What to Ask a General Partner (GP) Before You Invest: 10 Questions Every Passive Investor Should Know

Investing passively in real estate syndications or private equity deals can be a smart way to grow wealth — especially when you’re short on time and long on capital. But your success doesn’t just depend on the property. It depends on the people running the deal — the General Partner (GP) or sponsor.

At Fletcher Cove Capital, we welcome smart questions from investors. In fact, we think you should dig in. Because if you choose the wrong GP, even a great asset can underperform. So here’s a list of 10 essential questions every investor should ask before wiring funds into a real estate deal.

1. What’s Your Track Record — and How Relevant Is It?

Past performance isn’t a guarantee, but it’s a window into the sponsor’s capabilities. Ask:

• How many deals have you taken full-cycle (bought, operated, and exited)?

• What were the actual returns vs. pro forma?

• Have you done similar asset types in similar markets?

Red Flag: A GP showing high returns on paper but no exits — or jumping into a new asset class without experience.

2. How Are You Aligned With Investors?

Strong GPs invest their own money alongside LPs. This is called “co-investment.”

• How much of your own capital are you investing?

• How are you compensated (fees, promotes, etc.)?

• Do you make money only when we do?

Look for alignment through skin in the game and performance-based structures.

3. What’s the Business Plan — and Is It Realistic?

A good GP should clearly articulate:

• The asset strategy (value-add, core-plus, opportunistic?)

• Timeline to execute the plan

• How the market supports the assumptions

Red Flag: Vague plans like “raise rents” with no operational roadmap.

4. How Conservative Are Your Assumptions?

Ask them how they underwrite:

• Rent growth

• Exit cap rates

• Interest rates and debt terms

Bonus: Ask for the downside scenario or “stress test” model. A strong GP has already run it.

5. What’s the Capital Stack and Who Gets Paid First?

Understand where your money sits in the priority of returns:

• Are there preferred returns?

• Are there mezzanine or bridge lenders involved?

• When do the sponsors start taking a promote?

Look for transparent waterfall structures and fair alignment of risk and reward.

6. Who’s Managing the Property?

Great real estate deals can go sideways with poor execution.

• Is property management in-house or third-party?

• How often are the assets visited?

• Who oversees leasing, CapEx, tenant issues?

A vertically integrated sponsor often has more control and better performance.

7. What Happens If Things Go Sideways?

No one likes to talk about risk — but good GPs plan for it.

• What’s your plan if the lease-up takes longer?

• What if interest rates rise or a refi isn’t available?

• Have you ever had a deal go bad? How did you handle it?

Transparency here is more valuable than a perfect track record.

8. What’s the Communication Plan With Investors?

Will you be left in the dark after you invest? You shouldn’t be.

• How often will I get updates?

• Will I receive detailed financials and rent rolls?

• Is there a portal or dashboard to track performance?

Look for clear, consistent investor communication — monthly or quarterly.

9. Can I Speak to a Past Investor?

Don’t be afraid to ask for references, especially if this is your first deal with them.

Bonus: Look for GPs with repeat investors — that’s often the best proof of trust.

10. Why Do You Like This Deal Personally?

The answer can reveal how much conviction the GP truly has. Are they just syndicating to collect fees, or do they genuinely believe in the asset and the market?

You want a GP who invests their own money and has a long-term mindset.

Bottom Line

Investing with a GP isn’t just about the numbers — it’s about the people. Ask smart questions. Read between the lines. And don’t confuse slick pitch decks for operational excellence.