I am trying to analyze a deal that was proposed to me and am having trouble running the numbers.

They propose a 1 million dollar investment to begin with.

I do not agree with their counter-proposed rent.  

Whatever you propose ask yourself would you do it for someone else for that price.

I've actually met one, however he (go figure) is extremely busy.How do you propose to structure the contract?

You can't use the stock market terms and analysis and do it justice.What you are proposing is overkill for what is really a very simple analysis...if you use the proper sources/numbers to do it.Analyze Markets first to find Micro-markets. 

I might suggest proposing returning half the deposit, which is substantially more than your obligation, just to try to get things back to smooth and friendly.

I could have taken my purchase / rehab proposal to the bank for a 30 year with a construction loan on the front side and conversion on the back.

32 unit listed for 3.5 million in florida.  Seller owns the property free and clear and is interested in lease option.  How to do it?, 

You either continue at a lower rate of return/margin, or have to propose a significant rent hike just to get back in line with market rates.