Development Capital Raise

[Patrick D.]

I am working with a real estate developer who is looking to raise capital on 21 x 2 family house purchase, gut/rehab and flip. I am in the process of raising funds for him, basically $260k money raise per property. The developer has an option on all of the properties and plans on building in stages (ie; 5 at a time).

I have a few investors who have expressed interest. What is the typical commission on a money raise of this type? I was considering 2% on the front end (2% of $260,000) and 1% on the back end (after the developer sells the property, which he thinks he will get about $400k for each).

Assuming I raise money for one contract ($260,000) and the house sells for $400k, I'd come out with $5,200 on the front end and $4,000 on the back end.

As you all can tell, I am a novice at this. What is the typical protocol on raising capital on projects of this sort? And what type of agreements should be in hand?