What's the business case for this transaction?

The mentor/instructor that is local has their reputation and local business relationships at stake.  

Step 1 - determine the actual taxable profit, adjusted for closing costs, holding costs and funding costs, plus business overhead such as driving, technology and whatnot.Step 2 - determine Johnny's tax rate which depends on his overall income and its composition.

Open up Business bank accountsApply for a Credit Card - I recommend the Chase Business Ink Unlimited. 0% APR for 12+ months.

Knowing construction/remodeling, local codes, contractor licensing laws, state laws, project management, tax codes/laws, understanding market conditions and having a healthy amount of liquidity are but a few.Flipping is a business and subsequently requires one to be business savvy, especially in California. 

"When everybody is digging for gold, it's good to be in the pick and shovel business" - Someone smarter than me. 

Setup, marketing, sales & management.Their Goal: Develop steady income for the firm to combat dips in sales.My Goal: Develop my own business.

I kept all the rent collected and deposits in a business account but I did pay the mortgage out of my personal account up until last month.

Why would they want to have to pay out another business?

Yes, there is nuance to real estate, just like there is nuance to any business.