Buying my first 8 Unit Building - Need Advice

[Chris Simms]

Midwesterner - I've bought and sold 5 single family homes since starting in 2016, not a big deal I know but I recently came into the opportunity to buy an 8 unit building for $420,000. I'd be putting 100k down with a monthly mortgage payment of roughly $1,750 against $4,575 in monthly rent. I've seen the rent rolls for the last three years - the building grosses 55k annually in rent. Net operating income after expenses is 39K. The rents are slightly below market and most tenants have been there for a couple years minimum. The listed cap rate is 8.6%. The building is in good shape and had a number of renovations last year (new roof, decks, siding, gutters) - longtime owner that has by all indication taken good care of the property. How do my numbers look? I'm making a decision in the next day or two and any advice would be welcome. 

[Charles Carillo]

@Chris Simms

I would confirm the rent roll and the T-12 match the bank statements (confirm they are actually collecting what they say). Make sure to review leases and the expense ratio is only 29% which seems low. Also make sure you are updating the new taxes on your underwriting and your new insurance policy. How will their management differ from yours? Are they self managing?