However, some of the $200K is related to small fixes that one would traditionally call repairs if they were not done at the same time as the big ticket renovation improvements: landscaping revamp, hallway paint and carpet, etc. 

Just be honest about your improvements and what you should look out for. 

Also, it sounds like you are specifically looking to improve your ability to normalize expenses when underwriting multifamily properties.

If I couldn't identify a specific problem that I could fix to improve the situation, I wouldn't buy the property.

Both of these things will improve your dti.

When this turns around, you’re easily in the blackIf you get a loan, i imagine the cash you save will provide ample liquidity to cover a significant period of no incomeUltimately the question is twofold...can you cover the holding costs on an otherwise solid deal (assuming it was truly solid) until things improve?

This tenant does not handle business well and things will not improve.

Getting low down payment Bank loans for houses that need fixed/improved is also tough.typically appraisals are used to determine value of a house. 

Continue pressing forward because there is a rainbow on the other side with a fat pot of gold aka your money.

I could probably ask them to separate out what the windows cost for installation but my guess is it is definitely less than $2.5k.I don't see why I would want to include the cost of the rot repair in the capitalized improvement since it should not be one.