28 unit apartment deal analysis

[Steve Hilborn]

Hi BP, I'd love to get some input on this deal I'm looking at.  

Sellers 2015 numbers

Gross income  $176944  (current rent rolls work out to $188,340)

Insurance  $3733 (seems low)

Taxes $13569

W/S/G $37386 (rates for sewer are going to increase the next couple years)

Repairs $23876  (some cap ex seems to be included in here)

Misc  $4118

Other numbers not included by seller

Vacancy  $5308  (3%, its almost 0 in our area right now)

Management $14155 (8%)

NOI $72910

Asking price is $1,550,000  too high right? Cap rate is about 6 here.

Now the rents are really low for our area, the building is being self managed by an out-of-town owner.  I talked to a local PM company and they said current market rents would work out to $251,000 in gross income.  

The owner bought the property 10 years ago for the same as they are asking today, so I think they might prefer to sit on it rather than sell for below what they paid.  Is it worth worth overpaying based on current numbers knowing that future rents could be substantially higher with minimal additional costs?  Or just offer based on 6% cap ($1,215,000) and see what they say?

The building was built in 1970s looks to be in decent shape. B neighborhood.

Thanks in advance,

--Steve