Why Online Assets Will Outperform Your Real Estate and Stocks
Updated on March 16, 2020
By Zach Zorn
Today, I am happy to introduce Zach Zorn from MoneyNomad.com.
Zach was a recent buyer on our marketplace, and a newcomer to the online business world. Zach produced a 60% ROI on his investment just four months after buying an affiliate website from our marketplace. This article demonstrates that the opportunity to invest and build wealth through website acquisition is alive and well.
Now, more than ever, are opportunities for people just starting to get involved.
Without further ado, I’ll hand the reins over to Zach so he can share his inspiring story with you.
Take it away, Zach!
From Zero Experience to $30k+ Profit in Four Months
For as long as I can remember, technology has fascinated me.
Isn’t it mind-boggling, that we can reach people nearly anywhere in the world at any time with practically no limitations? This thought process is the exact reason I decided to become involved with website investing.
After graduating from college in 2016, I tried creating several passive income streams for myself. I started a Shopify store that did okay, which led to me starting an Amazon FBA private label business that did well. Since Amazon selling is fairly “hands-off”, I decided to learn more about affiliate marketing. During my research, I found Empire Flippers and quickly discovered I could purchase an already established affiliate website without having to spend years creating one from scratch.
After several months of playing with the idea of buying a website from Empire Flippers, I finally pulled the trigger on January 1, 2018, and purchased an affiliate website for $49,000. Although I didn’t realize it at the time, this decision changed my life for the better!
I need to point out that before January 1, I had virtually no website building, ownership, or management experience, along with no hands-on SEO experience. Therefore, I spent several months learning the inner workings of this website while adding and optimizing income streams. Four months later, I sold the website with Empire Flippers for $75,000. After paying the commission, I walked away with over $30,000 in profit, which included the difference from buying/selling and the monthly affiliate commissions.
I received a 60% ROI in four months, which made me realize that website investing is a legitimate way to build wealth!
But how does that 60% ROI really compare to traditional investments?
Traditional Investments
Growing up, most of us are taught to invest in real estate, stocks, and mutual funds. Looking at historical averages, these investment methods have delivered predictable returns and created much wealth for investors.
NerdWallet found the following trends:
- The S&P 500 (including dividends) has an average annual return of 10%.
- 10-year government treasury bonds have a current annual return rate of 3.15%.
- Online savings accounts have a current annual return rate of 1.90%.
Investopedia found the following trends (based on the United States):
- Residential real estate investments average a 9.5% annual return.
- REITs average an 11.8% annual return.
Don’t get me wrong, history has proven that these investments are relatively sound, and I believe it’s important to have funds invested in each to be diversified, but these investments are boring and mostly out of the investors’ control. Out of this list, real estate is probably the most “fun,” and the owner can partially control returns. In my opinion, however, nothing compares to website ownership.
Online Investments
If you’re interested in investing in the online space, you can find numerous opportunities to get involved with including affiliate marketing, SaaS, e-commerce, and advertising, along with many others.
Look through the Empire Flippers marketplace at any given time and you will see a mix of businesses/websites for sale that fall into the abovementioned categories. Personally, I am only interested in investing in affiliate and SaaS websites because e-commerce has too many variables for my liking, including money being tied up in inventory, customer service, returns, and tariffs.
As mentioned previously, I saw a 60% ROI in four months with my affiliate review website. Because the returns were so lucrative, I wanted another website investment.
In mid-2018, I purchased Money Nomad as a way to share my story, help others with online investments, and get involved with finance-related affiliate programs. I’m not going to flip Money Nomad, as I have a long-term growth plan in place, but I’m seeing about a 10.1% return per month.
Every investment has pros and cons; online investments are no exception. The goal, as a savvy investor, is to find these pros and cons and then eliminate as many drawbacks as possible.
Empire Flippers gives prospective buyers all the tools and resources needed to identify potential opportunities or pitfalls. After examining my affiliate website for just 15 minutes, I identified its concerns and opportunities and did my best to mitigate these concerns after the purchase. Since I had looked at several other sites before this one, I knew what to look for which helped expedite my due diligence process.
