You might want to look into Department of Labor rules about the payment of wages.

is there some rule against a family member building one new construction then buying it from them??

I understand it may be personal risk tolerance preferences, but if there is a general consensus or rule of thumb that would help.

Here are the details (hopefully this covers everything)Purchase Price - Offered 70k but most likely going to be 75kCurrent Rent: $850 but area looks like I could get almost $1000Repairs: $10-15k possibleA home across the street was sold for 125kI think it meets the 1% rule so want to make sure that this is something that makes sense.

So this means if you're buying a 3-4 unit property and you're trying to be the non owner occupant coborrower and have your partner "live," at the property then you'll be limited to 75% LTV (AKA means you gotta bring in 25% down or the difference).FHA had too much fun with straw buyers doing this in the past so they came up with this rule to protect themselves against this issue. 

Are there any other rules I need to know. 2: Will banks accept a price-to-rent valuation when appraising the property?

Either you haven't been completely transparent here, or you need to learn a bit more about how to improve your credit to put yourself in a better buying position.

Saves me 10s of thousands per year vs a bunch of jumping around.1st rule of investing is Don't Lose Money.

If you are trying to use the "Delayed Financing" exception a couple of things you should keep in mind, #1 you must have paid all cash for the property (no borrowed funds for purchase) and no liens on the property #2 you can use the maximum LTV allowed for purchase of property (ie. for an owner occupied property 97/95% LTV or non-owner occupied max is usually 80-85% LTV) #3 must refi within 6 months of purchasing the property (so for the most part you are going to use the purchase price plus improvements rather than the new appraised value) #4 property will have to qualify condition wise within the lenders guidelines, so no major work should be outstanding like broken windows, holes in the roof, ect. 

@Katie Stewart I assumed that as well but according to the rules Emotional Support is not protected.