Not leaving room for your own families.

.$323,472 leaves your pockets to buy the Investment.

I'm concerned about possible future conflicting interests, like we want to sell and she doesn't or vice-versa. 

If you are leaving the money in the business it isn't technically yours yet which is why lenders don't want to lend. 

@Michael Dang - I'm concerned I'm speculating too much.

Im 21 years old and currently paying $1400 in rent with my fiancé, I am trying to buy a 4 plex with FHA loan and live in 1 unit, I finally  found one that would cash flow if all units were rented (after running the numbers, average 7% vacancy); leaving me to pay $350 per/M by accupying one unit, it needs some minor maintanence but is livable as is right now.

I would say that the longer you plan to keep the property and "leave" the debt on it.. the more I would lean toward the mortgage.

As others have said, yeah, if an inherited tenant will be month-to-month, definitely leave it that way so that when you own the place and find out that the tenant who was apparently so great really isn't, you are not contractually obligated to them.

Tenants will leave when they want regardless of a lease or TAW.

@Jonathan New my experience is that banks always want something left on the table, sometimes you can talk them in to you leaving in 10% instead of 20% but the example i gave is really just to show the reason people would buy repairs on the HUD