At a given point in all areas the returns fall off as several people have pointed out to you above.

Congrats on the triplex as it's a nice place to fall into, and you're obviously already ahead of the rookies. :) I've also been listening for a few months and a 1-hour commute to work allows for quite a bit of listening an educating. 

Also, aside from any actual damage to the house, what are some of the pit falls that I should look out for when buying at a trustee sale? 

Don't expect deals to fall into your lap.  

Colorado's lax legalization has led to a big bump in prices lately, due to the sudden jump in demand (and stores in Colorado had to have something to sell day 1 of legalization), but when local supply there catches up, prices will fall again.

If you see it falling, find out why.  

Due diligence as to condition, market, value, title and insurability all fall under the financing contingencies.

Should the better option be to wait, build a larger down payment & see if prices fall?

Apparently not something you want to fall on if shoved. 

My goal this Fall is to educate myself as much as I can and how banks and private lenders lend on these type of deals.