Advice Needed on This Analysis

[Tanya Brown]

Hello,

So this is a 5-plex with below market rents. The owner pays water, garbage, sewage currently. I would return that to the tenants, but I included it in the expenses under Misc. The offer price is for $129K but when I run the numbers with that price, there is minimal cash flow. So I reduced the price to $70K in this analysis. The cash flow is better, but not great...it's just OK. The seller also has another another 5-plex for $109K. I run those numbers and get an ok cash flow also (similar to this one). Is it too much speculation to expect to go in expecting to raise rents to bring up the cash flow. About 2 of the units in each property have been renovated, leaving 6 units needing to be updated as tenants leave. I put in $7000 for immediate renovations that may be needed after purchase, but all units are currently rented. I was thinking of offering a ridiculous offer on both units that are at least $40K below what they are asking (so $80K below what they are asking for both properties). All they can say is no...or come back later when they become more motivated to sell, right? Any thoughts are appreciated. 

Thanks. 

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