But I’m not sure what my situation would look like if I did acquire more debt. 

I allow co-signers in certain situations.

In the right short-term situation where you can buy them out quickly by refiing the property as you suggest I think it works well but those deals are very hard to find for people with deep experience and connections in that local market so for someone with no experience and no local knowledge it's going to be nearly impossible.

It seems to me that even in the perfect situation, where I get paid like 12% interest rate with no chance of default, and I get a HELOC with around 6% interest rate, I'm going to have to pay taxes on the interest I collect, but I cannot write off the interest I pay, and it will probably not be worth it.

I have listed my rental home of 6yrs for sale, our situation me and wife are working and the capital gains tax quite doesn't look correct.

Unless everyone is completely stupid and didn't learn anything, the situations that caused the 07 bubble are not whats going to cause the next one. 

That way if any tenant in the future has issues or questions about this situation you will be covered from a liability stand point.

Depending on your situation, you could live in a unit finance via FHA w/ 3.5% down and bank the other two units. 

I'm just trying to understand the general situation, not looking for legal advice or an answer in a specific situation at this point. - standard disclaimers about questions apply.Thanks very much.sw

My current situation is that I'm interested in generating rental income but I don't have enough cash flow currently to make it happen anytime soon.