The physical analysis is a component study of the major common area components (or items) of the association.  It consists of: Build a strong foundation!

  • component list development
  • current cost estimates
  • useful life estimates
  • remaining life estimates
  • field report preparation (condition assessment)

All five (5) elements of the physical analysis play a pivotal role in the success of the long-term reserve funding plan.  They are, in essence,the building blocks of the reserve study and form the foundation upon which the financial analysis is built.   Inaccurate or incomplete information builds a weak foundation, and results in failure of the long-term reserve funding plan.

Professional Reserve Study Firms (or individuals) conducting the physical analysis are sure to encounter various problems that call for resolution.  These normally include:

  • component responsibility issues-
    Fifteen years of direct documentation/plans review allows Strategic Reserves to resolve most indeterminable component responsibility issues.  Any issues that remain unclear after exhausting all available resources, must be addressed through legal interpretation (which may also have a tendency to be unclear), documentation amendment (a cumbersome process) or by simply accepting as association responsibility by default.
  • cost issues-
    Over twenty years of construction estimating experience (in all construction trades) and the development of our own database of "actual costs" incurred by numerous associations in maintaining and replacing various components, allows Strategic Reserves to excel in providing reliable cost estimates.
  • useful life issues-
    Our own in-house library of product manufacturer specifications/warranties, useful life manuals (obtained from government/commercial sources) and the development of our own database reflecting the "actual useful life" of many components that failed within numerous associations, allows Strategic Reserves to be superior in providing reliable useful life estimates.
  • remaining life & field report issues-
    Condition assessment and preventative maintenance review (and suggestions) play a key role in estimating the remaining life of a component and in preparing the field report.   In newer associations, remaining life may be determined by simply subtracting the development age from the useful life.  The older the association, however, the less accurate this method becomes.  Strategic Reserves personnel conducting the component study are licensed general contractors that have been educated in all trades of construction.  This unique qualification requirement provides for reliable remaining life estimates and field reports necessary for the- Security of a successful plan!
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