They then recapture their investment by selling it to an end buyer at retail. 

I'm probably a bit old school, but I focus just on what the property needs to get to Retail (ARV - After Repair Value)  I start with Retail (nice) comps and work back from there on my numbers to get my max offer amount. 

You'll get a decent discount to retail, since most owner occupants want a finished product, and many flippers are pulling back since they can't get funding.

I hope you got a good discount off retail.

They want retail.  

That will benefit the midwest retail market and home prices will rise.  

The Fed has lowered rates, yield on the 10-year treasury is nearing 0.5%, Jamie Dimon said on the most recent JPMorgan Chase earnings call said he couldn't see rates going much lower due to the cost of originating and servicing retail mortgages.

Property is a retail storefront plus a separate 3 bedroom 2 bath house in the back.

And retail value of property is $400K? 

More and more retail chains, restaurants are announcing bankruptcy.