Valuation of Multifamily Apartments - No Tenants

[Derek Magdziak]

When evaluating a multifamily property (5+ units), one would determine the actual property income (the total income the property generated in the prior 12 months) and use this calculation as part of the calculation for the NOI and the purchase price.

If one comes across a property that is a completely renovated multifamily commercial property but has no tenants, should one focus on using the actual potential income of the property (meaning total income the property could have generated assuming 100% occupancy rate over 12 months) since the actual income doesn't exist to calculate the NOI and purchase price?

Thanks in advance.