Newbie wants to buy $5 Million apartment complex

[Jakoby Moore]

unorganized compiled thoughts and information about this deal

I pass by this place every day on my way to work and it is near UNT here in Denton. I just feel like it could be worth owning. The complex is in an area that is very up and coming and I think has major potential. There are several apartment complexes in the area being built and remodeled and the population and property values in Denton are rising. However, I'm a noob and I am here seeking counsel. I have read up on common mistakes and the importance of the underwriting process as well as a few other things and I am unsure if the seller would take a low offer. But I really want to know if something like this deal is even worth it. What else do I need to know? Please help!

Some Numbers

• asking price $5,900,000 
• currently poor CAP 4-6%?? idk
• should I Offer $4,000,000??? 
• 97 units
  • studio $630/mo per unit (7) $4,410/mo
  • studio $630/mo per unit (7) $4,410/mo 
  • 1b1b $785/mo per unit (20) $15,700/mo 
  • 1b1b $795/mo per unit (19) $15,105/mo
  • 2b1b $875/mo per unit (28) $24,500/mo
  • 2b1.5b $930/mo per unit (16) $14,880/mo
  • 100% occupancy @ current rates yield $79,005/mo $948,060/yr

The next numbers in this section are according to one of the listings I found and are not verified

• Gross Annual Expenses: $446,168
• Gross Annual Income: $853,658
• Net Annual Income: $407,490
• Insurance Expense: $37,902

Major Variables

Seller's financials all currently unknown

-bank deposits

-expenses

-taxes

-insurance

-management

-maintenance

-staff

-lawsuits between tenants and owner

-current occupancy of each floor plan (something online said 95% but, I doubt it)

-delinquencies

condition of

-structure

-hvac

-roof

-plumbing old needs maintenance

-foundation

-parking lot

-pool pumps/cleaning

Noticeable areas of improvement

exterior paint, shutters, landscaping need updating

pool and pool area is small and ugly

office needs to be remodeled

marketing: none

website sucks

reviews give 3 stars at best

reviews online from tenants state there is only 1 maintenance person and multiple plumbing problems and poor management and possible pest control problems

Other notables

Been on realtor.com for 361+ days

mature trees

soccer field (could be re purposed)

year built 1974

class c complex

Pets ok

reviews online from tenants state there is only 1 maintenance person and multiple plumbing problems and poor management 

remodeled in 2010

On the UNT bus route