Are there any other negatives I might not be considering besides smell? 

No the cemetery will not affect the value since it isn't that close but the thing that is closer is the city sewage treatment plant and homeless shelter (google 40 Prado), on a windy day you may get some not so pleasant smells in that direction since the wind blows southeast mostly through the Los Osos Valley wind tunnel. 

@Ethel Weaver its going to be a battle and you may spend more money on an attorney than its worth. if you do seek the advice of an attorney make sure he isnt just charging you, writing letters, appealing hearings etc.. just to run up your legal bill. talk to 1/2 dozen attorneys and get their opinion on is it worth even going after.

The big question that I have battled with for years: should I get life cover and an retirement annuity?

(great point) - I worked my *** off for so long that it's a skill I'm learning to slow down and smell the roses. haha.100% enjoying life includes learning, and to look behind the curtain a little bit and understand how some of these exotic real estate transactions are conducted  (exchanging property, accelerated depreciation on commercial buildings, 1031/financing until you die, subdividing, bank financing on the business cash flow, etc.. etc.. etc..) 

My wife's nose is more sensitive than mine - she always tells me when she smells gas.

I love the smell of pet urine in a property for sale...

And the basement, does it smell damp?  

So I have been trying to figure out a way to use the process of their recovery in the flipping process to fill and equip them better for the battle.

Can someone confirm that I CAN loan a party in Texas the money to pay off their 1st-position loan and rahab without running foul of Texas rules and regs?