I need help underwriting deal

[Jason Malabute]

i need help on this deal I'm underwriting. The seller wants $1,250,000. It's a 10 unit, B neighborhood, built 1988, 5% vacancy, average rent is currently $742, but it can be pushed up to $955. Cap rate is 6% . Only 2 of the units need to be rehabbed which will cost me $15k each. I'm using 40% ratio because its a B property. Financing is 4% and 25 year amortization (which the seller agrees with). What I don't understand is based on a 6% cap the value of this property is supposed to be $1,145,763, but according to my underwriting for me to get 7% return my offer should be $900k. Why don't the value based ($1,145,763) based on 6% cap and offer price ($900k) to get 7% coc return agree? Please see attached underwriting.

https://docs.google.com/spread...