One thing to be aware of is if you invest in MF deals a typical waterfall may be 6 or 8% with a 70/30 split, (70 to investors), in notes it is usually the opposite as there are lower management fees involved and lower expenses as most of the management is done by the sponsors team and if they were only to collect mgmt fees it would not be worth their effort.

Complexity may depend on if you have equal ownership or have a waterfall model

From a sponsor's perspective, regardless of the source of the capital being sent, it will effect the investor's overall return and move the needle as far as a waterfall is concerned.  

Typically a waterfall structure is used to incentivize the developer (general partner).  

When it's an unknown situation and the person doing the leg work is working to achieve that track record, then you can get better splits for the capital investor.  60/40 or more likely even an 80/20.Additionally, you can look into a waterfall model (which is kind of complex) but it creates provisions that regulate the returns to the operating partner based on the success of the project.  

Hey BP Landlords,Tenant reported a bad ceiling leak , which according to PM was caused by the water falling through between the vanity and the tub. 

Typically the General Partner receives a development fee of 5% on project costs (excluding land unless the GP led the acquisition) and is rewarded with profit sharing via a waterfall structure.   

If you are living in the property you may also elect for higher grade finishes ( waterfall center island, ect). knowing all of that I would assume $150-$175/sq.ft.as for zoning, if you have 3 story home and want a roof deck it will be more about setbacks and parapit.

Assuming flip, I would structure a waterfall to ensure that you are fairly compensated for the additional services you will be providing to the partnership (oversight, management, etc). 

Added custom waterfall counters to extend out that luxury feel.