My choice would be to mortgage and pull out every penny possible or sell and start over if they do not cash flow with full leverage.

In addition to being taxed on the distribution you would have to pay the penalties, in some cases depending on the amount and tax bracket I've seen folks lose 40-50% of the amount they pull out.

Let me know if you decide to pull the trigger on us, maybe we can help each other. 

Our current home was on the market in 2005 for $450k (3Br/1.5Ba ranch, full unfinished basement with Bilco doors, on 3/4 acre next to a golf course), languished & pulled off market before we had a chance to see inside. 

Both units of the duplex are rented out pulling in $1,650.00 per month.

As far as repair money, Your parents can just pull out home equity line of credit on the house.

Have the financing in place so you can pull the trigger quick.

A lot of people in this business are not making money and they scrape by on bad deals that they have to pull money from their day job to support their real estate. 

I would recommend pulling the condo's Covenants, Conditions & Restrictions (CCR's - essentially their bylaws) from the county records, which generally indicate who's responsible for dues in event of foreclosure. 

I COULD just have title pay off the existing crazy water bill then keep working to have Philly Water reimburse me, but I also have heard horror stories of getting the city to pay you back on something like that being difficult to near impossible to pull off once you've actually paid them.