It seems here in the Bay Area, it is starting to soften, DOM increasing, some sellers having to accept lower than listing price.

This change alone stands to gain me ~$150k+ in equity due to the increase in NOI.My concern is that firing this PM may prove complicated due to his status as a tenant.

A part of me would like to bring them up to market rents right away but then I risk the chance of one of them leaving and having to deal with turnover right away.   

Office space and housing  rents are increasing.

The 585,000 number is based on the income-approach used in commercial properties, but it sounds like the appraisal approach would have to be comp-based because it is still a residential property (4 units) at the present time and there is a chance the city won't allow the extra unit.The 461,500 number is the all-in price - purchase+rehab+holding costs. 

The market is saturated with flippers who have driven many poor home owners out of neighborhoods and decades old family homes once they can no longer afford the taxes.Families can't even get in to see a house the day it is listed because there are already multiple cash offers and the banks take them and don't give the families a fair chance.Trying to buy a home for my family in Monroe County, and the price we can afford, but newly listed homes that may need the smallest amount of work … NO chance for us.

I would check on how much your property taxes are because they may increase if they have not already.

There really is not that much cost increase with that little of a jump in number of units. 

To save $1080, your tax burden increases plus you'll get to take less depreciation while you own it.I've had great results not getting a buyers agent at all.

Chances are if you've given them value and they trust you, they'll be open to the idea.