Does Multifamily/Commercial zone add value

[Shem Varhaftik]

I made an offer on a property today, but unfortunately, it was not accepted. I informed the seller that I would do my due diligence to see if I could get closer to their asking price. I wasn't unprepared—I had a clear idea of my MAO, ARV, and estimated repair costs. However, the condition of the property was much worse than anticipated, which prevented me from further negotiations.

I have a rough estimate of the necessary repairs, but the challenge is that an investor might see this as either a full gut renovation or a moderately heavy project. This is a single-family home in a commercial and multifamily zone, so I believe that if the right investor obtained this property, it could be acquired at a higher price due to its potential for significantly higher cash flow.

I'm wondering if I can increase my asking price because of the property's zoning potential. If so, how can I attract the right buyer?