Is this an unrealistic offer? Or is my math wrong...could be that

[Tyler Turpin]

I came across a 5-plex in San Pedro, CA. A Rent Controlled Area. Rougher part of town but with a huge 1 billion development starting in 1 year near by. I have only seen the exterior and it looks rough. I'd imagine the interior is equal to or worse that that. My rough estimate is 50k-60k for rehab to get it to pro forma level. 

Asking Price: $695k

Gross Rent: $54645

Gross Multiplier: 13.30 (According to MLS)

CAP: 5.1%

NOI: $36,066 - they didn't factor in vacancy or management and I believe the posted utility cost is low

My Estimated NOI: $25115

$25115/ 0.051=  $492,500

Is it unreasonable to offer $492k - $520k?