NC, after 7.5 years of running this site may I suggest you start the way we did here at the Towers.
We got the first 2 years of experience simply using the space quaranteed to a normal private user's ISP. We crept up the experience ladder during that time and even now we still only have a footprint of around 40gigs.
If you want the excitement of building, formatting, patching and securing your server then go ahead and fill your boots.
On the other hand if you'd like to build and run a website, well, our way actually works
Can't help but point out that Friends Reunited was created and run through a laptop. Server was elsewhere within an ISP.
Best of Luck
rob