Flipping Web Sites as a Business Model 

When I am just being a Lazy Business Owner and flipping through the TV channels instead of doing any work, I love it wen I can find a reality show about companies or individual investors who make money by flipping real estate.  There is something very "lazy" about buying a house for the cheap, having a budget and expected sale price, and then selling it just a few weeks later for a very nice profit.  Since I don't know enough about how to do that with real estate, I know I would get burned trying it.  But couldn't I just as easily create a lazy business around being able to flip web sites for profit?

The Ability to Flip Web Sites

The investors that flip real estate might not be able to rewire a house or fix broken plumbing in the property but they know enough about these areas to determine what's needed, how much it will cost, what type of value it will add, and who they can hire to get the job done.  With websites, I know enough about all the different areas (design, programming, SEO, PPC, eNewsletters, online conversions, etc.) that I can do a pretty good job of determining what a website needs, how much it would cost to change, what type of value it will add, and I have a great list of vendors to help me get the job done.  

Yaro Starak had a great post about flipping web sites that I would recommend reading for some tips on how to go about buying and selling a web site for flipping.

Flipping Web Sites as a Lazy Business

I could probably do most of the changes myself (except for design - I am way out of my league there) but I'm a Lazy Business Owner.  I want to create a system and watch while other people implement it, and do that hundreds of times over to maximize my income.  I realize the people on TV flipping real estate are very much involved but imagine if they did everything themselves.  They are handling dozens of properties at a time (you just don't see that during 1 show) and making sure that it gets done.  If they tried to improve each house themselves, they would never make any money.  They have plans in place (budget, expected sale price, vendors, etc.) and as long as they are executed, they make some good money.  

Here's what I would have in place to get my web site flipping enterprise in full lazy mode:

• Criteria to Buy - I would use valuation models to determine the value of the web site now and the future value of the web site.  By using this on web sites, I can do a pretty good job of determining what is a good value to buy.
• Plans to Add Value - A lot of this is figured out through my initial valuation but I would have repeatable plans and steps to take to add value to the website.  This might just mean that I call up my preferred vendor and ask them to make the changes to my web site. 

Web Site Portfolio Business

I would not do this on a scale of 1 or 2 sites.  I would treat this as a real business and allocate enough money to buy a portfolio of web sites.  To be successful in most business models, you need to really scale to make the most money possible.  This will also introduce the most efficiencies possible to provide a more consistent return at less cost.

The reality is that many of these web sites might stay in my portfolio for a bit of time and by having many different sites, I lessen the risk of being stuck with 1 web site that I cannot sell.  

100:10:3:1 Rule When Buying Web Sites

 One of the rules I heard a long time ago about investing in real estate is the 100:10:3:1 rule (I'm not even sure if that was right and I'm too lazy to look it up for sure).  Anyway, it says that if you want to invest in property you should:

1. Look at 100 Properties
2. Make Offers on 10
3. Negotiate on 3
4. Buy 1

I don't see why you can't do the same for web site properties as well.  You will need a system to actively search for web site properties.  

Just remember that valuation and execution are the key to making money in this business.  If you can find a website that just needs some changes to become much more valuable than what you have to pay to own it and execute on those changes, you can make some nice money.  

Will I Start Buying Web Sites?

Yes - but not now.  I am too focused on other ventures right now to allocate the time and energy to make this successful.  I also think this is something that requires a sufficient amount of capital to finance the purchasing and operations of the portfolio.