I’d like to buy into a co-op that’s running a deficit. Is that a mistake if the roof falls in and there’s no reserve fund?
It’s tough to tell from your question what the financial statements really look like. But it’s worth making the point that the income statement and the net worth statement are different. In plain English, “running at a deficit” and “having no reserve” are two different things.
“Running at a deficit” is when you spend more money than you make — which is fine if you have money in the bank.
“Having no reserve” is when you have no savings for a rainy day — which is fine if you make more than you spend.
The combo, however, spells trouble — has your attorney already pointed this out to you and you just don’t want to believe him/her?