Analyzing 12-unit apartment building

[Cindy Gonzalez]

Hi BP,

I am analyzing a 12-unit apartment building in the Fort Lauderdale area and even though their operating expenses seem low, the valuation I came up with after adjusting the numbers is off by A LOT so I wanted to hear everyone's thoughts about what looks off or what important details I might be missing. I don't have the actual rent numbers so I am using what was given on the pro forma and on the right are my adjusted numbers. 

          PRO FORMA                            ADJUSTED

Gross Scheduled Income: $148,980 ---- $148,980

Vacancy Cost: $5,767 (4%) -------------- $14,898 (10%)

Gross Income: $143,212 ----------------- $134,082

Operating Expenses: $40,724 (28%) --- $73, 745 (55%)

NOI: $102,487 ----------------------------- $60,337

Cap Rate: 5.9% ---------------------------- 3.4%

Asking Purchase Price: $1,750,000

Valuation/Offer: $1,022,661

Even if I adjust the vacancy rate to 5%, I still arrive at a $1,079,475 evaluation - over $600k less than asking price. I have been running into this a lot when analyzing properties and it seems to be a common theme where my offer would be far less which makes me think if I'd have a tough time getting an offer accepted if other potential buyers are coming closer to what is being asked. Is this common for the numbers to be so off? I want to make sure I am going through the analyzing process correctly so any feedback will help. 

Thanks in advance!