Fair Purchase Price

[Reuben Stone]

Hello BP! 

I need a little advice. I have a property that I am looking at and I would really like to hear peoples advice on what a fair purchase price would be. I have done my own analysis and would like people to just confirm my finding for me and give me some strategies for negotiation. 

THE DEAL: 

9 Unit apartment building on a highly traveled street with easy access to one biggest city in my state. 15-20 parking spaces, and its also zoned for commercial use although currently all units are being used as apartments. New roof in 2014, new electrical 2012, new windows and egress doors, new appliances. Solid building that has been maintained basically.  Purchase price of $999,995

THE NUMBERS: 

INCOME

Unit 1 (3 BR) $1,300.00

Unit 2 (3 BR) $1,100.00

Unit 3 (2BD) $1,119.00

Unit 4 (1BD) $900.00

Unit 5 (2 BD) $1,050.00

Unit 6 (2 BD) $1,000.00

Unit 7 (2 BD) $1,075.00

Unit 8 (1 BD) $875.00

Unit 9 (1 BD) $775.00

EXPENSES

Insurance $3,264

Repairs and Maintenance $1,670

Lawn and snow $800

Taxes $17,733

Trash Removal $1,440

Utilities $3,660

Sewer and Water $3,507

Total Expenses- $32,074 

The numbers I came up with are assuming 20% down at 5% for 30 yrs.

NOI $72,737.60

Cash Flow $21,202.98

CAP Rate 7.27%

COC Return 10.10%

However I feel some things are unrealistic. According to the given numbers, the expenses only account for 30% of the GOI shouldnt it be more like 40-50%? Also the repairs and maintenance is way to low for a 9 unit building. I would assume it would be at least $1000/unit per year correct? By making the adjustment for the repairs and maintenance to $9000 for the year my new finds come to:

NOI $65,407.60

Cash Flow $31,909.93

CAP Rate 10.06%

COC Return 22.79%

So it appears to me that the asking price of $995,995 is way to high and a more realistic asking price would be $650,000.  Can the BP community confirm my finds and provide some feed back on things I may have missed and give some pointers on how to negotiate a fair price. I also own my own property management company so just to keep that aspect it mind. I am confident that the rents are slightly low and I can operate this property at less than a 5% vacancy rate. 

Thank you all in advance!!