If you’re going to invest $10,000, $20,000 or even $50,000 through buying websites for profit, how do you know what will give you a good return?
Today’s economic climate shows us that leaving your money in the bank will give you very minimal % return. In fact, if you cater for inflation – leaving money in the bank can actually cost you money in the long-term. So it seems pretty attractive when you start seeing people making 30-100% returns when buying websites for profit.
But before you go and invest your hard-earned money into websites, there are some important things to consider so that you are buying smart and investing wisely. Read the transcript, or watch the video below to find out more.
Liz Raad: Hi, again. In this article, we want to talk about how you can realistically make $10,000 a month (or more), buying websites for passive income and for profit.
Matt Raad: One of the things we want to show you is how we go about this. We want to answer 3 main questions:
- What’s our strategy?
- What’s our search criteria?
- What are the kind of sites that we buy?
We also want to show you some examples from our students who are actually doing this, so you can understand how this works.
Liz: But first, let’s have a discussion about the returns.
Realistically, how do we make $10,000 a month from these websites? We need to look at how much money does it take to invest in them, in order to get that return. This is something that a lot of people don’t really think about when they first buy websites for profit.
Returns to Expect when Buying Websites for Profit
Liz: So, let’s get real and talk about what it actually takes. To start off with Matt – can you talk to us about the type of returns you would expect when you go into this marketplace?
Matt: This is really important. First and foremost, you want to be thinking about websites as real businesses. Basically, they work just like bricks and mortar businesses and the returns are actually valued the same.
If you don’t already know about our background, we started out buying and selling bricks and mortar businesses, and manufacturing etc. But, when we did it online it became a lot easier.
In terms of what you can expect in returns, it’s similar to bricks and mortar businesses these days, which is between 30% to 100% per year.
Liz: So, some of you property investors reading this are probably thinking, “Wow, that’s awesome.”
Matt: But, obviously, there’s more to it that and you need to understand. Similar to bricks and mortar business, the reason we get 100% returns (or more), is because we can renovate them. The kinds of websites that we buy are very high cashflow businesses.
Liz: And they’re very leveraged too. This is what attracted us to this market in the first place.
Matt: I know you’re probably sitting there thinking, “Hang on. Wow, I’m an investor and I buy a property and I never get returns like that.”
For any of you that have bought businesses however, you will understand what I just said, “Oh yeah, that’s what you normally get when you buy a business”.
Knowing how to buy simple, low risk websites to renovate can help you to potentially double your investment in year
Matt: Obviously, there’s a bit more risk when you buy businesses, too. But I want to reiterate, the beautiful thing with websites is that we can renovate them. We buy safe, simple sites that we renovate.
Liz: I think what we need to cover though is that we can say, “Okay, website returns are 30% to 100%. What does that mean?” It means, if you invest $10,000 into a website or into a portfolio of websites, we’re realistically looking at returns of somewhere between $3,000 and $10,000 a year. If you invest $100,000, then we’re looking at $30,000 to $100,000 a year etc.
Now that sounds pretty exciting. But like Matt was saying, is you’ve got to build up some skills and there’s some things to learn before you go and just spend $100,000 into the marketplace.
Matt: Well, it’s just like buying bricks and mortar business, Liz.
How much money should you expect to pay when buying a website for profit?
Liz: So, let’s give you an example of how this works. When we teach our students, we’ve got a specific strategy. Just like property, we’re always looking for the worst house in the best street. We’re looking for those websites that we can actually add value to (or increase the income), reasonably quickly.
This is why we pay 1-3 x multiple of the yearly profit for a website. So, if a website’s making $10,000 a year, it’s valued at 1-3 times that, being $10,000 to say $30,000. But also, in today’s market with the prices rising, it could even be $40,000 – $50,000.
Matt: It could be a lot more. Which is good news, because that means there’s an opportunity.
Liz: I’m happy to pay $50,000 for that website if I can see that we can renovate it and we can increase the income of that website reasonably quickly. Now, you maybe understand why we do that, because the faster we can pay that back to ourselves that quicker our risk basically goes to zero.
