Is this a healthy HOA financial statement?

[Jacob P.]

Hi guys,

We've invested in townhomes up until now, but currently have an accepted offer on a condo.

I just received financial statements for the last 2 years. I don't know exactly what to be looking for, but generally speaking it's not looking super healthy.

It's a 15 unit, older building. Converted to Condos 20 years ago.

They ended last year with $20K in the operating fund, after declines of $5K and $10K in the preceding years. They collect about $50K in fees per year.

There were no extraordinary expenses over that period. The bulk of it was management, Insurance, Fuel, etc. with maybe on average $5 to $6K in various repairs.

Obviously the decline in reserve accounts is a big red flag, and I'm wondering if it's enough to potentially walk away from this deal?