I sit on the local board for the UF school and Masters alum have said they learned quite a bit about putting deals together and that was useful at the UF program...structuring waterfalls, etc.  

Waterfalls are also common after a targeted return to investors hits say 18%, then the split may change to say 50/50 for every $1 distributed above that 18% IRR. 

But so far, not so good, so I'm crossing my fingers, trying to be patient and trying to calm the wife that it wasn't a huge mistake.Hope to provide a good news update on this soon when it rents out.James

I am wondering what advice you can give on an appropriate waterfall payout to investors if I am the manager of the real estate assets, leases, and management.

I can put up with a lot. if and when I buy the place, I imagine the lender is going to want an inspection but my whole plan is tearing the building down and building new. if there is a problem I will cross that bridge when I get there.Once I explained my plan, he calmed down a bit and asked why I'm not doing a rent to own with the partial rent going to the final price.

Decent point, but I don't think that it's too much of a worry:  IMHO:The supply of Rentals in Bushwick is nothing compared to the massive oversupply of (low-quality) rentals in Bed-StuyOf all the Brooklyn Rentals I've seen, South-East Bushwick rentals tend to be, on the whole, the nicest, highest-quality and most expertly renovated (and thus offer the best value.)The benefits of South-East Bushwick are innate and won't dissipate regardless of Rental supply: Great access to multiple Subway Lines, Multiple Parks & Greenspace: (Ex: Irving Square Park, Tiger Playground, Bushwick Playground)Great 'Livability': Beautiful Townhouse Architecture, calm, quiet streets with mature trees while still close to Bushwick's best Bars, Restaurants, Boutiques, Cafe's & Lounges. 

And it can go to even a more even split based on waterfalls and other more complicated structures.3.

I ran into a few issues with some of the repairs (I had to replace all the pipes as well as the furnace) but due to the fact that I expected the unexpected, I kept a calm game face and I kept moving forward.

Can anyone recommend a deal analyzer with a more robust underwriting of the waterfall/promote?

There is enough depth in at least one section to more than cover a submersible pump, which can be used to feed a waterfall, or can simply bubble, to keep water movement.