My policy has been to either use cheap materials that can easily be replaced between tenants with minimal grumbling, or pay for durable, tenant-resistant materials.

@Bill Brandt, that is just an estimate for Electric, Water, Sewer, and Gas for THREE units.

I would assume you would want to budget for roof 25 year life span, hvac 20 year life span, appliances and hot water heater 12 year life span, bath and kitchen remodel 15-20 year life span, etc.

With your current estimates, you're essentially assuming infinite lifespans for the property's various components (roof, foundation, HVAC, electrical, plumbing, water heater, etc.). 

I would bump your expenses to atleast 800/ month between 2 units of utilities and averaged maintenance and vacancy over the long haul as future gas prices, water charges, and maintenance could go higher. 

Any other expenses that landlord normally pays in duplex in your area like water/sewer/garbage, is snow and mow completed by tenants?

Another incident I had a tenant wanting me to pay her water bill after it was not repaired for two months.

The cabinets, flooring, and paint look to be in good shape from the photos, but what about the roof, foundation, HVAC, water heater, etc.? 

We have 1 or 2 properties that are not sub-metered for all utilities and 3 that arent sub-metered for water...

@Richie ThomasThinking through this after what you mentioned I think the owner is scared to sell it outright because he would be in hot water due to the condition and the tenants are likely not safe to what the county would expect.