Hey dude. As you expected, the pm didn't go through. I do more commercial banking vs retail banking, but I think I can give some advice.
I certainly would not use your 401k. Between the penalties and loss of compound interest, it will cost you big time. It's pretty difficult to use rentals as collateral for a line of credit, and when a bank does, it's usually at a much smaller percentage of the equity. Typically around 50% compared to the 75-90% you get with your primary residence. Both are low rate options that work if depending on how much money you need.
You may want to simply ask the bank for an unsecured line if you don't need a ton of money. I have one with an 8% rate that has no collateral whatsoever. It's like a credit card, just with a better rate.
I use the equity in my house frequently. Every year it terms out into a new 5 year note.
I hope that help, but feel free to give me a shout if you have any other questions. Good luck on the multi unit.