Questions to Ask General Partners Before Passively Investing in Real Estate
As an accredited investor looking to passively invest in real estate, whom you partner with is one of the most critical decisions you’ll make. For this reason, you should approach finding these team members like a job interview. That means coming prepared with questions when you have the opportunity to speak with the general partner about investing in apartments.
Here’s a rundown on the top questions to ask general partners before you delve into passive investing in real estate.
Types of Questions to Ask General Partners
The questions to ask the general partner (GP) fall into four categories:
1. Investment Strategy FAQs: Questions to ask the GP to gain an understanding of their overall investment strategy and process.
2. Specific Deal FAQs: Questions to ask the GP about a specific deal they have under contract and are raising money for.
3. Market FAQs: Questions to ask the GP about the market in which they are investing.
4. Team FAQs: Questions to ask the GP to learn the qualifications of them and their team.
I don’t recommend calling up the GP and asking them every question on the list below if you’re exploring passive investing in real estate. Otherwise, you might drive them clinically insane, and that’s not good for anyone. Instead, you should be able to pick up most of the info from their website and any info they provide you via written format about their company.
In fact, ideally, the general partner will proactively answer these questions when they are presenting a new deal. The purpose of this list is to make you aware of the types of questions to ask and information you need in order to make an educated investment decision before diving into passive investing in real estate.
I’ve also included my thoughts on each of the answers based on my experience as a value-add GP.