Buying a co-op in North Riverdale? The kitchen and views matter, but the building’s books matter more. If the corporation behind your future home is shaky, you could face higher maintenance, tougher loan terms, or surprise assessments. This guide shows you how to read a co-op’s financials so you can spot strengths, ask smart questions, and move forward with confidence. Let’s dive in.
Why co-op financials matter
When you buy a co-op, you buy shares in a corporation and receive a proprietary lease. That corporation pays the building’s bills, carries any underlying mortgage, and sets monthly maintenance. Strong financials help keep maintenance stable and support steady building operations. Weak financials can mean cash shortfalls, special assessments, and stricter board decisions on sales and sublets.
In the NYC metro, lenders and boards look closely at a building’s financial health. Poor ratios or thin reserves can increase your required down payment or even limit your financing options. Converted co-ops also have offering plans and rules filed with the state. For background on these documents, review guidance from the New York State Attorney General’s Real Estate Finance Bureau.
North Riverdale’s co-ops vary in age and size. Older buildings may carry higher capital needs, like plumbing, facade, and heating upgrades. That is why you should always review building-specific financials rather than rely on neighborhood averages.
Documents to request
Ask the seller’s agent or managing agent for a complete board package. At minimum, get these items and skim for the notes below.
- Audited financial statements for the last 2–3 years
- What to look for: auditor’s opinion, any qualified language, and footnotes about one-time items, litigation, or related-party transactions.
- Most recent year-to-date interim financials and the current approved budget
- What to look for: actuals versus budget, and any large variances in revenue or expenses.
- Reserve study or capital plan and current reserve balance
- What to look for: upcoming projects, timelines, estimated costs, and whether funding is on track.
- Board meeting minutes for the last 12–24 months
- What to look for: special assessments, litigation, management changes, major repairs, or policy updates.
- Delinquency report
- What to look for: percentage of unpaid maintenance and whether delinquencies are concentrated in a few units.
- Underlying mortgage documents
- What to look for: balance, interest rate, maturity date, debt service, and any balloon payments.
- Offering plan and proprietary lease
- What to look for: flip tax, sublet rules, occupancy requirements, transfer restrictions, and how maintenance is allocated.
- Management agreement and insurance declarations
- What to look for: fees, term, termination rights, internal controls, coverage levels, deductibles, and claims history.
- Building tax bills and any tax abatements
- What to look for: recent increases in real property tax and changes that could affect maintenance.
- Rent roll for any commercial space
- What to look for: tenant concentration, lease expirations, vacancy risk, and reliability of this income.
- Special assessment history
- What to look for: frequency, size, and reasons for past or pending assessments.
Read the statements
Balance sheet basics
The balance sheet shows what the co-op owns and owes on a specific date. Focus on cash and investments, accounts receivable, accounts payable, and any debt. Ask if current assets cover current liabilities. If most assets are tied up in fixed assets, liquidity may be limited.
Income statement trends
This statement shows revenue and expenses for the year. Recurring revenue usually includes maintenance and any commercial rent. Major expenses include payroll, utilities, insurance, repairs, management fees, and real estate taxes. Look for a steady operating surplus over several years, and read footnotes for one-time costs.
Cash flow insights
Cash flow shows how money actually moved. A paper surplus can still mean tight cash if receivables are high or capital spending surged. Review cash from operations, capital expenditures, and any loan proceeds or payments.
Footnotes and audit opinion
Footnotes often reveal the most important details. Read them for related-party deals, pending litigation, accounting policy changes, and capital projects. An unqualified auditor’s opinion is standard. A qualified or adverse opinion or any “going concern” language is a red flag.
Simple ratios to run
You do not need to be an accountant to run a few quick checks.
- Current ratio: current assets divided by current liabilities. Below 1 can signal short-term pressure.
- Months of reserves: reserve balance divided by monthly operating expenses. Many advisors want to see several months of coverage.
- Reserve ratio: reserve balance divided by total annual budgeted expenses. Higher is better when aligned with a clear capital plan.