When it comes to due diligence, I am looking at multiple aspects of a website. I’ve actually created a due diligence checklist to help myself with this, but I encourage you to look into the following:
- Website traffic. Is it trending up, down or staying the same? If it’s going up or down dig deeper as to why this is happening.
- Traffic sources. Is a majority of the traffic from ads or social? Personally, I’m looking for a site that receives most of its traffic from organic search since that has proven longevity.
- Is the seller the original owner or a website flipper? Often time website flippers will fix “low hanging fruit” opportunities, which leaves less room for quick improvements that can increase traffic and/or profitability.
- P&L statement. Examine the income streams, see which ones have been increasing and decreasing, and explore why. Also, notice what expenses the website has such as programming or advertising costs.
- Abnormal profit increase. Examine the P&L to determine if the seller added income streams in the past six months to build up profitability in an effort to increase the selling price. If I notice this to be the case, I’ll take this into account during my offer.
- Opportunities. As you’re exploring the site, look for opportunities that can increase traffic, user experience or profitability. Can you add another income source? Can the website be redesigned to create better engagement? Do articles have poor keyword targeting and just need a little “push” to rank higher?
Fixing the concerning points that you find during the due diligence process is an important step in creating a sound asset. Many buyers that have strong SEO or content creation skill sets, for example, will look for a site that has these issues or risks. Use risks to your advantage, and negotiate a reduced price because of them. My website had several risks, the largest being downward trending traffic. Since the website focused on tech reviews, many reviews were written and then forgotten about. At one point these reviews ranked high, but over time the ranking slipped downwards as the content became stale and outdated. Refreshing content was an important step in stopping the downward traffic trend. The website already had several monetization strategies which is ideal as this adds diversity, but I added several more to protect my investment. In my opinion, you can never have too many income streams, just don’t bombard your visitors with ads!
If you find a website that is only monetized in one way, then this could be a huge opportunity. Determine if more income sources could be added and if the answer is yes then consider moving forward with the purchase. The quicker you can recoup your initial investment, the better. This thinking drives my decision-making processes.
Website ownership comes with massive potential.
Around 55.1% of the world’s population has internet access, meaning you can reach 3.2+ billion people! Not many factors hinder website growth; it’s virtually sky’s the limit. No government agency determines how many people can be in your place of business (your website) at any given time, time of day is not a factor, marketing opportunity is nearly unlimited, and overhead cost is nominal in most instances. When compared to brick and mortar investments, website ownership becomes 100x more appealing. The most significant risks that I see with regard to website ownership are the ever-changing organic ranking algorithms, malicious cyber-attacks, and hackers. However, even brick and mortar stores that use internet marketing to promote their businesses can experience the same risks, along with the additional risks mentioned above. If you protect your site, host with a quality hosting provider, and follow “white hat” SEO tactics, then your risk is mitigated.
With an online investment, you hold most of the control on whether the business soars or flops, especially if you are an owner/operator. You control the quality of content that your website publishes, the advertisements served, the user experience, marketing and every other aspect that makes up success or failure. This might be overwhelming at the beginning, but take it one step at a time like I did, as I was self-teaching.
Utilize websites like Upwork to hire freelancers that can fulfill skills you lack, and network with people at work and other activities to find programmers and graphic designers if you don’t want to hire a remote freelancer.
Empire Flippers Sets Buyers Up for Success
Any website or business listed on the Empire Flippers marketplace has been heavily vetted by the Empire Flippers team. This means that only quality listings are on the marketplace, which gives buyers a more positive experience.
As someone who has bought and sold with Empire Flippers, I can assure you that the vetting process is very involved and everything gets disclosed to buyers.
As I touched on earlier, Empire Flippers gave me the tools and resources that I needed to do my due diligence on any website I considered purchasing. Some of these resources include:
– Google Analytics access
– Complete profit and loss spreadsheet
– Ahrefs analytics
– Details about included assets
– Way to contact the seller and ask questions
You can read about my whole experience using Empire Flippers here, or if you’d prefer to watch a video, you can watch it here.
