Analyzing Apartments, am I missing something?

[Ayodeji Kuponiyi]

I'm sure someone can help me with this. I've read many books on commercial and multi-family properties. I understand using the 1% rule of thumb to see if a property is worth looking into deeper as well as the 50% rule of thumb to see if the property cash flows after mortgage is paid.

I know NOI = Income - Expenses but how do I deduct or calculate for replacement costs from the NOI?

At what price are annual replacement costs should be calculated per unit?