This sounds like the price is too high or they have found a better deals after closer look.It really depends on many factors, like what is the exact location, what is the shape of the lot, how is subdivided,  how is it accessed, how far are the closes utilities, are those private / public, is there any public access, are the access sufficient or do you have to build a new roads etc. 

This would be items like mortgage interest, real estate taxes, home owners insurance, utilities etc.Pro-rating the expenses have to be done in some logical methodology.If the units are of equal size - they should likely be 50% allocated to the personal residence and 50% to the rental property.if they are not equal - you can pro-rate based on amount of rooms or square footage.

When you examine all the sold comps and compare each of them you will likely see some commonalities within the individual price ranges. 

@Jeff Duford --it's common for borrowers to use private loans to acquire / rehab / stabilize, and then refi with a conventional lender on buy/hols.

We have a software program we use for managing the units that has all our numbers in it, but I haven’t utilized anything like quickbooks yet....

I'd have to run sewer and all utilities to it, as well as do a studs down remodel (it actually has good bones and a reletively newer asphalt shingle roof). 

As the title states, I have a question in regards to my options utilizing a 203k loan.

Two common techniques I have incorporated with clients is to use a double corporation strategy or the utilization of a discretionary irrevocable trust.

Don't forget the utilities and "yard cleanup" (2X per month!) 

You can call utility company and get the yearly average.