Taking a loan to buy a website

[ElliotG]

Is it crazy to take out a loan to buy a website?

For example, take a 8k loan, buy a niche blog website on flippa or a really good expired domain (up to 5k), invest in content (up to 1k) and the rest in link building.

Grow the website and then monetize it with ads/affiliate or just sell it with profits.

I have only worked with client websites up until now, maybe I am wrong. People with more skin in the game, please correct me if this is a dumb idea.

 

[God of Porn]

Why to take 8k loan when you can build and launch one for like 50$ or less. Write some content with the keywords researched and let it age for 3-6 month and will be the same value of that that you would buy right now. Loans interest arent exactly low.

 

[TheMarquis]

Taking on debt to make money works for some, but not all. Make sure that site is worth the money & make sure you have a solid and realistic strategy, from A 2 Z.

Cheers!

 

[MisterF]

I'd not borrow money to buy a website.

 

[sageshark]

Neither too dumb, nor too smart. It is somewhere in between. To be more precise it is a risky move.

A similar question was asked few weeks ago in BHW and I had answered the same to the OP.

What if you buy a website and then the traffic drops or the website suffered a jolt due to the reasons beyond your control? You will end up repaying the loan from your own pocket.

You have to think this twice before deciding to do anything about it.

 

[NirvanaWolf]

Like others, I am going to advise against doing this too. You should rather buy an expired domain and buy content and links as and when funds become available.

 

[IM Dude]

With Google update 3-4 times a year and "real time google algo update" niche blog buying selling is a risky business.
In short yes its crazy.

 

[tazarbm]

Why to take 8k loan when you can build and launch one for like 50$ or less. Write some content with the keywords researched and let it age for 3-6 month and will be the same value of that that you would buy right now. Loans interest arent exactly low.

because he's lazy. He's in the exact same spot I was in some 10 years ago when I've been fed up with everything and heavily pondered getting a loan.

@ElliotG don't do this, dude! It's too risky, google de-ranks sites on a whim and no one can guarantee you'll make enough money to repay your debt before your site tanks. Just take the hard work / huge investment (which you don't have apparently) route, or don't do SEO as SEO will consume your entire time, mental energy and savings

 

[Proxysepetim]

Don’t invest in anything with borrowed money

 

[PlusMein]

Is it crazy to take out a loan to buy a website?

For example, take a 8k loan, buy a niche blog website on flippa or a really good expired domain (up to 5k), invest in content (up to 1k) and the rest in link building.

Grow the website and then monetize it with ads/affiliate or just sell it with profits.

I have only worked with client websites up until now, maybe I am wrong. People with more skin in the game, please correct me if this is a dumb idea.

I guess not the correct budget distribution at all. If you are ready to invest 5k on a domain or good websites (there are a small number of excellent websites for such a price on Flippa), you need at least to invest in content & link building two times more.

But before doing this, you need to start from the research and competitors analysis. How many links do they have, how many of them are paid and, how many do you need to pay to replicate their strategy, how many articles do competitors have to gain this traffic and results as you need? How old domains and many other things you need to consider before buying but not in this logic. It is a fundamental mistake that leads to losing money. Just advice.

 

[Eiffel]

You may find it difficult to get a loan after giving that reason.

 

[ElliotG]

because he's lazy. He's in the exact same spot I was in some 10 years ago when I've been fed up with everything and heavily pondered getting a loan.

@ElliotG don't do this, dude! It's too risky, google de-ranks sites on a whim and no one can guarantee you'll make enough money to repay your debt before your site tanks. Just take the hard work / huge investment (which you don't have apparently) route, or don't do SEO as SEO will consume your entire time, mental energy and savings

With Google update 3-4 times a year and "real time google algo update" niche blog buying selling is a risky business.
In short yes its crazy.

Don’t invest in anything with borrowed money

Neither too dumb, nor too smart. It is somewhere in between. To be more precise it is a risky move.

