Can you talk me out of making another offer for this 24 units MF?

[Henri Meli]

I found this 24 unit located in a small NC town, about an hour from Raleigh, NC.

Built in 1979, 24 units, all 2BR, 1 bath,located near major highway, near mall and near county hospital. Each unit has one extra room, which could be used as an office. Consists of 4 buildings of 6 units each.

Utilities and Water are paid by tenants. Each unit has stove, refrigerator, & dishwasher. Washer/dryer hookups provided.

Occupancy is 95%. Rent averages $600/month/unit ($172k per year pro forma total).

Seller has provided rent rolls from the past 5 years (2011-2015) and I have reviewed them.

Seller is asking for about $56k/unit (1.4million for the 24 units)

Roof is about 7 years old. 50% of HVAC were changed in the last 5 years.

Below are some hard numbers from the seller. Seller provided the numbers for 5 years.

Taxes: $11k/year (Verified with county data)

PM: $14k/year (8%) (I have adjusted this number upwards by 2%)

Insurance: $7k/year (Verified with Insurance agent)

Electricity common area: $1k/year

Yard Service: $4k/year (Verified with some landscapers)

Repairs/Maintenance: $14k/year (includes: Plumbing, carpeting, painting, cleaning, various other repairs)

CapEx: $14k/year (HVAC, appliances, some upgrades). Adjusted sellers numbers by 30% upwards.

Garbage Collection: $3k (verified with city). 

Legal, advertisements, pest control, ...($2k/year)

Total expenses: $70k/year

This gives a NOI of about $100k.

Based on the sellers data, the NOI for the last 5 years has been: 99k, 100k, 88k, 100k, 110k.

I have visited the complex during the day and drove around at night a few times, to get a feel.

I have only entered one unit and it was in pretty decent shape. Nothing major from naked eye.

There are many other rentals around (which are newer in age), and the rents are higher. The seller purchased the 24 units 14 years ago for $950k (source: county records). He is selling, because he is doing a 1031 exchange into bigger properties (source: sellers agent).

I have talked to Banks, and the best terms I could get:

Loan Amount: 75% of purchase cost with 25% equity going in at closing.

Rate: Fixed rate of 4.50% for 5 years, Term: Five Years, Amortization: 20 years, Fee: ½ of 1%

I made an initial offer at $1 million a few months ago, which was turned down. I have used the Deal Analyzer tool on this site, and numbers make sense at a higher purchase price. 

My major concern has been the age of the property. I don't have any experience with any property built prior to 2000. 

Do you see any issue with my investigation so far? Do you see any red flags in my analysis or thought process? I'm tempted to make another improved offer soon. Can you see reasons, why I shouldn't raise my offer?

Your input (comments and/or criticism) appreciated.