I also doubt very seriously that any brokerage/custodian is going to allow this kind of loan with 401k assets; it's likely going to need to be a 401k general purpose loan, which is highly regulated (as someone else mentioned). 

Pay Down the Loan Faster:I’m considering applying $40,000 annually to the loan principal.

It may or may not show on a credit report, depends on the servicing and you should have the loan serviced.Failure to include the debt on a future loan application is mortgage fraud, wanna go to jail?

@Mark Sullivan if you are a buy and hold investor these loans work great.

Here are some thoughts on your choices:401k Loan: This can be a good option since you're borrowing from yourself, but it comes with repayment risk, especially if you leave your job.

(more than likely) The rates are not locked in until final approval is given.

Rosalita, for something like this you would definitely need to get creative and it may require some extra leverage in form of a HELOC or a second position loan on your current home. 

I know that interest on the acquisition loan can be included in the cost basis since it’s inventory.

Still, this is a poor time in the rental season and 1 months rent can be expected as a cost of vacancy (in addition to the cost to clean and touch up - $900) .Finally and I hope this is is the last one lol - Another tenant is moving out Jan 31st and this unit also requires a full cosmetic rehab.

If the lender is licensed in the state you're buying in, then they can do the loan.