appraisers can help. Should cost you a couple grand.\n\nHope that helps.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i8ljc8g", "text": "Zoning attorney.  You can also go to the county and request information regarding rezoning a property from residential to commercial.", "replies": [{"id": "i8nnwqp", "text": "Yes, definitely get an understanding of what the process entails for your town. You might also search for similar recent rezonings and watch recordings of the planning commission/city council meetings and get the agenda packets for those meetings to get a sense for how prickly the city will want to make the process.", "replies": [], "depth": 2}], "depth": 1}, {"id": "i8lonn6", "text": "Did you read the zoning? What's allowed as of right and what's been developed around you?  A combo of a good land use attorney and commercial broker who specializes in land deals may be a good start.  After you know what's possible to build, can look to sell, get entitlements then sell, partner with a developer where you bring the land (obviously) and developer brings the expertise and development knowledge", "replies": [{"id": "i8luld4", "text": "I honestly haven\u2019t done anything, this was my first step. I have no intention of developing the land myself, I\u2019m really just trying to maximize my chances of some entity giving me a stupid return on it. I just today found out there\u2019s an easement between the two properties which apparently dashes my hopes of combining the two.", "replies": [{"id": "i8map1a", "text": "What kind of easement is it? Not easy, but they can be removed/moved.", "replies": [{"id": "i8me0un", "text": "I wouldn\u2019t know the type, but apparently it was once a very small alley who knows how many years ago, that is now just my yard, however there is now a power line pole there that was installed about ten years ago.", "replies": [{"id": "i8mgkbx", "text": "Talk to the City and they'll give you some insight. If it's the power company that holds the easement, you can have it moved, likely at your cost. Nothing is impossible in commercial real estate, just takes time and money.", "replies": [{"id": "i8mgrv1", "text": "Appreciate it", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i8mjkzi", "text": "Converting to commercial can sound better money but do your homework. Taxes will be at least 1.5 times more than resi, insurance, electric changes, is rent really going to be more than resi?", "replies": [{"id": "i8q1ssx", "text": "You don\u2019t need to convert to commercial, just find out if the city wants commercial or if commercial use already exists. You can price it based on that. At that point, usually the value is all in the land and the structures become valued at 0.", "replies": [], "depth": 2}], "depth": 1}, {"id": "i8mvd65", "text": "Get a land use/entitlement attorney. Then they may have a trusted Commercial Broker they work with.", "replies": [], "depth": 1}, {"id": "i8p8zpy", "text": "\"After talking with some armchair real estate people, they seem to thinkthere\u2019s gold in combining these two properties and getting them changedto commercial.\"\n\nYes and maybe. if you could get your uncle to sell his  property with yours at the same time, you could form what is known as an assemblage. As an assemblage you will most likely get more money than you would have by selling the lots individually. You may find under current zoning you can build more on the combined lots than you can on individual lots.\n\nThere are two things that are absolutely key, the size of the lots and what the CURRENT zoning allows. For instance if the current zoning allows for multiple units on the lot, or to build multiple floors, or mixed use, (commercial on the bottom, residential on the top). Then there could be a significant increase in appreciation. Also with everything going on in that area, there is the very real possibility that your properties zoning, may already allow for commercial.\n\nHere are some things you can do on your own to get some info on the properties. In the US you would go to the County Tax appraiser website and look up the property by address or owner name. Once you have the property pulled up note the square footage listed, then look for Zoning code, this may differ from the land use code. It will most likely be something cryptic like RM-12, or B-2, or T5 -O-20. From there google zoning codes for your county. Once you find the appropriate zoning code, read what is allowable. This will usually be based on per acre.  For instance in Miami RM-12 allows for 12 units per acre, so if your and your uncles land combined are .5 acre, then 6 units could potentially be built on the land, it is a bit more complicated than that but I wont bore you with set back and parking requirements.\n\nThe next thing you can do is hire a appraiser to find out what the land is actually worth, including things that may be attached to the land that you may be unaware of, and may be more valuable than the land. For instance transferable development rights AKA TDRs. TDRs can be sold to a developer to add greater density (the ability to build more units) to the developers project.\n\nIf the appraisal price is enough that you consider selling, talk to an experienced real estate attorney.  Find one that is an escrow agent, title attorney and who is also an experienced litigator in the event a potential buyer tries to pull a fast one.\n\nThen find an experience real estate broker to work with, preferably one that has had multiple land sales with the developers in your area.\n\nI hope that helps.", "replies": [{"id": "i8pknos", "text": "It absolutely does my friend! I really appreciate the time you\u2019ve taken", "replies": [{"id": "i8vacid", "text": "You are welcome", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]