I know they say that your income is the average of your 5 closest friends.

The rate which you finance the loan is based on your credit and a host of other things they look at debt/income ratios etc.

My goal is to buy and hold (rent the property for income).I’d like to get feedback from experience investors.

My goal is to replace my income within ten years from the cash flow from the rental properties I'll be buying. 

Since you are going new construction, the difference in cost between 2bed and 3bed is not that much and the ability to get tenants for 3 bed is much easier and therefore more income capability.  

2) We want all of this classified as passive income (and will for instance have a property manager), so I believe would want this classified as an LLC, with the investors listed as the owners.  

I have asked for a cosigner who currently has the adequate income to make the rental payment and a good credit score. 

I am self-employed and take out large deductions, so using returns for income verification is a problem.Do I have any options to pull out equity from these properties, or do I have to turn to hard money to fund this flip?

As a successful investor and business owner, I felt like I had enough active and passive income and cash reserves to start having a little fun.  

I do have lawyers I do have credentials I'm not a shade tree "Carpenter" I have a family & so does the guys who works with me or for me, want a continuous income.