Opportunity to buy, but what price?

[Account Closed]

Looking at a condo in a high-income historic neighborhood, near a major university. Neighborhood has appreciated at a 5% rate in the past 10 years and has tapered off to 3.5%. Unit is in need of some work and I have the opportunity to get it at a discount.

Zillow estimate rent: $1,100, recent nearly identical comp sold at $135,000.  Known expenses (hoa, tax, ins) are $400/month.  Newer construction apartments down the street rent for more like $1,400.

Repairs needed: Repair plaster walls, paint, repairs to casement windows, HVAC is 15 years old, possibly bathroom updates required.

I have a couple of questions to help me pin down a good price:

1.) Need to narrow down cost of repairs, I've estimated $5,000 - $15,000.  

2.) What's an appropriate cap rate for this area?  Recent sale indicates  5% cap rate (using 50% rule)

[Sebastian Gast]

Whatever you think you will need for repairs, add 50%! Ask me how I know that. It is pretty tough to "rehab" anything to be rent ready for less than 10k. Condo may be different though.