5plex $215k, but needs work

[Jeremy Roberts]

Im looking over a 5 plex in midcoast maine. The number do not look bad but not yet sure of the scope of repairs. 

Rents are

1) 620 a month 2bed/1bath, Adjust to $700

2)570 a month 1bed/1bath, Adjust to $600

3) 570 a month 1bed/1bath, Adjust to $600

4) 570 a month 1bed/1bath, Adjust to $600

5) 600 a month 2bed/1bath, Adjust to $700

Heat is electric and tenant pays, hot water is electric and tenant pays

The heat on the spreadsheet is to keep the downstairs at 50 degrees in the winter so nothing freezes.

They haven’t replaced all the windows, but they have replaced a few, as well as doors and made them weather right. A couple just need cedar shingles around them on the outside. He has replaced a few decks and stairwells. One whole side of the building he has rebuilt one whole end of the building and made sure it was supported with new beams. I am not aware of any water damage in the building except a small place in the basement from heavy snow melt.

Current landlord bills dumpster directly to the tenants. 

With tenants paying heat and hot water rents are about right. I was going to push a little higher and stop billing dumpster separate. 

Totals rents will total $37400 after increase. At 15% vacancy, adjusted income is $31110. 

Expenses with management are $14000 before required repairs. putting NOI around $17110.

Asking price is $215,000. Been for sale for 50 days. 

The realtor numbers seemed low, and didn't include any management. His NOI was $25000

I have not seen inside yet

What are your thoughts???