How do you determine market rate and advertise? 

How do you determine whether you are better off rehabbing the existing property vs demolishing it and starting from scratch?

You could always make an offer below asking but you'd need to determine what price would work for you.

and will the value still be determined by the NOI divided by the Cap Rate? 

To determine the STC i need to know the floor system. 

They type of stain determines the best treatment.

One thing my agent was telling me is we could waive appraisals with exception of the HUD inspector to determine the scope of work.

Of course I'd have to analyze specific properties to determine if this would make sense, but I just don't know if I'm crazy to consider selling a payed-off, cash flowing house to take on 2-3 mortgages (and reduced cash flow). 

After you determine the numbers, then think about which one would make your life better.

What you should do is Cap a stabilized pro forma NOI and then deduct the costs to get there to get to your current value based on the direct capitalization method.I would go to the OM, use the broker pro forma, and then do your own research to determine the viability of their assumptions.