Anxious about financing the first deal

[Heather D.]

Where to start -- I'm a newbie when it comes to actually applying all the information I've pounded into my head about real estate over the last decade. Finally got the stars all lined up to leap off the cliff and do something and now I'm getting anxious about the financing and questioning myself over and over again.

I'm trying to stay with what I'm comfortable with at first so I can build more experience before adding different twists to the mix. I'm targeting a "cookie cutter" rent house - less than 10 years old, under 1500 sq ft, 3/2/2. I've found a number of listings in my area that fit my requirements as well as my target price and market rents. I think I have all my ducks in a row but I'm anxious about the financing route.

I have one rent house that I bought 5 years ago as my primary residence then later converted to a rental. I owe about $73K on it with a market value of ~$105K -- not enough equity to really do anything. However, I've got a vested balance in my 401K of ~$40K.

I was thinking of going through a hard-money lender which will require me to draw the money out of my 401K to serve as a cash reserve.

OR should I try to do a few small flips to build up some $$?

OR should I target a cheaper property for my first few rentals... ?

I have to believe the first deal is the hardest... because I know I'm likely making something out of nothing.

Thanks for reading through all my anxious rambling!!!