Newbie from NY; Developer's fee

[Tal B.]

Hi Everyone,

My name is Tal. I'm new to BP and also to the real estate development world.

Excited to start here and I hope I can get some useful information and make some friends.

I have a friend who wants me to partner with him on the development of a 40 unit residential building. We estimate the development to be in the millions of dollars. He has investors who will supply the financing and we will take also bank financing (about 20%-30% equity).

He wants me to take charge of the project, which is still on paper and coordinate everything. He will still be involved of course. I imagine this will take at least half of my work week (You can tell me if I'm right or not) .

It will take about 1.5-2 years to complete the project. The apartments will be for rent (i.e., we count on cash flow from rentals). Also there may be other projects in the pipeline. We need to come up with a fee for myself. It will be a combination of salary and equity rights. I am not required to bring any equity of my own.

Here is where you can advice me: What is the acceptable developer's fee for this kind of project? What should I ask for? What does it depend on? A percentage of the total cost? How to allocate salary and equity? (most of my income will derive from the project). If there was a discussion or an article about it, I apologize for not noticing and will be happy if you can refer me.

Thanks a lot!

Tal