12 unit apartment building in low income neighborhood

[Jimmy Hong]

Hello fellow BP members,

Please kindly offer your advice on this property deal. This would be my first commercial apartment building. Its an out of state property in Columbus, Ohio. 12 unit - 2 bed / 1 bath apartment building.

Property info:
Gross Schedule Income $4,800
($400 rent x 12 units, rental rates verified and comparable with surrounding neighborhood)
Less Vacany Allowance (10%) $480
Gross Operating Income $4,320
Less Operating Expenses
Maint & Repairs $918 (I think this is high)
Insurance $150 (just guessing)
Taxes $652 (confirmed but will be lower after purchase)
Utilities $100 (seller is actually paying only $32)
Property Management 10% $432

Total Operating Expenses $2,252
Net Operating Income $2,068

Seller stated 92% occupancy. I think I'm being very conservative with the expenses, please let me know if I'm not.

Seller asking $188k, cash only. So no P&I.

Here is the important factor, this property is in a low income neighborhood. My agent took some pictures and informed me that this neighborhood is not good, expects me to deal with tenant issues. Seller said he would give this neighborhood a grade of C- (but could be lower to D). It is not a warzone though. I will post the pictures following this post.

Agent also drove around and next block had a nice apartment complex that is kept well, gated, security cameras and looked decent. I asked him the question of if a family with kids can walk around at night and he recommended no.

Thanks in advance everyone.

Jimmy