Seems to me it locks the owner into a financial arrangement that's unilaterally one-sided.

Technically, @Joshua Rolfe you don't have any right to put up signs or advertise for that house until you close, unless you have made other arrangements in the contract.  

For this deal, you can try pay as you go ... if it works out, then propose a partnership arrangement where he puts in some funds, you put in some funds, and you split the profits ... since he will be boots on the ground managing them, it is only fair that he either gets more of the profits or you put in more of the money and you get equal shares of profits ... just what is fair on that split is up to you both to negotiate, but the key thing is he has some skin in the game and he gets a bit extra for the work and local expertise he is providing.

I have worked with new construction, SFHs, MFPs, College living, house hacking arrangements, Airbnb ect...

So after how many units would you consider that arrangement?

I believe the investor had arranged to buy it directly and pay the "wholesaler" a chunky finders fee. 

Is this a common arrangement?

I know there really isn't any typical arrangement but I just want to see what are some of the general practices are out there in the market. 

If you are investing out of state and do not have the time to be a landlord or arrange multiple repairs, you may want to think about Turnkeys.

I met a private lender here n BP and was arranging a deal with them.