Bought a Residential property and rezoned to commercial. Question..

[Daniel Bryant]

My wife and I bought a residential property in the outskirts of Columbus OH in a beautiful neighborhood. It's 1800 sf on a 1.2 acre of land. We purchased it for the purpose of rezoning to commercial and expand our existing business model (workspace rental for people in the creative field). We got it for a really good price of $360,000 on a super low interest rate (3%) back in '21. So that part is great. We spent the next two years hiring an architect to help us with the rezoning process and finally embarked on getting it zoned commercial changing the occupancy status from R-3 to B, S-1. Also that is great!

The proposed plan which got approved is to expand it from 1800 sf to 4235 sf, and initially I speculated that this may cost $300-350k to do and budgeted it accordingly. However after all the work thats required which includes landscape, parking lot, fencing lighting and interior/exterior work, it looks like the presumed cost of remodeling it will be double that, although Im not positive (still taking bids).

Ive priced a comparable property in our area which has similar square footage and lot size and they seem to be going between $700-800k, and so my question is: based on a higher than expected construction cost which is necessary to finish our project, one which will exceed the amount of money of what a similar property goes for in our neighbrhood, should I continue with this project, or an alternative plan would be to simply beautify it for approximately 100-150k
and ditch the plans, and flip it instead for approximately 700-800k now that its zoned commercial.

My fear is that if I do invest the moneys to finish the project over the budget I initially priced it for, and the business doesnt take off, I would initially lose money on this investment.

Thank you for taking the time reading this.

[Jacopo Iasiello]

Hi Daniel, Market Demand for Workspace Rentals: The core of your business model revolves around workspace rentals for creative professionals. Assessing the demand for this service in your area is crucial. Is there a burgeoning community of artists, designers, or other creatives who need space? Have you conducted market research or surveys to gauge interest levels?

[Daniel Bryant]

Quote from @Jacopo Iasiello:

Hi Daniel, Market Demand for Workspace Rentals: The core of your business model revolves around workspace rentals for creative professionals. Assessing the demand for this service in your area is crucial. Is there a burgeoning community of artists, designers, or other creatives who need space? Have you conducted market research or surveys to gauge interest levels?

Although we did get a response it wasnt as overwhelming as our sister properties in Queens NY. So hard to tell if this will take off fast and or fill up, which is why I was going into this thinking that if worse case scenario it wont take off we could sell the property and break even at the initial cost I assumed it to be, but now with the construction costs being higher Im not sure that Im willing to take that chance