16 Unit Apartment Deal Analysis

[Richard Jimenez]

I have my first commercial deal under contract for a cash purchase of $375,000 (I  am paying all closing costs). It consists of eight 2BR/1BR units and eight 3BR/1BR. All units are currently rented with a gross monthly income of $7,325. A building inspection revealed major deferred maintenance. All AC units will be have to be replaced in the near future. Plumbing is old leaky copper and will have to be replaced. Three sets of stairs need refurbishing/replacement. Tenants pay for all utilities except water and trash. The roof was replaced in 2012. A local property manager thinks that if I  rehab the apartments I can realistically expect about $10,000 gross month income. I  am currently trying to get the seller to come down on the price due to the condition of the units and deferred maintenance. Any advice would be greatly appreciated.