1. So many different ways to do this. Some guys offer a preferred return (a % return on investor money before you participate in any profits), some people do a straight split on equity (IE 80/20 investor/sponsor split where cash flow, refinancing proceeds and sale proceeds are allocated according to equity stake), some combination of the two, etc.
Honestly just figure out the absolute minimum your investors need to make to be happy then under-promise and over-deliver. If they need to make 7% cash flow to be happy and you know this is gonna make 12% returns, then promise them 7% and let them be pleasantly surprised when their portion is 9%.
There will be an operating agreement for the LLC and you'll probably need to get some PPM documents drawn up unless you know these people really well. The operating agreement will spell out all the stipulations for the partnership, how cash flow will be allocated, management fees (if any), how the partnership will survive if one of the managing members dies, what do to with members who want to sell their interest in the LLC, etc.
As for company structure, each property will usually have it's own LLC, also known as a special purpose entity. Your main structure, let's just say David Toupin LLC, will probably own your shares in each property. (IE, David Toupin LLC owns 25% of 123 Main Street LLC, 25% of 123 Elm Street LLC, etc.)
If you buy 123 Main Street, fix it up and re-sell it for a profit, then 123 Main Street LLC will be dissolved, all the cash will be divvied up among the investors and you move on to the next deal but David Toupin LLC is still standing.
2. In NY the process is:
Write offer
Sign contract with 5-10% deposit (This is where you have the deal locked up.)
Due diligence, appraisal, inspection (I've never seen an investor supply financial statements honestly, usually just tax bills, rent rolls, oil/nat. gas bills and insurance.)
Assuming everything checks out, you're clear to close.
