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Thread: Is website flipping still an opportunity for beginners today, or has this changed

  1. #1
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    Is website flipping still an opportunity for beginners today, or has this changed

    [Thread split from http://experienced-people.net/forums...hread.php/6024 ]

    Quote Originally Posted by VinceT View Post
    I was doing residential flips for a couple years, its just too competitive at the auctions in AZ, people were bidding up prices past what the end sales price would be, so I stepped out. I own one rental which cash flows nice, its a good long term asset strategy but your right, making a solid income takes years and years.
    You just described website flipping accurately For a short time, the opportunity (both real estate and website flipping) was huge for anyone so inclined. People could learn to buy and improve real estate. People could learn to buy and improve websites. Once they knew how to build, manage, maintain sites, they could then buy properties, improve them, place those back on the market, and make money in a short period of time. As this became more common, and others learned of the opportunities, it became more competitive; Many people saw this and believed they had found a pot of gold.

    Then, just like real estate, those that were the best at recognising opportunity and had the better skills, began to push the smaller people and n00bs out. A business-person that buys a duplex in need of repair, and knows how to do the repairs himself or has employees on payroll already capable, can pay more and still be profitable. Greater experience, economy of scale, lower cost resources, combines to push newbies into loss of their investment, as they cannot compete until (or unless) they build a same or better structure, to capitalise on opportunity better than their competition.

    That all translates to web sites. A professional can price new aspiring website flippers out of the market, as people new to this simply would not have the experience of the person they are bidding against. A n00b looks at an opportunity to flip, sees decent revenue and thinks he can maintain or improve the site. The professional doesn't conjecture, they know in advance exactly how to improve monetisation, and set a maximum they can bid. Both deal with the risks differently.

    A beginner sees revenue and decides they can bid 20x monthly, then if they add articles, content, drive more traffic, they can sell at a profit. The professional will easily price the beginner out of the market due to experience. The pro sees a familiar niche, knows the intricacies of the industry, knows the people to call tomorrow to get banner ads placed or has referral agreements, comes along and bids up to 150x monthly. Same website, same revenue, same opportunity, but the pro knows how to make more money faster, and uses that knowledge to seize opportunity from competition. The professional knows exactly how, prior to buying, to turn that 150x paid into 20x (or even less).

    The new aspiring website buyer never had a chance, but nobody ever said business had to be fair. Ask any experienced person whether it is easier to find opportunity today, compared to a year ago, two years ago. How many people are successfully flipping real estate today? How many are successfully flipping web sites? Does anyone just do flips anymore? Is the attempt even valid any longer, or is it better to buy, hold, and operate purchases for revenue (rather than capital gains) in the current environment?

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    aka "meathead1234" Thomas is a Premium Member
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    It's definitely still possible, but I would admit that it is harder than it used to be. I think the main "issue" is "buy and hold" investors who have been coming into the industry more and more - they are happy to pay a multiple that would price a "flipper" out.

    There's definitely still money to be made, my 2011 P&L shows some very profitable flips with the average turnaround being 3 months. The hard part about flipping is scaling, if you try to scale by buying bigger sites, you're going to struggle as sites at that level are much harder to add value to (you can't double the value of a $100k site overnight unless you get very lucky finding a buyer!), whereas with a $1k site it's not too hard to double value to $2k in a few days.

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    Administrator Clinton is a Premium Member
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    Whether it's difficult or easy seems to depend on whether you're doing it yourself or selling a course/seminar/ebook telling others how to do it.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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    Another thing about the 'big' guys is they can afford to sit on something longer before they expect to see a return on their investment. They aren't in as big a rush to turn a profit in a short period of time. Waiting doesn't hinder them and the growth of their business as much as someone who is getting by one flip at a time. I don't think the task is any more difficult than it used to be, it just cost more. If I'm talking out my @55, just tell me and I'll shut up.

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    Administrator Clinton is a Premium Member
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    The premise is that you can pay $1000 to buy a site making $100 a month and improve it to making $200 a month which allows you to sell for $2,000 i.e. $1,000 profit.

