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Buying Websites - For Long Term Investment - Advice Needed

Discussion in 'Site Flipping' started by cheapyoutubeviews, Jul 6, 2011.

  1. cheapyoutubeviews

    cheapyoutubeviews BANNED BANNED

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    I am not positive this is the right section for this post, as I will be buying sites for a long term investment, not to flip. Ok thanks to BLHW. I have been able to accumulate and save a large amount of money through a variety of websites and methods. However, I have not had time to work on them, and they are starting to level off.

    I will be going back to school in the fall, and will have less time to focus on these things. So instead of investing it all in the stock market, I am going to purchase several websites (flippa most likely), Do the quick easy changes, Change Monetization ect, outsource the seo, and then by the end of the summer, have them running on mostly autopilot. I am hoping they will then return my money after about 6 months, after which I will begin profiting. I understand that not all will do this, but its a goal.

    Anyways, I need your advice as to what size, type, cost, ect.. of the sites should be. Here is what I was thinking, but I really have no clue for the purchases: They should make over $500 a month, so that they are worth my time and energy searching, revamping them, seoing them.

    I was thinking They should be semi-established, so that the investment isn't as risky, and that I should buy several (maybe 5-10) $3,000- $15,000 sites.
    The idea is that I willl be making a solid income while Im going to school, while not having to work much. If I sense a major market change, or profits decrease dramatically, I would of course sell the sites, but that is not the goal.


    Any advice would be greatly appreciated, or if there is any good resource for me on this, I would love to read it. Everything I have read so far is about flipping and selling for a quick profit.
     
  2. bryanon

    bryanon Executive VIP Premium Member

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    Few quick pointers for you:

    1. Make sure that you play with your budget wisely. 10x$500/mo is always better than 5x$1,000/mo as in this industry things can happen very quickly so it's always good to keep your eggs in as many separate baskets as possible.

    2. Try to invest in as many different kind of sites as possible. While it might be tempting to choose a particular niche, a particular type of site or sites that are all monetised similarly (from management perspective), it's a lot safer to have the sites differ from each other in as many ways as possible.

    3. Always negotiate as much as you can, and do this while pointing out negatives. If you do your research properly then you will easily find a few negative aspects that you can point out. And it doesn't matter if it's something that for you is an easy fix - the buyer, in most cases, doesn't know this. Also - when buying from Flippa avoid bidding and try to close the deal early by offering a price lower than the advertised BIN but promising a quick deal and a smooth handover. Sellers very often go for that, especially because bidding doesn't usually pick up till the end of the auction but they don't know that and are worried that no-one is interested in their site.

    4. Avoid sites that aren't established, i.e. have been showing constant revenue for less than 4-5 months. While some of those may look very good and the multiples can be decent, there's quite a few risks involved, especially in cases where the sole traffic source is Google.

    5. When managing a portfolio of sites make sure to host them on separate servers. Just get a cheap shared hosting account from each and you're all good. I've heard countless of horror stories from people who have had all their sites deindexed because google didn't like one of the sites. And obviously, this is the very worst thing that can happen.

    6. Last but not least, make sure that you do proper due diligence and don't cut corners when doing this. There's a lot of scamming going around and spending 20k on a dud probably wouldn't make you very happy :)

    Happy shopping!

    (and feel free to hit myself or meathead1234 up when you're starting as we quite often have good sites in the $10-$15k range up on offer)
     
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  3. cheapyoutubeviews

    cheapyoutubeviews BANNED BANNED

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    Thanks so much for your post, it was very helpful.

    Just a few questions,

    3. What would you say is a good time to contact a seller, and make an offer, i.e. 24 hours before the auction ends? Do you usually offer this through skype, or pm on flippa?

    5. Wow I have never experienced or even really heard of that. I will keep that in mind though.

    6. Besides the flippa due dilligence info, and all the stats that they upload, what are some good ways to make sure their info checks out?

    What would you say is reasonable as far as multiples go, for an established site that has made consistent income for 5 months+. I have heard 8-12 x months earnings, but from what I'm seeing on flippa, it seems they go more like 4-10x.

    Also, I am sending you a pm in regards to seeing what sites you had for sale. I am very interested in purchasing.
     
  4. Burn Notice

    Burn Notice Jr. VIP Jr. VIP Premium Member

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    Wow! Thanks for that bryanon. I too am just about to embark on the exact same sort of venture as the OP here and your quick pointers are a great primer.
     
  5. mission11

    mission11 Newbie

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    I don't have the experience that bryanon does but the one piece of advice I can offer you is make sure there is something you do better than the seller so you can grow the site.

    For example, if you are good at SEO, or building a community, or whatever, find a site where the seller isn't.
     
  6. bryanon

    bryanon Executive VIP Premium Member

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    I wouldn't worry too much about the exact time, however I tend not to leave it towards the very end of the auction as then they may already have other people interested and will therefore not agree on a bargain price.

    I usually try to get all sellers on Skype or have a phone call with them. Not only is it good to put a face (well, voice) to a name but it typically allows a much smoother communication and also helps weed out some scammers, as most of them are reluctant to speak to you in person.

    Teamviewer. And have them open the websites while you see their screen, rather than having them open already when the session starts. I never trust screenshots. Or videos for that matter.

    Obviously, the depth of your due diligence should depend on a) how trustworthy the seller's profile seems (e.g. if it's a seller that's been on Flippa for 2 years and done 15 deals then it's likely that they can be somewhat trusted) b) how trustworthy the seller seems to you personally - i.e. what's your gut say.

    Depends.

    10x is a good figure to start from - and add if there are any exceptionally good aspects (revenue has been growing steadily, several different traffic streams, 100% passive, etc.) or deduct if there are any major risks/negatives involved (site is very young, revenue has been in decline, site is dependent on one non-stable revenue stream etc.)
     
  7. cheapyoutubeviews

    cheapyoutubeviews BANNED BANNED

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    Ok. Thanks for all your tips. They were extremely helpful, and I feel like I have a solid foundation for a good buy now. One other thing, would you say Flippa is the best for buying these large, quality, sites, or is there a better place?