Deal Analysis - Tax Assessment Challenge

[Mike Russ]

Hi - I recently purchased a rental in the Dayton area and I am looking to do more off market deals but am struggling in a specific neighborhood in my target market.  This neighborhood was required to convert from well/septic to city water and sewer.  The tax assessment was approximately $2k per year and now the owners also pay an excessively high monthly water bill.  I have contacted several owners and have strong leads but we continue to be on different price points.  Per area comps, prices should be higher ($240k-$260k) but due to the tax assessment and high water bills, these items kill the financials and are only valued at $200-$210k per my calculator.  

Has anybody faced a similar situation or have additional insight on how to make this deal work? The owners want the higher price points but the NOI just doesn't back it. They point me to comps but I try to explain as an investor I have to focus more on NOI and meeting my cash on cash/cap rate metrics. I have not been able to successfully close the gap.

Thanks,

Mike