Question about capital gains.

My wife and are eager to get into the relistate game but are working to gain experience while we build up a down payment to start house hacking.

Add it all up. 

Your HOI needs to be able to insure the LLC, not additional insured(some carriers do this), and I recommend getting commercial umbrella insurance for your LLC especially as you get more and more properties.Also, personal umbrella insurance coverage for yourself.

Many lenders will charge additional rate increase if loan is under $150K.

If it’s for experience then you can gain some experience with it but I would calculate how much you are actually making doing this.Is it worth the risk?

Pros:Stable Income: These facilities often sign longer leases, providing landlords with a more stable and predictable income compared to traditional residential rentals.Higher Rent Potential: Because these facilities generate income through the services they provide, landlords might negotiate a higher rent than standard residential properties, reflecting the commercial nature of the tenant's business.Lower Tenant Turnover: Residential assisted living facilities tend to have lower turnover rates, reducing the frequency of vacancies and the costs associated with finding new tenants.Social Contribution: By renting such facilities, landlords contribute to addressing the growing demand for assisted living and support services, positively impacting their community.Property Maintenance: Tenants in this sector often maintain the property well to comply with regulations and ensure a comfortable living environment for their clients, potentially reducing wear and tear.Cons:Regulatory and Compliance Issues: Facilities must adhere to strict regulatory and compliance standards, which can involve the landlord in complex legal and zoning issues.Higher Insurance Costs: The nature of the business might require additional insurance coverage, potentially increasing costs for landlords if they are responsible for carrying this insurance.Modifications and Upgrades: Meeting the specific needs of an assisted living facility may require significant property modifications and upgrades, which can be costly.Market Limitations: Should the lease end or the facility close, the specialized modifications made to the property might limit the market for future tenants, potentially requiring substantial investment to revert the property for standard residential use.Operational Oversight: Landlords might need to monitor the facility's operations more closely to ensure compliance with lease terms and local regulations, requiring more hands-on involvement than traditional rentals.

I would have them correct the situation at no additional cost due to their lack of due diligence. 

You will pay half of the extra 5% in  additional upfront fees not to mention the rate being higher as well.

This is a two-way interview, so have a short list of questions to ask the mentor (What books do you recommend I read to gain a better understanding?