Does This Rental Unit Make Sense
All right, found a FSBO 6 flat with NOI of $37K & and the owner is asking $469K. He is willing to go down to $450K. (Motivated, movin' down t FL). Giving a cap rate of 8.67%. I've gone to a couple of seminars that say you should aim for a 10% cap. 3 of the 4 comps I looked at have Caps at least 60bps less, unfortunately 2 of the comps are 12 flats. The building is in fairly good condition, low maint. Seems like a good deal to me, but just a little hesitant to close the deal. 
[addsig]
Mark
You didn't provide all the numbers, so any sort of calculations are going to be very rough, and possibly very wrong. At $450k, assuming 20% down, it looks like your annual cash flow is going to be less than $5k. For a 6-unit property that's too low in my opinion.
[addsig]
I'd take a 5K positive cash flow on a 6 unit anyday as long as the 6 unit was priced around 150K Now on a 450K property I'd pass...
Q
with 20% down (88K), annual cash flow of $12K. So somewhere around 13% on my initial investment.
If the owner is motivated trying offering 400K and see what he does. All he can do is say "NO". Don't fall in love with any potential deals, there is always the next one around the corner. With the owner moving down to FL you are in a good position. I'm not sure why he'd tell you that, it puts him in a lower negotiating position which is to your advantage--use it.
Good luck,
Q
I don't know your area, the property, or your market....That said, this property looks average at BEST.
You say the seller is motivated. "Motivated Seller" generally means "Absolutly screwed if they don't sell the property fast". He obviously WANTS to sell the property, but I don't sense any kind of desperation.
How are you going to finance it? Do you have a down payment? If he'll carry 25% at 0% interest, it might be a good deal. It won't cash flow as a "no money down" deal otherwise.
Assuming your numbers are correct (expenses are ALWAYS higher than the seller tells you they are, and income generally lower). Let's say you put 20% down and get the rest at 6% over 30 years.
Cap: 8.22%
ROI: 12.3%
Cash Flow: 11K per year
GRM: 12.16
If you're throwing $100K at it, I think it's a terrible deal. If you can get into it for no money and get it to cash flow, it might be worth your time. I see very little that I like about the deal though.
...and you should shoot for a cap of around 10. I'd never go lower than 9.5 or so unless I could get it no money down, or knew that I could improve the income of it in the near future.