Structuring a Private Loan

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I have never done a flip with a private loan before, but a good opportunity has presented itself and I know someone who is interested in partnering with me.  The way it would work is he would fund the purchase and rehab costs with cash.  I would buy the house, renovate it, sell it, and give him a flat percentage of the amount he loaned.  I have a few questions related to this.

1) How do we structure this deal between the two of us.  How does he protect himself if I were to skip town ,die, or just decide not to pay him?  Do we write up a lien?  How is that done?

2) What is a normal percentage to pay to a private lender?

3) How do we go about putting in the best and strongest offer?  Does the seller need to know that the money isn't my own?  Does he give me the loan before the closing, or does the money go directly from him to the seller at closing?

Thanks in advance, I'm sure I'll have more questions to add to the thread as the discussion gets rolling.