I would tend to look at it as a long term investment.If you are looking at that investment as an investment that is just the start of primary income, I would recommend that you try to form a Partnership and buy in-town apartments with a positive cash flow on day 1. 

Make sure that when you underwrite the deal, you are creating a pro forma for the entire hold period and not just for one year.

What I would recommend is learning about how to raise money and how to learn about the best way to form a Partnership where you have control and purchase apartment complexes and start off fairly small and working your way up. 

And is just 10% (pro forma) discount, a real deal?

I will try to answer your questions below.The reason supplies, advertising, legal is because those expenses were specifically called out in the Pro-forma I received from the owners. 

@Matthew Bruce BaileyOne could be pro-forma Cap Rate (when every unit is 100% occupied), the other Cap Rate could be as-is.

If you do end up going this route, make sure whoever is selling you shows you REAL numbers over a meaningful period of time (minimum 4 years) and not some pro forma with sunny projections based on perfect tenants and perpetual sunshine. 

There are a plethora of soft costs that you are going to have to include in your pro forma that you need to determine their costs...ie architect, geotech, survey, system development charges, engineers, appraisal, loan fees, loan interest, etc.A fee developer or a development consultant will help you build your pro forma.

Besides the 3 that I think highly of, the rest of the hucksters are bottom feeders who only have the skill set to sell properties based on false marketing and high pro forma's.

You should definitely charge interest on this, and if they could qualify for this loan form a bank, they might as well just buy it from you outright.