As per other reviews, yes this place is a little odd: actually only ca 20 rooms on first floor over a street of heaving bars (by night, favoured by the young).
It can be cheap if you look for an online deal.
Eccentricities include the fact that there is a trick for getting the key to work - ASK or you will spend hours haunting the hallway and waiting for fellow gueststo return -- reception closes ca 5 pm.
Owner could be described as tempermental -- but he makes a fantastic breakfast including the best coffee in Berlin: unfortunately there seems to be an unwritten rule that you are only allowed one cup.
Everything they say about the pillows is true but not limited to this hotel: somehow the pillows don't seem to have anything in them -- whatever it is offers no resilience. Not good for sleeping but absolute hell if you are trying to read in bed or similar.
Re the area, this is very close to best restaurant streets and late bars in the East (but definitely not this street itself). Try the Nord-Sud cafe around the corner, Auguststrasse 87 for truly wonderful French cooking at ridiculous 7 euros for three courses. (Found myself saying to proprietor 'have you heard of capitalism?")
