Mostly because it creates the illusion that everyone's comments are of equal value.

or give the illusion of choice, allow the dog but remind them that it must be accompanied with it's owner at all times.

It gives people the illusion of productivity while saving them from making the mistakes that will inevitably happen when trying something new. 

Its a smoke and mirrors tactic to give xyz investment the illusion of making more money that it actually does.  

In an area where MFH are hot does not mean MFH are hot everywhere.Secondly, If you compare the number of SFH sold to investors versus the MFH sales to investors, the SFH numbers far exceed the MFH numbers.Thirdly,  In markets where the numbers don't work for SFH, this drives more people to MFH to capture the illusive cash flow.Fourthly, the gurus have been pushing MFH as a comeback to the objection that you can't make any money in SFH here. 

It seems the guys willing to sell are under some illusion that their property is worth far more than it is.

This is worse than not having an LLC, because you have a false illusion of protection. 

What's the use of this illusion of higher CF if all you're doing is repaying yourself? 

It is just an illusion with all the hype in tech. 4)< You asked for call structure.

Ill use 2 simple example though.1) Forget to do a federal lead based paint form, and the EPA audits your records....the fine can be up to $100,000 and can incur criminal charges that result in jail time. 2) Simple fair housing violation, $16,000 federal fine on 1st offense.