8 unit in Niagara Ontario, canada

[Sukhvinder Johal]

Hi all, was hoping to run a potential purchase by the BP community.

This property is ~ 50 y.o and is in a rougher part of niagra. However its been well maintained by the present owner who purchased in ~ 5 years ago for 600 000K. 

Its a 8 unit apartment building with four 2 bedrooms and four 1 bedrooms.  Asking price is 850 000K. Yearly rents are 70K with about 2 K from laundry on top. Tenants pay there own hydro. Expenses including taxes (13K), machinate(4K), insurance (2K) and utilities  (10K) for common areas is about 30 K with 2% vacancy allowance. 

There seems to be some room to increase on rents as some have not been increased for some time. Building is in good shape and fully rented. Lots of parking space.

There are two large lots and a old hospital near by that were purchased ~ 5years ago with the intent of building newer housing however this has yet to occur. 

My thought was that if I were to go in with 30 percent down I would cover the mortgage and have it cash flow positive. With the numbers above this property does not meet the 1 % rule but Im having a hard some finding anything here that does. Also, there is a potential for development but that may take some time as well. So Im not sure how much appreciation to factor in. 

Thoughts?

Thanks