    That's what the site flipping ebooks say, that's what's being taught in some of these courses.

    The reality is slightly different. For every ten $1,000 sites you buy making $100 a month, the vast majority will tank immediately after purchase. If the seller's business is making these sites for sale ... why doesn't he keep them instead and wait for 10 months when he'd have made the full sale price and without losing the site itself? The answer is because it would take him a lot of work to keep each site earning $100 a month.

    Why do these sites tank? Their traffic was originally driven by the seller's social network, SEO efforts, new site boost in Google ... or whatever. You don't know that so you buy 10 sites at $1,000 each and don't have ten people to work full time on them for free. So the sites start dropping in traffic and earnings.

    Now put a value to all the time spent finding those sites, getting familiar enough with them, moving them to your server and making the various alterations and changes you need (aff codes, GA, htaccess, GWT root text file, file permissions, stats collection ....), testing other ad programs to see how they perform on your site etc.

    It's a losing proposition unless you can a) identify cheap 10x sites that WON'T lose traffic/revenue or 2) play in a bigger market such as the $100K+ arena where it's worth spending time and effort thoroughly checking prospect sites out and/or reaching contractual agreement with the seller to test run the site or share risk for an extended period of time.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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    I think there are still opportunities, but they are diminishing.

    Improving the site's traffic is usually not an option for a flipper since that requires resources, times and is never guaranteed at all. Most novice flipper would buy a site assuming they can quickly improve it and unless you have rich experience in the niche and plan to add some more substantial value to the site, I'd advice strongly against this approach.

    Monetization can frequently be improved in the short term: you can add more ads, use better converting and higher paying ads

    Another option is if you are able to find cheap deals, buying sites below market average and then able to sell well above market average there is decent profit to be made.

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    Administrator Clinton is a Premium Member
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    Quote Originally Posted by DomainMagnate View Post
    Another option is if you are able to find cheap deals, buying sites below market average and then able to sell well above market average there is decent profit to be made.
    That's a statement of the obvious: If you can buy anything cheap and sell it at a higher price you make a profit.

    If you're saying that there are cheap deals to be had, then join the MMO merchants who recommend site flipping - they all say there are cheap deals to be had. Which course do you recommend we join to learn how to find these cheap deals?
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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    Which course do you recommend we join to learn how to find these cheap deals?
    Some courses suggest where to look for them - Flippa is the usual suggestion. Some courses tell you how to value a site so you can spot if it's undervalued and there might be scope for you to add value and sell it for more. But none that I've seen yet addresses the issue of whether these undervalued sites going cheap are actually lying around waiting to be snapped up by eager buyers.

    In any case, I thought there was a tendency for sellers to overvalue their sites for various reasons. I still can't see where there's a big opportunity for me to snap up a site at a rock bottom price, fix it up, and then flip it. Can someone please show me where to find all these cheap sites?
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    Quote Originally Posted by Clinton View Post
    That's a statement of the obvious: If you can buy anything cheap and sell it at a higher price you make a profit.

    If you're saying that there are cheap deals to be had, then join the MMO merchants who recommend site flipping - they all say there are cheap deals to be had. Which course do you recommend we join to learn how to find these cheap deals?
    This is what I do, I don't recommend anyone else to do this and I certainly have no idea about what the MMO courses recommend.

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    Quote Originally Posted by DomainMagnate View Post
    Quote Originally Posted by Clinton
    If you're saying that there are cheap deals to be had, then join the MMO merchants who recommend site flipping - they all say there are cheap deals to be had. Which course do you recommend we join to learn how to find these cheap deals?
    This is what I do, I don't recommend anyone else to do this and I certainly have no idea about what the MMO courses recommend.
    I know a couple of webmasters doing this as well. They have absolutely no interest whatsoever in joining MMO merchants who recommend site flipping. They do not recommend courses. They do not promote ebooks. They quietly follow their methods to find opportunity and go about making money in their businesses.

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