Some people do double close regularly but in general you hear wholesalers close only if a) they have to since the contract is not assignable, mostly REOs and Short Sales or b) they did such a good job that the fee they will be making is especially large and they don't want any issues with the buyer or seller getting POed if they see how much money they made.If they put the contract on it because they in fact think it is a good deal that they can easily sell then putting up a deposit should not be a deal breaker for them.  

Would I have to pay regular income tax on the profit?  

I will keep my day job as I am good at it and certainly want to keep my regular income as I explore this new hobby. 

I bet their were no regular inspections and not real option consideration or earnest money to be lost if not purchased, like 3 - 5% of FMV.A Security deposit on a nice home does not cover many damage items of being in excess of "normal wear and tear."

We regularly come across deals in Jersey City, Union City, and other similar areas;  would love to help connect you to them.  

Because if it were passive, I was wondering if I could use our carryover passive activity loss from our real estate rentals (we do active participation but cannot use the PAL against regular income due to income limit). 

Also, would I use a business loan for  refinance/finance process (since I'm buying it as an LLC and not myself) or regular mortgage as I do for my primary home?

You want to consider over the next 10-20 years the property will most likely appreciate, you do have tax benefits with rental property, the income is taxed as passive income which is less than regular income and you will pay capital gain tax when you sell verses regular income tax plus it can also be put into an SDIRA.

A 401k (and other similar things) basically are regular investment accounts that are called retirement accounts in the US and have some special tax treatment (either now or upon withdrawal).

In the mean time I do not want to live a life of self imposed impoverishment, then someday to live the same life with out a regular job.