I'd like to get feedback and your perspectives of the pros and cons for our scenario.  

From a business/ profit perspective you can structure the partnership however you want you want.

My perspective now, 8 years later, 1 nasty lawsuit later, and being a second year law student, is pretty much the same except I'd have an attorney review it. 

Clearly some of these posts have not lived through the gravity of such a situation.Should she have been better prepared -ideally, but we are not always given this chance.Lets see how you perform when you have been bombarded with Chemotherapy and Radiotherapy especially with very little family support.Lets also take into account, she has rented here for 20 years and she is EIGHTY years of age - Is this how you think society should move forward.I understand business is business BUT lets put this into perspective here, we are talking 3 BOUNCED RENTAL CHEQUES!

From the perspective of a resource deployment (using cash) the borrower would need to justify that the cash value exceed the coupon rate and not the loan constant.

My wife and I are smokers, so I figured I'd let you know my perspective from the "other side".

To put that into perspective, that's ~6.25% of GDP.

Although I wouldn't like that type of activity going on in my properties neither, answering this question might help put things into perspective.

What exactly are the risks involved in transactional funding from the lender's perspective?

If you're not going to pay cash, I would actually suggest getting closer to 50% leverage (and 50% your own cash) as opposed to 20/80, from a purely financial perspective.