Newsflash: Buying Condo in DC, Need Help Deciphering the Balance Sheet Disclosure

So we are excited to have found an affordable condo in DC in a 12 unit building, but we suspect there might be a reason for the low price relative to the market: $380,000, $500 HOA fee (includes taxes). The building is 100 years old, but pretty well maintained from the look of it. The meager balance sheet states the following:AssetsCash Operating: $1,700Cash Reserves: $11,700Total: $13,400Liabilities & Equity:Accrued Expenses: $3,950Prepaid Assessment: $350Total Liabilities: $4,400CapitalRetained Earnings: ($40,000)Total Capital: ($40,000)Reserve FundsBeginning Balance (Jan 1): $50,000Reserve Contributions: $6,000Total Reserve Funds: $56,000Net Income Gain/Loss: ($7,000)Total Liabilities & Equity: $13,400So the first thing that jumps out to me is the low reserves. We don’t have any other information or a reserve study on the building. Second concern is the negative retained earnings and seems weird compared to the “beginning balance” – does that mean there was a large expense since January? It could mean that they operate at a loss, but I’m financially illiterate so I don’t know. They operated at a loss last year.Any thoughts on this? The HOA says they are not expecting any special assessments in the future, but they always say that, don’t they? Hmm.

Read more at https://www.reddit.com/r/RealEstate/comments/76205g/buying_condo_in_dc_need_help_deciphering_the/?utm_source=ifttt

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