Calgary company Reserve Plus wants to help condos owners avoid a massive special assessment, and condo boards from having to assess them.
Steven Laidlaw, a mechanical engineer by trade, was 25 when he bought a condo in Bankview. He remembers hosting friends, watching football games, having drinks.
“Everything was running along pretty good,” he said.
“Then, we had an unforeseen big (building) envelope replacement project hit the condo. That meant that I was hit with about an $80,000 special assessment.”
He lived in a seven-unit building, but he had the biggest unit. Laidlaw had to pay the lion’s share of the $280,000 total special assessment.
Laidlaw said his personal cash burn was low. He talked to the bank and his family and was able to absorb the hit. Two other condo owners weren’t so lucky, and according to Laidlaw. They had to turn over the keys in a foreclosure.
“Reserve Plus was the silver lining – or me trying to create a silver lining out of it,” he said.
He learned everything he could about the condo board process, about the buildings, and, about the reserve funds and reserve fund studies. Laidlaw started with his own building.
“It maybe wasn’t totally accurate, and it was out of date,” Laidlaw said.
“It meant we didn’t have the proper funding to be able to cover that.”
Reserve fund studies
Reserve Plus has actually been around for 10 years. Laidlaw and his co-founder, Taylor Smith, just went around and wrote reserve studies for different buildings, he said.
In the meantime, both worked for a SaaS company that eventually sold to a private equity firm. They’d built up some exposure and expertise.
Doing the reserve studies, they learned a lot about that aspect of the business and realized there was an under-served market. It was also what Laidlaw called a “pen-and-paper” industry. They had word documents, excel spreadsheets and the like, he said.
“It lacks data knowledge, accountability, like everything,” Laidlaw said.
“It kind of set the stage where if we can build this into a really good, even just for our own purposes, a digital platform for us to use, this will become way more efficient than our competition.”
A reserve fund study tallies all of the depreciating parts that will require replacement or repair on a condominium. It typically includes common property, the different components, a financial analysis and recommendations (funding model, etc) to aid in financing any work.
With their 400+ condo database, they’re able to pull data and provide in-depth analytics to create a “scoring” system for operators. It’s their My Reserve Planner – a suite of tools for property managers as they manage capital replacement on their properties.
It creates and reports on regulated items and can be produced and sent to condo owners.
They’ve also created a condo viability score that looks at a board’s financials, energy efficiency, management to come up with a credit-score of sorts for that building.
Key messaging rethink, for expansion
Having been in business for a decade, Laidlaw said they’d already done some of the typical start up business stuff: Core values, purpose messaging and the business planning.
This was an opportunity to revisit some of what they’d done.
“My messaging is so much stronger now that it was prior,” he said.
“We’ve spent two months thinking about it, working on it, practicing it.”
The Alberta Catalyzer Velocity program is challenging Laidlaw to think differently about Reserve Plus as they look to raise cash in the investment community.
The goal is to close a pre-seed round and then look at expansion, Laidlaw said. He said they’ve grown seven times over the past two years. Now he’s looking at 10X growth.
The suite of services they’ve put together seem to have filled a demand. They’re scheduled for an October road show with the Valhalla Angels, too. Investors are taking notice.
It all came from that condo experience when Laidlaw was 25.
“Those tools, all kind of together, are how we’re protecting condominium owners and prospective buyers and supporting property managers,” he said.