Are there any potential red flags I should be aware of?

He was soooo deep in the red ON PAPER, and didn't know what to do.

If you can't close fast enough or has too much red tape, then you lose the deal to others.

Labor, supply chain (we are on an island) and red tape: from offers and closing, to funding to permits.  

Any GC that does not work like this is a huge Red Flag and you should run away.2) Also any experienced GC should have theur own state-legal contract that spells out terms clearly and protects both of you.

Don't see any major red flags here, so long as you are comfortable in the low income space.

Now, my thoughts (full disclosure: I am not selling you anything): I see it as a red flag that the GP is doing a capital call, but you don't know why.

Smoking cigarettes is also quite legal, and also prohibited under the lease.I think your argument on unit count is a red herring here. 

That extra cash flow isnt safety, its the market signaling with a big red flashing light, Risk.

That means if a tenant leaves once a year I have two weeks to get someone in before I go in the red.