@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.

@Chukwudi Motanya The easiest way to gauge cap rate for a particular market is to work with a commercial real estate agent or property management firm who would be willing to help.

Should we have them do seller financing for the amount they can gift us each year without further tax implications?

@Zach Fairfield @Scott D Fitts - Easiest way to get over this, so you can make future offers with confidence, is to just go make some stupid and ridiculously lowball "can't lose" offer on the next thing that catches your eye.Zero reason to be nervous about an offer at the "can't lose" price point.99% chance that it's not going to be accepted, so it really doesn't matter.And you know what, if it does get accepted by some miracle of fate?

The best we can do is a gift card, not redeemable for cash.

That's the easiest way to get started.

Can they contribute 50% of the down payment and closing costs without it going through me or being taxed as a gift or anything else?

If you ever have a property that's a good deal you'll wholesale it no problem, the hardest part is finding the deals, the easiest part is finding a buyer if the deal is good.  

In our case it's easiest when you know what type of investors you want to meet.  

I am by far the easiest going landlord I know, but after a few years I've learned if you give an inch they take a mile.