Negative Retained Earnings Condo Red Flag?

[Chris Schmitt]

So I’m looking at purchasing a rental property condo and received the financials.  My attorney and accountant disagree on the state of the property.  The balance sheet shows negative retained earnings to make the balance sheet balance. A debit balance in retained earnings seems concerning.  They also took out a 15 year loan for repairs and maintenance, and seem to have had some cash flow problems. However, they got a clean audit opinion, means they didn’t misrepresent their financial statements, and the report didn’t say “going concern”, which is what CPAs say when they think a business will likely go under, so that’s a positive. Also, the cash reserves, etc look alright.  Just curious if this is a deal breaker or sign that assessments or raising maintenance are on the way to make it balance? Currently the maintenance of very low which is one thing that makes it appealing.