16 units apartment complex new Fort Worth, TX - I don't get this...

[Nick B.]

Hello BP,

An apartment complex came on sale. Here are the stats:

Built: 2001
16 1bdr/1bth units, 729 sqf
Scheduled rent: $550/unit; $105600 annual
Current rent: $55550 (4 units are vacant and 3 are being evicted, 3 are late)
Current expenses: $52740
NOI: $2810 (0.47% cap!)
Pro-forma NOI: $49K (8% cap)

Asking price: $600K

I understand that the property is grossly mismanaged but is the asking price right? If the property was performing as proforma says then $600K would seem to be appropriate. Which means that buying it at $600K leaves room for income improvement but no room for forced appreciation.

What kind of a discount should this property sell for to warrant $2800 NOI as-is? If I use 8% cap then the value is just $35000. I'd buy but they won't sell.

Thanks
Nick