EFP 128: Lifestyle Larry Guide To Job Replacement Income

Justin Cooke

March 5, 2015

There’s not much worse than being stuck in a job you hate.

Whether you’re just not being challenged or you hate the career path you’re facing, you’re in a tough spot.

Introducing: The Lifestyle Larry Approach

We’ve talked to quite a few of you who are looking to move away from your jobs, but know that will require job-replacement income. In this week’s episode, Joe and I sit down to discuss the challenges that come with transitioning from the J-O-B to a portfolio of website and put together an action plan for anyone looking to make the move.

This topic really resonated with us because we WERE those guys sitting in an office and wondering how to “get out”.

I think this is one of our best episodes in a while and whether you’re looking for an escape from your current position or wondering how to build a diversified portfolio that replaces your income, you’re going to want to listen to this.

Check Out This Week’s Episode Here:

Direct Download – Right Click, Save As

Topics Discussed This Week:

  • How important is the size of your portfolio?
  • Security Through Diversification
  • Growth strategies that work
  • Time requirements to consider
  • Virtual Assistants – You’ll need some
  • Partners (Or Investors)?

Process To Purchase:

  1. Find Interesting Websites
  2. Pay Deposit
  3. Perform Due Diligence
  4. Make An Offer
  5. Complete Transfer
  6. Implement Growth Strategies


Spread the Love:

“If you work for someone else, act as if you own the company” – Justin – Tweet This!

“The deeper diversified you are the heavier the time requirement for you” – Justin – Tweet This!

“Filter the easy ‘No’s’ first in due diligence” – Joe – Tweet This!

Now…over to you! What would your approach be for a Lifestyle Larry? How do you balance diversification vs. time requirements?

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  1. Jim says:

    If you’re a complete newb to this investment vehicle, how does one get started?

    There’s a plethora of information out there and you don’t know what or who you can trust to get you on the right path.

  2. Jake says:

    Another great podcast guys! Really liked all of the talk about diversification, and will be taking some of those ideas into consideration in the future.

    I would definitely be interested in hearing more in-depth conversation about those 10 growth strategies you mentioned, as site growth is important for all buyer profiles.

  3. Jim says:

    Joe / Justin,

    Another terrific podcast.

    You are doing a great job developing buyers with your market discussions. The most talented sales professionals don’t “sell”, they develop buyers by providing insight to a market, provide a skill set they don’t have, develop tools to save them time, or provide risk management to an existing net worth or cash flow that is worth protecting.

    This week’s podcast does a great job highlighting the capital needs for investors looking to buy a cash-flow, but also for the investor/manager types.

    You have me thinking it’s time I come out of retirement, raise some capital, and develop an investment portfolio (capitalize a C-Corp) with a few of my local business contacts. I’d first need to develop a proof-of-concept with a few smaller purchases, then build from there.

    Suggestion – you do a great job depicting “branding” the type of buyers (Lifestyle Larry, etc)… something that might be of interest to investors who are listening, myself for example, is a discussion by the two of you with an open mic with 1-2 investors asking the hard questions (that I’m sure you get every day) about the type of products you offer. A breakdown of the risks, rewards, scalability, etc of each category of product you sell. Here are a few questions that I and possibly others might be interested in knowing…

    1. What are the Top 10 type of sites (products) that you have currently or recently listed and sold on EF (ex: AdSense, Amazon, LeadGen, etc)?

    2. What is your % of sites you have offered for each group over 2013/2014 and how has that changed so far for 2015? For example, 40% AdSense, 30% Amazon, 10% LeadGen, etc.

    3. Which type of sites sell quickest and why do you believe that is so? (the reason I ask is if someone were to acquire 10 sites, expand the GP of each, and decide to re-sell… which type of sites re-sell best?)

    4. What are examples of why other investors have purchased certain types of sites? What are the plus/minus of each type of site model from an investor perspective?

    5. Discuss the monetization models, but also what have others done to increase GP for each type of site you sell?

    6. Are all of your buyers individuals? Or do you have any corporate/portfolio buyers?

    Like any enterprise, there are those who initiate (start from scratch), those who accelerate (the pump and peddle types), and those who stabilize (the old money types that “capital retention” and risk management is their primary focus).

    From an equity growth perspective, those who can quickly increase GP will see a significant return on their investment. Last week’s podcast was intriguing as you addressed the issue that online investments can be LESS risky that a brick-mortar investment in that their fixed operating cost is significantly less.

    The due diligence experience that EF brings to the table is a risk management service. Your value-add to the market is well worth the reasonable broker fees you charge.

    If you’re ever in the Boston area, shoot me an email. I’d enjoy meeting you and discussing your thoughts on capitalizing an investment pool in the States.


