Cash flowing in Cleveland

[Dennis Minary]

I have been looking to invest in Cleveland and getting feedback that the tenants don't usually pay for all utilities. It's difficult to cash flow when an investor has to pay for water/sewer expenses. Any feedback regarding that cash flow dilemma?

[Arman Ahmed]

Quote from @Dennis Minary:

I have been looking to invest in Cleveland and getting feedback that the tenants don't usually pay for all utilities. It's difficult to cash flow when an investor has to pay for water/sewer expenses. Any feedback regarding that cash flow dilemma?

Water and sewer are definitely something you have to underwrite carefully in Cleveland, but they don't automatically kill cash flow. Many successful investors build those costs into their underwriting and purchase price. The key is buying at the right basis, verifying historical utility bills, and looking for opportunities to separately meter utilities when it makes sense. A good deal will still cash flow, even with owner-paid water, if you've accounted for it up front.