Am I crazy or is it this deal

[Brandon Malone]

Hi Biggerpockets,

I need your input for my sanity. I have a property I'm looking to purchase that was built in 1992, a townhouse about 1,950 sqft. It's a foreclosure. Value 600k, Bank has accepted 515k with 15k Seller Assist. 5 properties listed in the community all above 600. Property needs about 40k of work (mostly to update bathrooms, floors, etc). It's in very good condition (very livable) except, and here's where things just get difficult. First, the bank has denied turning the water on for inspection or allowing me to pay for the cost to activate the water. It appears the bank simply winterized the house, but later the water company shut off from the outside due to an outstanding balance of 154. The house has about four areas where the drywall is cut to access pipes and some other areas with peeling paint. Since I can't do an inspection w/o water active there's a risk. 

Second the lender/agent have asked that I repair the drywall for appraisal to go through. My question is, is this normal or should I be running for the hills. I've budgeted for about $5k in piping repairs. I'm off base, especially if it happens that I have to replace all of the copper pipes. Help shine some light on my scenario. What would you do?