Custom Builder or Builder with Project Management Fees

Hello Team,

I'm a new builder and I would like to apologise upfront if this question has already been asked and answered.

We are 3 friends and each of us are looking to upgrade our home by building double storey homes. The plans that we want are not with volume builders so we were looking at custom homes.

But recently few more of my contacts have went with builders who were doing cost plus percentage.

Now I do not have any idea on how this works and what should I be wary of?

So, I'm looking for help on this on how to approach the cost plus percentage or amount model, what factors I need to consider, what should be my queries, etc