- Delinquency rate: total delinquent maintenance divided by total annual maintenance income. Rapidly rising delinquencies, especially above roughly 5 to 10 percent, deserve attention.
- Debt burden indicator: underlying mortgage balance divided by annual maintenance income or total revenue. Higher values can increase risk at refinancing or maturity.
Compare these numbers across 2–3 years to see if the trend is improving or slipping.
Red flags to watch
- Frequent or large special assessments in recent years
- Reserves that cover only a month or two of expenses, or reserves used to plug operating gaps
- Delinquencies above roughly 5 to 10 percent or rising fast
- Large or growing underlying mortgage with a near-term maturity or balloon payment
- Qualified or adverse auditor opinions, or repeated internal control concerns
- Material litigation or major building violations
- Big capital projects planned with no funding plan
- Heavy reliance on a single commercial tenant, or vacant commercial space
- Sharp insurance premium spikes or a high claims history
- Management turnover or unexplained jumps in payroll costs
Green flags to welcome
- Consistent operating surpluses and small, explained budget variances
- A recent reserve study and reserves covering several months of expenses
- Low, stable delinquencies with clear collection policies
- A clear capital plan and documented funding approach
- Unqualified audits and clean footnotes
- Stable management with a clear, cost-appropriate contract
- No major litigation or unresolved violations
Local lender and tax notes
In the NYC area, lenders are sensitive to building financials. Weaker ratios, thin reserves, or high delinquencies can affect your down payment or loan options. If you plan to use government-backed financing, ask whether the co-op is approved for the program you need and review HUD guidance on project approvals for context.
Property taxes in NYC are paid by the co-op and allocated among shareholders. A rise in assessed value or a change in abatement status can flow through as higher maintenance. In older North Riverdale buildings, also review recent facade, heating, or plumbing projects and whether reserves match the capital plan.
Quick checklist
Use this simple list to organize your review.
- Financials and budget
- Last 2–3 years of audited financials, current interim, and current budget
- Reserve balance and reserve study or capital plan
- Governance and operations
- Board minutes, management agreement, insurance declarations
- Offering plan and proprietary lease for flip tax and sublet rules
- Debt and taxes
- Underlying mortgage summary and maturity date
- Recent tax bills and any abatements
- Income and collections
- Delinquency report with aging detail
- Rent roll and lease expirations for any commercial space
- Red flags and green flags
- Note any assessments, litigation, violations, or unexplained variances
- Confirm auditor’s opinion and internal controls
Who to call
- A New York real estate attorney to review the offering plan and proprietary lease
- A CPA with co-op experience to evaluate reserves, ratios, and trends
- An experienced North Riverdale agent to gather documents, benchmark the building, and guide your strategy
- A building engineer if major capital projects are pending or the building’s condition is unclear
Buying or selling a co-op is a big move, but you can make it with clarity. If you want help gathering documents, spotting key ratios, or coordinating with your attorney and CPA, connect with The Advanced Home Team. Our Riverdale-based advisors bring neighborhood insight, senior-sensitive guidance, and Compass tools to help you move forward with confidence.
FAQs
What is a co-op financial statement and why is it important?
- A co-op’s audited financials show the corporation’s revenue, expenses, reserves, debt, and cash flow, which influence maintenance, assessments, and lending options.
How many months of reserves are healthy for a Bronx co-op?
- Many advisors look for reserves that cover several months of operating expenses; compare this to the capital plan to judge whether funding is adequate.
Where do I find flip tax and sublet rules in a North Riverdale co-op?
- Review the offering plan and proprietary lease for flip tax, sublet restrictions, occupancy rules, and transfer procedures.
What delinquency rate should concern a buyer?
- A rising delinquency rate, especially above roughly 5 to 10 percent of annual maintenance income, can stress cash flow and deserves a deeper look.
How do special assessments affect my purchase budget?
- Assessments add to your monthly costs or require lump-sum payments; confirm any pending assessments and timing before you finalize your offer.
