If the seller won't remove, your only real option is to see if your lender will escrow abatement funds for the asbestos insulation.

Utilities - all my buildings are metered individually for min. electric - water, we have a monthly standard fee and mostly No Gas  (also the buildings with Gas Service are metered to the tenant)You can also consider upgrading the through the wall untis to a nice new white sleeve and a new unit if necessary  - it will change the look and feel -  complete removal will require as you know substantially more exterior work - again have done this also on a building it came out ok, I improvised and infilled with Hardie board on exterior, insulated, etc and painted exterior (red brick color) - it was less expensive than doing a ton of masonry.As you know you will need to bring some additional services to meet your HVAC need, it may outweigh the return.

Vermiculite insulation in the ceiling and walls...it contains asbestos.

Account Closed do you know of any insulators in he south jersey area?

You'll likely also need fiberglass insulation boards- add $100 per square.

Considering that it would likely take you ~10% in transaction fees to sell if your plan to rent for cash flow does not work out, then it is highly likely that you are losing money on that deal.If, on the other hand, you are able to buy under retail market value and force appreciation in the short term, then not only does that help your cash flow by getting into the same property with a smaller investment, but it also insulates you to some degree from short term market fluctuations as well as gives you another viable exit strategy to sell at a profit if you need or choose to.Ideally, if you get a good enough deal, then you should be able to sell at profit (even after transaction fees) at anytime from the day after you close escrow, to the day after you finish rehab, to 10+ years down the line after holding as a rental.

Don't count on appreciation, make sure it cash flows.Besides the beautiful environment and much better ratios for cash flow than in Eastern MA (if you know how to manage your property correctly), the Berkshires is also somewhat insulated from the big peaks and dips in market cycles.

There is no insulation on the floor and the vapor barrier also does not go all the way to the exterior of the house on the side with the issue. 

The previous owner had all the insulation covering the window. 

The notable exception is if you buy at the top of the market and need to sell at the bottom, but that is why you need a "margin of safety" in the form of excess equity created by a "killer deal" to insulate you from the short term market fluctuations.