They are classified by the IRS as dealers rather than investors.

If is a single human they may not ask for the loss payee for months, or ever.

I find that if you approach a prospect with the mindset of coming into the conversation as a partnership and that they are actual human beings, you'll standout. 

If you are also deemed to be a dealer because you are continuously doing this type of deal with a bad option, installment sale reporting could be lost to you, triggering all of the gain in year 1 as self employment income, while not receiving cash for years - ouch!

What Ken is saying is that if you are a flipper, as in buying and selling multiple properties a year with no intention to hold them, then you won’t qualify for long-term capital gains tax treatment even if you hold those properties 366 days as you’ll be taxed as a real estate dealer, not an investor.

Because humans make stupid decisions every day .

One can’t simply bring investors and capital to the deal unless one has the proper securities or dealer license. 

I use my c-corp for flipping so I wont get tagged with dealer status. 

That part of the "it" factor is american & human generated attention seeking.

If you have or have had a financial mess to clean up that makes you part of the human race.