Financing Options for purchasing a house from a family member

[Dakota Walker]

Sorry if this is common knowledge here. I am new and only have one rental house right now, but looking to buy more. I have a family member that has a rental property that she was going to unload because she didn't want to manage it anymore; I expressed interest in buying it to either rehab and rent or perhaps rehab and sell. I already have one rental property that has been rented for the past 3 years and would like to buy more, but this property is about 50 miles from my current residence and in an area that might not attract the best tenants. The property is a 4BR 2BA residential home with a Zestimate of $130k and a comp a few houses down that sold for that amount about 6 months ago. She only owes about $60k on it and her goal is to get at least $20k profit to fix up her current residence. I could probably buy it for between $80-100k, but it still needs some work (new roof, etc) before it could be resold or rented. I have several questions about the buying process: 1. If I buy to rent, I know I could qualify for a conventional loan with 20% down and I have enough for that down payment. However, if I buy to flip this house after reno, would it still qualify for a conventional loan? Is that the best route for a flip? Is Seller Financing an option in this case? Basically I am looking for what options we might have to purchase this house from a family member. 2. Price. If the price is less than 25% of market value, is that going to be an issue with taxes? What can we do to stay within the legal limits? (Gifts, etc?) 3. Are there any options to "cash out" at closing to cover rehab costs? I probably have enough cash for a down payment and rehab, but if I could get a loan for more than the buying price to cover the rehab not out of pocket, that would be great. Or could a HELOC be used for rehab after purchase? State is Kentucky if that matters. Thanks for any advice you can offer.