The is a lot of competion in the space from professionals who focus on recovering lost assets. 

@David Shirts only reason to hold onto this condo is if your appreciation outpaces the cashflow loss. 

This may decrease the amount of dues owed per unit, but also creates major issues when there is a hail storm or other loss that effects the exterior and shared spaces of the property. 

If you have rental losses and you're a qualified real estate professional, those losses can offset the income from property management.

If it actually goes through, my plan is to use this money to fund my Roth IRA after I recover my basis.How much do attorneys typically charge and who pays?

Usually the first few years you’ll get a paper loss, so no taxes to pay, but once you show a gain you’ll have to pay.

I am having difficulty figuring out how to use the numbers here to see whether i cut my losses or proceed knowing some major capex work could be done after renovation, so hopefully no major expense in the near to medium term, and all the potential of the area in price growth and rental growth.  

First, it's a plan-z measure, that if they have to take the asset back, that after all the expenses of such and what-not, there potential losses are mitigated to $0 or as close to $0 as possible.

What about the losses in a deal?

If it is due to a condition of the property (multiple losses, unrepaired damage, etc.) it will be more difficult to get a regular company to write it.