Current Merced CA sold comp values are running under $60/sq ft for nearly new homes near UC Merced. Older homes are under $40/sq ft. Sure, you will see listings way above that and a few higher sales, but the old entrenched Merced Realtors are some of the main investors now and this is what they will pay. The best deals are never seen in MLS. MLS is full of property priced at double or more than their true market value. Also be aware many of the older properties have many code violations and non working HVAC systems or unpermitted construction, which can be a real nightmare.
Many areas of Merced are rife with drug users/sellers/meth labs and people on assistance. The pool of potential tenants is bottom of the barrel.
I am a retired California Certified General Appraiser and licensed California General Contractor and have been investing in real estate since 1965. Have also been silent owner in 2 real estate companies. I know real estate values. I have property in Merced, so I do know the area and investment conditions.