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Buying A Website When You’re Broke
By Max | June 1, 2007
I know some of you are thinking, “Hey Max, I really want to get started buying a website, but I am broke.” Well nothing comes for free, but here are some ideas to get you on the right path. If you do your homework, and put a little effort into your ideas, 50% ROIs are achievable in the website world. It doesn’t take long before you are making good money with returns like that.
1. There are some decent earning websites that cost less than $1000. You aren’t going to be negotiating deals for youTube with a grand, but you should be able to find a site in a small niche with some search engine traffic that pulls down $50-$100/month for $1000 or less. Pay with paypal, and put it on your credit card. Even if you have a ridiculous 20% interest rate, you’ll be able to pay it off quickly.
2. Prosper.com is another good option. You can get an unsecured loan up to $25,000 through this website. It works like ebay for loans. Other regular guys just like yourself are funding these loans. I did a little research into Prosper when I first heard about it, because I was intrigued by the possibility of earning more than my savings account pays me in interest. It turns out that the rates are really in the borrowers favor, and so I didn’t end up loaning out any money. I think Prosper is a great way to get funds for starting a business. I don’t know of any banks that are willing to lend unsecured funds to a fledgling business with no financial track record. Isn’t the internet great?
3. This isn’t easy, but it is possible to find a site you believe is undervalued. Negotiate a deal with the seller, and then you can turn around and sell the site through Sitepoint and potentially flip a website in just a few days collecting a decent premium. To do this you will have to get creative about finding a buyer who isn’t aware of the value of his site either because he hasn’t optimized his ad mix or isn’t familiar with the typical channels through which people sell sites. You would be surprised. There are a lot of webmasters who have been running a website as a hobby for 3 years and is now getting tired of it. They may not have ever thought their website was worth anything. They may have only thrown up google ads in a bad place on their website and been satisfied that it was earning the hosting fees.
I don’t normally advocate borrowing money since debt can pile up quickly and you don’t want the power of compounding to work against you. However, just like houses, borrowing money to purchase a revenue producing asset is often the normal course of action. I don’t know many businesses in the brick and mortar world which never had to borrow. You just need to make sure your rate of return is higher than your interest payment by a significant margin.
Topics: Purchase Tips |
June 3rd, 2007 at 10:55 am
Hello
I have around 10 websites for sale. You can reach me via raman at cnelindia.com
Thanks
June 6th, 2007 at 11:44 pm
That Raman character has a real gem of a site ready for sale. Haha.
June 7th, 2007 at 2:40 am
I emailed him about his sites, but he hasn’t emailed me back. I had another guy, Usman who emailed wanting to sell a website, but I think his valuation is a little high for me.
I should write more about valuing websites as businesses. I think there are a lot of misconceptions out there, and a lot of webmasters don’t view their site as a business.