Failure to repay the loan according to the plan's requirements could result in penalties and tax consequences.Tax Implications: While 401(k) loans are generally not subject to income tax or early withdrawal penalties, there can be tax implications if the loan is not repaid on time or if your husband defaults on the loan.

Additionally, basing the loan amount on past below-market rents seems unfair, as lenders should consider current market value and potential rental income.

Yes, some locations are better than others but it all comes down to price, condition & what you can get in rental prices to ensure you have both income & equity in the property you are buying. 

Lastly make sure you have a high income if possible to help fund those assets asap so you can have flexibility when entering the real estate investing world.

There’s a few options:1. conventional loan: this assumes your debt to income could support the mortgages2. commercial loans: these would likely be similar to what you are in now.

When buying a new property today, I'd definitely be conservative when it comes to rental income projections.

Another method they can use is the income method or the cost to build.

This includes the rental income, PM fee, any repairs, etc.

I'd try to find family/friends/network that would want to come in with you on it and share in the income.

When evaluating rental properties, aside from school districts and convenience, consider factors like neighborhood amenities (parks, restaurants, shopping), rental demand, job market trends, property condition, potential for appreciation, and rental income compared to expenses (including taxes, insurance, and maintenance).