278 units 99 occupancy -20k per year

[Owen Hogarth]

This property is in texas i'm not sure how the owner got himself into this trouble but he has a great 1st mortgage. 5,200,000 @ 5.38 percent for 30 years and 99% occupancy.

he's losing 20k per year

he wants me to assume the loan at 250k + 50k assumption fee so for 300k i can have a property that is losing cash.

this property has great upside though his rents average 300 per month for his 278 units while market rents in the area for similar properties average 550 - 600.

so do you guys think this is a good deal to move forward with?
talking with some other management companies they say the rents can be raised over a 6 month period.

what do you guys think about a 400,000 investment to own this property. Also looking at the OM the property also has high expenses paid to the current management company that is not doing a good job.

Owen