Structuring Acquisition Fees

[Snehann Kapnadak]

Hi All,

How do you present a deal to an investor with the goal of being compensated for it when it closes via an Acquisition Fee? If I find a deal, but don't have capital to bring in and instead work on underwriting, due diligence, and seller/broker relationships, and present it to an experienced investor who closes on it, at what point should I ask for an acquisition fee? I feel a little odd asking, although I know that I should be compensated for my efforts and for finding the deal in the first place. 

What are the logistics of making sure I get the fee? Do I need a to get a contract written up that states what the fee will be? Do I do that from the beginning or should I wait until we get the deal under contract? My fear is that I'll do a lot of sweat equity on the acquisition and the investor will take the deal and close it by themselves and cut me out (this has happened to me to some extent once before).

Any insights would be greatly appreciated. Thanks in advance!