Since they've been good folks and are discussing the issue ahead of time with you, I would let them out with 30 day notice but hold them responsible for prorated rent until the next tenant comes on board.

Recently my wifes parents went ahead and split up their inheritance and my wife received her share of the inheritance, they wanted to do it before they died cause they would rather see her benefit while alive...Anyway, Its a piece of commercial property that is paid for completely right downtown.

But when you can get a leg up ahead of everyone else who is going it alone, that can be gold!

@Adam Valenta  Per the law, the seller must have fee simple title, so you couldn't do a SLO, but you can do assignments or just straight lease options. 

Go ahead and interact and meet new people.If you like, you can check this quick guide to learn how to use BiggerPockets to grow your business: http://www.biggerpockets.com/bizSee you around!

So my advice is to use a straight lease and a simple option.Another idea is to use a ROFR, which I discuss on my BP blog ( lease and right of first refusal)

I negotiate (other than real estate) for a living, there are times it is better to throw out the first number, especially if you think a seller has a crazy high number in their head.If you have reason to believe they think its worth (pick a number) $100k, and a fair deal would be more like $60k, throw out a low number to start, this makes the negotiations start at the lower number.Now I will say, don't throw out the top dollar you will give for the property, and I agree in most cases let them throw it out, but I'd rather defend a $50k offer that is somewhat realistic, than start at $100k and work your way down,,and don't just 'throw out a number', given the reasons for your offer before you give the number.If from your conversations you know the seller is going to use the house down the street that sold at $110k, then go ahead and deal with that now,,explain that there are houses in the market that have sold for very high prices, those houses (explain the difference),,,take away what he is going to try to use against you in negotiations before he can.

What are the steps you take to go ahead and get into these markets or do I need to physically go there and view these properties?

It's called Bigger Pockets : )If you are a beginner, I would suggest you start here to obtain your footing:http://www.biggerpockets.com/real-estate-investingAlso, believe it or not, the Real Estate Investing for Dummies Second Version book is helpful, pretty straight forward, and entertaining to read.  

But the zoning also permits multi-family, straight commercial (service businesses, straight retail, or a mixed use combination of all.As for how it came about... we were looking for residential flip opportunities in the area and happened on this property the day a FSBO sign went up.