Another issue, since it sounds like you're working with her, is the Mortgage Relief Act is expiring and in 30+ days she can get tagged for the forgiveness of debt from the SS.

Further, in all probability the plaintiffs will be able to argue successfully against granting you bankruptcy relief under the provision that liens resulting from fraud are not dischargable in bankruptcy.  

Philadelphia seems like the prime market considering there are a lot of sellers just looking to cut a deal and receive some relief and perhaps this would be a nice way to dip my toe into the water. 

The 50% is expenses before debt relief.

Adding a 3rd bedroom in lower unit is not an option.Top unit: Currently has reliable tenant (couple) paying $1,345/month (this is maxed out in my opinion) This unit has potential to be a 2 bedroom but must be advertised as a 1 bedroom b/c the top attic floor bedroom needs an 'Area of Relief '/fire escape in order to bring it up to code as a 2 BR.

But, another issue is the tenant, if the community has a no rental policy this could be a major issue, because  they now have just cause to seek relief through the court

While I believe aid and relief to the needy is necessary, our government always brings a rocket launcher to a knife fight.Let's use me as an example.

No loose wires, uncovered boxes, loose light fixtures, cracked plates.Water heater, pressure relief valve with tube, 6" off floor.No plumbing leaks, even a drip..

It was with a sigh of relief that I granted the request of the tenants to be released from their lease when their jobs transferred to the far side of the metro area.Two important lessons we gleaned from this mini-debacle are 1) nothing is more important than leasing to good quality tenants, and 2) having a property that shows well and is in a fact an up-to-date place that’s nice to rent is critical to attracting and retaining good tenants.As this was happening we were also learning the ins and outs of the local eviction process as we evicted tenants from two units who were non-payers.

The biggest stress relief has been having a property manager who knows what they are doing.