    • Justin Cooke says:

      Hey Jim,

      Sorry it took me a while to reply to this. I wanted to wait until I had the time to put something thoughtful and then realized I’d forgotten to get back!

      Yes, selling “around” what we do is a strategic decision we’ve made as a marketing strategy that’s worked really well. Things like creating seller/buyer profiles that visitors/listeners can use to self-select, discussing expansion strategies, etc. – all used as ways to educate the market and build trust/authority.

      Your suggestion for having an investor or two on the show to discuss is a good one. We’ll talk to our beta investors for the investor program and see if any would be willing to come on the show to discuss – would be interesting! We’ve actually had these private conversations before, but have never recorded them for a show.

      Let me answer your questions the best I can:

      1. First, I should say that what gets submitted with us is not necessarily indicative of the market overall. Our market share of the larger industry is pretty small, so we’re more prone to streaks and our inbound marketing funnel’s focus.

      That being said, we’ve seen quite a few Amazon and lead gen (Quinstreet, specifically) sites coming through. We started off with a ton of AdSense sites and still have those, but we’re seeing more diversification in the submitted listings due to us getting the word out that our buyers are looking for other types of sites. We still don’t get many SaaS offerings, but I think that has to do with the fact that many SaaS companies would see a sale under $1M as a failure and we don’t operate at that end of the market.

      2. I don’t have exact numbers here, but can give you a rough estimated and educated guess. I’d say 35% Amazon, 25% AdSense, 15% Lead gen, 10% other affiliate, 10% dropshipping/eCommerce, 5% other.

      This has changed heavily since Q2/Q3 2014 where the majority of sites listed (more than 50%) was AdSense only. (See Answer #1)

      3. The smaller sites have the largest buyer pool and the $20K or less sites generally go pretty quick. In the $20K – $100K the biggest demand seems to be for lead gen and Amazon sites. $100K – $300K buyers are looking for more diversification of a particular site in terms of traffic, monetization, etc. OR they’re looking for packages of $20K – $80K sites to create a diversified portfolio.

      4. It’s hard to peg an investors reason for purchase as they vary widely. Some are looking only for sites that are 2+ years old, increasing in traffic/revenue, with no PBNs. Others only want declining sites they can turn around, sites that are not currently ranked on the first page of Google for important keywords, etc. We also have some that are only looking for paid traffic sites because that’s their skillset or because it helps to diversify their portfolio.

      There are things you can do to improve sellability overall, but trying to narrow the focus to a particular type of buyer isn’t the way to go, IMO. Instead, be crystal clear about the situation the site’s in and the work required so that the right buyer can make the right decision. We try not to cut deals in the vetting process that come down to taste, because there are different scenarios that work for different investors.

      5. This answer requires more depth than a comment allows, so Joe and I are going to dedicate an entire podcast to the topic and we’ll have that out soon.

      6. More than 80% of our buyers are individuals, but I’m guessing if you weigh it by volume, we’re closer to 50/50 for individuals Vs. groups.

      The groups mainly consist of partnerships, (2 working partners, 1 working one capital only, 2 working one capital only, etc.) consortiums, and mini-PE firms that manage portfolios. We’re still a bit small for what I would consider the “regular” PE groups and true investment teams, but I’m guessing some of the groups package and “sell up” the food chain.

      I’ve never been to Boston, but will look you up if we head out! We’ll like be back in the US this year or at least next for conferences, I’m guessing.

      We should probably setup a call – would love to chat with you about this stuff if you’re interested.

  4. Kae Kohl says:

    You referred to this podcast as “meaty”. That is definitely true! I particularly liked the info about focusing on certain growth strategies across the portfolio so you’re not trying to be an expert on everything at once. The discussion about anchor sites for the portfolio was also helpful. There were other gems as well. Thank you for your generosity in sharing your knowledge.


    • Justin Cooke says:

      Glad you liked it, Kae!

      I think this was one of our best shows in a while – I’ve been using it as a reference to the dozens of calls I’ve had in the last couple of weeks.

      Important points for me: Diversification in terms of monetization, traffic sources, and seasonality.

  5. Does anyone wanna lend me $240,000?

    Great podcast guys. It’s great that you guys will give the money back to the buyer if the seller spooks you. I know it’s a pain and frustrating for both parties, but this is what really sets you apart from flippa, and why people are happy to pay 20x earnings. Keep it up!

    As always, cheers for the mention.

    • Justin Cooke says:

      $240K? Done! :-)

      Glad you dug the show. Yeah, while we represent the seller it’s important to our long-term interest to promote win-win deals and we have to consider both parties when completing the transaction.

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