Negotiating 40 condo package purchase - need help evaluating

[Recia Davis]

I'm going to be looking for an investor for a large condo package (40 units, same complex) and I need help negotiating/analyzing the deal in order to make sure it's profitable and attractive for an investor.  Are these types of deals analyzed by cap rate, appraisal of each individual unit or a combination? What experience do you have with larger package purchases (analyzing/negotiating/financing) that may come in useful?

This is the current, basic information I have:

Location - Phoenix, AZ

Seller is asking $49,000/door

Annual Rent: $414,000 <-- this is in line with market rent rates so not much room to increase without renovation

Annual HOA (includes all utilities): $180,000

[Patrick L.]

Price is definitely going to need to be lower unless this is a super desirable area.

Gross Rent $414,000

Vacancy Loss $33,120 (8%)

Management $41,400 (10%)

Interior Repairs/Maintenance $20,700 (5%)

Property/Liability Insurance $12,000 (rough guess, used $300/door/year)

Property taxes $40,000.  (you can probably fine the actual number, I used $1,000/door)

HOA $180,000

Annual Net $86,780, a cap rate of 4.4% on the seller's full asking price.