Help with review of financials on 24 unit apartment building

[Adam Craig]

I am in early stages of looking at this off market deal. 24 unit apartment building. Sellers is asking 1million and provided the numbers below.

Below the income numbers they ran some numbers for financing at the full asking price with a NOI of only 19K. It seems I could be one property tax re-assesment away from being negative cash flow if those numbers are accurate and remain constant.

				ACTUAL
Gross Rental Income:
Based on Existing Rent Roll Submitted by Seller on 11/8
8 units/2 bedrooms @ 818 building		$ 71,244	$ 742.13
8 units/ 2 bedrooms @ 842 building		71,064	$ 740.25
8 units/2 bedrooms @ 850 building		70,884	$ 738.38
				$ 213,192	$ 740.25
Other Income-Washing Machines Est. Based on 2017 P/L	4,000
Total Projected Income			$ 217,192
Less: Vacancy Factor of 5%		(10,860)
Management Fee of 5%		(10,860)
Adjusted Net Income			$ 195,473
Operating Expenses:
Utilities-Based on 2016 P/L		(21,000)
Insurance-Based on 2016 P/L		(5,000)
Landscape-Based on 2016 P/L		(7,000)
Trash Removal-Based on 2016 P/L		(6,000)
Marketing-Based on 2016 P/L		(4,000)
Professional Fees-Estimate		(3,000)
Repairs & Maint.-Est. Based on 5% for each Building Rent	(30,000)
Building Reserve-Est. of $250 per unit		(6,000)
Sub-Total of Operating Expenses		(82,000)
Projected Real Estate Taxes		(34,290)
NET INCOME				$ 79,183
			PAGE ONE
OPINION OF CURRENT MARKET VALUE-NOVEMBER 2017
Net Income				$ 79,183
			Amrtz. Term
Blended Cap Rate:	Interest Rate	Years
Debt Amount	75%	5.00%	20
Equity Amount	25%
Debt Constant	7.92%
Return Equity	8.00%			-
Blended Cap Rate:	7.9400%		-
OPINION OF MARKET VALUE BASED ON BLENDED CAP RATE	$ 997,264
Amount of Debt: 75%			$ 747,948
Amount of Equity: 25%			$ 249,316
NET INCOME AFTER DEBT SERVICE
ANNUAL DEBT SERVICE-5% @ 20 YEAR AMORTZ.	(59,234)
NET INCOME AFTER DEBT SERVICE		$ 19,949
CASH RETURN ON EQUITY			8.00%
Footnote #1: Pursuant to rent roll and discussion with seller on 11/17, all units are leased.
Footnote #2: Financing based on exiting local bank rates as of 11/17/17
Footnote #3: Repairs & Maint. Is an estmate based on 5% of the total rents for each bldg.;
	that was the estimate suggested by loan office from Bank.
	Recommendation to buyer is to engage contractor to inspect the property
	to verify the accuracy of this estimate.
Footnote #4: Estimate reserve based on $250 per unit.
Footnote #5: Real Estate Taxes are an estimate based on that the buildings will be
	assessed at a market value of 80% of the asking price; as a result
	this will be readjusted based on the final purchase price and when
	the property is eventually reassessed.
THE INFORMATION CONTAINED WITHIN THIS ANALYSIS SHOULD NOT BE COSTRUED IN ANY WAY AS AN
APPRAISAL. THIS SUMMATION IS MY EXCLUSIVE OPINION THAT WAS BASED ON INFORMATION THAT
WAS PROVIDED TO ME BY THE EXISTING OWNER. IN ADDITION, THE SUMMATION WAS BASED ON
DISCUSSIONS WITH VARIOUS LENDING INSTITUTIONS WHO CONVEYED INFORMATION PERTAINING
TO FINANCING RATES BASED ON THE MARKET AS OF NOVEBER 17, 2017. AS A RESULT, I CANNOT PROVIDE
ANY WARRANTIES OR ASSURANCES REGARDING THE ACCURACY OF THESE PROJECTIONS. THIS
SUMMATION DOES NOT INCLUDE ANY OPINION REGARDING THE PHYSICAL CONDITION OF THE
BUILDING OR IT'S IMPACT, IF ANY, UPON THE VALUE OF THE BUILDING.