Billions of dollars are being spent every year in an opportunity called “Site Flipping”, yet despite being described as “the hottest investment opportunity for decades”, the vast majority of Internet users are not aware that this phenomenon even exists.
Investing in “virtual property” is a technique that has been available since the early days of the Internet, but it is only recently that it is reaching the mainstream. Some experts believe that the high profile takeovers of websites such as YouTube.com & Myspace.com may be the reason that the rest of the Internet has started to get involved.
Today we are going to delve into the world of site flipping, and we will be speaking to a leading website investor.
So what is site flipping and why is it becoming a popular investment option?
To answer these questions we spoke to Dean Hunt who is a world renown Internet entrepreneur and site flipping expert, and asked him to shed some light on the world of site flipping.
“Site Flipping refers to the process of buying something and then flipping it for a profit. Initially people would flip houses for a profit. But now this term has moved into the online world. The goal is the same as any other investment, buy low sell high”
We asked Dean why he thought site flipping had become so popular: “There is one factor that in my opinion makes site flipping a far more attractive proposition than any other investment opportunity, when you invest in websites you start earning from day one. If you compare this to the stock market for example, you could potentially wait 20 years before you see a profit. I know that if I purchase a website on a Monday, by Tuesday I will be earning revenue from that site. This makes it a very unique investment opportunity.”
Dean has bought over 20 virtual properties to date, we asked him to share some of his successes and failures with us: “My biggest success to date was a celebrity gossip website that I purchased in early 2007. I paid around $2,000 for the site, and within four months I had made my investment back in full. Now I make a nice sum of money every month, and this will be residual income for years to come. However, I could quite easily sell the site today for 10 times what I paid for it. The site actually gets over 250,000 visitors per month now.
In terms of failures, I have had only one so far, and that was just a small investment. I paid $400 for an antiques website, I had hoped it would take off and start earning more, but it has gone a bit stagnant. I could probably get $350 for it though, so I won’t be losing any sleep over a $50 loss.”
Dean’s investments are generally under $10,000, but he says that there are investment opportunities to suit any budget: “I have seen sites sell for as low as $20, and as high as $1.65 billion (YouTube.com). I get contacted on a weekly basis by business people who want me to find online investments for them.”
Recently Google purchased YoutTube.com for a reported fee of $1.65 billion, but now it seems this interest has spread to smaller business investors and entrepreneurs. Dean was keen to share with us some other reasons as to why he believes site flipping is the new property investing: “The factor that excites me the most is the fact that you can purchase a website related to something you love, so for example, if you like football then you could purchase a large football chat site, or a football memorabilia store. There is nothing better than being paid for something you love”.
So should we all rush out and start purchasing web property? Dean is quick to advise caution: “I believe that site flipping is by far the best investment opportunity available today, however, it is not for everyone, For example, if you purchase a website, you will either need to run it yourself or hire someone to run it for you. Most sites need less than an hour per day of time, but others will need more. If you have no prior knowledge of running websites then it would be best to hire someone to help you maintain and improve the site. I am always available to answer any further questions via my site flipping diary at www.midascode.co.uk/blog”