When a condominium in Surfside, Florida collapsed and killed 98 people in 2021, the headlines caught people by surprise. But as it turned out, the building's issues had been known.

“The Surfside collapse was a tragic, horrific loss of life,” says Marc Tamres, co-founder and CEO of HomeRun IQ. “Though many people focus on the physical failure, this was a critical fiscal failure. The owners knew for three years that they had a critical problem. Sadly, a key factor was that they didn't know how to pay for it and ran out of time.”

Physical collapses like the Surfside disaster, fortunately, are rare. “But the fiscal challenge is pervasive,” Tamres says. “It is more the norm than the exception.”

Although real estate is the world's largest class of assets, the industry often fails to make long-term plans for those assets, including financial reserves for maintaining and upgrading the properties. Moreover, Tamres says the need for these financial reserves in multi-unit residences (apartments, condominiums and homeowner associations) is rapidly growing due to aging properties, stricter state regulations and heightened environmental concerns.

HomeRun IQ, an MIT STEX 25 startup based in San Francisco, addresses this critical gap in financial planning for these residential properties. The company's workflow software eases the path of collecting, preparing and analyzing building data, and then putting together tailored financial plans directing property resources. Such plans have become critical for owners, managers and underwriters, says Tamres.

Investigating infrastructure
Multi-unit buildings house about half the U.S. population, and most buildings are old—on average, built 40 years ago. “Nothing lasts forever,” Tamres says. “Physical infrastructure ages just like people, and you have to do things to maintain and sustain that property.” But all too often, when properties do capital planning, they fail to budget for maintaining infrastructure.

This oversight has created a pervasive problem for multi-unit residences that lack proper reserves and are headed for financial challenges. As a result, California, Florida, New York and other states have passed laws forcing action by these properties. Underwriters such as Fannie Mae and Freddie Mac also have recognized the problem and look to see suitable reserves as a critical factor before making loans in the condominium market. (“If Fannie Mae and Freddie Mac won't back the loan, a lot of people can't get a mortgage,” Tamres points out.)

The engineers and property managers that owners hire to generate plans for these real estate assets typically follow the process they did decades ago, says Tamres. The process still usually involves physical inspections, taking notes on paper, transferring that information into a spreadsheet, putting comments in a document, creating a static paper-based file, and performing several revisions. This process is extremely inefficient, often omits key information and is out of date as soon as it is done.

“HomeRun IQ addresses these problems very simply,” Tamres says. “First, we have a very flexible workflow model that adapts to the current needs of the industry. Second, we collect the data, and it is structured in our platform so that financial models can be run. Third, the analysis evaluates the financial trade-offs to make the best decisions. Finally, the analysis is dynamic to deliver the results based on market requirements and to stay current.”

He emphasizes that these analyses cater to the specific needs of each property—for instance, reports on properties in Florida are tailored to that state's legal requirements. And the software makes it far simpler to keep plans up to date.

Covering bases with HomeRun IQ
After earning a master's degree in mechanical engineering at MIT, Tamres worked for Ford Motor. Deciding to transition to business roles, he returned to MIT to study innovation and entrepreneurship at the Sloan School of Management. Afterwards he went to Silicon Valley and worked at several technology companies, including Tellme Networks in natural language voice recognition and Microsoft in search, geospatial mapping, and collaboration software.

From personal experience, Tamres knew about the glaring gap in multi-unit residential property planning. After buying a condominium, he found that his building's liabilities had been gravely underestimated.

“I realized nobody looked at this property like an asset,” Tamres recalls. “Everyone looked at this like an expense. But when you look at things like an expense, you just pay for things when they break. You wait for the problem to happen.”

Tamres launched HomeRun, with Ron Peters (another MIT alumnus and now chief technical officer) and chief product officer Zach Pritchard, to address the widespread gap in asset planning in real estate.

Demand for the service has been accelerated by tighter state regulations and rapidly evolving requirements for environmental sustainability and climate resiliency.

“Until now, if your building was built in 1983, the goal was to sustain and maintain it to its original 1983 levels,” Tamres says. “But increasingly, these properties now have to get to 2025 or 2050 levels.” That means making significant investments for upgrades such as energy-efficient and lower-carbon-footprint systems.

“All these requirements are coming together,” Tamres adds. “If you're going to make an investment anyway, don't do it twice.”

Addressing the necessary pent-up demand for infrastructure updates and upgrades will require significant amounts of capital. Fortunately, HomeRun IQ reserve and capital plans make it easier to understand and evaluate what's going on with each property. That in turn makes it possible to deliver financial resources in a more economical way.

As HomeRun IQ fosters relationships across all the sets of stakeholders in multi-unit residential real estate, “we're starting to align people's interests,” Tamres says.

“We're part of the industry driving these changes,” he says. “We're sharing our intellectual capital, we're getting the word out, and we're listening to the market and saying, This has to change. The conversation is about how we move the industry forward. Our product is one of the ways to help do it, but we are all part of this journey together.”

Read

Placing real estate on a solid financial foundation

HomeRun IQ

HomeRun IQ

HomeRun IQ software addresses a critical gap in planning for multi-unit residential properties.

Read

Placing real estate on a solid financial foundation

HomeRun IQ

Read

Placing real estate on a solid financial foundation

HomeRun IQ

HomeRun IQ

HomeRun IQ software addresses a critical gap in planning for multi-unit residential properties.

Read

Placing real estate on a solid financial foundation

HomeRun IQ

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Read

Placing real estate on a solid financial foundation

HomeRun IQ

HomeRun IQ

HomeRun IQ software addresses a critical gap in planning for multi-unit residential properties.

Read

Placing real estate on a solid financial foundation

HomeRun IQ

Read

Placing real estate on a solid financial foundation

HomeRun IQ

HomeRun IQ

HomeRun IQ software addresses a critical gap in planning for multi-unit residential properties.

Read

Placing real estate on a solid financial foundation

HomeRun IQ