Signed lease, partial payment, transfer of possession and control of the premises smells like a tenancy to me.You would be wise to see an attorney, and quickly.

If you control the property w/ an assignable contract or inside of a trust then it's not illegal.  

Don't rationalize a bad deal into a good one by using arbitrary % and/or depending on future events I have no control over.  

Avoidance just makes things 10 times worse and ultimately it will come out you just do not control how it happens at that point and have lost all trust with your partner from keeping things from them.No legal advice given.

Figure out how to control your environment first, and then get tools to help you expedite the process!

Be clear with the seller, you buy real estate with a P&S contract with earnest money at risk.Be clear with the buyer, that you either sell real estate you control, or cleaner and with fewer legal issues, you assign P&S contracts.  

You have no control over how a seller reacts to your offer.

I know this is pretty standard for commercial loans with 10 year balloons but since small multi is valued like SFH you have less control over the value of the property and its a little more risky.

esoecially since it's so tightly controlled by the City and The Irvine Co.Also, demographically Irvine has not been ripe although just north in Tustin and adjacent unincorporated county area(s) the demo's are great.

@Ben Leybovich  This did get out of control and was not my intentions.