As a buyer, I felt very protected when working with Empire Flippers. The vetting process and full transparency gave me confidence, along with the protection during and after migration. If a major, non-disclosed finding is made in the migration process, then the sale can be negated; additionally, if the website earns less than 50% of what it was stated to earn after the migration, the buyer may be entitled to a refund. Empire Flippers also holds a buyer’s funds in a secure account during the entire process. All these factors were important to me, as I was not interested in getting scammed.
Quality listings sell fast on the Empire Flippers marketplace. I’m talking within minutes to hours in some cases!
If you’re a serious buyer, I recommend having Empire Flippers hold a sizable deposit on account so that if the right opportunity presents itself, you can simply purchase the website or business with an email, rather than needing to send a wire transfer to make sure you win the wire race. The first person to get their funds to Empire Flippers gets to buy the listing; sometimes it’s a mad dash to the finish line.
Ask a team member for more information if you’re interested.
I Encourage You to Invest in the Online Space
At first, I was skeptical about buying an already established website and wiring $49,000 to an unknown company, but I’m grateful that I took the plunge and went for it.
A lot of people ask where I got the capital for my website, and this purchase is a prime example of why I’ve always saved money, allowing me to have the funds available. If you need a loan, consider checking out a company called Prosper that does peer-to-peer lending.
From my experience, I can confidently say that investing in the online space is a lucrative way to build wealth regardless of age. Empire Flippers’ marketplace offers listings that range from $25,000 to over $1,000,000, appealing to nearly every budget. Don’t let age or experience deter you from buying a website; I’m 24 and had zero experience prior to my purchase.
If you are willing to learn, there are countless blog posts and videos to teach you anything that you don’t know. Every day I’m learning, I encourage you to immerse yourself in content that will help you build up a profitable website.
Empire Flippers is here to help.
I credit a lot of my success to their processes that set buyers up for success.
Start building your online investment portfolio today, as you never know what will change your life.
Email me if you have any questions; I’d be happy to answer them. Zach@moneynomad.com
If you’re ready to start your journey into investing and owning profitable online businesses, then schedule a criteria discovery call with Empire Flipper’s business analysts to help you find the perfect fit.
Discussion
Nice article. Slight issue with it though if I am being honest. Numbers do not add up. he purchased for 49,000 dollars sold for 75,000 that is 26,000 difference. Claiming to get to have gotten to keep an ROI exceeding 30k I would want to hear some of that aspect not paid for a company and sold it and here are some numbers. The stock market one could have purchased GNUS last Monday and at 2.,62 per share, and sold it today for 5.15 or anywhere in between when it was at a high of 8 dollars. A story saying more of what was done to increase it would be more interesting to me than like to focus on how he added the value to sell it. It would also be able to be taken on as this could be you and that is something we should all want. So taking a snapshot of the market as a whole 10% a year for 50k and 50 years is no small amount of money it ends up at 5 million 869 thousand 542 dollars and 64 cents. Now one can do those same numbers and have a lot more at 30% a whole lot more and so on as the % grows.
Hey Dustin,
It is actually quite difficult for us to capture the buy/sell market as a whole like how you could with real estate or stocks. Mostly because so much of the vital stats are quite hidden and private compared to those much more public investments.
The extra ROI above the $26k difference also comes from the fact he was making solid net profit (increasing net profit even) during all the months he held onto the digital asset.
If you like to check our attempts to capture some real market data on ROI, we recently published two different studies interviewing buyers that bought at least 6 months ago from the time of study.
Here is the one we did on content sites:
https://empireflippers.com/content-sites-roi/
And here is the one we did on FBA businesses:
https://empireflippers.com/amazon-fba-roi-2020/
We’re going try to keep these updated as new information flows in from new buyers too. You might like those studies more than this post, as one thing we tried to figure out is exactly what common trends the buyers that saw an increase in profit did to get to that increase (likewise we looked for the commonalities of buyers that saw a decrease in profits too).
Hopefully that helps 🙂
very nice blog post about real estate and stock I will share this with my friends..thanks!