I suggested her to pull a HELOC and finish the basement but she filed for bankruptcy and can't get any loans. 

Is this a good suggestion for everyone out there?

If you  are seriously looking into buying this property and possibly using it as 2-unit now or in the future, I'd suggest spending $150-200 with a land development consultant who could explain to you the issues and challenges related to such rezoning process.All that said, City of Austin code enforcement is very complaint driven.

Short of crowdfunding does anyone have any suggestions on how I can approach potential investors about helping me come up with this down payment ?

I would suggest that you definitely do that.

If you are going that route you are taking right now, I would suggest you associate yourself first with Flippers/Cash buyers/Landlords then you can maybe deal with them about bird dog fee that if you found a property and they were able to close on that deal, give you sort of bird dog fee. 

My worry is that is I commingle the banking activities and the 2 rentals I have in my name with the LLC I have potentially negated the benefit of creating the LLC if/when I am sued down the road.I think this must be something others have come across and I would really appreciate suggestions on making this a bit simpler.  

All suggestions are welcome.Thank you all for your help in advanced!

Any suggestions? 

Most importantly, I am looking for suggestions on CU's that offer great terms and conditions in the Chicagoland area.