Matt: You want to think of this as a high net-worth investor. I’m sure a lot of you have read Robert Kiyosaki’s book, “Rich Dad, Poor Dad”. The number 1 question we’re hearing from our high net-worth investor friends at the moment is, “Where do you park your cash?”. That’s because cash in the bank right now is getting effectively 0%.
Liz: Well, it’s actually going backwards.
Matt: Yes, especially with inflation. So, looking at that, even if you have to spend $50,000 on a website and you don’t quite get your 30% return, it’s still better than money in the bank and it’s an investment.
Big Corporates are now investing in online assets by Buying Websites for Profit
Matt: I want to come back to what I said right at the beginning of this article. These are real assets. Websites are real businesses, and we can build them up over time. So, we’re not flipping websites here. We are building real assets, online real estate. With the returns in a rising market, it’s better than money in the bank and we’re adding value to them. We’re building an online asset for ourselves that we can sell later on.
Liz: This is why big corporates are buying these businesses. We’re seeing a real turnaround in this marketplace. Now, we’re seeing a lot of money coming in from the corporate world, who are realizing that websites are awesome high-growth and high-cashflow assets.
What makes Buying Websites for Profit is so Valuable?
Liz: We’ve got a few examples of students who are doing this. But before we do that, we want to follow on to what are we talking about here? Why are these assets so valuable?
The specific sort of websites that we focus on tend to be content-based websites. We’re not talking about E-commerce, we’re not talking about owning any products. We’re not talking about software as a service (SaaS), or any of those kinds of businesses. What we’re talking about are websites that deliver content. They solve problems and answer questions for people who are looking up topics in Google.
“The reason we like content-based websites is because they build up a momentum and have a history of security in the marketplace.” – Liz Raad, eBusiness Institute
That’s because when they have that good strong content base, they really stick in Google and in other search engines. Every time someone looks up that particular topic, up comes a page of one of our websites. That’s gives us great momentum.
Buying Content-Based Websites allows you to build Online Real Estate
Matt: If you think about it, this reinforces the idea that I was talking about earlier. These websites are literally digital real estate these days. 10 years ago, you probably would have found it hard to get your head around this.
But if you think about what Liz was just saying, when someone types up a certain topic (say a health issue etc.), and a website keeps coming up in the Google search engine results – this space in the search engine is like real estate. That’s what the big corporates are willing to pay lots of money for. So, if you want to do the big sell out, there’s another whole strategy around that.
“The bottom line is the reason we buy these content sites is we’re building online real estate.” – Matt Raad, eBusiness Institute
The cool thing with content-based websites is that they’re relatively easy to renovate. We train a lot of beginners how to do this. You might be a professional, or working a full-time job, but you can do this in your spare-time.
How Lisa Compounded her Returns to $7,000 a month from a $2,000 Website Purchase
Matt: I’m just thinking of our elite student Lisa. Lisa has been buying websites for profit, and she bought one particular site for $2,000. Now it took a couple of years to build this up, but let me explain how that’s compounded. At first, it doesn’t sound that exciting. She bought this little affiliate website that’s based around content in the health niche.
Liz: And she reviews particular products.
Matt: It’s a very simple site. In 2020, COVID really gave it a boost, but even beyond COVID, this site is doing very well. It only cost her $2,000, and just hit $7,000 profit per month. Now that’s the sort of returns you want.
This is obviously a much bigger return than 100% on your money. But you’ve got to keep in mind, it’s taken a few years for Lisa to get to this type of return. She’s been adding content over that time.
But the point I’m making is, this is a simple content site. We find simple content sites are relatively easy to run and to renovate. They’re simple, and they’re easy if you’re a beginner. If this is your first time buying websites for profit, and maybe you’re coming from the property market, we would recommend you look at content sites.
Creating Leveraged Income with your Content-Based Websites
Liz: Content sites are also easy for teams.
Matt: Yes, and that allows you to get leverage on them. So, for Lisa – her site is now starting to grow. It’s got what we call lift-off. She grew it more by feeding the profits back into that business. It’s become a compounding machine. When you get that lift-off with those content sites, it’s actually pretty easy because they all basically revolve around more content. And we can outsource that content. We pay writers and they can even post the content onto your site for you.
