Two prime properties, one AirBnB, one commercial, how to proceed?

[Chip C.]

My family  has two properties, one a residential rental, just renovated, in seaside community. This property has two structures, a main house 3br/3b, and boathouse 3br/1b, sleeps 14.  240k mortgage, market value est $2.3m.  Estimates based on local airbnb rental occupancy will be at level to pay all bills, taxes, etc, but not much cash flow. Property will be handled by local company as family is not located in area.  Great appreciation over several years, because  of premium location, probably will always have  high value.

Second property 2.9 acres business on major hwy right in the middle of restaurant row, already subdivided, zoned commercial, existing 18k sft structure w long term tenant paying about $120,000/yr.  No debt, all maint and taxes paid by tenant.  6-8 lots on back of property could be built out residential for long or short term rentals.  Roughly could be built into 6-8 single family homes current market value $2.5m  

All in all, a nice "problem" to have.  We are trying to decide best options.  

We want to improve the cash flow of the commercial as much as possible as it is under utilized presently.

Current thinking is to build out apartments for long or  short term rentals (or a mix) on commercial property.  Using the calculators on this site and talking to family in the construction business local to the area it seems the apartments would cash flow well.

Should we sell the residential at top of market and use some of the the funds to invest in the apartments?  The property has a good basis so the capital gains would be low.

Keep the residential even though it is not expected to cash flow much and just borrow  more against commercial property equity and income?

I would appreciate any ideas.

Thanks

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