A similar question was asked few weeks ago in BHW and I had answered the same to the OP.

What if you buy a website and then the traffic drops or the website suffered a jolt due to the reasons beyond your control? You will end up repaying the loan from your own pocket.

You have to think this twice before deciding to do anything about it.

I'd not borrow money to buy a website.

Why to take 8k loan when you can build and launch one for like 50$ or less. Write some content with the keywords researched and let it age for 3-6 month and will be the same value of that that you would buy right now. Loans interest arent exactly low.

Don’t invest in anything with borrowed money

This is the problem. I have come to conclusion that it is way easier to make money with money. I don't have that. I don't know how to get the initial cash elsewhere. My salary is not enough to build a website. With my current position in my country the 8k I could get in a loan I would save up in about 2 years, which is a very long period to save up for one website. I feel confident that I have the necessary skills and training to rank it. If I start from scratch it will be way longer and time consuming. I have started saving money a couple months ago but I don't have enough savings yet, I can't afford to not work and focus on building a website.

 

[Hawkeye Digital]

It would be bad choice , but the metrics is good then go for it , websites can give unto 4x profit !

 

[MisterF]

This is the problem. I have come to conclusion that it is way easier to make money with money. I don't have that. I don't know how to get the initial cash elsewhere. My salary is not enough to build a website. With my current position in my country the 8k I could get in a loan I would save up in about 2 years, which is a very long period to save up for one website. I feel confident that I have the necessary skills and training to rank it. If I start from scratch it will be way longer and time consuming. I have started saving money a couple months ago but I don't have enough savings yet, I can't afford to not work and focus on building a website.

I understand your logic, you are too busy working to pay bills and haven't the time to learn/build your own site.

IF, you do decide to buy through a loan, please take time to do due diligence. I'd hate for someone to sell you a healthy looking site, ranking through a PBN then they pull the PBN links, and your site crashes. Also, I know PAA and Ai sites are the rage just now, but I feel these are on Google's radar, so maybe avoid these types of sites.
You might be as well to buy 2 sites, in different niches, monetized differently and spread the risk. Whatever you choose, hope it goes well for you.

 

[Alexion]

Here's some financial info you might not have thought it through.

You'll get a loan of 8k spanned out for 5 years, which is usually the max for a personal loan.
The monthly payment on that loan will be somewhere around $150 depending on the interest. Let's say $150 for simple maths.

With the $8,000 you now have, ideally, you will want to buy a long established blog earning at least $150/month consistently for the last 24 months.
Normally, these websites sell for 35x-50x the monthly revenue.

Let's say you will have the luck to buy one for 40x.
That's going to be $6,000.

On that same example, let's assume you will want to invest all the money you have, which is $8,000.
So that will fetch you, ideally, a website generating $200/month consistently over the last 24 months.

Theoretically, you will now be able to pay off the monthly payment for the loan from the website's revenue.

Let's say you will work on it to increase revenue.
There isn't much you can do in 6 or 12 months.

Let's assume you'll get lucky and manage to increase the revenue by $100, leaving you with $300/month in profits.

After 12 months, if you decide to sell it, you will get, in theory, $12,000.
If you pay the loan ($6,000 or so leftover) you'll have $6,000 left as profits.

That means $500/month as a salary for your work on the website.

This will happen if everything works according to plan. In real life, that hardly happens, and a $8k loan is not cheap money.
Do you afford to pay the monthly payments if the website goes bust after 3 months?

Your plan is ok.
The issue is, people who do this, work on a whole different level, with investments starting from $200,000 or more, where a 10% ROI is $20k.

Take the loan if you can take the risk of paying $200/mo out of your pocket in case something goes south.

