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I was supposed to sign the contract for a co-op just yesterday, but after reviewing the financials of the building I decided to take a couple of extra days to make a decision. I would really appreciate the advice of someone here with more experience than me.

The building has 35 units, of which 12 are sold and the rest are rent stabilized units. (I only found out about it yesterday. The broker assured me that 75% of units were sold… when in fact less than half actually are). The deal needs to be all cash, the building has almost no reserve, and a wrap-mortgage payable for $1,250,000 (and to be honest, I don’t even know what that means). I have the financial statement of the building here with me. The statement indicates that the building’s income for 2005 was $188,653 and the operating expenses were $236,088. Although I’m no expert, I can tell something is not right. My maintenance right now would be $440 but it is increasing to $580 from January.

Now the good side… the building is exactly in the location I desire, the apartment is big, has original details, large kitchen, sunny exposure, and it costs a lot less than other apartments in the same area. I love love love the apartment and the price is a steal. But I’m very afraid of making a big mistake and perhpas ending up with an apartment that I won’t be able to sell in a few years unless a buyer is willing to pay cash too. I’m also afraid because of the lack of reserve and the building’s underlying mortgage.

What would you do if you found an apartment you loved, in the exact location you wanted it in, and for an extremely good price… would you take a chance?