I would suggest you simply call around and get rental comps on boarding house rooms. Same approach as finding comps on office space, even though you're probably dealing with amateurs... I don't now.
I have no idea if this posting here might will do for you, but this was meant for a person who had a small mixed-used they wanted to flip, whom was wanting advice on market evaluations and negotiations.
Please feel free to ignore what doesn't apply. However, maybe someone else reading this can get some insight dealing with odd-ball property like you're describing.
You need to ask a lot more questions of the seller. Why has it "really" been vacant all this time. How come nobody could rent this thing?
Meantime, mixed use properties, at this size, are practically impossible to get financing on. Just saying. Why? Because the "value" is based on income, and the income is really dependent on the owner's management experience. Commercial space can be vacant for months at a time, but the overhead stays the same. Then there's tenant improvements at the time of a lease up.
Well, that just scrambles the forecasts and projections. A lender may assume a 20% vacancy factor when evaluating a mixed-used property (unless there's an established, verifiable, track record, which you don't have anything of the sort, to work with at this point.
Also, <<<false assumption alert>>> you don't have a track record of taking empty, mixed-used properties and turning them around, or repositioning them in the market. And just to add insult to injury, your buyer will have to have this expertise and experience IF he's applying for a loan on this deal.
All that said, find out what the rents are for boarding house units. Then you can extrapolate the GSI from the comps. You'll assume a 50% overhead including vacancy factor, and then you can work backwards to determine the final market value, based on income. However, you're really only needing that information to create a pro forma for your buyer, the future lender, and to use against the seller. You're not paying the seller for a performing property. Your buying a dead, hulk of a non-performing property. One that stinks to high heaven on paper for the last 7 years, no less. So, it's worth the land, and the obsolete structure is worth about .20c after the cost of upgrades and remodeling are factored in.
Then find out what the average lease rent per square foot on like-commercial office space is in the area. There's gonna be other house-office conversions close by. Go inside and see the level of tenant improvements that exist and ask the managers what the "rents range in this area", not "What's your rent?" One's a reasonable question, the other is an invasion of privacy. I've been kicked out of offices after asking the question the 2nd way. FWIWRealize that a buyer will want concessions from you in order to justify both buying the boarding house and then having to plow in tenant improvements, etc. This means the buyer has got to put up 2 down payments; one to finance the property, and the other to improve/convert it into office space. [This will be their negotiating position]
BTW, you need to be talking to a commercial mortgage broker right now and get a lay of the land about what types of financing are available for this project. Ask him what he needs to make a thorough analysis on the property and the types of loans that will be available. Don't leave this up to the buyer to figure out.
Plus, knowing what kinds of financing is actually available, including the terms, the potential costs of tenant improvements, etc, will give you a backstop to operate against, so that you'll be prepared for negotiations.
This is not going to be a simple "wholesale deal." It's weird. It's mixed use. It's not bread and butter. It will require negotiations both buying and selling.
BTW, again, after talking with a mortgage broker you'll also have much better idea about now to negotiate the purchase price.
For example, if the mortgage broker told you that the best terms anyone is going to get on this potential, office space is 8% over 20 years with a five-year balloon, that will make a big difference as to its marketability and value. You use that against the seller. You tell him:
"Mr. Seller, the financing I can get on this project sucks drain water.
It's gonna cost me "x" to rehab the property, another "x" to draw remodeling permits (and you know what kind of can of worms that opens, right Mr. Seller?), and then we've got really stiff, "mixed use" financing ahead of us that practically makes this deal unworkable with the rent schedule I've been able to put together, based on neighborhood comps (pulling out the rental comps).
The financing is going to eat into the bottom line like termites in your wife's wooden leg. So as a result, I can only buy your old boarding house at 50% of your asking price, and then only if you're willing to finance it 100% with zero down for five years. Then it's close to making sense."
Of course you build in "front porches" like you were building a plantation home, for negotiations, so that the seller can feel good about giving you his empty, crumbling boarding house for half what it's worth. And then it automatically becomes the "no-brainer, I-can't-believe-my-luck" wholesale bargain to your wholesale buyer. And you close in 2 days for cash and pocket $20,000 in return for about 10 hours worth of work. Hey $2,000 an hour isn't bad.
But this only happens when you know your numbers better than anyone else does and can negotiate from a position of both authority and credibility, if not strength.