It's eating away every bit of cash flow from the property and then some.Both units currently have baseboard heating - which I've heard can be on the more expensive side of heating options - but I'm not sure if this amount is realistic for the area, or if there is a better heating option that I should look into for a reasonable cost.

RentRedi has options of "Accept", "Reject", and "Request Update (more information)".

Option 3- If they have qualified for FHA; counter the offer to see if they can qualify for low downpayment conventional loan

I was looking for some advice (viable target areas in Cleveland or Ohio in general, financing options and credible PM/realtor contacts) from the experts here though especially if you are in a similar boat as mine (reside in Canada/Ontario area and invest in US). 

@Marc Robinson what's the lot rent, who pays what utilities and what's the source of the water and sewer?

@Ana Vhan there are many commercial options where you can add multiple locations/multiple states onto a single policy.  

If you have equity and decent credit, a conventional Fannie Mae HomeStyle (or the Freddie Mac version) would likely be the better option instead of an FHA 203k loan (which will require a 3rd party HUD consultant to oversee the deal in addition to having the contractor involved). 

Anyone have any good referrals for any of these sources that are geared toward or accommodate investors?

As far as I understand, as I am living in it, I was able to get cheaper down payment options.

Yes, Evan Conner has been an excellent source for us in the Ozarks area of Missouri.