Some red flags:
1) I don't understand why they can't provide you with the board minutes, reserve study and financials before escrow. If they don't have them, that is a pretty major red flag already --shows poor management (those things should be available in e-form almost immediately from any competent management company). If they are HIDING them, for me that is a walk-away condition. You have a right to understand the underlying financials of any property you are about to invest in. They can ask you to sign a non-disclosure agreement, but they should not be hiding these important documents.
2) Why did they have to take out a 15 year loan to fund that plumbing work? The special assessment for that is fairly low, but the fact that they didn't have or weren't willing to pay for that out of the reserve is concerning. If it is a matter that they had already spent down the reserves for other remodeling, I would ask what the nature of the plumbing repairs were and why the entire systems in the building were not assessed/properly maintained BEFORE cosmetic remodeling was done. Owners and management companies should ALWAYS address the core functionality and stability of the structures of the buildings before doing other work. Roof, plumbing, electrical, and elevators if they have them.
Basically get more details on the sequencing and amounts of the repairs and their funding. If the loan for the plumbing was taken out 9 years ago and the major remodel was 5 years ago the story is not adding up.
3. I am not a property investment expert, but as a potential buyer I would be very nervous about how low that reserve is compared to the size and running costs of the building. The rate they are adding to the reserve is less than 2% a year -- that's not even keeping up with inflation.
4. The high rental occupancy is also a warning sign. I think over 50% rental means units will not qualify for FHA financing. That cuts out a big chunk of potential buyers right there. Buildings with high rental percentages can also have more management problems + issues with tight-fisted investors not being willing to put cash in the building. This can also happen with under-resourced owners but you are more likely to be willing to fund repairs and improvements as an owner living on site than as an off-site investor, especially if you are more the slum lord type. Anyway, the property summary should tell you if it is FHA eligible. It isn't a total make or break issue, but something to dig into.
The good aspect of high rental occupancy is that it probably means there are no rental caps. So as long as that remains the rule you could potentially rent this unit out in the future if you move, etc.
I would push them to get the reserve study and financials, at a minimum or at least a better explanation of
1) why they needed the loan for plumbing and what was the nature of the expense/repair/cost,
2) what was the nature/cost of the remodeling work that was done 5 years ago
3) What is the breakdown of units in the building (1br, 2br, etc.) and what the rough total monthly assessment is for each. You want to make sure that this # x 12 actually adds up to the 1.4mill in annual income.
Tell them you are willing to sign a non-disclosure form if necessary, but would prefer to have the original documents.
If you are working with an agent push them HARD to get these documents. If they are lazy THEY may be the ones resisting. A good agent should be able to get you these things or explain why they are not available. A good agent should also be raising the same red flags, or at least most of them, that I am raising here.
