Once I have cash built up (outside of the 401k) and the new company is established, the company can then buy the rental property from the 401k, correct?

Once you establish a relationship with someone it will go quicker as all parties know what is required from each other.

Frank, even with the 20% down and covering the cost, Banks hesitate and deny the loan to LLC, unless you have a good relationship or your LLC is well established and can show the cash flow from prior operation.  

Lastly Ive suggested this for clients before but if you live in an area that is expensive look for deals in places that are a bit more affordable where you already have established contact (if this is possible) relatives or college friends in other areas may be of great use to you as an absentee investor

OTH if the OOS re-established some pockets and maybe that helped the locals next door. 

@George Leeman  The best advice you'll ever receive is to stay with a larger, more established, company.   

They will have intimate knowledge of the area and be able to compare this prop against other props in their portfolio.This is where your relationship building hat will be important to establish repertoire for them to view you as a potential client and not just a tire kicker.As for college, neither good or bad.

What matters the most is establishing your threshold.

Once you establish communication with a bank it is your call. 

I think setting this balance/threshold also establishes expectations and boundaries for the tenant.