Rodrigo Nino is the CEO of Prodigy International and he is taking your regular run-of-the-mill house flipping to an entirely new level. Nino hopes to spend $500 million over the next 12 to 18 months buying distressed condos in New York and Miami. His ultimate plan is to quickly resell the condos with the help of his company’s network of agents to individuals outside the United States, particularly in Europe and Central America.
For Nino, this is a first time he has set up this type of distressed property fund, and in a recent interview he explains why he figured now would be the best time to do so, even at a time when buyers remain skeptical and somewhat sidelined.
When asked what the fund’s strategy is, Nino said, “What we do now is we buy wholesale and sell retail at the marked up price in periods that are no longer than 90 days. So we basically turn around the capital four times a year and therefore we have substantial returns. And that happens because we have a very strong distribution network around the world, which is Prodigy Network. That means we can literally sell thousands of individual units very quickly.”
When Nino was asked to explain why they choose New York and Miami as opposed to say Panama or the Caribbean where his company also does business, Nino said, “I think now demand is concentrating for New York and Miami because the opportunity is huge. Historically speaking the prices have never been where they are today. And as we hit bottom in terms of those prices and the recession starts to recover, as it clearly is right now, people see that a true buyers’ market is already beginning. I see a lot of Miami activity already and I see a lot of activity in New York.”
Nino believes he is able to get a bounce in 90 days because “the individual investors are already trying to buy massively.” He notes that since he already has the relationship with developers, banks and individual owners, he is able to buy in whole and mark the price slightly up and sell retail. “I buy in Miami and I sell in Milan. I buy in New York and I sell in Madrid,” he says.
Nino says that from the peak of the market until now there are discounts from 25 percent to 65 percent which he is paying. While there are still going to be a lot of condos on the market in 90 days, Nino says, “it doesn’t matter because the individuals don’t have access to the inventory that we do. These cities have a global demand. That’s why I like Miami and New York. Because you have interest from all over the world.”
When asked if he is seeing many opportunities to buy in bulk, Nino offers, “Sure, I just closed 10 units, in a smaller bulk deal, of $2 million, 10 units on Brickell Ave. And I have to say that probably before the first 30 days the units will be gone. I think I already have three or four of the units of the 10 we purchased under contract.”
He is currently selling to European buyers, specifically Spaniards and Italians.
For the crucial question: why does this model work now, Nino says, “All of [the vulture buyers] missed the market completely. They were low balling so much they are out of the game. With the fracture of the market that we went through, a number of opportunities were posed. But there was a disconnect between the institutional buyers and the sellers because the sellers ended up being the banks that couldn’t get the inventory off their balance sheets and take another hit. With some activity starting to pick up, in terms of the economy, the banks are in better shape and now they are releasing the assets in a better way. That’s why prices are making sense. That’s why transactions are happening.”
Nino makes a point to mention that he is not going to get into the rental game because he doesn’t want to hold on to the inventory. He adds, “Basically I buy, I bridge the transaction and turnaround and sell the individual unit for people interested in buying and holding.”