Assuming the basics pencil out, similar to what others have recommended, you should get it under contract with an inspection period of 90-120 days if you can with 1-2 extra 30 day extensions built in (may need to put additional earnest money down for each extension). Brad Hayden made a good list of the initial items you want to tackle -- the goal here is while there may be some sunk cost, you want to find out if your assumptions will pencil out. Is it zoned correctly for my intended use, and if not, can I get that zoning? How long will it take? Does the building have the integrity/are there no surprises I didn't account for? Are there environmental problems I didn't foresee? If so, what? Will I need a phase II, and what will remediation cost (there's more involved from multiple parties if you have findings on a phase II). Do I need to do Geotechnical studies? If you're going to do anything to the site, you may need a Land Disturbance Permit (LDP) in addition to other permits you have to pull for interior/exterior construction.
Couple of things not mentioned here is before you hunt down a GC (and generally should be a local GC or a regional GC that routinely does work in that market), you'll probably want to find an architect who has done what you're looking to do and who has design styles you like. They will help with drawings for permits, they will ensure you fit the zoning requirements and/or code requirements, to include for things like historic architecture, likely have references for civil engineers, structural engineers, professionals for mechanical, electrical, and plumbing (MEP), and they can typically help you find an experienced GC for your specific project.
I would also proforma out the project in 3 phases: construction (so, construction draws, financing costs, hard cost and soft cost expenditure, holding costs (soft costs)), lease-up, and as stabilized. Three very different distinct things happening here, all important to understand especially because there will be negative cash flow until you reach break-even occupancy. The bank will probably want to see all these proformas as well. A.CRE has some great content on this here: https://www.adventuresincre.co...
Regarding your equity question, from a true development perspective, typical JV equity stack for a more passive partner is typically 10%/90% equity split Active/Passive, for the initial 8-12% of the return, then increasingly towards the Active Partner up to 50% equity past an 20-24% IRR hurdle. THIS IS NEGOTIABLE. You could just do a straight split that equates out to a projected 20-25% IRR once stabilized (honestly getting less than that when taking all that risk is very unwise for the passive partners). Simple is better, especially if people don't have experience with waterfalls -- a confused mind says no. Also, if you're gonna hold, and not sell, you will need to figure out if you want a certain equity split during the construction to stabilization phases, and then a different split post securing permanent debt (refinance). Typically a 10/90 with an escalating promote doesn't work well for the active partner once the majority of the value has been extracted from the property.
