Next let’s talk about their shady business practices.

Quote from @Jonathan Greene: The last thing you should do is try to turn this into a rental/ Not because that's not a good idea, in theory, but because you don't have the expertise or connections to do the rehab and will overpay and underperform on rent.

The problem is a gun just like any external weapon can give the person carrying it the false sense of superiority.It amazes how many people practice with a gun yet a gun is not allowed in a ton of places nationally.

Yes, this is quite a common practice for professional PM companies.

So in practice , accredited-investor-only investment has bigger risk/reward than public investment.First because public investment has its own transparency.

There are tons of beginner friendly hard money investors on here that will lend to a first time flipper, although it may be a higher rate, their expertise will be invaluable. 

That's my area of expertise.

The example that comes to mind are often are of folks that operated a dental practice, an accounting office, a bankruptcy lawyer and her staff that did quite well in the 2008 aftermath, and so on, during those first few years, taking up a portion of or all of the space.Once you realize what a dumpster fire it is finding good financing for offices, if you need it, I'll be available. 

Is there a best-practice on how to do this or can you share pointers from experience?

Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice.