Lease/Option an Apartment Complex

How to determine the numbers?

Here’s what I’ve got:

Option for $260,000-$275,000 to be determined.
Seller wants out badly (Reasons have been identified)
Property appraised at $350,000
20 Unit Apartment Complex
50% Occupancy due to terrible management and no advertising
Lease for 12 Months or until we acquire 100% Occupancy then REFI.
With 90% occupancy the Cap Rate will be around or above 20%
I want the seller to pay closing, combined with the realtor commission he’s looking at about $20K
Gross Rent (Annual $85K Approx. includes 7% Vacancy Rate)
Net Operating Income Approx $45K-$50K
No renovations pertinent, just typical refresh
Lender said that with full occupancy the value would be $400K+
Rent is $350 for all comparable apartments within one mile.
These are by far the nicest apartments in the area.


What marketing to use for filling vacancies?
Anything specific I should put in the lease?
How would you work the situation if you were in my shoes?