You must have heard about the many investors who have made fortunes from buying and selling property. Simply buying investment properties low, adding value to them and then selling high.
For these investors, it’s all about adding as much value as possible, as fast and as cost-effectively as possible. And the renovations are done to attract certain specific types of buyer. The investor doesn’t care what it looks like, as long as the right buyers are willing to pay top dollar – makes sense?
We think about business and websites just like you would an investment property, and when you jump on to Flippa to find yourself a deal, you should be looking for one with potential to renovate the areas that add the most value, so you can increase the cashflow as quickly as possible. Ideally with every website or business you buy, you plan for it’s sale right from day one. This process will help you create highly valuable online assets so no matter what happens in life – you’ll know that you have options to liquidate them quickly and for a great price.
Businesses and websites give you high leverage and cash flow
Unlike real estate where you often need to wait for the market to rise to really get the big returns, the value of a business or website asset can be increased significantly in a relatively short space of time. If you don’t have a lot of starting capital then you can use this to your advantage to build up your “bank”, because if you can buy, quickly renovate and then sell for a profit, this allows you to buy again, or move onto bigger websites and leverage up. Many of our wealthiest clients do exactly this and so do we.
Plus right now, websites give relatively high cash-flow returns and can be maintained with relatively low work hours – most of which can be easily outsourced in today’s world economy. And because this is still a relatively new market, there are still plenty of bargains available out there.
It’s all about starting small and taking action. You don’t have to do a multi-million dollar deal straight away, you just need to take action and get started at a level that suits your current experience and finances. Once you get success – no matter how small – it’s much easier to leap-frog up into better and more profitable deals.
Why buy a website instead of starting one?
The first question we are often asked is why buy a business or website – why not start one up? There are four reasons why buying is a far better business decision:
Your time is limited – not only the amount of time you have each day, but also the amount of time you have on this planet. If you want to be able to “retire” and enjoy life, then you need to create your wealth as fast as possible and ideally still enjoy time along the way.
When you buy a website, you’re not just buying all the development and setup and database, you are also buying all the time and effort that the original owner spent getting it going. Generally a new business doesn’t turn a profit for at least the first year, usually the first 2 years, and a new website takes around 6 months to really get some traction – so if you work out what that is really worth in your time it’s probably hundreds of thousands of dollars, and are you prepared to wait??
You get instant cashflow, instant customers and (usually) instant profit in the business. Customers are already clicking through and giving you money, and you can plan ahead based on that existing cashflow.
History and Momentum
The longer a website runs, the more momentum it builds, which generally means it can recover from mistakes more easily than a new business. You also have a proven system that works, where a new website is untested. You also have historical data that you can do due diligence on, further reducing your risk.
You’ll often be paying cents in the dollar to what it actually cost to set the website up. A website is like a little mini-business and you can get started for far less then traditional brick and mortar businesess many for less than $1,000, you can even buy them for under $200!
So the secret to generating wealth without losing your freedom? Think like the multi-millionaires do – think like an investor by leveraging your time and money. And the best way to do that is by buying established website businesses, adding value and then keeping them for cash-flow or selling them high.