Professionals think in percentages. For Jérémy Correia, a healthy operation aims around 25% gross marginwith work representing nearly 30% of the price of the property. Banks remain reluctant when the work exceeds 50%.
Before buying, Jean merchant of goods for more than 20 years (Editor’s note, the first name has been changed), scrutinizes each transaction on a spreadsheet: purchase price, notary fees (3 to 4%), cost of credit and duration of carrying, works, architect, construction site insurance, co-ownership charges, accountant… without forgetting a safety margin for unforeseen events. “There is the amount we think we will pay, and there is the amount we are actually going to pay”he summarizes. It thus systematically provides between 4 and 7% work hazards.
Added to this is professional civil liability, around 500 euros per monthas well as insurance per project such as structural damage or ten-year insurance on large projects.
Then comes the corporate tax, around 25%then the dividends subject to the flat tax of 30%. A gross margin of 100,000 euros therefore does not mean 100,000 euros in the pocket.
“Below 20% margin, there is too much risk. The game is not worth the effort”says Jérémy Correia. Jean confirms: we must aim for at least 25,000 to 35,000 euros margin per transaction.
The real danger: getting stuck with stock
The main risk is not always the construction site, but resale. “The biggest risk today for a goods merchant is having stock”explains Jérémy Correia. A poorly located studio or commercial premises that are difficult to resell can tie up cash flow for months.
Jean experienced this in 2022. After purchasing two workshops in 260,000 eurosa craftsman disappears with 25,000 eurosthen the project far exceeded the planned budget. Resale is almost at a loss. “I could have refused to sell, but I might still have it on my hands”he says.
The logic is simple: better one 20% fast, that one 30% blocked for one year.
No diploma, but three real essential skills
No diploma is required to become a goods dealer. In theory, all you need to do is create a company. In practice, improvisation is expensive.
- First pillar: taxation and legal structure. SAS, SARL, holding company, real estate VAT or dividends can change profitability.
- Second pillar: town planning. Reading a PLU, anticipating an administrative refusal or an impossible division avoids many pitfalls.
- Third pillar: the land. “Good deals are not found on the Internet, they are found on a closed network”insists the CEO of Plus Investissement. Real estate agents, notaries, craftsmen and brokers remain the real providers of opportunities.
Can you start without being rich?
The myth of the property dealer financed solely by the bank remains largely exaggerated. Personal contribution is almost always necessary. According to Jérémy Correia, it is often necessary to count at least 10% contributioneven if certain small operations allow you to start with approximately 10,000 euros.
But as soon as the projects grow, the association becomes essential. “All we need is a million euros. We don’t have the million euros”summarizes Jean. Other property dealers, family real estate companies, private credit or crowdfunding then become necessary.
With 3 to 4 well-structured operations per yearaim 80,000 to 100,000 euros per year remains realistic. But in this business, we don’t just buy stone: we especially buy risk.
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