Any CPA's/Attornies adept with Co-op Statements?

honestly, there is not to much to it. You are seeing what they are collecting for maintenance fees vs expenses. are they running a surplus or deficit. Then you want to see what sort of reserve fund they have. Also are they disclosing any major renovations coming up, assessements, etc.

I do not understand why your attorney can not read both, sounds sort of incompentant to me actually.

The only real difference between the two is the ownership structure, condo means owning your apartment, coop is owning shares in a corporation. Coop will have some sort of underlying mortgage that you just need to understand what the terms are, maturity date, etc.

Coop/condo financials are cookie cutter, presentation, footnotes, etc. YOu just have to understand what you are looking at.

If they are running a deficit and have almost no reserve fund, i would run, whether condo or coop. You want to always have a cushion so they don't hit you with a major assessment every time something goes wrong.

I am not an atty, but I 1) have a Wall Street background and 2) read these things all the time.

I will go over it with you for a consulting fee .. not to say "yes" or "no" but to teach you what the numbers mean and what ratios to run ... if you're going to own a piece of this corporation you'll want to know how to read subsequent statements anyway.

that would take an hour or two of your time.

ali r.
DG Neary Realty
contact me: ali [at] dgneary [dot] com

I dont know for some reason I find this funny.

I agree with MikeV: it takes less than one-half hour to digest a coop annual report
unless it has serious financial or legal problems.

my gut is to walk away which is what im 90% doing, just wanted to see if co-op specialist had any 'aha' perspective which doubted.

reserves look okay - i hear they should at least be 1/3 of annual maintenance income.. it's a little above that.. my ? is that part of the refi they just did forced them to put money aside for reserves... so i wanna make sure that they didn't do a cash out to do this as thats a red flag, though you can see principle of loan go down from 08 to 09...

...long term deficit in the 10's of millions.. i hear a side preached by some attorneys that a co-op is NOT in the business to make money so some deficits shouldn't scare you, of course they have incentives, and i trust a CPA 10 X more than most attorneys, but don't know many CPA's specialize with co-op opinions outside of audit letter, which doesn't really state an 'opinion' to avoid any liabilities...

2 owner lawsuits, looks immaterial compared to maint income..

ali - i read your posts and appreciate some of your thoughts on RE, but as someones from the Street, i know most who say i have 'Wall Street' background can barely make an opinion on SEC filings and don't have the accounting depth to get past EBITDA and footnotes..

i find the most competent are small CPA firms who don't have a boss or colleague to blame ala with the bigger firms and are forced to take ownership on their opinion, just all my buddies are w/big 4 or hf/pe and they're smart enough to not even believe their own BS

ss400k as an aside as an accountant you have to understand it is the smaller firms doing those audits because there is really nothing to them and the fees are not enough to make a larger firm want to do them. I did a few year ago with a prior firm and you find that the board wants to pay zero and take up all your time with questions.

That being said. I am not sure i understand your issues. They refinanced and the bank asked them to have reserves for capital improvements, this is pretty normal in the market outside of coops, so maybe they have a similar thought process. You do not want to run into the situation where the coop does not have the funds to finance a major repair. If the loan outstanding is going down, that is all that truly matters.

No building is in the business of making money in the condo/coop world. Remember no matter what the ownership structure, we are talking about a balanced budget more then a surplus or a deficit. A properly managed coop/condo should run in my opinion a small surplus every year. This leaves you with potentially some excess cash to pay a surprise expense.

I am not sure the type of person you are looking for or whether you need. My point was that an attorney should have the capability to read and discuss the underlying facts in a financial statement whether a coop or condo, and if they can not, you should not be using them.

thanks mikev...

my major issue was the 10's of millions of DEFICIT it had.. looking at 08/09 they had a small loss, and small gain respectively..

taking out depreciation/amort which are non-cash expenditures, some losses may turn into gains, which could explain the huge deficit tucked in retained earnings..

re: audit letter i have it in hand and it seems most who audit these co-ops dont issue an OPINION on the financial health, but rather whether co-op's management financial statements are simply substantiated..

so im not looking so much for an accounting firm capable of issuing these light-weight letters but rather a CPA/tax dude of some sort capable of digging further to actually provide an opinion beyond general substantiation of mgmt's assertion.

ali r. - it is really getting annoying with your constant pushing yourself and your services...I thought there was a rule against that here, otherwise, let's have every broker, lawyer, appraiser, plumber, etc. give a pitch on each thread. And your "Wall Street" background is negated by working for even one day at the NY Post

That's not fair, Ali is a regular contributor with an occassional offer of services.
And particularly this conversation, the original poster asks what it would cost, opening to solicitation.

ss400, I am assuming the financial has the auditor's signature and their opinion since that is a requirement of an audit. If there is no opinion in the fin'ls, then is not an audit but rather a compilation of the financials. The letter from the CPA firm should have clearly stated what it is.

I'm a cpa but I don't read co-op financials for a living. But based on my experience, aside from your basic bal sheets, cash flows, and inc statement, the footnotes are very important. This is where the mgmt/co-op will disclose any material information such as maturity of debt and funding capability.

My opinion is complex and long financials are created to distract the reader. Try reading AIG's financials.

good luck

thanks truthskr

aptboy, it's a violation of my real estate license for me to not identify myself as a real estate agent on chatboards. And frankly, my posting does attract clients. However you can "ignore" my comments if you want.

ss400K, my accounting depth is medium -- I did two of the three years of CFA accreditation prep before I walked off the street.

However, you have enough accounting sense to think that maybe the deficit is a problem, so you want someone who will look at the building's financials in the context of the original offering plan and board minutes.

I don't think anyone -- broker, atty, or CPA -- can do that at this stage. You can purchase the offering plan from the other side for about $250, but I don't think anyone is going to let you read board minutes prior to a bid.

ali r.
DG Neary Realty

what you are looking for does not exist. These so called "light weight" letters are standard audit letters, which the purpose of an audit is to express an opinion of the financials. The only way they will comment on the financial health is if there is a going concern risk.

What you need is someone to tell you what these numbers mean. You will not be able to drill deeper than the financial statements, per se (minutes of the board can shed some insight). Any of your big 4 friends should be able to do this for you in a conversation. You will not get an opinion type report as would with an audit.