Please help evaluate this deal

[Chris Connery]

Hi all, 

First time poster and first time investor from southern NJ. Please let me know what you think about this deal. Please excuse the layout of these numbers, it didn't transfer well.

Unit 1	10098
Unit 2	10098
Unit 3	10098
Unit 4		10098
Gross Income		40,392
Vacancy @	8%	3,231
Effective Gross	37,161
Expenses:
Taxes	6,640
Insurance	1,384
Utilities	900
Misc.	870
Water/Sewer	3,482
Management @	3%	1,115
Replacment Res @	5%	1,858
Total Expenses		16,249
Net Operating Income		20,912
Loan amount		150,000
Interest Rate		5.00%
Term		300
Monthly Payment		$ 876.89
Annual Payment		10,523

The property is listed at 225K but i believe is overvalued and could be gotten for close to 200k. The loan numbers reflect that in my calculations. An LLC has been formed with a partner and 25% will be put down on a commercial loan. The apartment is also 100% section 8 occupied with a very solid rental history. The former owner managed the property himself and said the NOI is closer to 26k, if i was to go that way. A few additional questions, what are your thoughts on section 8 tenants? Can i legally raise rent on section 8 tenants? Is the cash flow on this property good enough for me to ignore the fact that I DO NOT KNOW what will happen to real estate values in this town in future years. It is not a ghetto or a crumbling town but i would not expect heavy long term appreciation, im just unsure. This deal caught my eye because it is very difficult to get this much cash flow with such a low purchase price in my area. Any help is appreciated. Thanks