each cold start up, i would hear the engine rattle. when it gets warmed up rattle goes away.

Not sure whats making the rattle. Anyone knoes this issue?

 

Could be lose exhaust heat shield. I would start there.

 

where would that be located? Its rattling from inside the engine

 

I believe what you're hearing is the timing chain tensioner. I currently have the same noise on my 03 w/ 82k miles.

I bought the car 1k miles ago and noticed the noise when I started it in my garage the first time.

Is this an emergency situation? How much time before it fails? What happens if it fails?

 

take it to 10K to see if it fails