50-50 Equity Split doesn't seem right

[Amber Boskers]

Here's the scenario:

Have been approached with a 12-unit apartment style complex deal.

Absentee owner looking to sell

Off-market

Rents $300/Unit Below Market Rents

2 units - month to month

10 units - 12 month leases

Wholesale deal

$1,600,000 purchase price

$200,000 rehab budget

$50,000 closing costs

$24,000 acquisition fee to wholesalers

Property is free and clear.

$500,000 cash from two investors

$75,000 cash from wholesalers

Wholesalers will oversee rehab and manage property.

Financing the rest, intend to refinance in 3 years after stabilizing complex by renovating units and bringing rents up to market standards. Two year time frame for rehab. 3-4 week vacancy per unit for rehab.

Wholesalers want 50-50 split on rental income distribution. 50% to wholesalers, 50% to cash investors.

There are several things I don't like about this deal:

1. Not enough cash upfront.

2. Too much debt because of #1.

3. Two year time frame for rehab is too long. 4. Don't like 50-50 .... Looking for feedback about this from seasoned multifamily investors.

Thoughts?