2 duplexes sitting on a residential and commercially zone land

[Dennis Sy]

Need some help, ideas, and creative inputs on a 2 property combo possibility.

Looking at 2 duplexes for sale by one owner in CA. Both duplexes are corner lots and its backyard are facing each other. Although seller willing to sell each duplex separate, would rather have it sold together and would probably be willing to negotiate. Here is the information.

Duplex #1 sits on a residential land with a 2/1 configuration, both units are occupied by long time tenants. This duplex is a about 40 years old but looks well maintained. It has new roofing and has dual pane windows .  Competitively priced per comparative recent sales in the area but nothing much more. Both units are renting about 15% below market running rent and certainly has that plus for possible upside. Located in a single family home area in a neighborhood that is somewhat old but established and desirable. 

Duplex #2 sits on a commercial land with a 2/1 and 2/(1/2) configuration. While this was originally zoned as residential, the recent or previous owners (not sure who) had it converted to commercial zoning. As of now it is zone as commercial. Asked city hall about having it reverted back to residential but they said it has to go through series of reviews if it can be done. It would also carry a hefty fee of 15K to have it even just considered. This corner property sits on a busier intersection and face an adjacent strip mall. There is good traffic in the area. This property has been empty not sure how long and looks like some if not much work is needed. Although it has new roofing, less than one year old and dual pane windows much of the inside require some fixing. One unit has a full bathroom but the other unit has only half bathroom. One unit is missing an HVAC and a kitchen. Looks like they had this duplex configuration building as an office. It was used for mixed commercial use. Most likely no conventional loan on this property.

Questions:

On Duplex #1, although it may seem like it is a straight forward deal - any thoughts or questions we should consider about the property? How would you negotiate for better sale price? 

On Duplex #2, If unsuccessful on converting it back to residential zoned for residential renting how would one set up the property to better lease for commercial usage? Or do you even want to have it converted back to residential? Wondering how beneficial having a commercial property in the mix with your real estate investing portfolio? It has good size back yard and as it is have maybe 8 car stalls for parking already. 

On Duplex #2, If it were to stay commercial, what do people do to setup for lease (esp. there is work to be done inside). Every potential business leasee may have their own configurations for the space. Since there is work to be done inside we are stuck on how to move forward in fixing (or adding) and how to show it even. For example, why would we add a kitchen if someone would use it for an office space? Basically, we don't want to renovate only to learn that businesses would have the setup differently. 

Any idea guys are appreciated. New to this game but excited with all various possibilities!

TIA!