Apartment Building Investing

[Chuck Williams]

Hello. I am a somewhat experience investor who owns a few rental properties. I have been primarily focusing on single family homes in the 3/2 1400-1800sqft category. I've been interested in getting into multi-family investing and recently found a 25 unit building at a very reasonable price. The cap rate is 12.5 percent. The property is in need of upgrades inside and out (I haven't done a through inspection) and isn't in the greatest location. It's at about 90 percent occupancy. 

I feel that the area is an up and coming location and that the landlord is probably not charging enough for rent (I'm sure I could charge more, with some upgrades). On the outside, it sound like a good deal but the price seems too good to be true. The owner is even up for seller financing. My problem is, I don't know the first thing about valuing this property. I want to talk to the seller and do a walk through but what questions do I ask? What am I looking for? The building is listed for 500k. I planned on doing commercial financing with 25% down, but what would a decently structured LC look like?