If things go sideways, you discovery greater rehab expenses, the market takes a turn for the worse, you can get in the red quickly. 

Since it is a family member and I would potentially buy the property for under market value.

It is not that good at the price point of DC or in my market (but better than my market).  

This is one of the main inherent risks with pre-construction, and the pre-construction market has cooled, and with impeding tariffs, there is some uncertainty around where prices will be in the coming months.One thing to clarify, are you looking to buy an investment property or a primary residence (or perhaps abit of both where you live in one unit and rent out the other)?

My wife and I own four properties in that area and the rental market has been very strong.

However my market is currently Arizona.

You may qualify based on Market Rents or Lease Agreement.

They would likely be able to confirm that your expenses are reasonable for the area or that your rents are at market rates.

If Allstate is not offering proper coverage (stress the if) and you can get proper coverage in the surplus lines market you would want to do that. 

I don't know how much you have but a build to rent triplex all in our market is 150k liquid normally with full return of capital in 9 months.