50-50 Equity Split doesn't seem right

[Amber Boskers]

Here's the scenario:

12 unit apartment complex

Off market

2 units month to month

10 units 12 month lease

Units are $300/month Below Market rents

Absentee owner

Property is free and clear

Purchase price $1,600,000

$50,000 closing costs

$24,000 acquisition fee to managing party

$500,000 cash by two investors

$75,000 cash by managing party

$200,000 rehab budget

Financing $1,300,000 of approximately $1,900,000 budget.

2 year time frame to rehab and bring units and rent up to market standard.

3-4 weeks vacancy per unit for rehab

Refinance at year 3.

Managing party wants 50-50 rental distribution split.

I'm concerned about several things:

1. Not enough cash.

2. Too much upfront debt.

3. Rehab term of 2 years is too high.

4. 50-50 doesn't seem right and am looking for feedback in this from seasoned multifamily investors.

Thoughts?