How do you appraise a Single Room Occupancy building?

[Chiagozie Fawole]

Do you analyze Single Room Occupancy building as a multifamily building, or as an apartment/commercial property?

 I just came across a 3-story building, Single room occupancy building in my neighborhood. Comparably-sized buildings in the neighborhood ('regular" multifamily homes) are on the market for ~800K, but the owner is asking for a little over $1M.

Would you value the property based on the NOI? Or would you consider the other buildings in the neighborhood - which, arguably, are not similarly set up?