I did it from my back patio swing.  

Profit from flipping is ordinary income.

Flip profits are ordinary income tax plus plus self employment taxes.

When the investors receive their K-1 at the end of the tax year, can this additional depreciation offset their ordinary income and/or capital gains from other business/real estate ventures?

And the losses referred to are Ordinary Losses from a passive activity.  

Whether it is long term/short term and capital/ordinary would depend on your holding period and whether or not you are in the business of selling notes.

I assume since you did not specify "rehab loan" that it is an ordinary conventional, owner occupied mortgage.

Develop a target to triple your money in 3 years.  1 year is just to hold so you only pay Capital Gains and not Ordinary income.

@Zane LyonsHas he also said it’s 0% interest as he would have to pay around 4% in taxes on that money as govt doesn’t allow 0% loans for tax purposesAnd it’s taxed as ordinary income rates…

If you want to buy whole loans, right now you are probably looking at getting 8-10% on those but also recognize that the interest will be taxed at ordinary income (unless you are using a SDIRA).