Can I get some feedback on underwriting a 60 unit apartment deal

The owners asking $2.4M for 64 units. About 70% of the units are 2bd 1.5 bath and 30% are 2 bd 1 bath. Working class apartment, unit rents on average range from $475-$500. I believe tenants are paying all utilities and I think the building is sub-metered but I need to speak with the owner again to make sure.

Property built in 1990, wood siding, sheetrock interior walls

The gross monthly revenue averages out to around 28k. The owner estimates from his rent roll that if every unit was rented and paid he could get $30,045.

Where I'm caught off guard is that his monthly expenditures seem incredibly high for this size of a deal. He sent me about six months worth of basically word documents detailing the expenditures and rent roll for this deal, however the months are spread out and not in a row.

On average he's showing around 25-28k in expenditures per month, but this also includes the draws he's taking from the property. Don't think he hires out an onsite manager but oversees the day to day repairs/ and leasing from time to time.

Expenses

Feb 2017 Expenses

Bank Note-$11,000 Laundry room-$195 AT&T-$118 Owner's Compensation- $3875 (I believe he might be the onsite manager day to day) Credit card- $750 Discover card-$500 County Tax Comm- $3000 Insurance-$1178 HVAC- $1315 Home Depot-$750 CPA-$750 Grass cut-$300 Ace hardware- $210 Carpet clean- $80 Maintenance guy-$1500 (repairs) Roofing material -$1600 City -$1251 (utilities)

This gives a general overview of the kind of expenses he's showing month to month with other line items popping up here and there.

This deal seems completely over priced right, or could there be a value add play with boosting the rents. This is one of the few apartment complexes in this town and certainly the worst around.

There's a much nicer garden style deal next door getting $900 for a 2bd/2ba 1000 sqft, and $750 for a 1 bd/1ba with 800 sqft.

Another complex down the street is getting $650 for 1beds and 720 for a 2/1 and 750 for a 2/2, but is certainly nicer than the subject.

The owner mentioned the possibility of doing a lease at first as a partnership until I got financing.

I'd appreciate if anyone could input their advice on how they'd look at this deal.

Taxes run about $25k annually Insurance runs about $13k annually