Usually, you will offer a preferred return and a profit split.

You are on the right track searching for a commercial policy since the property is larger than a 4 unit. 

When trying to send money for a non-profit to Germany, the money was stopped, he was questioned thoroughly about the origin of the funds.

What is a fair way to split profits on this transaction?

You could also set a minimum profit for yourself.

A business is an entity that generates income and expenses and calculates a profit or a loss.The S-Corp he is proposing generates $0 income and generates expenses that do not benefit the S-Corp - they benefit somebody else's business.So the S-Corp is going to generate losses year after year after year. 

Yes the plan would be the use the profits from the flip to pay off loan.

This shifts the urgency to the contractor to get done as quickly as possible to maximize profit. 

A hodge-podge of updates over 100+ years have left the houses with awkward spaces and outdated everything.The larger house is 1,625sqft duplex with a 3 bedroom unit on the first floor and 2 bedroom on the second floorThe small house is 1,150sqft duplex with 1 bedroom on the first floor and 1 bedroom on the second floorAsking price (FSBO) is around $240k for both (7 bedrooms total, 4 doors) but I'm fairly certain there is plenty of wiggle roomThese houses need *complete* remodels.

Once you have all those important numbers, a SPOT on rehab budget with 10-15% contingency, then you choose your profit, then you get your offer number.