Newbie here and plan to start soon. Questions about 401k and equity.

[Account Closed]

Hello! My husband and I are learning how to invest our money into real estate. Right now we have about $5k in equity in our home, and $17k in 401k. Great credit, we have also been approved for an investment loan.
My first question is, What do you think about using our 401k or equity as part of a down payment? If so, how do we do it? Honestly, I'm not sure which steps to take first. There is a house we are interested in, to buy and hold and rent it out. The owners inherited it and is planning to sell very cheap, around $40,000. It's a nice little 3 bedroom house but needs work- electrical, hvac, windows, pipes, maybe roof. I feel like it can be a great opportunity to start with.