Opinion on a co-op's financials

What are the RE taxes?

Need to look at revenue vs. cash operating expenses (e.g. excluding depreciation) and rate of increase of operating expenses. Any underlying debt?

This type of question with this limited info will get you no useful info. Too many other factors. What are upcoming capital expenses? Special assessments in place to rebuild reserves? Special assessment history? What type of mortgage/terms, when will it be refinanced? As a general observation, cash reserves are utterly inadequate. A coop with robust, healthy finances would have minimum of 6 months operating expenses in the reserve fund.

How are you defining operating expenses (does not include real estate taxes I guess). I would think you have $1.5 MM in operating expenses, since you have $1.5 MM in revenue and no net income.

Cash reserves are definitely low, agree with kylewest.

Are all of the liabilities the mortgage, what else is there? I would be a bit worried having that low of cash reserves, and already a decent sized mortgage, suggests potential for assessment if large capital project comes. I would want to understand building condition, when was last Local Law 11, how old is the roof, how about the boiler, how old are the risers / piping

what's the 5mm asset if only 150k is cash?

Thanks.

Q) As this property has commercial property income, wouldn't offset some of the operating expenses?
Q) When we say we need cash reserve of 3-6 months of operating expenses, are we excluding RE taxes or not?

Additional Information:
* RE taxes 700k/year, increasing at 8% per year, not sure why. Operating expenses 500k/y, plus some other expenses totaling to 1.5mm/y of expenses.
* Operating expenses increasing at 4% per year.
* 170k/year of assessments going on for a few years.
* Recently done building wide renovations ate up some cash, upcoming capital expenditures if any presumed not be massive.

Nothing that's not been said before. Cash looks low but too many unknowns.

Commercial property can be a good asset. It can become a problem if a large unit ceases a lease and there is a signfiicant hole in income for an extended period.

The cash does look low. Do they have a revolving line of credit in place?

I'd also look at size of the mortgage. If they've got a $7MM mortgage and have utilized some of the line of credit it could raise some concerns. If they've got an amortizing mortgage which they've paid down from a $4.5MM starting point to $2.5MM and they're due to refinance, you could see that they've been planning for an increase in cash from refinancning back to $4.5MM or $5MM.

As others have said, where do they currently stand on major financials. Local Law 11? Converting from Oil to Gas? Elevator renovations etc..etc... If these are all in the rear view mirror it may look different.