What To Look For When Buying Solid, Low Risk Sites?

[tvanslooten]

My experience as a site flipper comes primarily as a seller. I'm great at building and marketing websites and selling them. I SUCK at buying them but I want to get good at it because it would allow me to utilize my building and marketing skills to increase their value and then flip them for great profits

I've purchased 4 websites in the past two years and everyone I lost money on. In total, I've lost over $6,000. What can I say, I'm a glutton for punishment.

I'm looking to invest under $3,000 for a site this time around. What are the core things to look for when looking for a "fixer upper?" And I'm not looking for a get-rich-quick purchase either - like one of those "once in a lifetime purchases." Even if I could find a site that would allow me to make a 10% return would make me happy.

I'm looking for specific how-tos here...like should I search Flippa as my primary marketplace? Am I looking for sites that get X amount of traffic per month...what am I looking for???

Travis

[Clinton]

I've purchased 4 websites in the past two years and everyone I lost money on.

I don't mean to dwell on the negative but I learnt valuable lessons from every website I lost money on. I'm keen to learn from mistakes others have made as well. What do you feel were the lessons to be had from those experiences?

Even if I could find a site that would allow me to make a 10% return would make me happy.

My advice would be that unless you can see a 100% return within the first year or two don't buy it. If you don't have a plan that you reasonably expect to generate that kind of profit, walk away. I'm not talking about plans presented to you by the seller - they are almost always rosy!

[tvanslooten]

Lessons learned? I could write a book...lol. Seriously, though, it's the lessons I learned that have kept me from getting angry from my stupidity. If I had to summarize the lessons learned, it would be:

1. Don't buy an ecommerce site without knowing the supplier of the products being sold - and have at least one backup supplier before you purchase (my first purchase was an ecommerce site and within a month of taking over the site, the supplier went out of business and I couldn't find another supplier to fill the void).

2. Don't buy a site without having a game plan on how you're going to monetize it.

3. Don't buy a site in a niche you are totally clueless about or have no interest in - in other words, don't buy a site just because the numbers look good on paper.

So you're saying if the site is making $200/month a guy shouldn't even buy it if he can't get it to earn at least $400/month?? I've been so beat up with my buying experiences that now when I look at websites I just ask myself: "Can I at least break even on this?" 100% return would be incredible.

Travis

[hooperman]

So you're saying if the site is making $200/month a guy shouldn't even buy it if he can't get it to earn at least $400/month?? I've been so beat up with my buying experiences that now when I look at websites I just ask myself: "Can I at least break even on this?" 100% return would be incredible.

I think Clinton meant a 100% return on your investment i.e. don't buy a site for a $1,000 unless you expect to earn > $1,000 in the coming year.

[benitez17]

I think Clinton meant a 100% return on your investment i.e. don't buy a site for a $1,000 unless you expect to earn > $1,000 in the coming year.

That's a good rule, and I would say that the key point in that statement is that you should expect to earn at least 100% on your investment. There are sites that are making $1000 per month for sale where I don't think I could make $100 per month with them, and there are sites that make $100 per month where I could immediately make $500 per month or more.

I generally try to find the latter case so I can get a return well over 100% in a year.

[TrustButVerify]

Clinton gave great advice - you need to pull your money back out with 12-24 months.

I'm always looking for sites that are in my opinion underdeveloped and have lots of potential if correctly marketed.

It's easy to do a deal and pay 24x months of income (what would seem to be a good price) and then make some changes to pay it off in 12 months.

For example... with an adsense site - if they already have super aggressive adsense placement - there is not a lot you can to do increase that revenue source except by increasing traffic. But if there adsense sucks, or you have a product idea that you can sell yourself (way better) then it's something to look at.

It's almost like you have to see something the other guys don't... unfortunately a lot of us are looking at the same sites for sale... and there are a lot of savvy investors/marketers out there.

These auctions that get out of control prices are bid up by really smart investors or really dumb ones...

[tvanslooten]

That's what I struggle with. I figure if there are any sites "still available" they obviously aren't worth anything or they would have sold. And those that get bid up, I don't know if everyone wants it because it's a great deal or like you said, most of the bidders are clueless.

Travis

unfortunately a lot of us are looking at the same sites for sale... and there are a lot of savvy investors/marketers out there.

These auctions that get out of control prices are bid up by really smart investors or really dumb ones...

[Clinton]

I figure if there are any sites "still available"

You do realise it's not a static pool?