Question about Promote/Carried Interest

[Nikhil Paul]

Not sure if this is the right place to post this but I didn't see an "Equity" section in the forms.

First a few example numbers: Say the property is $1,000,000 with 30% down, so $300,000 equity required @ 8% hurdle.

So this question is in relation to promote/carried interest. I know of the typical promote/carried interest used in RE/PE where say an 80/20 split is on the profits above the hurdle rate. But in the BP podcast 324, the guest spoke about taking the carried interest at the start. I.e, If he raised $300,000 for the downpayment, he took 20% off the start for "sweat equity", search costs, etc. (so he gets $60,000 right off the bat and LPs are left with $240,000 of what they invested) and the cash flows get distributed at the 20/80 split. 

Is this common? Why would anyone do this? Seems like the LPs are giving up a tremendous amount if the give up equity at the get-go.