analyzing my First Commercial Deal

[Vicky S.]

Hi All,

I am working on scaling myself into the commercial RE and am talking to a prospective seller (they are looking to retire). here are the initial high level numbers: 

Location: Chicagoland; Unit Type: B

# of units: 20; 3B/1.1Ba | 60-70 yrs old property.

Questions: 

1. what would be the price you would offer to the seller, given the current market conditions? currently the ask is really high ($4+M)?
2. how would you have sold this back to him without sounding very arrogant and not losing the entire conversation in the process? 
3. Seller was telling me that i should account for the reduction in taxes, that i will experience, due to the depreciation into the cash flow(I have a decent paying W2 job that i do not intend to stop anytime soon, i am looking for this as a passive income source and replace my W2 income at a later pt). Is this even the correct way to analyze the deal? 
   
4. Seller also wanted me to account for the first yr equity & possible appreciation that i build into the property? is there a way to calculate that into the model to depict the right price. should i even do this? 
5. I think i am too lenient on my debt servicing calculation? do you agree? 
6. Am I missing any critical information to evaluate this deal further?
   
   

Looking for your experts opinion/ input to help evaluate this deal further. Thanks in advance.