Rent Controlled 4-plex in Berkeley

[Daniel Lorence]

Hello, I've got a pre-market deal in Berkeley that I'm trying to crunch the numbers on to give the real estate agent an offer. It's a four plex that has 3 unit's rented out getting about $1400 rent per unit. My friend is in one of the units and is planning to give me his unit if I buy the property, so I'd have 2 unit's and probably live in one and rent the other out. (all are 1br units, market rate about 2k/each)

I talked to the real estate agent and he said he's trying to get between 900k-1.2M, which I think is absurd given the rent controlled units and that the building isn't in the best shape. I know the landlord and I think he might give me a good deal. I'm trying to figure what is a reasonable offer price for him. See my spreadsheet below. I'm wondering if $769k is too low or reasonable.

Any Advice is appreciated

Thanks

[Edward Liu]

I have sold all my rentals in the bay area as price is way too high.  At current prices, everything on the market is negative cash flow, no matter how much deal you get from current owner.  I would not do a negative cash flow deal, especially for rent controlled units.

For same $800k, you can get much better returns if invest somewhere outside of CA.