If in fact the legal owner of record has expressly abandoned the property (can be orally, but best if it is in writing), or has implicitly abandoned the property (actions and failures to act that would lead any reasonable person to believe the owner has abandoned it), then you have a legally valid defense if you are charged with trespass.   

So if most (or all) of it goes to debt servicing ($1.76 million at 5%= $114K yr), how are deals like this ever put together?

If the 2nd is likely to lose most or all of their investment in a foreclosure by the first, they will probably work with you.

If you write off a lot or all your earnings you most likely won't qualify for a Fannie, Freddie or FHA loan.

Partner and buy the home in your parents name or all your names .

Sometimes an oral contract is enforceable, sometimes not. 

I'd like to set up some agreement to ensure its clear who pays and does what.Does anyone have any experience part or all of this?

Without the tax advantages, I don't see it as being comparable to traditional real estate ownership, however if you do get most or all of the tax advantages, it may seem like a better proposition when taking account the work of being a landlord. 

There may be examples of someone taking out very large debt, say one million dollars or more, and that debt may not enslave them to anyone, however there may be an example of another individual taking out a loan of five thousand dollars and this loan may all but enslave the borrow to the debtor in many or all aspects of their life.

This will allow you to potentially avoid some or all of the capital gains tax upon sale(won't avoid the depreciation recapture since you starting renting it out).