Srila Prabhupada doing Vrindavana parikrama with some devotees Unless one is a resident of Krishna Loka, one cannot be a Spiritual Master. That is the first proposition.
A layman cannot be a Spiritual Master, and if he becomes so then he will simply create disturbance. And who is a liberated person? One who knows Krishna.
Nectar of Devotion lecture by Srila Prabhupada in Vrindavana next to Srila Rupa Gosvami Samadhi It is stated in BG, fourth chapter, anyone who knows Krishna in truth is immediately liberated, and after quitting the present body, he immediately goes to Krishna. That means he becomes a resident of Krishna Loka.
As soon as one is liberated he is immediately a resident of Krishna Loka, and anyone who knows the truth of Krishna can become Spiritual Master. That is the version of Lord Caitanya.
So to summarize the whole thing, it is to be understood that a bona fide Spiritual Master is a resident of Krishna Loka.
(Letter to Mukunda, June 10, 1969)