Walking through 1 bedroom to get to another is generally considered to be a privacy violation, so the middle entry bedroom may not be considered by and assessor or an appraiser, I personally will look at the layout and consider how a typical end user in that marketplace will utilize the space, while I hate to get rid of bedrooms and bathrooms, in this case it may be worth consideration given the privacy violation, smaller bedrooms to begin with, as well as lack of closet space...just my opinion, good luck. 

@Joel Owens  @Moses Kagan - My thinking, after reading your comments, is to scale back on my original plan and take your suggestion of minor variations as follows:The building has two types of units: 1 & 2 Bedrooms with identical layout by type.

Here's how I would approach this question, since you will know most about the property, layout, etc.How much do you pay per sq ft to do the same thing where you're at?

I couldn't follow your layout description. 

We fixed the foundation, new electrical and plumbing, walls and layout were adjusted, new kitchen and baths, new roof, siding, and landscaping.

We got it for about 80% of market value and knew it wasn't a fantastic deal after factoring the rehab but the numbers were still pretty good and the location is solid.The good:all replacement windowsamazing first floor layout with 10' ceilingslots of light and good viewsgreat location for nightlife, walking, bus linepossible hardwoods throughout first floor (waiting for painting to be done to remove 100 year old wall to wall carpet)The bad:only bathroom is on second flooreverything is from 1940small bedroomsspent roof (we knew this coming in)The ugly:super weird bedroom layout, one closet is in the bathroom!

The waterfall thresholds can be set at certain LP IRR returns or multiples (2X, 3X, etc) and can be quite complicated to model so it is important to lay out clearly with dollar figures who gets what when with waterfall structures.Note that the split of cash flow above any pref can also have a waterfall structure.

The DRE in Jackson that runs the state is a small office you can walk right up to the counter most days and talk to an enforcement officer ( I have done it) just lay out what you want to do and they will tell you if it requires a license.. 15k wholesaling course is a Joke.. its not 15k complicated.. and its also far more difficult than anyone leads on.. you need a lot of skills to do this correctly.

We didn't get to see the actual property we have in contract but our agent partner was able to get us into a unit that has the same layout just to get a feel of what could possibly go wrong.

If everything is equal area, location, bedroom, bath, sqft then it comes down to layout and aesthetics.