In my experience it is better to get the DC reading well in one language before introducing a second.
This is what we have done.
DD did not start reading and writing until 6yo, as is normal in Switzerland and learned in French first. She has since started reading in English and in German and it has been quite easy for her, with no formal teaching.
Your problem will be that the Germans don't go to school until they are 6yo and so the first reader books are geared up for this age group, and will be too advanced for a 3.5yo. Not necessarily from reading ability if she is very bright, but the subject matter.
DD's first reading books were the Connie series which is all about starting school and boys and kissing. (I hated them - she got them from the library).
You may have noticed that German books are often more practical based than typical English story books, so about teaching the children something.
When she is older, the Cornelia Funke books are wonderful, but she won't really be up for that until at least 5 or 6yo. I will have a look at the other books to see if there is something that strikes me.