Those that are different are unlikely to be active businesses -- they are more likely to be investing strategies, where you are paying capital gains as opposed to earning ordinary business income.Regardless, it sounds to me like you're looking for an excuse not to get into flipping.  

It’s a ordinary income that is subject to the self employment taxes.

So in David's example you're a dealer and that 100K is going to be taxed at your ordinary state and federal income rate plus you'll probably have to pay employment taxes.What I've counseled some investors to do who are in the flip mode but are tired of the huge dealer tax is to change your model slightly. 

It's gives you a paper deduction based on your property "wearing out" and can be used to offset rental income and even ordinary income within limits.

There are no shared entrances/ basements/ driveways and the back patio/lawn appears separate too (like townhouse style). 

@Syed H. given this seems like a new investor let's clarify that you mean because it is short term capital gains, (unless you are a terrible flipper and held for a year or more) Short term capital gains are taxed as ordinary income and are not tax exempt.

Ordinary income tax from rent and depreciation.

Income from both fix and flipping and from wholesaling is ordinary income.  

Cashflow is taxed as ordinary interest income and can only be offset by depreciation up to about 7%.In summary, I would focus on finding investments that cashflow up to about 7% and where the rest of the gain will come from equity growth, likely from a value-add strategy.

The accounts typically have to be registered with the state governing body and should be trust accounts, not just ordinary personal/business bank accounts.None of this sounds right.