For a CPA office, this type of review is considered non-recurring revenue. That means that the client will not return year after year, like if they were doing your taxes. Doing a co-op financial review will not have opportunities to cross-sell other services to the same client so this type of service is under-served.

In addition, the fees charged for financial statement review when buying a business is frequently in excess of $100,000 so on a commercial side this service exists. Due to the small nature of these types of transactions, I think this type of service offering is unlikely to grow substantially.

Inadequate Reserve Funds: Insufficient or variable reserve funds that can lead to very significant assessments levied on members.
High Debt Levels: Significant amounts of debt or upcoming balloon payments that could impact the co-op's     financial stability.
Operational Deficits: Consistent operating deficits where expenses exceed revenues. Co-op owners having to fund bad debt agreements or bad cash management strategies through their maintenance fees.
Aging Infrastructure: High costs associated with maintaining or replacing aging building systems and     components.
Legal Liabilities: Ongoing or potential legal issues that could result in significant financial liabilities.
Poor Financial Management: Inefficient financial management practices leading to budget overruns or     misallocation of funds.

Some attorneys offer review of co-op financial statements. These attorneys are typically not CPA's, but they can provide a reasonable level of comfort for the following types of co-ops:  
     - Small co-ops (2-10 units)  
     - Co-ops with very few amenities (doorman, pool, etc)  
     - Owner-Managed co-ops where all units have a board seat, which typically are 2-10 unit co-ops.  

These attorney reviews will not provide a high level of confidence or won't answer specific questions for larger co-ops, co-ops they have not previously worked with, as well as higher amenity co-ops. The common questions buyers may have that they will likely not be willing to answer is:
     - Will my maintenance vary greatly year-to-year and what will this variance be related to?  
     - How does the co-op fund small versus large projects and costs?
     - What has the history of maintenance increases been?
     - Compared to similar co-ops, how does the Management compare?

The Co-Op Insight process begins with online examination of the building and the unit. With this information, a list specific to that co-op is then determined and requested from the co-op. These items regularly include:
     - Annual financial statements and budget reports  
     - Statements of cash flow and equity
     - Reserve fund analysis from a 3rd party, if completed
     - History of assessments

Seldom do you receive all of the requested information because co-ops will tend to only have certain documents prepared for external distribution. What we do receive we will begin working with. Although typically an incomplete package, we can gain knowledge and insights from first reading the statements, then doing a detailed comparison between them to find differences that can drive insights.

In the industry there is no specific set of steps to compete a thorough analysis. As it's a risk-based approach, as I read through the statements there will be concerns or takeaways that I'll want to look further into, and there will be areas that we'll be more comfortable based on our first read of the financials. However, these are the typical types of analysis that will always be done:

Balance Sheet Review: Assessing the co-op's assets, liabilities, and equity to understand its financial stability.
Income and Expense Analysis: Reviewing the income statement to evaluate revenue sources and expense     patterns, ensuring that income covers expenses.
Cash Flow Assessment: Analyzing cash flow statements to determine liquidity and the ability to meet short-term obligations.
Reserve Fund Evaluation: Checking the adequacy of the reserve fund for future repairs and capital     improvements.
Debt and Mortgage Analysis: Evaluating the terms and conditions of any debt, including mortgages, to     understand long-term financial commitments.
Budget Comparison: Comparing budgeted figures to actual performance to identify any discrepancies or areas of concern.
Assessment Review: Looking at past and potential future assessments to gauge financial impact on     shareholders.
Legal and Compliance Check: Ensuring there are no significant legal issues that could affect the co-op's financial health.
Other: Other assessments will be used using the risk-based approach, such as if available for sale units in the building is higher than normal, which may suggest a planned assessment that has not gone into effect and sometimes is not disclosed, a search of legal proceedings on county/local government websites, and other approaches as necessary.

Your CPA can read the report and provide his or her findings and assessments. The key differences between your CPA and Co-Op Insight:
     1. Your CPA likely does not specialize in real estate financial statements. This will require additional time to understand the basis of preparation and applying standard health metric ratios. CPAs are generally not experienced in financial due diligence or forensic accounting, which focus on trying to find additional insight based on the typically limited set of information provided.
     2. They charge hourly, which will likely result around $1,000 in total but that can vary very significantly. As somebody who prefers upfront pricing, understanding the cost/benefit prior to engaging an outside party is typically a better experience.

Understand Financial Stability: Assess whether the co-op is financially sound and capable of meeting its obligations.
Predict Future Costs: Identify if the co-op will double maintenance next year to fund a new elevator, or if they can fund it out of reserves.
Evaluate Risk: Determine the level of financial risk associated with purchasing a unit in the co-op.
Make Comparisons: Compare the financial health of different co-ops if you are considering multiple options. Ask Informed Questions: Equip yourself with the right questions to ask the co-op board or management.

Co-ops typically operate with either low reserve levels or high reserve levels.

The lower reserve co-ops will typically charge assessments to cover any costs of maintenance or repairs, or even will charge assessments to increase reserve levels.
High reserve co-ops will typically not charge assessments and generally follow better co-op practices.

For lower reserve co-ops, buyers can be quick to buy due to low maintenance costs, but need to fully understand how frequent special assessments are used to perform repairs and upgrades. Higher reserve co-ops tend to be safer from an assessment perspective, but can still hide unforseen changes that can impact the unit value.

After your purchase, co-op financials should be reviewed annually or as frequently as they are distributed to members. This regular review helps ensure that the co-op remains financially healthy and can address any issues promptly. Any large changes should be reviewed and inquired about to the co-op board if possible.

My report will help you understand the financials and you can use it to guide your annual review of the financials annually after you purchase. It will highlight important metrics and calculations that you'll want to focus on throughout ownership.

Typically, on such short notice you may be lacking some documents from the co-op, but if you have received partial financials information, we can likely draw some important conclusions from the limited financials we do have to make the exercise worthwhile.

You only pay me after I've given you my findings, so I'm the only one with potential to be scammed. But I am confident that people are good natured and will love the service.

Yes, we can review financial statements for co-ops outside of New York City. While we have extensive experience with New York City and surrounding cities co-ops, the principles of financial analysis are applicable to co-ops in other locations as well. We can tailor our review process to comply with local regulations and specific co-op structures outside of New York City.