#1 – Fix and Flip
The most common strategy of website flipping is Fix and Flip. This involves buying a website that needs simple improvements and then selling it for a nice profit. Like any other website purchase, the key is to buy it at a price that is much lower than market value and then sell it for a profit.
To make this strategy effective, you need to know exactly what it will take to get the website in “sale-able” condition. For example, you see an underperforming website that lacks obvious elements all websites should possess such as meta tags, site map, backlinks, etc
In other words, basic Search Engine Optimization (SEO) programming could be easily improved. Another situation would be a website that has quality content but the presentation is poor. Both examples would be a good situation where you could take a website needing some tender loving care, fix up the site, and then sell it for a profit.
A buyer can quickly identify these deficit features and within a few days incorporate them and then post the website back up for sale. This Fix and Flip strategy is a tried-and-true method and works very well. You can easily make a decent profit on one deal, depending on your market, how good you are at finding bargains, and the quality of your sales presentation.
The possible challenge with fixes and flips is either paying too much or underestimating repairs. Be realistic in your improvement costs and the length of time it may take to resell. This is where being a seasoned webmaster/internet developer can be to your advantage because it doesn’t take much to sort out the bargains that are available. And if you don’t desire to fix up a site, you could just hire a freelancer. You will need to incorporate their costs into your expected profit margin but they tend to be very cost-effective.
When I had a chance to buy a friend’s website (HalloweenAlliance.com), I knew that it had potential. Although I had been hired as the webmaster for the previous few years, I knew the owner was not taking advantage of the many opportunities to make the site profitable.
She had tons of other websites linked to her but found it “not worthwhile” to her to hire someone on a continual basis. When she decided to sell, I bought the site (with no money down) for $2,500. I spent about 12 hours fixing the site and, in the end, I flipped the site for nearly $10,000. This, of course, was after the site netted me about $10,000 within 18 months so as you can tell, the “investment” or time to flip the website was obviously worthwhile.
#2 – Buy and flip “as is”
Don’t feel like doing fix-up work? Consider selling the property “as is.”
If you’re able to find an exceptional value, this may be the route for you and it’s especially true if you’re able to locate a hot-topic website or where the owner is in a “must sell” situation.
When I was writing this post, I placed a post on one of my favorite forums asking if others had utilized this strategy. One forum member privately contacted me to say “yes.” The only concern was that he did not want me to identify him publicly but here’s what he said.
“The deals to be had are unbelievable compared to other investments such as a standard savings account. The main way I made and still make money is to buy under-valued websites and sell them on other marketplaces. It takes a little more time but in the end, I usually make between 30-50 percent profit by simply selling the site almost the same as I purchased it. If I need to, I simply hire a freelance programmer to do minor work which is still cheaper than having a regular staff. In the end, this is a great way to make money.”
When asked what his number one secret was to his success, he stated it was two critical factors. The first was a site that sold way undervalued and equally important was the “sale description” in the marketplace advertisement.
Flipper’s Tip: If you buy a website, it’s advisable not to use the same marketplace where you bought the website to resell the site.
While I wish I could reveal this individual, he is thoroughly convinced that flipping websites “as is” is one of the easiest methods of generating a positive cash flow.
#3 – Buy and Offer a Lease Option
To most of my readers, this is probably a concept you may have never considered but it’s sure to be a successful strategy in the future. Sometimes, you can actually make MORE money by selling an established website either on terms (over time) or with a lease agreement.
Think about it. If you let someone buy on a lease rather than buying outright then you get to keep the asset for yourself while collecting cash. At first, this may seem crazy but you can improve your net worth if you know how to fix a website and then find someone who is interested in operating a website but does not have all the cash at one time.