Offer for an apartment building

[Mike Krieg]

I'm looking at an 18-unit building tomorrow being offered for 350K. Rent rolls show it's 65% occupied and the maintenance budget is showing about 10% which is probably about 5-10% too low for this property. So this is a value-add deal. NOI is 28K. Based on that the cap rate of the offering price is 8 which is far too high for a property like this. This is a lower end property that will require more hands on management. So, I'm adjusting my asking price for a cap rate based on 12% or 280K. What are the questions I need to be asking as I look at this property? I've looked at comps in the area and I expect that money will need to go into each unit to bring the place up to par with those comps. Also, we'll look at plumbing, foundation, electrical, location relative to competition, etc...I'm trying to find a checklist I can use for a smaller apartment building like this. Anybody know of one I can use?