Long term I want to be investing in commercial real estate with a focus on multifamily properties to build up passive income to supplement my business income. 

You could snowball a SFH into another using BRRRR and so on until you get to your goal, orYou could build up your savings and buy that one property that will get you to your goalBest of luck!

Your construction costs are off by almost $50 a square foot unless you have some kind of deal already inked.

I will just build up a cash E-fund and forget about pre-payments as they are not necessary if I'm not being irresponsible (which I'm free from thank goodness) and let time fix this, that is clearly the best option here.And no, I absolutely would not lend my best friend money in my situation. 

Residential property is more about control due to circumstances, personal preferences, cash flow, equity build up and debt pay down...holding for term and exiting with cash...Why are you investing and what do you hope to accomplish with this project? 

If you do not have enough saved up to do that I recommend getting a 2nd or 3rd job to build up your war chest.

BP People, what would you do if you wanted to get any loan or hard or private money lending but your credit score was 400 something and you weren't able to get anything to help get started in your real estate venture and wasnt able to build up your credit score because of lack of income, not able to land a job or borrow from friends and family, what would you do in this situation???

My plan/goal is to build up enough passive income through Real Estate (specifically small multi family units in East TN, but not opposed to SFRs) to quit my current job, move back to TN, and be a full time investor by the year 2025.

Bellingham is definitely a desirable location with seemingly less of the possible crash factor Seattle has, so you may be in a good place to continue to build up your equity for a while.

Where do you find a Fix & Flip contractor in a hot King County market?