If the interest rate are close, then you should pay off the primary. 

In the OFF-chance (not as common), you're looking to get into a DSCR loan...there are ways to get no origination or processing fee by originating your own loan (yes this is possible and you can do it in 39 states without a license).

FYI I do have plenty of reserves for my other units already, but would like to keep each property separate.My question is, where should I draw funds from to pay the least amount in penalties, taxes, loan interest, etc. from the following sources I have available:- 20 year 401k loan for a property- Sell a piece of my stock portfolio at 15% capital gains tax- Take a HELOC against an existing property- Private money loan from a trusted partner I have worked with beforeAlternatively, I could pool the reserves for all my properties to ensure I can cover anything immediate and know that I could always sell off a piece of my stock portfolio if needed and have the funds within 3 business days or set up a HELOC and only draw from it if needed.Appreciate any thoughts or what you have done in the past.

If indeed it is stated that the second lien foreclosure is subject to the first, then no, the first will NOT be paid off. 

Someone advised me to start with an attorney so I suppose that is my jumping off point. 

It takes 2 off the table. 

Spend a little more money than you might have been planning to, buy in a better area (i.e. not a “turn key” 100k house off the mls), and self manage.

I don't want to bite off more than we can chew with managing a full reno while we learn the ropes. 

It sounded exciting for you but it is so far off from your current holdings and managed properties that it gave me pause. 

The trade off being if I want a property I need drive a little to work.