Interest rate on the home is 2.6%, so I don't want to pay down the loan with the additional income coming in.

My name is Chandler Koch and I live in Boise, Idaho with my wife and 2 kids.

There are also 'mezz' lenders (typically for larger transactions) who will cover up to 90% CLTV and require you to bring the remaining equity to the deal, and additionally there is Gap Funding in the form of unsecured personal debt.The latter can potentially be the most expensive option, but allows for true 100% financing as there are no restrictions for how to use these funds, as they are unsecured, and generally obtained through personal credit, income etc (since there is no collateral for obtaining these funds).

Additionally, are there any other factors I should be considering when purchasing a duplex or triplex?

That's an ADDITIONAL capitol investment made. 

NEVER borrow from a 401K, you are taking pre-taxed dollars and paying it back with after tax dollars, you do not get to return the loan with pre taxed dollars, in addition, some 401K plans do charge interest and maybe even fees, and lastly if you get laid off for some reason, it is a distribution with all the "fun consequences: tax at the last dollar rate, and if you are under 59.5 there is also the additional 10% penalty.Personally I like the HELOC, however you can also sell stocks and do tax harvesting there to offset gains if that is an option

Buyers usually want to purchase on today’s value while sellers often want to use future potential of the property (“current rents are below market” or “room to build an additional property”, etc) to increase the purchase price or likelihood of a sale.

You don’t get to just expense the additional real expenses.

I agree and additionally I'd recommend going down to the store and actually feeling them.

Additionally, the price point is still cheap enough to find the 1% rule and positive cash flow and there's amazing appreciation potential.