Question for those who act as a GP on larger deals

I’ve been wanting to get into some bigger deals for the last year or so, as I now have the team and experience necessary, and the network of investors and people sending me properties that I think would make great additions to my portfolio as well as benefit my investors.

Recently I was sent a 16 unit property for 4m (decent numbers where I live) that an agent I work with was able to get a lead on off market. I brought a buddy along for the walkthrough who has done multiple larger (20m+) deals at this point. We both liked the property a lot and analyzed it in depth after seeing it and getting scope of work, dialed in expenses, etc.

When we were done, after accounting for paying the investors quarterly using his model of a 50/50 split after an 8% return to investors (LPs), the GPs (me and him) were left with damn near zero cashflow. It’d be an IO loan for up to three years so no principle being paid down either.

I’m used to structuring a straight interest return with my investors, and only buy distressed buildings in which I can refinance all their money out once the property is stabilized, give them their returns and go find the next one. In his model, he takes a 2% acquisition fee, 5% fee for managing the property, and gets a 50/50 split of everything quarterly after the investors are paid back 8% on their money each quarter, and then 50/50 split of all profits at the sale, which he sets for 5 years after acquisition.

He’s assuring me this is how the big boys do it. They don’t make monthly cashflow, mostly just fees and a big check at the exit. Is this true? Am I being greedy wanting monthly cashflow as a GP? This sounds like a good way to overpay for deals because you’re acting for fees alone. Please let me know if you have clarifying questions.