If you do an isolated transaction with an accredited investor, you may not need to do anything else, but if you are pooling funds from non-accredited investors, or your business starts to depend on repeated borrowing from private investors - you are in the business of selling notes as securities and you still need to comply with securities laws. 

My primary driver is isolation of assets in case of any litigation, but there may be other considerations of which I am ignorant.  

It sounds like these are isolated incidents and hopefully, they will stop coming around when you tell them off. 

Their loss is now isolated from future losses by their equity position.

And these are small business owners all across the country, not just an isolated demographic cross section.Where is the evidence pointing to a recovery?

You isolate an audience, with a series of filters with hopes that the remainder would have a high probability they may want to sell a house. 

Isolated as hell in the middle of a city.

If the area is isolated and isn't affected by US economic tends, then by all means focus on what matters.

I understand:create the lease in one documentthe option in anotherand don't credit any portion of the rent towards the purchaseThis isolates the Option such that if an eviction were to become necessary, the option does not become a complexity contributor.

Is this most isolated to a small area and is the fire under control?