Arm's length regulations when selling a flip

[Payman A.]

Hi all,

Thought I'd see if anyone has info/advice on this matter.

Made a cash purchase to renovate and flip earlier this year with one of the main goals being able to show that profit this year in order to offset other losses and keep our DTI close to where it has been. No surprise, we ended up with a couple issues and no way we'll be able to close before year's end so I'd like to consider selling the property mid-project to someone who knows and trusts me so I can still show profit this year and new buyer will basically finish the project/transaction early next year.

Of course, I realize there will be some buyer and seller costs but I think those will be worth spending if we can avoid a big hit on our DTI.

My question is if there are any "arm's length" guidelines/regulations with regards to this type of a transaction if there are no loans involved.  I don't see why there would be but thought I'd get some opinions.

Thanks,

Payman