Then after that we split cash flow 50/50?

The cost associated with insurance for not having 20% is peanuts compared to what you potentially can do leveraging your down payment. 

Quote from @Jaycee Greene: Assuming you pay asking price, I'd estimate the down payment for something like that using a hard money loan (HML) would be around 40% of the purchase price and your monthly payment would be $2,600 with an interest rate in the low 7% range (probably need a 700+ credit score to get that).

Use the 20K as a down payment on the next house hack and don't touch your current properties equity.

The 38% cash on cash return is including the principal.

Depending on the seller, you may sweeten the deal, by letting them know that they don't immediately need to cash out, or can partly cash out.

I have seen 85% LTV on a purchase and 80% on a cash out refinance.

But one question is can you afford the payments for the HELOC on its own

Would a cash out refi be under commercial terms since the property(s) are under LLC?

Pay cash.