Greg,

I plugged the data on Colonial Oaks into your format.  The actual NOI for 2001 is around 305,000.  But there is not a professional management company.  Subtracting $25,000 for management costs the NOI would be $280,000.  However, I increased the taxes and a few other expenses to bring total expenses up to $3,000/unit.  This would yield an NOI of $240,000.  Comparing the rents charged to the other 17 properties, it doesn't look like the rents have a great deal of upside.  

The asking price is $2,700,000.  Using $240,000 would make this an 8.9 cap.  Using the seller's NOI of $280,000 would be a 10.4 cap.  The cost per unit is $33,750 for a 1969 project.  The cost per square foot is 36.58.  

The numbers would be better if the property was offered at $2.5 million.  Jeff Smith claims that $2.7 million is as low as the seller will go.  This property has not been on the market.  So I would like your input of what the market would pay for it.  If $280,000 is a reasonable NOI, then I would thing it would be sold fairly quickly for $2.7 million.  It does have the benefit of all brick exterior and elderly tenants.  Plus the location is by far the most convenient.

Financing is the other consideration.  I am assuming 25 year, 7%,  and 25% down.  What do you think could actually be achieved?  Can you put me in contact with a lender?

I will follow up with a phone call.

Thanks,

Phillip