As for your question, I suppose if you have a newer unit that does not require major repairs and/or capex expenses, then perhaps you can lower it, BUT you will still need to budget for these items in the long run.

Hi @Nick Thurston,Stop overthinking it.Purchase price is $100k, to keep the math simple.The buyer sends $3500 to the escrow company.The lender sends $96,500 to the escrow company.The escrow company disburses all funds to the seller.The only thing different with 203k is that the lender sends $96,500+reno budget to the escrow company.

Looking for some that will make the kitchen really pop, but nothing that's going to blow our budget.

We are currently paying $700/mo which is quite comfortable as far as our budget is concerned.

If you're on a budget, you can do the same with just one number, and different extensions.

My budget is in the 300-400k range and looking to buy and hold.  

This will help you estimate repair cost, or if nothing needs to be repaired now he/she can help you estimate how much you need to budget for repairs down the road.Also, talk to some property managers to see what is market rate for those units with whatever amenities the apartment has.Utilities can be learned from current owner.

Make a budget and find out where your money goes.  

But, yes, billing back tenants for unseparated meters is a normal practice and you are within your rights to either ask for a percentage repaid, or else tack on an increased rent (like a budget plan) specifically for utilities. 

(Note: Is the property type you want to buy in-line with your budget?)