It’s a gamble.

It is a gamble and some people get lucky.  

Also, many of these investors are funds and buy these in bulk, gambling on the chance (say 1 in 5, as example but not sure what the exact odds are) that it will go to a tax deed sale and they eventually take ownership of the property. 

I know it seems like a gamble or fake money but I'm getting 10% percent returns with no fluctuation.

So somewhat of a gamble. 2) Partner with the developer that's already building. 

I definitely don't want to mess with anything that may be fraudulent!

It’s common so be careful to check your adds are not getting fraudulently used.

Definitely don't underreport expenses, as Eamonn noted that is fraudulent - you are misrepresenting your income to the mortgage company.You can certainly work with your tax pro to make decisions that can draw out or accelerate expenses - taking or electing out of bonus depreciation, 179 depreciation, at what level  of expense you capitalize vs write off (de minimis safe harbor), election to capitalize repairs and maintenance you otherwise could have written off, making or not making small taxpayer safe harbor.Of course talk with your lender to see what they add back - if they add back depreciation/179/bonus, then that isn't a reason not to accelerate.

Also, I had a tenant that claimed online fraudulent activity on their bank account.

Gambling, lotto tickets, tobacco products, excessive drinking.If you go beyond that I would say buying anything with the intention of displaying your wealth.