 

[IM Dude]

This is the problem. I have come to conclusion that it is way easier to make money with money. I don't have that. I don't know how to get the initial cash elsewhere. My salary is not enough to build a website. With my current position in my country the 8k I could get in a loan I would save up in about 2 years, which is a very long period to save up for one website. I feel confident that I have the necessary skills and training to rank it. If I start from scratch it will be way longer and time consuming. I have started saving money a couple months ago but I don't have enough savings yet, I can't afford to not work and focus on building a website.

It's easier to make money with money doesn't imply that you will make money with money.

 

[sageshark]

Here's some financial info you might not have thought it through.

You'll get a loan of 8k spanned out for 5 years, which is usually the max for a personal loan.
The monthly payment on that loan will be somewhere around $150 depending on the interest. Let's say $150 for simple maths.

With the $8,000 you now have, ideally, you will want to buy a long established blog earning at least $150/month consistently for the last 24 months.
Normally, these websites sell for 35x-50x the monthly revenue.

Let's say you will have the luck to buy one for 40x.
That's going to be $6,000.

On that same example, let's assume you will want to invest all the money you have, which is $8,000.
So that will fetch you, ideally, a website generating $200/month consistently over the last 24 months.

Theoretically, you will now be able to pay off the monthly payment for the loan from the website's revenue.

Let's say you will work on it to increase revenue.
There isn't much you can do in 6 or 12 months.

Let's assume you'll get lucky and manage to increase the revenue by $100, leaving you with $300/month in profits.

After 12 months, if you decide to sell it, you will get, in theory, $12,000.
If you pay the loan ($6,000 or so leftover) you'll have $6,000 left as profits.

That means $500/month as a salary for your work on the website.

This will happen if everything works according to plan. In real life, that hardly happens, and a $8k loan is not cheap money.
Do you afford to pay the monthly payments if the website goes bust after 3 months?

Your plan is ok.
The issue is, people who do this, work on a whole different level, with investments starting from $200,000 or more, where a 10% ROI is $20k.

Take the loan if you can take the risk of paying $200/mo out of your pocket in case something goes south.

Very detailed analysis and very well explained. Your experience speaks man! Thank you for taking time to write this in detail.

@ElliotG Mate, I can sense that you are too desperate to do this, but mind me, even one thing goes wrong and you will find yourself in pickle. All the people above have said the same and these many experienced people can't be collectively wrong.

I have a middle way for you - why don't you start a free Wordpress blog and test your project on it? As you said you are confident that you have the skills to take it to the top you should be able to take this free wordpress blog at the top too without any risk!

Once the blog starts generating some revenue you can always migrate it to the self hosted wordpress site and continue from thereon without any problem.

This way you will be able to test the water without taking any financial risk.

What do you think?

 

[tazarbm]

This is the problem. I have come to conclusion that it is way easier to make money with money. I don't have that. I don't know how to get the initial cash elsewhere. My salary is not enough to build a website. With my current position in my country the 8k I could get in a loan I would save up in about 2 years, which is a very long period to save up for one website. I feel confident that I have the necessary skills and training to rank it. If I start from scratch it will be way longer and time consuming. I have started saving money a couple months ago but I don't have enough savings yet, I can't afford to not work and focus on building a website.

everyone's advising you against it, and yet, you're trying to make us tell you that it's a good idea. You're in a bad spot, mate. You're desperate, and only strong characters can use desperation to get out of the hole. If you were a strong character you'd not need our advice, but since you're asking for our advice it means that you're mentally weak, and borowwing money (especially from banks) when you're in this state spells trouble for you. You might have executioners knocking on your door and beat you up to give them the money... or you might be thrown out on the streets.

SEO is not something to risk the money you don't have on, so either slave your life away for google if you wish to rank a site without investment, or get a 2nd job. It's much safer than gambling on SEO

 

[HustleTong]

Terrible idea. It takes 5-8 months to see if your site is worth working on

 

[thedorf]

Buying someone else's website sounds horribly risky.

The best advice I've seen here is:

1) Don't do it.
or
2) Buy 2 websites (from different people) and spread your risk.