Let’s talk about real life real estate for just a moment…
How do you make money in real estate?
You buy a property, rent it out, and use the rent money to pay off the property.
Or, you use the rent money from your first property to buy your next property. You rent out the second property and buy your third, and so forth.
So yes, you’re coming out of pocket on that first property, or you’re taking out a loan. But in the long run, you wind up with several rental properties that eventually pay themselves off, and you’re a millionaire.
But the problem with buying properties are numerous: Real estate loans are a hassle to get. Renters are problematic. You’ve got to pay property taxes and all upkeep. You get calls in the middle of the night saying a pipe broke, or whatever. There’s always more added expense and headaches than you expect.
But what if we do something similar on the internet, so that we get all the benefits without all the hassle? It would look something like this:
(And by the way, many millionaires made their money using this exact method.)
Let’s say you go to Flippa and you find a website that’s making $800 a month. The owner is willing to sell that website for a minimum of $3,000. You bid on the site, others bid on the site, and you manage to buy it for $4,000.
Now you might wonder why someone would sell a $800 a month website for just $4,000. Frankly, their reasons don’t matter. What does matter is you did your due diligence and confirmed that they are in fact making $800 a month with the site, and you are getting everything needed to continue earning that $800 a month. That may include a list, or a product, etc. As long as you can continue to make that kind of money, you’re golden.
Let’s say you make no improvements to the site other than upkeep and maintenance, and you continue to earn $800 a month. In a year’s time you will have more than doubled your money. The following year everything is profit, and so forth.
But you don’t stop there, because you take your profits from the first website and buy a second website. You take the profits from the second website and buy a third website, and so forth.
You’ll notice that you can pay for a website a whole lot faster than you can pay for a piece of real estate.
In addition, it’s much easier to make improvements to your websites than to your properties.
For example, if you want to upgrade the kitchen on a rental home, you’ve got to get bids, hire a contractor, let the house sit idle without a renter for two months, and pay a hefty fee for the privilege of not collecting rent while the kitchen is being redone.
But with your website, you can hire an outsourcer for a few hundred dollars to make whatever changes you need.
Which brings us to the next point… often times there are small things you can do to a website to create big changes in revenue. And as an experienced marketer, you’re in prime position to see those things and act on them.
For example, have they been using the site to build a mailing list? If not, this one step alone can often double and triple revenue within just a month or two.
If they are building a mailing list, are they mailing to it on a frequent basis and selling products through their emails? You’d be surprised how often they’re not.
Is the website getting good SEO? If not, hire an SEO person to help you out, because it can be money well spent.
There’s almost always going to be something you can do to increase the revenue you get from the site.
Imagine if, in a year’s time, you buy 6 websites that each earn $500 a month when you buy them. Imagine you tweak them just a little and get them up to $1,000 a month. That means you could have a $6,000 a month income without much work.
I know a fellow who bought a site for $5,000 that was earning $600 a month. He saw a lot of potential in the site, as well as things that could easily be improved.
He made a few tweaks (took him a week) and now the website earns $3,000 a month.
I don’t know where else you can invest $5,000 for an asset, spend about $900 upgrading that asset, and earn $36,000 a year. In my opinion it beats the stock market and real estate combined.
And if you ever decide you’re tired of a particular site or you just need some fast cash, you can always sell the site on Flippa again.
Now you might be wondering what sorts of changes you might make to a website to increase the revenue.
Broadly speaking, your changes will fall into one of these categories:
1: Increase the amount of traffic that’s coming to the website. If your website is already earning good money from advertising or product sales, you might just need to send more of the same traffic it’s already getting.
2: Increase the quality of traffic that’s coming to the website. If the original site owner wasn’t targeting just the right people, then changing your ads or methods of driving traffic may greatly increase sales without increasing traffic.
3: Get more of your visitors to become customers. Tweak the site to convert more prospects into customers. Also work on turning those prospects into list members so you can continue to sell to them, even if they don’t return to your website.
4: Sell more to your customers, meaning either sell them higher priced products, or sell to them more often, or both. For example, add an upsell to the sales funnel, as well as an autoresponder sequence that sells them on more products.
It will take some nerve to make that first website purchase. Learn how to appraise sites and verify traffic and sales before you do, and you’ll be alright. Remember, you can always sell the site later if you want to.
I think once you try this, you might just get hooked. It’s a lot of fun to have an entire stable of websites, all making you money like clockwork. And should one of them ever stop producing, it won’t matter. You’ll have already made your money back, and you’ll still have all of your other revenue streams from your other websites.
As you can see, the internet can be a great place to develop your ‘real estate’ fortune.