Liz: And there’s huge leverage there too. Let’s look at the figures. If Lisa’s site’s making around $7,000 a month, then that’s income of around $80,000 a year. If you multiply that by 3, she’s now sitting on a $240,000 value out of an initial $2,000 investment. I know that sounds phenomenal, but that’s the sort of growth that is happening in this marketplace (when you know what you’re looking for).
Mark Makes $10,000 a Month Buying Websites for Profit from an initial $50,000 Investment
Liz: You’ve got to have a smart strategy. When buying websites for profit, you have to know what you want, and choose your website investment carefully.
A great example of this is another one of our elite students, Mark. Mark started out with buying a $6,000 website. And within 4-5 months, this website was making $6,000 profit a month. Another website he purchased was for $18,000, and I can’t remember the exact return, but it’s making many thousands a month.
Overall, Mark’s invested around $50,000 when buying websites for profit. And he’s making anywhere from $10,000 to $20,000 income a month. So, now we can see this return because he was very smart and he bought websites that he could renovate and add value to.
Buying Websites for Profit gives you Massive Returns by Compounding your Income
Matt: Mark is thinking like Robert Kiyosaki (and I know that Mark has read Robert’s book, “Rich Dad, Poor Dad”). Robert Kiyosaki was right – you want to be thinking like an investor. What we want is assets that generate cashflow without our time. For both Mark and Lisa, they don’t have to work on this full-time, but they do now. They’ve quit their jobs, and this is what they now do for a living.
So, these websites are compounding machines. If you’ve heard Warren Buffett’s story, that’s why he’s so incredibly wealthy through the share market. This is just an alternative asset class where we can get these 10 to 30% returns. When we get the winners, we just feed them. We put more content in them, if you stick to our strategy.
Like what Mark has found – the power of this is you need to understand these websites. It’s way beyond the time when websites where just these pretty online brochures at advertise businesses and stuff. We are not talking about that at all. I want to reiterate, these content-based websites are real businesses, just like the bricks and mortar businesses that Liz and I used to buy. You add value to them, but they would take a decade to get up and running, because you’ve got to put so much money into these.
But, these websites are small, relatively simple to run businesses. Once you learn the right online skills, they’re pretty easy to run at home in your jimmy jams. You can compound them like Mark has, and he’s bought sites that you can renovate. That’s what we’re looking for as well, to get those massive returns.
Accelerate your Income Growth by Reinvesting your Website Profits
Liz: Another part of that renovation (and what Mark and Lisa have done really well), is to reinvest the profits. If you can afford to do this, then your growth will be even faster. In the initial stages, those guys have taken the monthly profit from their websites and put them back into the business. They did this by adding more content and applying the renovation strategies that we talk about. This actually snowballed the growth and is why it happened so quickly for them.
Matt: We have a favourite story in our community about this strategy. Last year, we had Thomas Smale from FE International come to our Champions closed-door event. Thomas shared an example of a client who had just sold a website for profit. They had initially bought the website for $20,000 – and it was very similar to what we teach. It was a very basic, content-based website.
These were 2 young guys who didn’t have a family to support yet, so they just reinvested every cent they earned back into the website. They compounded and compounded the income. I think it took about 2 or 3 years and he sold it for them for $15 million. Obviously, a big corporate came in and bought it out. Now that’s an extreme example…
Liz: But, it shows you what can be done though.
Matt: All they did was set a goal of a million words a month. They just outsourced to lots of writers and they went for it. Now, we’re not suggesting that you go and do that unless you want to sell out for $15 million. But it’s a beautiful example of how simple content websites can be renovated and compounded over a period of years and then sold out for masses of money.
Join our Free Masterclass if you want to Learn More how to Buy and Renovate Websites for Profit
Liz: So, I hope this gives you a bit more of an idea of how you can realistically get into this market. We’ve shown you how much money you might need to invest to get the returns that you want. If you’re smart and using the strategies that we teach, then the amount that you need to invest is a lot less than if you want to actually just buy yourself income. So, there’s some ideas, and hopefully we’ve inspired you to get out there and look at more into this marketplace of buying and renovating websites for profit. If you would like to learn even more, then join our free masterclass here.