I can offer select services remotely up and down the state for a fraction of the cost of traditional management.

I don't have data to back this up, but im willing to bet that the volume of CDO's in the housing market is a tiny fraction of what shorting is to the stock market.

http://www.har.com/content/newsroomHouston Real Estate Highlights in March: Single-family home sales declined 2.2 percent compared to last March;On a year-to-date basis, single-family home sales are up 1.0 percent;Total property sales declined 1.0 percent to 7,375 units;Total dollar volume fell 2.5 percent to $1.9 billion;At 272,658, the single-family home average price was down 1.6 percent compared to last March;The single-family home median price rose 2.4 percent year-over-year to an all-time March high of $215,000;Single-family homes months of inventory climbed to a 3.6-months supply versus 2.8 months a year earlier;Townhomes/condominium sales rose 1.9 percent with the average price down 2.0 percent to $193,483 and the median price up 4.9 percent to $150,000;Leases of single-family homes climbed 9.0 percent with rents up a fractional 0.6 percent to $1,736;Leases of townhomes/condominiums rose 7.4 percent with rents up 1.7 percent to $1,596.

He would give me a small fraction of the down payment and I would pay the rest and handle all of the other aspects of the purchase and maintenance of the deal once it goes through. 

He's mad because he spent a lot of time, effort, and money to become a realtor to make a whopping 3% commission, while wholesalers don't waste even a fraction of the amount of time to make $5k, $10k, $15k, $20k, or more per deal.

Rather then sell and move into cash by selling outright and enduring the tax hit to wait for a market correction and good buying opportunity, they will buy fractional passive investments that qualify for 1031 so they can continue to reap tax deferred status, and garner depreciation etc.  

(In our experience, when the owner has some cash to sink into the building, you can often do this in three months but will run the building financially in the red, so since we had to keep it in budget, we systematically worked through a host of tenant problems.)Fortunately, due to having great relationships with long term vendors, we were able to get a lot of the work done at a fraction of the cost some vendors would charge us and were able to really spread out the cost of these repairs.

And he did a fraction of the financial damage Morris has been alleged to do..

It would require a lot of capital to start, but still only a fraction of what would be expected if trying to develop a parcel with less negotiable landowners. 

While you could choose an "S" corporation and have pass-through tax, there are a number of problems with this: (1) you are possibly creating character mis-matches of ordinary income and passive losses, depending upon the level of management activity you have; (2) a buyer is not generally likely to want to purchase your fractional interest in stock - they will insist on a discount or worse, an asset sale.