condo building with 400K arrears in West New York, NJ

[Margharita Silva]

Hi All, 

I am in contract to purchase a studio condo in WNY, NJ and want to have anyones thoughts on the financial situation of this building. It is approximately 200 units and audited financials revealed that they are after 400K in arrears which they may or may not receive. The property manager declined to provide a list of units in arrears with the specific  amount but they are in court with several people. They have 1.3 million in reserves but took out a loan for 2 million in 2015 towards capital projects which is due in 2028. They have a 2 year brick pointing work which will cost approximately 1 million and a lobby renovation lined up, as well as replacing roof fans, and after all this work, they won't have much left in their reserves. Some of their other expenses are 50k for accounting and management, 90K in legal fees, 50K bad debt expense. Purchase price 125K.  Am i dragging myself in a financial hole? Any thoughts appreciated.