10 units / 300k list / 10cap - what am I missing?

[James E.]

Hey BP,

I've done a few successful SFH / Condo deals in my area, and am looking to move into apartment buildings out-of-state (very low cap rates and high entry points in Boston area).

I'm looking to do my first deal with my own capital and start building a track record for lenders, future investors etc... 

That being said, I'm running into a few hurdles:

1. It's tough to get financing for loan size <1m

2. The lenders I've talked with don't want to lend to an out of market investor (esp. for something on the small end). 

I've uploaded the offering memorandum for something that fits the ballpark of what I'm looking for and have run some sample analysis. 

Would love it if someone could help me poke holes in this or tell me what I'm missing, or how you would approach getting this deal done (or, why I should walk away).

 Here is the high level if you don't want to go into the PDF:

- 300k list price, 10 units, 10 cap in Cincinnati OH (near Xavier University)

- "C" class property in B class area

- Potential to reduce expenses by submetering gas heat / water (or putting in a RUBS system)

- Potential to raise rents by phasing out subsidized tenants and re-positioning as market rate class b/c tenants or class a/b student housing 

Offering memorandum:

https://drive.google.com/open?id=0B9-BaXwTNSWYdzhN...

Deal analysis:

https://drive.google.com/open?id=1gVmAPH7eLqzxBzhG...

Thanks for any help here!

James