Building 28 Apts on a Commercial lot i own

[Albert Albo]

This is my first post and i would really appreciate any feedback as I'm struggling to decided which way to go.

I own 1.5K acre multifamily lot located within 2 minutes walk from NMSU. I have blueprints ready and approved by the city to build 16 2br 2ba and 12 3br 3ba all condo style. All soft cost including the lot are fully paid for which was appraised @ $400k.

I'm currently working with a commercial builder to gather estimates from all subcontractors and it looks like it will cost $4.3M to bulid (including 6% contingency). The bank I'm working with requested an appraisal for the project which came in @ $4.7M(as completed land + construction). Appraisal assigned a 6.5 cap rate to the project (for a new build, REALLY??). NoI according to appraisal came at little over $300k. Bank would loan 75% or $3.5M @7%. Difference between my equity (land plus soft cost) and bank loan is roughly $500k which i need to bring to the table to finalize the deal (may need help with that).

Bank monthly payment @7% =$23K/m. NOI according to appraisal $25k/M. Cash flow $2k/M

Part of me thinks the cash flow is pretty anemic and i should scrap the whole thing. On the other hand, appraisal really low balled the #s as they rent forecast was based on neighboring properties rental rates with zero premium for new build. Also if at some point interest rates drop a little (maybe 5% range) cash flow will be more juicy.

Anyone thinks the numbers make sense or should i wait for interest rate to come down some before i proceed?

Albert, Las Cruces, NM