What options do I have in terms of an offer on this property if owner does not want to do a sub 2?

Are there any rules of thumb in terms of percentages of reserves requiring immediate liquidity, 3 month liquidity, etc?

What would best advice you can give in terms of profit sharing between me and owner? 

I would narrow down what you are looking for in terms of size/how much you have to spend/etc.

We both have the same risk in terms of our investment.

My suggestion is get on loopnet...start calling brokers, tell them exactly what you are looking for in terms of price, cap rate, how you do your underwriting, then let them bring deals to you, before they go to market....That is how it really works...The deals have already been shopped before they even get on loopnet.  

I'm not competing with a million other people trying to find a stock deal, I'm competing with a handful of investors and in most cases I know every single one of them.It's not difficult at all in my neck of the woods to find, buy, rehab and rent a property and nearly double your investment in terms of equity.

In terms of sharing. 

Or how would you compare/contrast the two in terms of average net profits? 

There is another option but it is expensive in terms of rates.