Evaluating a first deal - would like opinions and help as I go...

[Jeffrey Day]

I'm not a paying member (I will be once I have completed my first deal) so I can't put the link for the BP calculator but I'll spell out the information in this post.  I hadn't really planned on starting with something this big but the numbers are looking too good.

This is a property that is less than one mile from a well established University.  My daughter graduated from here so I've spent a lot of time on campus and in the area and know it's a great area to live.  Here are the details.

180 unit dormitory style multi-family property built in 2009. 492-bed purpose built student housing property.  Made up of 48 2+2 and 132 3+3 units.  Full featured student community.  Large, open floor plans, full size washer/dryer in units, individual locking bedrooms, and either a balcony or patio depending on which floor the unit is on.  Property is made up of 15, three story buildings.  Property includes a fitness center, swimming pool, outdoor basketball court, tanning beds, computer lab, private study rooms, a clubhouse, and a game room.  Unit interiors are original to 2009 and achieved rents are roughly $100 below newer construction.  Occupancy dipped to 84% after many years at 95+% but I believe that doing some upgrading on the interiors as leases change over would allow us to bring that back up as well as bring the rents up closer to the newer construction.

Asking price is $12.9M which is $71,667/unit. Class B, Garden style on 9.66 acres. Parking ratio is 1.55/1000sf. Claimed CAP rate is 7.25%, Gross rent multiplier stated at 4.61.

Annual numbers:

Rental Income: 3,126,240...less vacancy of (343,866) gives us a Gross Income of $2,782,354.

Property taxes last year: (380,472)

Insurance:  Not known yet

Property Management assumed at 10%: (278,235)

Advertising not known - Used ($5,000)

Utilities:  Each unit pays own but assuming ($1500) for public lighting and will add clubhouse/pool expenses when I get the financials.

Repair set aside amount at 5%:  (156,312)

CapEx set aside amount at 5%: (156,312)

Total Expenses:  (987,832)

NOI: 1,794,522

Mortgage Payment (looking for 100% financing at 11.5% for 25 years): (1,573,494)

Total Cash Flow: 221,028

I'm requesting the financial package to get more details.  I retrieved the tax bill from the local assessor so that's accurate.  Based on what you see so far what are your opinions?  While I haven't been to the property yet I'm guessing the roofs should all have a good 10-15 years left and the other major systems should be in good shape as well.

Thanks in advance.

Jeff