Are there any reports addressing the issues? There has to be a number ($$$) to fix the problems if there has already been inspections. Build the fix-it numbers into the offer.
If there are no reports, you can get the inspections done during your due diligence period after you get the property under contract.
Orinda is no stranger to houses "settling". Sometimes the settling is normal over time, and other times it can be a serious problem. An experienced Realtor familiar with soils can help.
If your friend wants the property, there is a price that works. Getting to that price is the challenge.
Many homes have or have had foundation issues in Orinda.
Call Joe Mingham at PMA (lender, division of WElls Fargo) 925.997.1023 as they have these rehab loans for homes that need work! You can do it for as little as 3% down.. though there are limits to the price, if the price is low enough for Orinda, it may work (under 729k) or ask him about other rehab loans.. there are loans out there.