Although I haven't been analyzing my finances or budgeting at all I have been living below my means for a good while and I believe that I am in a relatively good place to start from. 

Being based in Brooklyn, NY we would like to find a property nearby, but we're a bit intimidated by the market and feel like most things are going to be out of our budget.

Always budget for 10% more than your rehab estimate.

Budget in a couple of extra months of hard money costs in case the project runs long 2.)

I'm budgeting for a (nearly) full renovation for a 2 story ~900 sq ft rowhome in Germantown.

@Cesar Escobar In my opinion, if credit is not a concern (i.e. you can qualify for a conventional loan if you want to) there are two main reasons to use a 203k loan:You require a construction budget, but aren't able to put 20%+ down to acquire a construction loan (or don't want to)This is a first time rehab and you want to take advantage of a professional consultantThe second option has much less impact than the first. 203k loans tend to be more expensive than their conventional counterparts.

Doing unpermitted work can open a big can of worms if you ever need to sell (disclosure to buyers) or an insurance claim4) Most inspectors will give an estimated life so you can budget for different things like roofs in the future.5) Foundation issues (or anything major like plumbing replacement) a LOT easier to fix without a tenant inside.

Now you will see some sectors go down then up, like entertainment and travel, but essential business are in business and busier then ever. 

Costs to make those repairs don't tend to cost and arm and a leg.It all comes down to ensuring you have enough room in the budget to hit your personal return target.Now if the cost to repair along with the purchase price caused the deal to decrease your return target, then at that point yes I would consider it a deal breaker.

Like others mentioned here, do not focus on the entertainment or things like fancy cars that will only take the money from you.