12 unit c class in NC ...Deal or no deal?

[Thomas Moran]

Hi BP -

You guys have helped me immensely over the years and I am finally at a point in my investing career where I can embark into apartment buildings. I'll be honest though, the idea of writing an LOI and all the jazz is a little nerve-wracking.

Please poke holes in this, particularly those of you who invest in North Carolina, so my first larger deal doesn't become my last.

The numbers:

-$880k valuation on prop stream. 2.5 miles from the hospital and ECU. (Greenville, NC)

-Seller seems likely that he would sell in the mid 6's (he's an old dude and lives out of state)

-C class property, 12 units, built in the 90's, professionally managed, brick construction

-NOI right now is in the 50k region but based on comparables could easily be improved to 85k ish

-CoC if he agreed to mid 6's is 21%.... total ROI 61% with note paydown etc.

-It would be a 13.1 cap but my mentor owns property in Greenville and says cap rates are 6-7% which would make this worth about 975k if rents were raised.

-PITI would be about 4160 with a 162k downpayment.

-low vacancy, no evictions in the past 10 years

This is an off-market deal (communicating directly with the seller) and am currently finding partners and raising capital. If you know anyone feel free to reach out

What am I missing? Tear this one apart...seriously. Thanks so much in advance.

-Tom