After that, my downpayment money is gone and I'd have to find another source (not sure a hard money lendor would lend to someone with very few properties under his belt.  

I haven't purchased any properties yet, but my biggest source on leads has come from building relationships with realtors and getting on their mailing lists.

I recently decided to become an investor myself and gathered BiggerPockets is a great source to learn the nuances of the business from a buyer's perspective.

Has anyone in the DC area found craigslist an effective source of finding motivated sellers?

I have been warned recently by a more experienced investor that it is critical to inspect for lead and asbestos during due diligence as there could be serious health, legal, and financial risks to not doing so?

If I were you, I would focus on sourcing deals in less risky ways. 

Only income from the 1099 source (not the W-2) can be used to make new contributions to the plan, with a maximum at $53K - of which you can elect to make $18K Roth.You cannot use retirement plans as collateral for your own personal real estate purchases.  

There are other sources for leases in Illinois and you may want to address issues specific to your home/association/municipality.  

Do you have any recommendations for sourcing deals?

You should look at the UBG free book here on BP it's a great source of information.I'm a new hopeful investor as well.