How to analyze non-cashflowing MFH?

[Jay Bisaga]

As far as I know, the most common way to underwrite multifamily and other commercial properties is to use the NOI and cap rate(s) to determine a fair market value. But how do you do that when there's barely any (or nonexistent) cash flow?

Example: I'm analyzing a 6 unit that's so poorly managed that there's barely any NOI at all. According to the method described above, I should be able to get this property practically for free. The land by itself would definitely be worth way more than any value I could get from the NOI. How would a commercial broker or appraiser go about determining the value of the property?