Newbie Multi family unit in a different state,

[Ken Fricke]

Good evening BPers,

I have been doing real estate investing for around five years in my area, I have flipped a few sfr with a small amount of success and a large amount of learning, I currently own two sfr one I am renting out the second one I am fixing up and will be renting soon.  I never have been the type to study to much I like to jump in with both feet learn and repeat. Don't get me wrong I like to read and I have listen to all the podcast love to learn I just like to learn by doing as well.

Because the cap rates in my area are fairly low on multifamily units I stared to look outside my state namely Wyoming an oil town i do have some connections up there my cousin a contractor turned oil worker lives and works in the same town, we found a 16 unit property that consist of one 8 plex one bedroom and two four plex's two bedrooms.

A small regional bank owns the property and has tried to manage it the best it could over the last two years.  Calculating the vacancy rate of the property during the last two years was about 50% which was not typical for the area over the same time period the banker just hates being a property manager, the property is currently rented at a 20% vacancy which they are getting $500.00 for the one bedrooms and $850.00 for the two bed rooms 

One bedroom a month fully rented would be $4000.00

Two bedroom a month fully rented would be $6800.00

Total rent a month is                                       $10800.00

The property also comes with five building lots zoned commercial that can be converted into multifamily units.

The cost I used to calculate the cap-rate are as follows:

Management                                    12%

Maintenance                                      10%

Repair                                                  5%

Vacancy after talking PMC                 15%

Insurance yearly                               $5100.00

Taxes                                                $5100.00

The bank is asking $690000.00

currently we are negotiating with the bank on the price we have a counter at $599000.00

I believe they will go a little further so we offer $500000.00

There will be some renovation cost of around $30000.00

I have checked out the local economy and rental situation we interviewed two different PMC, three years ago they were renting for one bedroom $1000.00 and two bedroom $1500.00

Seems to me to be a good deal compared to what i am looking at in my market, I am just worried I am missing something since this is my first multifamily unit any comment or help would be greatly appreciated.

I don't post much so sorry if it does't flow that great or I left something out