disaster in fairfax, ca

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so I've recently taken over a project from a friend who purchased a house which he intended to fix and rent out. It's in fairfax in marin county which is a pretty high end market. Its a duplex on a pretty steep hillside with a lower 1/bd rented for $1300. Top floor pretty much has nothing going for it except a view. He paid cash and it's just a poor investment. 

  Purchase price was 590k and total rehab cost to make it worth selling would be 300k+.  Even then he might only break even or still lose money. My suggestion was to put 20-30k in making the upper unit rentable and collect rents in the mean time.  About $2000 or 3300 total. Not a great return but it beats spending 900k to get  800k at this point.  He has other poor investments which I'm helping with but this one takes the cake. All comments, suggestions, and criticism are welcome

Thanks