What to base an offer on for a low occupancy/distressed MFH

[Eric James]

I'm considering a 16 unit multifamily with an out of area owner. Supposedly, the owner purchased it to turn it around but didn't have the time and is now looking to sell. There are currently only 5 apartments rented and the NOI is a little over $7,000/year. Based only on the NOI and a realistic cap rate (say 10% for this area) yields a value that seems unrealistically low. On the other hand, I wouldn't be interested in offering a purchase price based on the units being renovated and fully rented. What would be an appropriate way to valuate a property like this?