Here is my question:Would it be better for me to start by flipping houses to acquire more cash OR would it be most beneficial for me to use the 10k as a down payment on a 40k house, use credit card loans to fund the rehab of the house and then rent it out (either traditionally or section 8)?

I could get this property traditionally financed but it would mess with some of my other prospective ventures that I'm working on.

I have about $200k in equity, but am running into the issue where traditional banks will not qualify me because I have 7 financed properties.

I do not have a "favorable" profile for traditional loans.  

Whatever the ARV ends up being the bank will lend me a total of 80%LTV and the construction loan will then be refinanced into a 30 year traditional loan at 4.5%.  

I told her that we help families or people who can not sell their house the traditional way like through real estate agent or banks that will not take them.

Maybe a taste of the medicine is what that neighbor needs.

I have a couple great commercial lenders in that area that are not traditional banks. 

This increase in debt will hurt you with conventional/traditional lenders.

I changed jobs in 2015 and at that time, I rolled my old traditional 401K into a Roth IRA, so I elected to pay the taxes for that distribution at that time.