Need assistance analyzing bank note deal

[Stephanie T.]

I am totally new to the purchasing of notes. I have recently begun working with local banks in gaining access to their non-performing assets/notes before they're handed over to brokers. One bank recently sent me the following opportunity:

- Single blanket note backed by 32 condos units in major metro Texas
- 90% occupied; avg $700 monthly rent/unit
- Current full retail appraisal $1.4m (bulk appraisal $900K)
- Interest, fees and delinquent property tax $170K
- NOI $1.47m; 10% cap rate
- Unpaid balance $1.165m
- Asking $1.2m

To me, this doesn't look like a good deal given (a) the fact the note is backed by condos which some investors consider to be a risky investment (b) there is such a slim LTV margin, especially if one assumes that the appraisal is overstated and (c) if one were to decide to foreclose on the properties, the numbers just don't work.

Since I know very little about notes I realize I may be looking at this through the wrong lenses so I'd appreciate any comments/input from BP seasoned notes experts!