the flipping industry "works" because consumers are lazy, ie) willing to pay a premium for a house that they likely will not have to do work on. even then, despite what all the hgtv shows would indicate, its typically quite difficult in most markets to make a profit flipping houses.
it really isn't a pyramid scheme, unless you think almost any industry is a pyramid scheme>the chair company takes $10 worth of materials, fixes it up, and sells these chairs for $30!!! its a pyramid scheme!!!!
people who make money flipping houses do so as a result of arbitrage, finding a product potentially worth more than it is being sold for, and labor, working to improve the product to become more valuable. normie soibois and boomers could buy a fixer upper themselves and do the work, but they are either unable to, or put their labor at a premium above the cost of doing so. this is why this "pyramid scheme" works, because people are willing to pay these prices. excuse my drunk rambling