Five things every first-time real-estate fund investor should ask

Before signing your first investor agreement, run these five questions past the fund manager. Their answers will tell you more than any pitch deck.

If you are about to sign your first investor agreement with a real estate fund — Bitfinix or otherwise — these are the five questions to ask. The answers reveal more about the fund manager than any pitch deck.

1. "What is your co-investment percentage, and at what level — fund or project?"

Generic skin-in-the-game commitments at the fund level are weak. Ask for project-level co-investment. If the manager invests 5% of every individual project, their incentives are aligned at the underwriting stage, not just at the AUM-fee stage.

2. "Show me the last three deals you declined, and why."

A good manager will have a clear, articulated rejection rationale. A manager who cannot remember a recent decline is either too new or too undisciplined.

3. "What happens in your worst-case cashflow scenario?"

Press for the stress test, not the base case. Every fund's IRR looks good in the deck. The question is what the recovery profile looks like if the primary exit fails. Is there a secondary sale path? A debt restructuring covenant? A sponsor guarantee?

4. "Where is investor money held before deployment, and who controls it?"

The right answer is: in an RBI-compliant escrow account, controlled by an independent third-party escrow agent, with release triggered against documented milestones. Anything less — including "in the fund manager's operational account" — is a structural risk.

5. "Can I see the audit report for last year, signed?"

If a fund cannot produce a signed audited financial statement from a recognised auditor, walk away. No exceptions.

The best fund managers welcome these questions. They have answered them before, in writing, to allocators who know what to look for.