Opinions Needed: Why Won't this Apartment Sell?

[Austin Johnson]

I'm practicing my underwriting on various local apartment complexes and found an interesting case that I wanted feedback on. Perhaps my method of running the numbers is wrong, I'm forgetting something or the local market is missing a massive deal. Either way, I'm sure I'll learn something and hopefully others will too!
The building: asking on MLS is $400k 1980 build, 8 units, all 2 bed 1 bath Class C. 62 days on the market.
I used verified rents from 2008 as well as current listed rents for the building to figure a conservative monthly rent to be at $4750.
$57k gross annual return. take off 30% (8% vacancy, 12% PM, 5% Cap Ex, 5% Maint.) 
We're looking at $39.9k return a year.
If someone paid all cash at asking price, it would be 39,900 / 400,000 which comes out to a 9.9% return?
If you got a mortgage and put 30% down, ($120k) you're looking at est. $20,796 in mortgage per year. Take that off the 39.9k and you have a return of $19,104/year. If you divide that by the initial investment of $120k, that comes out to a 15% return?
So, what am I missing here? I know I'm assuming a turnkey property with no value add potential. Why won't this property sell though? any feedback would be greatly appreciated. 

Edit: I'm not an agent nor related in any way to the seller. I'm observing the local market and trying to learn.

[Frank Jiang]

1) You forgot about insurance and taxes

2) What you're doing is just fun with numbers.  Have you actually seen this property and the state that its in?  Putting 5% into a spreadsheet for capex suddenly makes a lot less sense when you go there and realize it needs a new roof and 3/8 AC units are thrashed.

3) You sure this is a "Class C" property? As you've seen, it's very easy to make poorly performing apartment complexes look good by just plugging in assumptions, but once you own the place, you'll realize that things like 5% maint, 5% capex, and 8% vacancy are numbers you could only dream of.  Also, "Class C" is a catch all for sellers to refer to their D or F class property since its a classification with no real borders.

At the end of the day, building a model and throwing some numbers in is easy.  The part that is far more important is being able to analyze whether or not your assumptions are valid.  What you should do is call this place as an interested buyer and ask for a few things to validate the numbers you're putting into the model, such as their rent rolls (you will see if collectability or vacancy is an issue), historical costs and income statement if available, and any large capital expenditures that are coming up.