The property has many value-add plays and many people in the local market perceive commercial deals as "off-limits" so competition for small commercial multi-family is slim.

After doing the CMAs, I believe their house can sell for around 600K (but would be more competitive at around 550K just to get action of course).How should I go about this?

If in the comprehensive it shows your use industrial use then check out the required rules such as; lot size, required parking, lot coverage, FAR, etc.  

@Alexander Krasne I would manually look up prices on VRBO and Airbnb on similar properties and make sure you are being competitive.

If rentals you still need to know absorption levels for rentals and what amenities the competition offers to arrive at a projected lease rate and how fast it will be to fill up and stabilize.I would want to know for instance that there was no rent control looking at  a project like that and that demand was high for rentals and most places were full.

Once I kind of saw how things worked and how different industries related to each other and their main point of business it kind of clicked. 

There are various REO companies that have made quite large bulk purchases of foreclosures in our area and are re-marketing at competitive prices.

Unless your property is an industrial loft with exposed beams it will look horrible. 

I would like to work a few years in the engineering industry and have a side hustle of real estate investing to get my foot in the door.

And the third was gorgeously decorated with the shabby chic/industrial style when I purchased it, I haven't done a THING there.