How To Invest In Websites In Your Spare Time
I remember my first website sale. I made $13,000 Australian dollars selling a website that I had built from scratch myself. That sale was a big windfall for me and a moment I won’t forget because it was the first time I saw the real potential of online property investment.
Since that sale I’ve gone on to sell more than $150,000 USD in websites. Some of the sites I built myself, investing my own time and sometimes money, while others I have purchased and then sold for a profit at a later date.
I’ve never lost money on a website investment, although I have bought some sites that were not big money spinners – I got out with pretty much the same as I went in with. When profits are made though, the worst I have done is double my money.
Long Term Investing?
On the Internet you might call what I do long term investing since most of the sites I bought were sold no earlier than 18 months time. The websites I built myself take as long as five years to reach the point of sale, although I could have sold earlier for less or held on longer for more.
The best return on investment from a flip (a site bought and later sold) was 1,000% – 10 times the money I put in. It took a little over two years to do that. Another trade was a set of sites I purchased 18 months prior that brought in a little over double my initial investment.
In the offline world, returns like that in 18 and 24 months would be considered exceptional and certainly not standard. If a share portfolio or investment in physical property returns 20% a year you are doing well.
The world of the web is different. Everything is changing fast, yet with so many websites and so many people online, the size and potential of the market is tremendous. There are bargains out there all the time and as long as you don’t screw up what you purchase, simply allowing a site to grow organically can result in significant profits, if you are prepared to wait.
Flipping Part Time
I’ve never focused all my energy on buying and selling websites, which is why I haven’t done that many trades. Most of the time I work on whatever my main business projects are at the time, but I keep my eyes on some of the website trading forums to see if bargains come up.
When a site matches my criteria, I act fast with an offer, do some basic due diligence and if all things go well, make a deal. I miss out on more sites than I purchase because other people out-bid me, the site sells before I find it or due diligence convinces me to pass on a particular site.
As a result of buying websites purely as a side project, I’ve focused on a certain type of website and made sure I have people working with me who can help with the activities I don’t have the time to do. You definitely need to be careful if you want website flipping to be a part time job, it can quickly suck all your time, especially if you choose the wrong type of site.
Criteria for Part Time Website Flipping
Here’s some advice from what I have learned in the previous years flipping websites part time.
How I Generate $1675 Per Month Passive Income From Buying Websites
Continuing the thread from yesterday’s post regarding Ed Dale and the Dominiche system for buying and selling websites, I thought I might relay the story of how I acquired a set of niche websites that presently generate roughly $1675 in monthly passive income.
Unhappy With My Blog Income
The reason why I decided to go looking to buy websites was because I was not satisfied with the income I was generating from blogging. I was making about about $2,000 to $4,000 per month, no small amount for most bloggers, but I was still frustrated with the slow growth that is the nature for most blogs. This was back in the latter half of 2006.
I wanted to use the revenue generated from blogging and reinvest it to accelerate my income growth, but I was wary of increasing my labor as a result of any purchases. I had already experienced what happens after buying another blog when I acquired SmallBusinessBranding.com back in December 2005.
For the months that followed the purchase of Small Business Branding I came to a very clear understanding that while buying additional blogs can increase your income, unless you come up with an alternative content model to writing it all yourself, you end up significantly increasing your workload.
There is only so much blogging one person can do, and if you read through the archives of this blog you will see I have thought considerably about using blogs as a passive income source and eventually changed the structure of Small Business Branding to reflect a better model (see How To Outsource Your Blogging for details and also my series on professional blogging as a sustainable business model).
With my previous experience I decided that for my next website purchase I wanted something that was a pure passive income source (or as close as possible) and preferably was so from day one – I didn’t want to have to hire any people to produce content or perform any significant ongoing roles myself after buying the site.
User Generated Content Is Gold
I’ve always loved sites that grow because of the existing user base. If the people who use your website also create the content, thus generate the value, and even better – spread the word (market) for you – then you have the perfect formula for passive income.
Buying and Selling Websites The Ed Dale Way – Dominiche Launches Tomorrow
I’ve mentioned before that I derive some of my income online from websites I have purchased – forums in particular – that bring in a steady stream of passive revenue.
It’s not a huge source of income for me (about low four figures at the moment), but given the return on investment – you can buy a website and earn back your investment cost within 12 months at most (usually closer to 6 months) – it’s hard not to take advantage of all the amazing opportunities currently available in the online real estate world.
Dominiche
Ed Dale became famous as an Internet marketer because of his amazing story of selling 38 niche websites for 5 million dollars. He’s gone on to make over 9 million from website trading and it’s pretty clear Ed knows how to make money from buying and selling websites.
Ed, along with his friend Frank Kern, created a program called Dominiche, which teaches people how to replicate their system for locating, buying and profiting from website real estate. Earlier this year Ed joined the team at StomperNet and it appears that Dominiche came along with him.
Presently Ed is producing a series of videos introducing people to the world of buying and selling websites as part of the relaunch of Dominiche, this time brought to you by StomperNet. I just finished watching video number 8, where Ed explains how sometimes it’s better to have little money when entering the web property market.
