@Alex FreeloveArms length is when you're complete strangers and have no business interests (like employer/employee).Non-arms length is like buying from a family member or someone a business interest.Non-arms length sales below market value can be scrutinized by the IRS for equity gift tax by the seller.On the opposite end of the spectrum, non-arms length transactions are also an issue if the seller is underwater on the mortgage.FHA also has some LTV limitations of 85 percent maximum for identity-of-interest transactions on principle residences.Friend to friend is probably a non issue,  but it could come up.

The two ends of the spectrum are extreme regulation and almost total deregulation.

A good rule of thumb posed to me by a well-respected investor & property manager is:Less than 100 units – Self-ManageMore than 100 units – Property ManagerThere are certainly anomalies on both ends of the spectrum, but I've found that to be a sound template.  

(Trial and error)Or you can trust a broker to make all your deals for you, but in the end no one takes better care of your money than you.I have been on both sides of the spectrum, both as a borrower and as a lender.  

If we rent it on the lower end of the spectrum, say 550 a month, it will stay rented forever.  

. - I know it's a rather broad  spectrum. 

Then again, I'm just learning all this so maybe I'm wrong but like I said, it seems that homes in very poor condition are selling for more than a rehab would cost to bring them up to comps in the area.I would imagine that what I want to do with the place is nicer than what I would do with an investment property so that will definitely coming to play with regards to the price of the rehab, but I wouldn't necessarily call it a "dream home" because for me a dream home would be completely custom top-of-the-line everything, like 300k rehab or new home at $200/sqft.For this I'm really looking for primarily structural changes and then say level 4 out of 6 in terms of quality spectrum.

Figure out where you are in that spectrum and follow suit.  

@Chris May 1- prime areas like SF, Berkeley, much of peninsula, etc. fell on the lower spectrum of your range. 2- barring a major and unexpected global financial crisis (hint: Brexit is not it), any downturn that hits us in the next 1-3 years will be primarily tech driven.

I would just suggest to really look into comps and figure out if this property is on the higher end or the lower end of that spectrum.