New Wholesaler - First offer! Thoughts?

[Nicholas Stevens]

Whassup BP!? I'm a brand new wholesaler, sent out about 1,000 yellow letters so far. Fielded quite a few calls but haven't talked to too many motivated sellers yet.

Anyways, I went on my first appointment w/ seller yesterday he owns a 7 residential unit property with a commercial (business office) unit as well - 8 units total. I made a soft/rough offer and feeling nervous about it and wanted to see if anyone had any insight.

It was difficult to pull comps because of the uniqueness of the property but the closest I could find were 3 properties that sold in the last month and were all 6-families that sold for roughly $600k all of which had 3br/3br/2br type setup.

The subject property has 5 two bedrooms, 2 studio's and the commercial unit. The property is probably about a 6.5 out of 10. All units are rentable but not in the greatest shape, outdated, small kitchens, and small bedrooms. The other downer on the property is the tenants have no parking, just street parking. I'm close to Boston so for some people its not the end of the world b/c of the public transportation.
I ended up offering $620,000 and he said he will think about it but did not seem disgusted with the offer so I'm starting to think I offered too much.

The property right now is collecting rent of $7,100/month and he uses the commercial unit and also one of the studio's for storage so that would be approx another $1900/month in rent. The property could be getting $9k/month in rent if it were fully utilized. This equates to $108,000 per year and I'm using a rough 35% for expenses yielding $70,200 NOI. I'm figuring someone would be willing to accept a 10% cap rate and be willing to pay around $700k for it, am I even close on this?

Thanks in advance for any advice!