The second way is definitely the Direct Capitalization solution. With this process, as opposed to relying on gross rents, the appraiser will work out the net running cash flow. Commercial real estate appraisers usually use exactly the same formula to ascertain a property's benefit when they use the cost method. https://www.linkedin.com/pulse/role-midland-appraiser-divorce-settlements-silent-story-teller-3ml3f